THE QUEEN v. JAMES COE AND OTHERS

Headnote

Estreatment of surety - unusual method of approving sureties in the Magistrates' Courts - principles.

IN THE SUPREME COURT OF HONG KONG

(Criminal Jurisdiction)

HIGH COURT CRIMINAL CASE 320 OF 1989

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BETWEEN

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J U D G M E N T

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1. This is an application under Section 45 of the Criminal Procedure ordinance calling upon Dr. Hau who stood surety for a defendant, James Coe in the sum of one million dollars, why he should not have that sum of money estreated.

2. The background is as follows: Mr. James Coe was a chairman of a public company and well-respected businessman in Hong Kong, and was committed to stand trial in June 1989 on a number of serious fraud charges in relation to the offer for sale to the public of a fraudulent document which would have netted him many millions of dollars. His secretary and a clerk in the finance department were also committed.

3. The trial would not come on for some time, and the Crown therefore did not oppose bail as long as it was of sufficient amount. He was granted bail: five hundred thousand cash; his own recognizance of eight hundred thousand; and one surety of a million dollars. He was also ordered to surrender his travel documents.

4. The magistrate made this order, but according to the then procedure, which unfortunately still appears to be so, permitted the surety to be taken in front of his first clerk. A priest presented himself saying that he had five thousand dollars in a bank account and an annual income of a hundred and fifty thousand and he was apparently approved to stand surety for one million dollars.

5. I confess I fail to understand how he could ever have been approved; and the procedure in the magistrate's court must to be changed.

6. A month or so later, Dr. Hau, who was a nephew of Mr. Coe, was substituted as surety. He appeared in court and he signed an application form, but he does not appear to have been examined by anybody as to his means at all. His means in fact were twenty-five thousand dollars a month as a Hong Kong University lecturer and something like a hundred odd thousand dollars capital. He also should not have been approved.

7. The trial eventually was fixed for October 1st 1990. On August 9th, James Coe appeared in front of me to vacate the date saying that he had some problems with his lawyers, and it seemed fair to me that the trial should be postponed. A pretrial review was ordered on September 25th and the trial fixed for November 6th.

8. On the pretrial review, Mr. Coe appeared and made an application again to postpone the date or change his counsel. The trial was fixed for November 12th and Mr. Coe was told that that trial date would not be altered. Mr. Coe left Hong Kong on October 1st, and has never returned.

9. At the conclusion of the trial of the other two defendants, I forfeited half a million dollars cash bail by Mr. Coe and also the eight hundred thousand dollars as surety.

10. Shortly before Mr. Coe left, on the September 28th, Dr. Hau left his employment in the University to take up employment with the World Bank.

11. The Crown have now, as I have said, made an application that Dr. Hau should have his bail estreated.

12. As far as the law is concerned, the Ordinance permits me to make such order as may be just. It is therefore right that I should have regard to all the circumstances of the case.

13. In Keung Cam-yuen, 1988, 1 Hong Kong Law Reports, 427, the headnote reads:-

"There was a heavy obligation upon a surety to ensure that the person for whom they had become responsible attend court. Sureties ought to pay the money they had promised to pay, or to forfeit the money they had placed in court, unless there were circumstances, relating either to means or culpability, which made it fair or just to pay a smaller sum."

14. However, Silke V-P at page 428, when reciting the facts, said:-

"I would emphasize that both those sums were cash sums, not recognizance in the sense of a promise to pay."

15. In Wan Shui-Ying v. Attorney General (1990) 2 HKLR 139, the Court of Appeal said:-

"We are of the view that where cash surety is provided the instances where that should not be forfeited in its entirety when the conditions are not met must be rare indeed. ... As was said in Keung Cam-yuen, when cash is provided the court would not normally go into the background of the surety and his/her means to pay the amount in the event of, the accused person absconding."

16. In cash bail, or cash surety the money is in court available to be estreated. In my judgment, the court has a wide power, when asked to estreat a sum promised by a surety, to examine not only the financial ability of the surety to pay and any hardship likely to be caused, but also all the relevant facts surrounding the surety's, appointment and conduct.

17. There were, in my judgment, a number of very unusual circumstances in this case. First of all, the taking of sureties in the magistrate's court appears to me to be a very haphazard and inappropriate method of discovering whether a surety is of sufficient calibre to pay if so called upon to do.

