HKSAR v. Liu Sung Wai

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1997, No.14
(Criminal)

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Coram: Power, V.-P., Mayo and Stuart-Moore, JJ.A.

Date of Hearing: 20 March 1998

Date of Judgment: 15 May 1998

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J U D G M E N T

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Stuart-Moore, J.A. (giving the judgment of the Court):

1. On 16th December 1996, following a trial in the District Court before Deputy Judge Day, this Applicant was convicted of five offences of obtaining property by deception, contrary to section 17(1) of the Theft Ordinance, Cap.210 (charges 2-6). He was also convicted of procuring an entry in the record of a bank by deception, contrary to section 18D of the same Ordinance (charge 1).

2. He now seeks leave to appeal against conviction.

3. The material particulars of the charges were as follows.

(Charge 1):

"... on or about the 6th day of March 1995, in Hong Kong, dishonestly with a view to gain for yourself or another or with intent to cause loss to another procured the making of an entry in the record of a bank, namely a debit in the sum of HK$500,000 to account numbered 20-02-01490-5 in the name of Tin Chung United Transportation Company with the Chekiang First Bank Limited by deception, namely by falsely representing:

(i) that you would obtain a Letter of Credit in the sum of US$1,998,196.80 in favour of Tin Chung United Transportation Company, Hong Kong;

(ii) that a cheque numbered 000034 dated 28th March 1995 in the sum of HK$500,000, drawn on Tai Lee Jewellery Hong account numbered 835-818-768491-001 with the Wing Hang Bank, would be a good and valid order if presented for payment on or after the date thereon."

(Charge 2):

"... on the 6th day of April 1995, in Hong Kong, dishonestly obtained from Ling Wan-shun HK$400,000, with the intention of permanently depriving the said Ling Wan-shun thereof, by deception, namely by falsely representing that the two Letters of Credit dated 22nd and 27th March 1995, bearing serial numbers C LSA9503225 and C LSA 9503226 in the sums of US$314,238 and US$1,683,958.80 respectively, were issued by the Tokai Bank, Los Angeles."

(Charge 3):

"... on a day unknown between the 6th and 30th of April 1995, in Hong Kong, dishonestly obtained from Ling Wan Shun HK$170,000 with the intention of permanently depriving the said Ling Wan-shun thereof, by deception, namely by falsely representing that the two Letters of Credit dated 22nd and 27th of March 1995, bearing serial numbers C LSA 9503225 and C LSA9503226 in the sums of US$314,238 and US$1,683,958 respectively, were issued by the Tokai Bank Los Angeles."

(Charge 4):

".. the 28th day of June 1995, in Hong Kong, dishonestly obtained from Ting Sing-ying HK$435,724 with the intention of permanently depriving the said Ting Sing-ying thereof, by deception, namely by falsely representing that you would obtain for Ting Sing-ying a Letter of Credit in the sum of HK$3,665,098."

(Charge 5):

"... on the 18th day of July 1995, in Hong Kong, dishonestly obtained from Ting Sing-ying HK$300,000, with the intention of permanently depriving the said Ting Sing-ying thereof, by deception, namely by falsely representing that a Letter of Credit dated 11th July 1995 bearing serial number C FICAL, in the sum of US$3,665,098, was issued by the First Interstate Bank of California, Los Angeles."

(Charge 6):

"... on an unknown day in July 1995, in Hong Kong, dishonestly obtained from Ting Sing-ying HK$100,000, with the intention of permanently depriving the said Ting Sing-ying thereof, by deception, namely by falsely representing that the aforesaid sum was required by the First Interstate Bank of California, Los Angeles, to make alterations to a Letter of Credit dated 11th July 1995, bearing serial number C FICAL9507063 in the sum of US$3,665,098 issued by the aforesaid bank."

4. In view of the grounds of appeal that have been advanced for our consideration, it is unnecessary to give more than the barest outline of the case. In essence, the prosecution alleged that two businessmen (the victims), who knew very little about letters of credit, were introduced to the Applicant as someone who would make arrangements for these in order to facilitate payments for equipment on an overseas contract. The Applicant's arrangement fee was ten per cent of the value of the letters of credit, payable by instalments.

