HKSAR v. Lu Da Lin

CACC000244/1999

CACC 244/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 244 OF 1999

(ON APPEAL FROM DCCC 1376 OF 1999)

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Coram: Hon Stuart-Moore VP, Leong & Wong, JJA

Date of Hearing: 23 May 2000

Date of Judgment: 23 May 2000

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J U D G M E N T

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Stuart-Moore VP (giving the judgment of the Court):

Introduction

1. On 19 April 1999, following a trial in the District Court before Deputy Judge Sinclair, the Applicant (D3 at trial) was convicted of theft (charge 1) and attempted theft (charge 2). On 21 April 1999, he was sentenced to concurrent terms of three years nine months' imprisonment on the first charge and two years on the second. D3 now seeks leave to appeal against conviction and sentence.

2. The particulars of the first charge alleged that, on 17 October 1998, D3 together with D1 and D2 stole 2,600 pentium processors belonging to N.F. Smith & Associates (Limited Partnership) ("Smith"). The second charge, which was originally also jointly alleged against D1 and D2, related to the attempted theft on 22 October 1998 from the same owner of 800 pentium processors. D1 pleaded guilty from the outset of the trial to charge 1, and charge 2 was ordered to lie on the file. Ultimately, D2 also pleaded guilty to the theft alleged in charge 1 and the second charge was left on the file. This left D3 to be tried on his own.

3. The facts were relatively straightforward because to a large extent they were agreed. The prosecution's case was that D3 had acted jointly with D1 and D2 in the commission of these offences. D3 gave evidence which was directed to a large extent at providing explanations for evidence which, in the absence of any explanation, gave rise almost inevitably to the inference that he was a central figure in these criminal offences. In the event, his evidence was disbelieved and, when we turn in due course to the grounds of the appeal, three out of the four grounds which have been advanced are concerned with the judge's treatment of D3's alleged lies which were said to have been given in the course of his evidence.

Prosecution's case

4. Returning, for the moment, to the largely uncontested evidence, it was the prosecution's case that D1 and D2 were instrumental at all stages in the commission of these crimes. What was disputed was that D3 was a knowing party to the activities of the other two. The evidential background has been set out in the Reasons for Verdict commencing on page 86 of the Appeal Bundle.

5. The prosecution's evidence has been most helpfully summarised by Mr Saw, SC, on behalf of the Respondent, as Mr Cheng Huan, SC, for D3, accepted. It came down to this: Philips is a well known multinational company dealing in electronic equipment. This company was described by the judge during the trial as "the real Philips". Smith was also a multinational trading company. It had an office in Hong Kong where the manager was a man named Henry Chang. However, the head office and a branch office were in the United States of America. Smith supplied pentium processors which are an integral component of computers and perhaps their most important component part. These are supplied from the United States to companies such as the real Philips. On 22 September 1998, Henry Chang received a fax inquiry from Philips China, which was described by the trial judge as "the bogus Philips" because no such company existed. The fax inquiry related to pentium processors. However, given that the fax bore the logo of the real Philips, Mr Chang believed that he was then dealing with the real Philips. This fax, and others which followed, were sent to Smith by D1 and D2.

6. It was the prosecution's case that D3 was the third person acting with D1 and D2 in a scheme to deceive Smith. D3, for his part, was the general manager of an electronics company called Stack Electronics ("Stack") with an office in Hong Kong. He had been acquainted with D1 and D2 for many years.

7. Henry Chang replied to the bogus Philips in Shenzhen dealing, as he then thought, with a person calling himself Steve Chau. He remitted a request made by the bogus Philips for credit to his California office and a purchase order for 4,000 pentium processors. In due course, the request for credit and the application to delay payment for the 4,000 processors until 30 days after delivery was agreed to by the Smith credit controller in Texas.

8. The bogus Philips then sent Smith a request to despatch 4,000 pentium processors to MSAS Cargo International Limited at Hong Kong Airport and a shipping order to this effect was completed. Henry Chang and Smith had only agreed to credit being given for the order because they had been deceived into believing that they were dealing with the real Philips. Because of supply problems, only 2,600 pentium processors were initially sent and a further 800 later. The remaining 600 were never sent because the scam was discovered in time.

