Re Chan Hiu Tao

DCCC000471/2002

DCCC471/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 471 OF 2002

Transcript of the audio recording of the Ruling for stay of proceedings at the trial of Chan Hiu-tao, charged with Fraud, etc., before Deputy Judge Smout

Coram: Deputy District Court Judge Smout

Date: 1 November 2002

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JUDGMENT

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1.In this case, at the conclusion of the evidence of PW2, defence counsel brought an application for a permanent stay of proceedings on the grounds that due to two missing witnesses the defendant is unable to have a fair trial and therefore to continue the proceedings would be an abuse of the court's process.

2.Ordinarily, such an application is brought no later than the outset of the trial, but applications have been known to have been successfully made after a trial has begun. Indeed, one of the authorities submitted by defence counsel, the District Court case of Ng Kam Fuk, DCCC 104 of 1992, is one such case.

3.I am satisfied the application has been properly made and no blame can be attached to defence counsel for not making this application at the outset of the trial. He was not sure until after the trial began that the two prosecution witnesses, Yan Jie-bo, who I will from here on refer to simply as Yan, and Yi Lizzy, who I will from now on simply refer to as Yi, he was not sure that they would not be attending the trial, and in any event, he was hopeful that the prosecution's replacement witness for Yi - that is PW2 - would testify in such a way that would remove the need for this application. Yan and Yi were PWs 24 and 25 respectively on the prosecution's list of prosecution witnesses served on the defendant.

4.PW2, however, in his testimony testified that he was not directly involved in the business transactions with China Sources Industrial International Limited, to which I will from here on refer simply as China Sources. This is the company the prosecution allege was under the defendant's control, and according to PW2's testimony, he could not answer the questions asked by defence counsel in which he sought to obtain from him the same kind of information that is contained in Yi's witness statement.

5.The position at common law is that I have a discretion to stay these proceedings if the defendant is unable to have a fair trial on the basis that to proceed with an unfair trial would be an abuse of the court's process. Furthermore, Article 10 of the Bill of Rights grants the defendant the right to a fair hearing.

6.I am satisfied on the authorities that it is a condition precedent to the exercise of my discretion to permit the trial to proceed that the prosecution should have taken all reasonable steps to secure the attendance of these missing witnesses, and for that proposition, I rely on the English Court of Appeal case of Queen v Cavanagh & Shore [1972] 1 WLR 676.

7.The two missing witnesses are not residents of Hong Kong, they are Chinese nationals residing on the Mainland. The Independent Commission Against Corruption has taken witness statements from them and informed them well in advance of the trial dates of the need to come to Hong Kong and attend this trial as witnesses. The ICAC have also liaised with Mainland authorities, namely the Guangdong Procuratorate with a view to securing their attendance at this trial.

8.On Friday of last week, 25 October, however, the ICAC was informed by the procuratorate that the two witnesses refused to come to Hong Kong to testify at this trial. The reason the witnesses gave was that they were too busy. The prosecution has simply no power to compel Mainland residents to come to Hong Kong and testify.

9.I am satisfied in all the circumstances that the prosecution in this case has taken all reasonable steps that it was able to take to secure the attendance of these two witnesses at this trial. Nothing will be served by my adjourning this trial since there is no reasonable prospect that their attendance could be secured within a reasonable time, or at all.

10.My view of the authorities on the issue of a stay of proceedings is that the staying of criminal proceedings is only justified in highly exceptional circumstances - for example, if it is impossible for the defendant to have a fair trial. The burden of proof is on the applicant; the standard of proof is that of a balance of probabilities. The applicant in this instance has to prove that the evidence which the missing witnesses could have been expected to have given is of such a material nature that he would not receive a fair trial in the absence of those witnesses, and further, that there is nothing that I could do which would give relief against the unfair consequences of continuing the trial in their absence.

11.I have had to consider therefore the importance of these missing witnesses to the case, although I should add that the mere fact that the missing evidence is not so crucial as to be determinative of the issues in this case is not a bar to my exercising my discretion in favour of the applicant, and that proposition can be found in the District Court case of Lan Tat Chung, which was DCCC 342 of 1993.