5. Put very simply, the prosecution's case (on charges 2 to 6) was that the American banks, which the Applicant had said would be issuing letters of credit, never did so. However, the Applicant caused what purported to be genuine copies of letters of credit to be faxed to the victims. These faxed copies (exhibits P4, 5, 9 and 11) led the victims to believe that the letters of credit existed, which resulted in the Applicant being paid the instalments due under the arrangement.

6. In order to prove their case, it was essential for the prosecution to prove that the American letters of credit were false. For this purpose, the prosecution had evidence taken in Los Angeles by way of deposition under the provisions of section 77E of the Evidence Ordinance, Cap.8.

7. The main thrust to the grounds of appeal relates to procedural complaints about the way in which the depositions came to be taken from Anne Elder (PW11) of the Tokai Bank as regards exhibits P4 and 5, and Marissa Bautista (PW12) of the Standard Chartered Bank (acting for First Interstate Bank) in relation to exhibits P9 and 11.

8. This case has had a long history and, before turning to the principal grounds of appeal, a brief chronology is helpful in order to make sense of the submissions made by Mr. McCoy S.C. on behalf of the Applicant.

9. On 9th October 1995, the Applicant was arrested at Lo Wu. His original trial began in the District Court on 8th July 1996 before Judge Chung. However, on 16th July 1996, the depositions taken in Los Angeles under a Letter of Request issued by Burrell J. (First Letter of Request) were ruled to be inadmissible. We are told that this is because of what may neutrally be termed an "oversight" by the prosecution in failing to notify the defence of the procedure they were adopting. Accordingly, as the Court perceived potential unfairness to the defence, the depositions were excluded under section 77F(1)(d) of the Evidence Ordinance. The prosecution applied for an adjournment at that stage and, in due course, obtained ex parte a Letter of Request issued by Wong J. (Second Letter of Request). In the event, it was decided that the trial would have to be started afresh.

10. The retrial began before Deputy Judge Day on 3rd December 1996, by which time further depositions had been taken in Los Angeles. On 6th December 1996, the judge admitted the depositions of the two American witnesses. In a short ruling, at page 34 line I of the appeal bundle, he said this:

"The situation we have now is that the Crown wish to introduce into evidence these letters of request and the depositions and exhibits thereto .....

I have heard counsel, I have read the written submissions they have provided for me, and I have also of course this morning heard from Mr. Turnbull (PW3). Mr. Turnbull's evidence was largely concerned, I think, with whether it was reasonably practicable to bring these two witnesses over from America to Hong Kong to give their evidence, and as to whether adequate notice was given to the defendant before these depositions were taken from them.

I am quite satisfied, having heard from Mr. Turnbull, that it is not reasonably practicable to bring these people to Hong Kong and that the Crown did all they could be expected to do to advise the defendant of what was going on in relation to these proceedings and gave more than adequate notice to the defendant about them.

I have had regard to the matters mentioned in Section 77F(1)(d) of the Evidence Ordinance, and I am quite satisfied that all that reasonably could be expected to be done to ensure the taking of the depositions did not result in unfairness to the defendant has been done, and these letters of request and the exhibits thereto will be admitted in evidence." (Emphasis added.)

11. It is with this background that we can examine the submissions made by Mr. McCoy which are to the effect that the American evidence should not have been admitted.

12. In the first of his grounds of appeal, Mr. McCoy submits that there were material irregularities in the process relating to the taking of evidence which renders that process a nullity. Accordingly, he argues, the judge was in error by admitting the depositions taken in the United States of America in the Applicant's absence. This ground was particularised in the following way:

"(a) There was no notice or insufficient notice to the Applicant of the depositions hearing in the United States of America.

(b) The Applicant would have needed to make: travel and accommodation arrangements, (and to be given) a bail variation to permit him to travel out of the jurisdiction, and Legal Aid.

(c) PW3 from the Legal Department, Hong Kong, the person in charge of the prosecution of the Applicant, acted as a Joint Commissioner of the United States District Court for the Central District of California. A prosecutor cannot act in a judicial capacity in respect of the charges he is prosecuting. This is constitutionally impermissible.

