R. v. LAU YUK WAN

IN THE COURT OF APPEAL

1996, No. 389
(Criminal)

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J U D G M E N T

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Mayo, J.A. (giving the judgment of the Court):

1. The applicant was convicted by Deputy Judge Brazier in the District Court of delivering counterfeit notes contrary to s99(1)(b) of the Crimes Ordinance, Cap 200. He seeks leave to appeal against this conviction.

2. It was evident from the summary of facts which was prepared by the prosecution shortly before the trial which took place in June 1996 that the prosecution was claiming Mr Hans Schade a U.S. citizen had acted as an "informant" in assisting the US authorities in a joint operation with the Commercial Crime Bureau.

3. Mr Schade was apparently instrumental in setting up the meeting in Room 1808 at the Wharney Hotel in Wanchai on 24 September 1995 when the applicant was introduced to the principal prosecution witness Mr Zygowicz an agent of the US Government.

4. Mr Zygowicz gave evidence to the effect that the applicant attended at this meeting and was known to Mr Schade who was also in attendance.

5. The applicant had offered to sell Mr Zygowicz both genuine old US banknotes as well as counterfeit money. He had produced from his pockets several bundles of US$100 federal reserve notes. It was the prosecution case that these notes were counterfeits of a 1934 series of issue.

6. There had been discussions concerning the obtaining of further counterfeit notes and concerning the price which would be payable for these notes. According to Mr Zygowicz after some haggling it was agreed that the price which would be payable would be 20 cents to the dollar.

7. At a late stage in these discussions Mr Schade feigned sickness and withdrew from the room. Shortly after this police officers came in and the applicant was arrested.

8. When the applicant was arrested he immediately indicated that Mr Schade would be able to confirm that the notes were genuine notes. Accordingly it was known to the prosecution that Mr Schade was a material witness.

9. The defence run by the applicant at trial was that the meeting on 24 September 1995 was only one of a series of meetings and discussions which the applicant had had with Mr Schade. These negotiations related to a perfectly proper attempt by him to sell genuine old banknotes he had succeeded in tracing in China. Mr Schade had been assisting him in these endeavours and the purpose of the meeting in question was to attempt to bring to a successful conclusion these efforts and effect their sale.

10. The perfected grounds of appeal relate to the difficulties and problems which inevitably confronted the defence as a consequence of the failure of the prosecution to obtain a statement from Mr Schade who left the jurisdiction almost immediately following the applicant's arrest.

11. An application was made to the judge for a stay of the proceedings pending the defence being able to call Mr Schade as a witness. This application was refused. The basis of the refusal was the inability of the parties to locate this gentleman.

12. The first question which has to be considered is the duty of the prosecution in these circumstances. There would appear to be no doubt that Mr Schade was in a position to give material evidence as to what had transpired. Indeed he was one of the central figures in the whole transaction.

13. It would also appear that the prosecution were aware of the fact that shortly after 24 September he would be returning to the USA. Having regard to the fact that the applicant had immediately indicated that Mr Schade would be of assistance to him in his defence Mr Grossman for the applicant submitted that there was a clear duty imposed on the prosecution to obtain a statement from him.

14. Mr Zervos for the Crown accepted that the matter could have been better dealt with and that a statement should have been taken from the witness before he left the territory. He contended however that Mr Schade had been a "participating informant" and that it was always open to the Crown to call or not to call any witnesses they chose to give evidence in any case.

15. We do not consider that the description of Mr Schade as a "participating informant" is of much assistance. He was not an informant in the usual sense of the word as his identity was known to the applicant. What has to be considered is the scope of the responsibility of the Crown for making available information concerning a material witness able to testify on matters central to the proceedings in question.

16. Mr Zervos accepted that he had a duty to disclose any evidence which might be of assistance to the defence case. However he confirmed to us that his instructions indicated that no such material was available to him. While this no doubt may be true it is not germane to the problem which arises in this case.

17. We have no doubt that in the circumstances of this case it was incumbent upon the prosecution to obtain a statement from Mr Schade particularly as he was one of the key witnesses as to what had transpired at the meeting and more particularly having regard to the fact that the applicant had stated when the officers entered the room that Mr Schade would be able to substantiate the fact that he had thought that the notes were genuine. Indeed there is no material before us which would indicate even that the prosecution obtained confirmation from Mr Schade that this claim was not well founded.

18. The next matter for us to consider is the consequence of this. At the end of the day the real consideration is whether the applicant received a fair trial.

19. Mr Zervos submitted at some length that the case against the applicant was an overwhelmingly strong one and that it was virtually inevitable that he would have been convicted notwithstanding anything that Mr Schade may have been able to say.

20. With respect this cannot be right. The simple fact of the matter is that we do not know what Mr Schade might have said. It would not be right for us to attempt to speculate what his evidence may have been and there must be at least a possibility that his testimony may have cast doubts upon the case being made out by the prosecution.

21. The result of this must be that this conviction is unsafe and unsatisfactory. The application is allowed and treating it as the appeal the appeal is allowed and the conviction is quashed.