9. Smith then employed Federal Express to ship the two batches of pentium processors to Hong Kong from the United States. On 14 October, Federal Express received from Smith the first batch of 2,600 processors (charge 1), and on 16 October, these were delivered by Federal Express to MSAS in Chek Lap Kok. The remaining 800 were delivered to Federal Express by Smith on 15 and 16 October. They were then delivered by Federal Express to MSAS in Hong Kong on 19 October 1998.

10. In the meantime, a firm called Kotemax had been approached in early October 1998 by D3. Kotemax operated a storage facility described as a "mini godown". D3 had initially made general enquiries about renting storage space. Subsequently, D3, together with D1 and D2, returned to Kotemax on 17 October to make specific arrangements for renting storage space. Terms were negotiated with the representative of Kotemax and D1 and D2. Two documents were then signed, namely a "rental agreement" (by D2 using a name other than his own) and a document for "tenant details" signed by D3, D1 and D2, all using names other than their own. In the case of D1, he used the name Chan Wing-yip, Leung Kam-kwong was used by D2, and Chan Sai-tong was used by D3. They recorded the particulars, from the identity cards of those persons, on the forms. The evidence at trial showed that D3 might well have had the opportunity to acquire knowledge of each of those names and identity card numbers.

11. On 17 October, the 2,600 pentium processors referred to in the first charge, which were still in their original boxes, were collected by a transportation worker from MSAS and driven by him to Kwai Chung on the instructions of D1. The driver left them with D1 and another person. Within two hours, D1 and D2, together with D3, were using a cart to move those 13 boxes into Room 12 of the storage facility owned by Kotemax. It was D3 who then padlocked the door to Room 12 with a padlock that had not been provided by Kotemax.

12. On 19 October, D1 and D2 returned on their own to Kotemax and transferred the 13 boxes containing the 2,600 pentium processors from Room 12, where they had first been put, into Room 11. They then took away 750 of the processors and these were never recovered.

13. When D1 and D2 left Kotemax on that occasion, D1 locked Room 11 using his own padlock. On 20 October, D2 booked himself into a hotel in Hong Kong. Two days later, D1 and D2 were arrested and the hotel room and its safe were searched. From the room, many documents were seized implicating D1 and D2 in the fraudulent scheme. Included amongst those documents were two which respectively bore the fingerprint and the thumbprint of D3, as well as the fingerprints of D1.

14. On 23 October at 8.45 a.m., D3 returned to Kotemax. He was not at that stage aware that D1 and D2 had been arrested. He unlocked the padlock to Room 11 which contained the balance of the stolen pentium processors. He was then arrested. The evidence at trial provided no explanation as to how D3 came to be in possession of the key to Room 11. However, D3's fingerprints were found on the adhesive side of a transparent tape which was removed from one of the cartons containing stolen processors.

15. In a subsequent search of D3's office at Stack Electronics, a further quantity of documents were seized. Some of them related to the bogus Philips. Others related to the real Philips, its branch offices elsewhere in Asia and scraps of paper on which had been handwritten and typed the name and title of Smith.

Defence case

16. D3, in the course of his evidence, was largely concerned with providing explanations for his association with D1 and D2 about whose criminal activities he denied all knowledge.

17. The judge, in his Reasons for Verdict, set out at page 94 the essence of the defence by saying that D3 explained that he first came to know D1 and D2 in Canada in 1992. After that, he did not see either of them until 1996. It was not, he said in evidence, until August or September 1998 that he started to have any sort of business dealings with them. Thereafter, he saw them in his Hong Kong office and sometimes in the Shenzhen office of Stack. He said that he arranged with them to transport electronic goods to and from Hong Kong on behalf of Stack customers. He arranged payment to them of $6,000 each in September 1998. As far as he knew, D1 was then the manager of the Shanghai branch office of an American company called Continental which traded in chemicals and industrial goods. He knew less about D2. He did not know where he was employed except that he supposed it was somewhere in China but did not know it was in Shenzhen. He said he was happy to instigate a business relationship with D2 because his experience would have enabled him to comply with the complex import and export regulations on the mainland. Furthermore, D1 and D2 might, he said, have introduced mainland custom for Stack.