(d) The Order from the American Court, procured by the prosecutor who later sat as a Joint Commissioner, provided no right for cross-examination of the deponents by the Applicant.

(e) The Order from the American Court failed to prescribe any rules of procedure for the conduct of the Joint Commissioners.

(f) Neither the Hong Kong Letters of Request, the sealed Orders or supporting affidavit(s) in HCMP 134/96 and HCMP 2408/96 were ever served on the Applicant.

(g) The Orders, applications and process of the American Court were never served on the Applicant.

(h) The American Court never informed the Registrar, Supreme Court, Hong Kong of the time and date and place of the depositions hearing.

(i) The prosecution never informed the Applicant of the precise time, date and place of the hearing in the United States of America."

13. It is convenient to deal with the points raised in (a) and (b) together with (f), (g) and (i).

14. It was, as Mr. Schapel points out on behalf of the Respondent, the whole purpose of the second hearing in the United States that the Applicant should be afforded the opportunity to participate in it. As the judge made clear in his ruling, to which reference has already been made, "more than adequate notice" had been given to this Applicant of the proceedings which were due to take place. We can go rather further than that because it is abundantly plain from the evidence of Mr. Turnbull (PW3), which was never contradicted, that the Applicant had no intention whatsoever of attending those proceedings.

15. In our judgment nothing which Mr. McCoy has urged upon us under these headings had even the slightest materiality. It is certainly true that several documents were never served on the Applicant, but the Applicant was given clear and ample notice in more practical ways of the hearings in California. He chose, as was his perfect right, to ignore them.

16. We are satisfied, therefore, that the judge was fully justified in accepting that the Applicant was given ample notice and sufficient details of these hearings, and that the Applicant has never exhibited the slightest interest in attending them. There was nothing unjust about the admission of the depositions in these circumstances, and the failure to serve the documents to which Mr. McCoy referred did not breach any mandatory requirements under the procedures set down in the Evidence Ordinance for the determination of admissibility of such evidence.

17. We feel bound to concur with Mr. Schapel's summary dismissal of these particular submissions as "disingenuous and wholly incorrect".

18. Before passing from this aspect of the application altogether it is not without importance that, while Mr. McCoy complains that it was unfair to admit the American evidence taken in the Applicant's absence, the lack of authenticity attaching to the letters of credit was not inconsistent with the Applicant's defence. His case was that he acted as an honest middleman in respect of securing letters of credit so that their authenticity was not a matter which was within his personal knowledge. According to him, a man named Yeung Siu-man arranged for these letters to be issued. The Applicant asserted that if they were forgeries this was unknown to him.

19. In order to follow the submissions under Ground 1(c), (d), (e) and (h), it is necessary to look at the exact procedures under Part VIIIA of the Evidence Ordinance insofar as they are relevant to these issues, and at grounds 2 and 3 of this application which read as follows.

20. Ground 2:

"The Second Letter of Request (MP 2408/96) was improperly obtained on an ex-parte basis. The Applicant was obliged, uberrimae fidei, to inform the Court that the First Letter of Request (MP 134/96) produced depositions that were ruled inadmissible by the trial Judge. It was an abuse of process for the prosecution

(a) to apply for the Second Letter of Request and/or

(b) to adduce the depositions as evidence before the Deputy District Judge when such evidence had already been ruled, inadmissible in the aborted trial before Judge Chung and/or there was no right to apply for new depositions on the same original basis."

21. Ground 3:

"In the alternative, the learned Trial Judge wrongly exercised his discretion by admitting the depositions of PW11 and PW12 in that:

(a) He failed to give any or any sufficient weight to the requirement of s.77F(1)(d)(ii) that he have regard to whether the deponents were cross-examined.

(b) He failed to address his mind properly or at all to the question whether 'No unfairness was likely to occur."

22. Sections 77E and 77F of the Ordinance read as follows:

"OBTAINING OF EVIDENCE IN OTHER JURISDICTIONS FOR USE
IN CRIMINAL PROCEEDINGS IN HONG KONG

77E. Issue of letter of request to obtain evidence in criminal proceedings

(1) Where it appears to the High Court that any criminal proceedings-

(a) have been instituted in Hong Kong; ......

the High Court may order that a letter of request shall be issued and transmitted in such manner as the High Court may direct to a court or tribunal specified in the order and exercising jurisdiction in a place outside Hong Kong, requesting such court or tribunal to assist in obtaining evidence for the purposes of those criminal proceedings.