12.I have therefore asked myself the question: to what extent would the evidence of the missing witnesses have been likely to assist the defendant? To do so, I have considered the witness statements made by these missing witnesses. I have therefore followed the approach set out by the Court of Appeal in Takeshi Machiya, which was Criminal Appeal No. 332 of 1989. The prosecution case against the defendant - and that is according to its opening, most of which of course remains unproved at this early stage of the trial - is that the defendant, with intent to defraud, used a company under his control, China Sources, and its branch business, which bore the name of Chit Lik Stainless Steel Manufacturing Company, to place orders with certain suppliers and then resell the goods at an inflated price to an overseas company Ellos AB, which was a fellow subsidiary company along with the defendant's own employer of the Redcats Group.

13.The missing witnesses, Yan and Yi, were related to two of these suppliers. Yan was effectively the owner and boss of one of them, that is the Ningbo Kaibo Group Company Limited, which I will from here on refer to simply as Kaibo. Yan has made two witness statements in which he provided details of the business transactions between his company and China Sources. He stated that the representative of China Sources with whom his company had dealings was a Mr Chan. Communications with Mr Chan were over the telephone or by e-mail. He did not know, it is apparent from his statement, the full name of Mr Chan.

14.Defence counsel submitted that were he given the opportunity to cross-examine Yan he would hope to establish that the Mr Chan Kaibo had dealings with was not the defendant. It seems to me, however, that since, according to his witness statements, the communications with Mr Chan were not face to face, it is more likely than not the cross-examination of Yan would be unable to establish this. Accordingly, I am not satisfied on the balance of probabilities that Yan's evidence would have been of assistance to the defendant and I decline to stay proceedings on the grounds of his absence as a witness.

15.According to her witness statement, Yi was the marketing manager of a supplier known as Xinbao Electrical Equipments Company Limited, which I will simply from here on refer to as Xinbao. Her statement was supportive of the prosecution case in as much as she stated that China Sources was neither an agent nor a subsidiary of her company, and it is of course the prosecution's case that false representations were made by the defendant to the effect that China Sources was effectively in an agency position.

16.In her statement, Yi stated that she had business dealings with China Sources and they were conducted essentially on behalf of China Sources by a man called Li Yuk-ping. She had not only spoken to this man, but met him. She also had contact with a second man bearing the name Chan Hiu-nam. He was another representative of China Sources whose business card was given to her by Li Yuk-ping. She had also met a man called Deacon Chan, and it is an admitted fact adduced already at this trial that the defendant is known by that name. Deacon Chan was introduced to her by Li Yuk-ping and he was introduced to her as an employee of Redcats Asia Limited.

17.Defence counsel has submitted that serious prejudice is caused to the defendant's case if this witness is not called. The defence case is, so I am told, that the defendant had nothing to do with China Sources and that he had not knowingly or deceitfully made false representations because he himself was misled and lied to about China Sources by Li Yuk-ping. Defence counsel submitted that Li Yuk-ping was a man of low character as Yi also stated in her witness statement that he sought a secret commission from her. Her evidence could also establish, defence counsel submitted, that the defendant had not sought to conceal either his identity or his job position at Redcats Asia Limited from her.

18.Now, I do agree that based on the contents of Yi's statement and assuming that she came up to proof, that it is likely that Yi's evidence would have been useful to the defendant in bolstering his case that it is another man, Li Yuk-ping, and not the defendant who is essentially the operator of China Sources, and furthermore, that Li is an unscrupulous man. I have to say however that I am not satisfied on a balance of probabilities that the evidence which Yi could have been expected to have given is of such material and fundamental nature that it would be impossible for the defendant to have a fair trial in her absence.

19.Certainly, as is clear from the case of another authority which was submitted to me, the case of Holgate, certainly I will have to consider in due course before reaching a verdict the extent to which the defendant might be handicapped by Yi's absence and I will have to direct my mind as to how the unavailability of Yi affects the issues that I have to determine. Provided I do so however, I believe that this defendant will have a fair trial. Accordingly, I decline to grant the stay of proceedings applied for and order that the trial do continue.

Representation:

Present: Mr Edwin Choy, instructed by Messrs Haldanes, for the Defendant

Mr Sharman Lam, SGC, of the Department of Justice, for HKSAR