18. D3 gave evidence that he had written the name and identity card number of Chan Sai-tong when he had gone to Kotemax with D1 and D2 to make arrangements to rent storing space, and he provided his reason as to why that name had been written onto the form which he signed. He stated that he had returned to Kotemax during the evening of 17 October and admitted that he had helped D1 and D2 to shift what were in fact the stolen boxes of pentium processors into a storage room. He did this, he said, because D2 had telephoned him. He maintained that D2 wanted his assistance to gain access to Kotemax because there was a problem with the security guard, and that D2 thought that he (D3) would have more influence with the guard because he knew him better.

19. There are other aspects of the defence which is necessary to turn to when dealing with the grounds of appeal.

Grounds of appeal

20. Against this background, Mr Cheng has advanced in his first three grounds of appeal a complaint that the judge erred in his approach to and consideration of the lies allegedly told by D3 in the course of his evidence. Amongst other things, he argued in particular that the judge should have "merely directed himself that (the) lies went only to the issue of credibility" and that the judge had unnecessarily used D3's lies to support an inference of guilt. Mr Cheng further submitted that it was a material irregularity in the trial that the judge had failed to consult with counsel before delivering his Reasons for Verdict as to whether it was necessary to direct himself on the issue of lies and whether or not they should be regarded as supporting the prosecution's case.

21. The judge dealt with lies when assessing the credibility of D3. He had correctly directed himself as to the approach he should take and, in this light, concluded that the lies were deliberate, that they related to material issues and that the motive of the lies was a realisation of guilt and fear of the truth. However, the direction he gave himself to the effect that the lies could support an inference of guilt would have been better expressed as "supporting the prosecution's case" to follow the suggested reasoning in HKSAR v Mo Shiu-shing (1999) 2 HKLRD 155. We have no doubt whatever that the lapse on the judge's part, if that is not too strong a way of expressing it in the present circumstances, cannot render the verdict unsafe or unsatisfactory. There was a wealth of evidence against D3 and, when his evidence was rejected, the only sensible conclusion to be drawn from the remaining evidence was that he was guilty. The lies with which the judge was dealing were on crucially important aspects of the case and were of the utmost materiality.

22. In one example, dealing with D3's use of the name Chan Sai-tong, when renting room-space for the stolen items, the judge said at page 96F:

"This Chan was the same man who had testified to being unaware of whether he had in fact done work with Stack Electronics. Yet (D3) asked me to believe that he had written the name and particulars of PW2 (Chan) on the rental forms rather than his own name as an authorised user of the storeroom at Kotemax because, as he says, he thought that he might employ him as a courier of his own goods to Kotemax.

His explanation for retaining the particulars of PW2 for more than 18 months, particularly when he had not retained the particulars of the proprietor of Lively, Mr Lam, who, it seems to be common ground, he had used fairly often and knew, or indeed the namecard of his friend, D2, as he told us, confirm the total implausibility of his motivation."

23. In another example, dealing with D3's return on 17 October 1998 to Kotemax during the evening to assist with a so-called problem with the security guard, the judge said at page 97A:

"I believe this to be nonsense. Since it is the defendant's case that it was either D1 or D2 who had rented the room, he could not say who; why should the defendant have any influence? All three men can speak English. They must be able to from what the defendant tells me and the defendant maintains that his Cantonese is practically non-existent. In any event, the reliable evidence of the guard was that such problem as had existed was cleared up before the arrival of the defendant, which the defendant says was a matter of minutes after he had received the telephone call, and it is common ground that the problem had been cleared up.

The problem was obviously one of a minor nature. The defendant's only explanation for helping to cart the goods upstairs seems to be that he was merely helping his friends since he was in the premises anyway. I have no doubt that this whole explanation is a lie. The defendant did give self-serving explanations concerning his fingerprints and the seizure of incriminating documents from his office. I found the defendant to be wholly lacking in credibility."

24. These lies, taken in the context of all of the evidence, were clearly capable of lending powerful support to the prosecution's case. However, as the judge went on to demonstrate in the very next passage at page 97L, he appears not to have considered the lies as adding to the prosecution's case. What the judge said was this:

"His explanations had no effect on the evidence. Apart from the deliberate lies, I consider the evidence as though the defendant had elected to remain silent. Except for the lies, the fact that I do not accept his evidence does not prove or add to the prosecution case. It is, as I say, as if he had not testified.