(2) An order under this section shall specify the evidence to be obtained and, in the case of evidence to be obtained-

(a) by the examination of any person as a witness, the name and particulars of such person or such other particulars by reference to his office or employment as may be sufficient to ascertain his identity; or

(b) by the production of any document or thing, the nature of such document or thing or a description thereof.

(3) An application to the High Court for an order under this section may be made ex parte supported by affidavit-

(a) in respect of criminal proceedings referred to in subsection (1)(a), by the Attorney General or any person charged with an offence to which such criminal proceedings relate; .....

(4) A letter of request ordered to be issued by the High Court under this section shall be issued by the Registrar of the Supreme Court (in this Part referred to as 'the Registrar') under the seal of the Supreme Court in such form as may be prescribed by rules of court, or if no such form is prescribed in such form as the High Court may direct.

77F. Admissibility in criminal proceedings of evidence obtained pursuant to letter of request

(1) Subject to this section and section 77G, any deposition, together with any document or thing exhibited or annexed thereto, which is received by the Registrar pursuant to a letter of request issued by him under section 77E in respect of any criminal proceedings, shall on its production without further proof be admitted in those criminal proceedings as prima facie evidence of any fact stated in the deposition and in the document (if any) exhibited or annexed thereto if- ..........

(d) ..............., the court is satisfied that any document (if any) exhibited or annexed thereto is the original thereof, or a copy thereof made by any photographic process, and that, having regard to the following matters - (Amended 67 of 1986 s.5)

(i) whether it is reasonably practicable to secure the attendance of the deponent, taking into account for that purpose his bodily or mental condition or the delay or expense likely to be caused in securing his attendance;

(ii) whether the deponent was cross-examined before such court or tribunal; and

(iii) any other matter which, in the circumstances, appears to the court to be relevant,

no unfairness is likely to occur in those criminal proceedings consequent upon the deposition and any document (if any) exhibited or annexed thereto being admitted in evidence under this section ......

(5) A certificate purporting to be signed by the Registrar and certifying that any deposition to which such certificate is attached, together with any document or thing exhibited or annexed thereto (if any), has been received by him pursuant to a letter of request issued by him under section 77E in respect of any criminal proceedings referred to in the certificate, shall on its production without further proof be admitted in those criminal proceedings as conclusive evidence of the facts contained therein."

23. Mr. McCoy's complaints in Ground 1(c), (d), (e) and (h) are directed at what he submits were procedural irregularities that took place in Los Angeles. It seems that section 77F(5) was intended to enable the courts in Hong Kong to proceed without having to consider a foreign court's procedures, particularly with reference to the way in which evidence was obtained. During the course of the submissions, however, it emerged for the first time that no certificate as defined by subsection (5) had ever been attached to the depositions or produced to the court as an exhibit. The certificate was found in the general court file. Counsel in the application were, until the Court made this discovery, wholly unaware of this and it appears also to have escaped the notice of those who appeared in the court below.

24. In our judgment, an omission of this kind has the effect that a court can no longer accept without question the overseas evidence of the depositions and exhibits. It is only in these unusual circumstances that we have looked to see whether the American evidence was properly obtained.

25. It is wholly unnecessary to go through all the submissions that have been advanced on both sides. Subject to what we shall say about Mr. Turnbull's role as a joint commissioner, it suffices to say that nothing has been put before us which would cause this court to criticize any of the American procedures which were adopted in response to the way in which the Attorney General's Chambers had made their request on 25th July 1996. Whilst it may be true that the American Court never informed the Registrar of the Supreme Court in Hong Kong of the time, date and place of the deposition - taking hearings, this had been a simple request made by the Registrar. There was no mandatory requirement to comply with it.