18. What appears to happen is that someone goes in front of the first clerk; he fills up a piece of paper and just approves it. In my judgment, that is wrong. The obligation is on the magistrate. In this day and age with the Bill of Rights upon us, bail applications are treated in a different light, and on many occasions substantial sums of bail money are ordered by the courts.

19. If a magistrate's court makes an order for a substantial sum, in my judgment, there is an obligation on the magistrate personally to inquire into the means of the surety to pay. Of course, if the sum is deposited in court, it is there, but if it is a promise to pay, the magistrate should inquire whether the promise can be kept. He should look at documents and ask questions.

20. In the High Court the practice is just that. When a person appears in front of me and puts forward a surety, I ask the surety to attend court, take the oath, and he is personally examined. He produces documents, such as bank statements, passbooks, share certificates and deeds of property; and he is closely questioned as to his ability to pay if so called upon.

21. In that way, when an application is made to estreat bail, the court has a record of what occurred, and indeed a judge would know that the surety was in a position to pay and has been told that he would have his money forfeited if the defendant did not appear.

22. That does not appear to have happened here. Dr. Hau obviously knew that he had to pay the sum of money, but there was no examination and, that is a relevant factor for me to take into account. In my judgment, magistrates are abrogating their duty if they pass on this obligation to clerks because otherwise they should not grant bail unless they are of the view that the surety is of a sufficient calibre

23. What had happened was that James Coe over a number of hours had persuaded his nephew to stand surety.

24. I confess that I can understand that, having tried this long trial and seen how this so-called businessman, who was nothing more than a fraudster, was able to persuade and involve people to take part in his fraudulent methods and manipulate them.

25. Dr. Hau has flown over from America to give evidence and he has at the moment earnings of some HK$41,000.00 per month from the World Bank. He has $40,000.00 cash savings and his wife a similar amount, and he owns a sixth of a property in San Francisco owned by other members of the family, about HK$170,000.00. He makes substantial contributions from his earnings to evangelical organizations. He is obviously a thoroughly respectable and highly reputable man who finds himself in this terrible position now called upon to pay a million dollars. He is totally unable to pay that, and in my judgment it would be quite unjust, having regard to the facts of this case, to make him pay that substantial sum.

26. Counsel for James Coe persuaded the magistrate that the defendant's passport should be given back to him for the purposes of his travel abroad.

27. That, in my judgment, was a slightly naive decision by the magistrate because it placed the officer in charge of the Commercial Crimes Bureau in a difficult position, having to assess whether or not there was some genuine business arrangement. Again, the procedure that should have been followed was that an application should have been made to court and the responsibility taken on by the magistrate in the same way as applications are made in the High Court for returns of passport.

28. In my judgment, that was an inappropriate order for a magistrate to make. Each application to return a passport should be assessed on its particular merits.

29. Dr. Hau was at fault in not notifying anybody on the 28th of September that he was taking up employment outside Hong Kong. He should himself have come to court and either asked for his surety to be withdrawn or dealt with in another manner. He was obviously hoping that Mr. Coe would continue to attend court as he had done on a number of occasions.

30. In my judgment then, when I look at what order I should make, I have had regard not only to the means of Dr. Hau but also as to his conduct which I cannot find in any way reprehensible, and the method of him entering into this surety which was haphazard and inappropriate. The court is placed in a difficult position in making orders against people who really are unable to pay them.

31. I also have regard to the fact that I have already forfeited half a million dollars in cash and made an order for forfeiture of eight hundred thousand as far as the defendant is concerned.

32. It gives me no particular pleasure, having to make an order against someone who is not in a favourable financial position, but in my judgment, I would be failing in my duty were I not to make an order for estreatment of some of this money to demonstrate that sureties must pay if called upon.

33. Having regard to all the circumstances of this case, the conduct of Dr. Hau, the unusual method of taking up this surety, the unusual procedure of the magistrate making an order that put an invidious task on the officers of the Commercial Crimes Bureau, I consider that the appropriate order here to make is that he should forfeit $250,000.00.

34. There should be time to pay that sum of money; $100,000.00 should be paid in three months' time and the balance by December 31st 1992.