The lies told, however, are capable of supporting an inference of guilt. To be so capable, I must find that they were deliberate. They must clearly be shown to be lies from independent evidence. I must find it proved that there was no innocent motivation for the lies, bearing in mind that people sometimes do lie. For example, to bolster a just cause, out of shame or to conceal disgraceful behaviour.

However, the lie must relate to a material issue

There can be no suggestion that the lies were not deliberate. Their only purpose was to defeat or to cast a doubt on the inference that the defendant's dealings with the stolen property at Kotemax and his participation in renting a room at Kotemax for the purposes of storage was in pursuance of his alleged criminal joint enterprise with D1 and D2."

25. We consider that the failure to discuss with counsel the potential effect of the lies told by D3 is a point which is a non-starter as a ground of appeal and, indeed, in fairness to Mr Cheng, he has not emphasised this point to us today. But we do express some surprise that it was put forward as a matter of sufficient weight to found a ground of appeal. It is purely an administrative procedure. No doubt, a cautious and prudent judge will often consult with counsel, as this court suggested in Mo Shiu-shing (above), particularly in jury trials, where there is any doubt as to the proper course to take with regard to the directions to be given to a jury on lies. Here, however, the judge was dealing with what he considered to be blatant lies on central issues, and we cannot say that there was, in the circumstances, any real need to have firstly consulted with counsel. The judge has had long judicial experience. The issue with which he was faced would have been well known to him and his handling of the matter was perfectly proper. These grounds must fail

26. In the fourth ground of appeal, Mr Cheng submitted that the convictions were unsafe and unsatisfactory for a number of reasons arising out of the evidence which the judge, it was submitted, may have overlooked or alternatively may have wittingly or unwittingly, but unfairly, considered were to be taken as evidence which was adverse to D3.

27. In ground 4(1), on which Mr Cheng in common with all other sub-grounds, has relied on the written submission. He has submitted as follows:

"In his Reasons for Verdict the judge dealt with (D3's) return to Kotemax on the evening of 17.10.98 and concluded that (D3's) whole explanation was 'a lie'.

(a) In fact (D3's) office was nearby;

(b) Given the relationship between (D3) and D1 and D2 and that (D3) initially took D1 and D2 to Kotemax's premises at Kwun Tung on the morning of 17.10.98 there was nothing inherently unbelievable or odd that either (D3)

(i) was rung up to help solve the problem

(ii) actually went to the premises

(iii) when he arrived helped his friends shift the boxes

or that the 'minor' access problem had been solved by the time of (D3's) arrival."

28. This overlooks what the judge had said in his Reasons for Verdict at page 95D:

"His description of the relationship was, I fear, most implausible. Notwithstanding the 1st defendant's alleged responsibilities as manager in Shanghai, he employed D1 as a casual courier in Hong Kong and Shenzhen, not just once but several times in the month of September. Moreover, in October, D1 was, according to the defendant, constantly coming in and out of his office using it as a storage cupboard, borrowing office supplies, returning a laptop computer from Shenzhen quite apart from going to Kotemax and on one occasion moving the stolen goods into Kotemax.

He admits that neither (D1) nor (D2) did actually find any customers although the $6,000 he says he paid to them also included a consideration for them trying to do so and neither did D1 actually help him with the Chinese regulations, as was supposed, as I understood, to be a reason for his wanting to foster a relationship.

Moreover, it seems neither D1 nor D2 could be relied on to deliver goods as required. It depended, he admitted, on their coincidental presence when they were required. Again, this relationship is improbable. I found the defendant to be evasive when questioned about his knowledge of dealings with branches of the real Philips and with Smith and in regard to the relevance of his knowledge of pentium processors."

29. The judge's assessment of D3's relationship with the other defendants clearly was far wider than a simple consideration of the likelihood of D3 going round to help them with the boxes at Kotemax. The judge went on, in the passage cited earlier from page 97 of the Appeal Bundle to reject out of hand D3's explanation for returning to Kotemax on the evening of 17 October 1998.