26. The relevant terms of the Second Letter of Request were:

"NOW I, the Registrar of the Supreme Court of Hong Kong, HEREBY REQUEST for the reasons aforesaid and for the assistance of the said Court THAT you will be pleased to summon the said witness and such other witnesses as the agents of the Attorney General of Hong Kong respectfully request you to so summon, to attend for examination and to produce the documents and records as aforesaid, at such time and at such place you shall appoint, before such person appointed by you as according to your procedure is competent to take the testimony of witnesses and require the production of documents. AND THAT you shall require such witness or witnesses to be examined viva voce touching the said matters in question in the presence of agents of the Attorney General of Hong Kong or such of them as shall, on due notice given, attend the examination.

AND I further request that you will permit the agents of the Attorney General of Hong Kong or such of them as shall be present to examine such witnesses as may, after due notice in writing, be produced." [Emphasis added.]

27. The American authorities in Los Angeles, relying upon the continuing order of United States Magistrate Judge Wistrich dated 28th February 1996, which was given in response to the First Letter of Request, responded in the following terms:

"Upon application of Assistant United States Attorney Lisa E. Feldman, made on behalf of the Government of Hong Kong, and the Court having read the Letter of Request from the Supreme Court of Hong Kong, and being fully informed of its premises,

IT IS HEREBY ORDERED, pursuant to the authority contained in Title 28, United States Code, Section 1782, that Assistant United States Attorney Lisa E. Feldman and Senior Assistant Crown Prosecutor Richard Grant Turnbull are hereby appointed as joint Commissioners to obtain the evidence requested in the Letter of Request (attached as Exhibit A to the Application). (Emphasis added)

IT IS FURTHER ORDERED that the Commissioners may take such steps as are necessary to obtain the requested evidence in this District in conformity with the Letter of Request. These steps may include the taking of sworn testimony, the receipt of documents and physical evidence, the application to this Court for search warrants, and the issuance of compulsory process, in the form of one or more Commissioners' subpoenas, in order to effectuate the purposes of the Letter of Request. In obtaining the evidence, the Commissioner is not required to follow the Federal Rules of Civil Procedure. The following rules shall govern:

1. The Commissioners need not give notice of the taking of evidence to actual or potential parties in the foreign proceeding, nor need the Commissioners provide such parties with the evidence taken.

2. The Commissioners may take the evidence in accordance with such rules and procedures of the requesting authority that the requesting authority may prescribe.

3. The Commissioners may seek such further orders of this Court as may be necessary to execute the Letter of Request, including orders enforcing compulsory process issued by the Commissioners."

28. Mr. Turnbull, while a member of the Prosecution Division of the Attorney General's Chambers, acted in the United States in a quasi-judicial role as a "Joint Commissioner". Mr. McCoy seeks to impugn this conduct suggesting, to use his somewhat enigmatic phrase, that it was "constitutionally impermissible". If he meant by this that the advocate for one side or another should never, by our procedures, be seen to assume the role of a judge in the same cause, he is unquestionably correct. Justice must at all times be seen to be done and an advocate cannot at the same time, in the same cause, assume the mantle of the judge.

29. Mr. Turnbull was largely responsible for the preparation of the prosecution's case in the District Court. His signature appeared on the re-amended indictment. In the second trial before Deputy Judge Day, he also had to fulfill the role of witness when he had to give evidence as to all the steps which were taken to procure the evidence from Los Angeles.

30. Mr. Schapel, on behalf of the Respondent, has very properly conceded that the appointment of Mr. Turnbull as a joint commissioner, whilst this was in accordance with the prevailing practice in the United States, was not the only method by which he could have been allowed to question the deponents. Mr. Schapel who, like Mr. McCoy did not appear in the court below, accepts that the role of joint commissioner was in the nature of a judicial appointment under American law, but he submits that in practical terms there would have been a minimal difference between Mr. Turnbull being appointed as a joint Commissioner as opposed to being present at the American proceedings merely as an advocate permitted to ask questions.

31. We are satisfied that it was fundamentally wrong for Mr. Turnbull to have accepted a judicial appointment of any kind for the purposes of taking the evidence where there was an alternative procedure open to him. It would have been a different matter if the law in the State of California provided no other method. However, all that Mr. Turnbull had to do was to request that Assistant United States Attorney, Lisa E. Feldman, was made sole commissioner. This was not done and to that extent, in our opinion, an irregularity in the procedure has occurred. This was clearly avoidable and should never have been allowed to happen in the first place.

32. Now that this issue has arisen, we have had to consider whether the practical effect of this error was such as to make this a material irregularity.

33. We are satisfied, having read the full transcript of proceedings in California, that although appointed a joint commissioner, Mr. Turnbull did not in fact exercise a judicial function. None of the rights of the Applicant were affected in any way.

34. In these circumstances we have come to the conclusion that the irregularity was not a material one. However, if we were wrong about that, we would unhesitatingly have applied the proviso.

35. So far as Ground 2 is concerned, we are satisfied that the Respondent acted correctly in both respects about which complaint is made.

36. There is nothing to show, in relation to Ground 3, that the judge failed to consider the matters which are set out or that he wrongly exercised his discretion.

37. We do not need to dwell upon the fourth ground of appeal to any great extent. It reads that the judge:

"also erred in law or alternatively permitted a material irregularity in holding that (page 10 of reasons for verdict):-

'Defence Counsel has made much of the fact that the documents exhibited may have been "Pre-Advice" letters of credit (sic) ...... There is no evidence that such creatures exist.'

In so holding the learned Trial Judge omitted to take account of:-

(a) An express term in P11 and P9 that they do not themselves constitute the operative instruments as letters of credit.

(b) The law and practice of bankers' commercial credits as explained in accepted works of authority.

(c) The Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce."

38. We agree with Mr. Schapel's contention that if the questioned documents were not letters of credit but were some other document such as a "pre-advice letter of credit", this is something which could easily have been explored in the District Court. In any event, we take the view that whether or not these were properly drafted letters of credit, that is what they purported to be.

39. The first charge was in a completely different category. Mr. McCoy, having been reminded of this, went on to submit, in Ground 5, that this charge should fall with the others because the judge must have been influenced to some extent in coming to his decision by the knowledge acquired from evidence that ought not to have been admitted that the letters of credit were not genuine. In the light of what has been said already, it will already be obvious that we do not agree. There were two separate and distinct false representations made by the Applicant, either or both of which, if proved, would have led to his conviction. The trial judge approached the evidence with obvious care and precision and, at page 16 of the Reasons for verdict he said this:

"Dealing particularly with the first charge, the fact allegedly caused by the deception is the causing of a debit entry in the bank account of Mr. Lee's company in the sum of $500,000. This would have been charged as obtaining a cheque or chose in action until the recent House of Lords case of R v Preddy & Ors. The defence have sought to argue that what was done was too remote to be said to have procured the making of a debit entry in an account of a bank where the defendant is not even a customer. I disagree. The deception secured the cheque for $500,000. It was cashed on the defendant's order and a debit entry made. A direct and inevitable result. The fact that (the wife of one of the victims) handed over the cheque was not disputed. I had no doubt that she was induced to do so by the defendant representing that he would obtain a Letter of Credit, and that the jewellery shop's cheque would be a good and valid order if presented for payment. She told me that and I believed her. The defendant said that if the Letters had not been issued he would have met Mr. Chung's cheque from a refund given by Yeung. A refund from a man he asked for a receipt from because he did not trust him, about whom he said he 'didn't care' how he did business, and of whom he said he was not sure if his methods were unlawful. This was fanciful - and the defendant's own accounts could not bear $500,000. He was never going to secure an authorised Letter of Credit and he knew the cheque would not be met. There are two deceptions specified in the charge. Although the defendant would be guilty if either were proved, in fact I am persuaded, beyond any doubt, of both. He is guilty of the first charge."

40. There is nothing which causes us to interfere with any of the verdicts which were properly reached on strong evidence of guilt.

41. Accordingly, for the reasons we have given, we shall refuse leave and dismiss the application.

Representation:

Mr. A.E. Schapel, S.A.D.P.P. and Mr. Wesley Wong, S.A.D.P.P. (Ag.) for D.P.P./Respondent

Mr. McCoy S.C. & Mr. Maurice Peter Tracy instructed by D.L.A. for the Applicant.