30. In ground 4(2), it was submitted:

"In his Reasons for Verdict the judge used, inter alia, (D3's) failure to retain the name card of D2 as a reason for confirming the total implausibility of (D3's) motivation for retaining the particulars of PW2 for more than 18 months

(a) In fact the name card referred to by the judge related to D1 and not D2; and

(b) (D3's) evidence in relation thereto was completely plausible."

31. The judge did set out his reasons for concluding in the way that he did (at page 96F) which have already been cited. Whether or not the judge's reference to D2 was a slip of tongue, when the evidence indicated it was D1 to whom he should have referred in this context cannot advance the matter at all. It was a matter of little or no importance.

32. In ground 4(3), it was submitted:

"In his Reasons for Verdict the judge unfairly and wrongly took a point against (D3) namely that PW4 stated that on 23.10.98 (D3) told PW4 that he wanted to go up 'to check his luggage':

(a) PW4's evidence is to be seen at transcript page 261;

(b) The evidence in chief of (D3) never for one moment agreed with or sanctioned any coming to 'check his luggage' on 23.10.98;

(c) The cross-examination of (D3) never suggested for one moment that (D3) either admitted to or agreed he had said he had spoken to PW4 about going to check his luggage;

(d) Even though PW4 was never questioned on this point it was unfair to take against (D3) as (D3) clearly never adopted it or mentioned it and the inherent probabilities are that this matter was a slip by Defence Counsel who omitted to traverse it in cross-examination."

33. The transcript which is referred to by Mr Cheng in that submission reads in this way:

"PW4, Mr Islam, who I regard as a truthful and reliable witness, also gave evidence that when (D3) came to Kotemax on the morning of 23 October, after the arrest of D1 and D2 that is to say, (D3) had told him that he wanted to go up 'to check his luggage'. This evidence was not challenged and when he gave evidence himself, the defendant did not deny having said this."

34. The judge was fully entitled to take the evidence against D3 bearing in mind that there was no challenge of PW4. It has certainly been suggested in the written submissions of Mr Cheng that this may have been an oversight on the part of counsel, and it is significant that this has in no way been supported as it could have been by the production of trial counsel's instructions in a trial which took place long ago or by affidavit. Indeed, defence counsel at trial is well known in these courts as a highly experienced practitioner and incompetence, not surprisingly, has not been alleged and we reject this ground as having no substance whatsoever.

35. A number of other minor complaints have been made relating to the judge's approach to other aspects of the evidence with which it is unnecessary to deal in any detail. Essentially, the complaints are unjustified as the judge was entitled to have reached the conclusions which are criticised in the way that he did. However, it is necessary to refer to ground 4(7) because it alleges that the judge paid insufficient regard to D3's good character. We have been unable to find any justification in this allegation. The judge dealt with D3's clear record at the outset of his Reasons for Verdict where he alluded to it in brief, but later he returned to it more fully when dealing with D3's evidence.

36. Mr Cheng also complains about the way in which the judge concluded that D3 was an "evasive" witness describing that as "rather harsh" because he suggested that some of the problem with the evidence in the trial may have stemmed from difficulties in translating D3's evidence. D3, for his part, testified in Mandarin but he was described as being fluent in English and in French. The judge was entitled to have drawn his own conclusions, having had the advantage of seeing and hearing D3 give evidence, and we are not disposed to interfere on this ground.

37. It has been submitted that the verdicts were unsafe and unsatisfactory. We have found no reason which supports such a conclusion. On the contrary, the judge demonstrated time and again that he understood the issues in a case which, to some extent, involved complicated evidence even if much of it was agreed. There was one error made by the judge which related to the evidence which was later corrected but, as the judge pointed out, if he had realised the true situation when he supplied his Reasons for Verdict, this would only have made the matter worse for D3 so that the error he had originally made had not worked to D3's disadvantage.

38. As nothing has been raised of any substance in the application relating to conviction, the application must be dismissed.

(The application relating to sentence was not pursued and was therefore dismissed.)

Representation:

Mr D.G. Saw, SC, DDPP and Mr Naresh Daryanani, GC, of the Department of Justice, for the Respondent.

Mr Cheng Huan, SC and Mr Christopher Grounds, instructed by Messrs S.Y. Chu & Co., for the Applicant.