HKSAR v. LEE CHING KAI

CACC 544/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

criminal APPEAL NO. 544 OF 2003

(ON APPEAL FROM DCCC NO. 650 of 2003)

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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):

1.  On 25 June 2004, this court (differently constituted) handed down the judgment in HKSAR v Leung Wai-kei, Ricky (also CACC 544/2003) in which we allowed the appeal against conviction in the District Court by Judge Chua of the present applicant’s alleged co-conspirator (Leung).  The particulars of the charge of conspiracy to forge documents, contrary to sections 71, 159A and 159C of the Crimes Ordinance, Cap. 200, against Leung and the applicant alleged that between about 11 April 2002 and 24 April 2002, they conspired together to:

“… make instruments, namely (a) a City University of Hong Kong purchase order numbered 502722 dated the 27^th day of March 2002 (CityU PO) and (b) an invoice and a delivery order of Roctec Technology Limited both numbered V56271 and dated the 8^th day of April 2002 (collectively referred to as “Roctec Documents”), which were false in that (a) the CityU PO purported to be made in the terms in which it was made by a person who did not in fact make it in those terms and (b) the customer and the description of products which appeared on the Roctec Documents had been altered, with the intention that the said LEUNG Wai-kei or another should use them to induce somebody to accept them as genuine, and by reason of so accepting them to do or not to do some act to his own or any other person’s prejudice.” (Appeal bundle p. 2)

2.  The background to the case was set out by Beeson J in the judgment of this court at paragraphs 4 to 8 which we simply repeat for ease of reference.  The present applicant is referred to as D2:

“	4.	The facts alleged by the prosecution were set out clearly, in detail, by the prosecutor in opening the trial and that opening was relied on in these proceedings as setting out accurately the background to the alleged offences.
	5.	At the date of the alleged offences [Leung] was the sole representative of 3Com Asia Pacific Rim Ltd (3Com Asia), the Hong Kong subsidiary of a network product manufacturer (3Com Corporation) based in the USA.  His co-defendant (D2) was a Sales Director of Roctec Technology Ltd, an authorised distributor of 3Com Asia’s products, which could sell only to “resellers” and through them to authorised “end-users”.  Special discounts were given through this approved distribution arrangement.
	6.	Put simply, it was the prosecution’s case that [Leung] and D2 forged a purchase order for 3Com Asia computer parts, falsely naming the end-user as City University of Hong Kong, supported by an invoice and a delivery order in the name of Roctec Technology Ltd.
	7.	The purpose of the fraud was to enable [Leung] and D2 to circumvent a prohibition imposed by 3Com Corporation on a company known as Cobra Computer Tech. Ltd (Cobra) because it believed Cobra might sell 3Com Corporation products, which it had obtained at the special discount rates, at higher prices in the “grey” market in Europe, in breach of the distribution arrangements put in place by 3Com Corporation.  In the present matter, Cobra was in fact the end-user.
	8.	It was alleged that [Leung] and D2 devised the fictitious purchase to obtain goods at a special price, which would not have been available to Cobra, if Cobra had been known to 3Com Corporation as the true end-user.”

3.  In the particular circumstances which have arisen, it is not necessary to go more deeply into the facts for the purposes of the present application.  This is because, in finding Leung as well as the applicant in this case guilty of conspiracy, the judge in her Reasons for Verdict said:

“	The issue
	21.	As the 2nd charge accuses the defendants of conspiring together to make the false documents ‘with the intention that [Leung] or another use them to induce somebody to accept them as genuine, and by reason of so accepting them, to do or not to do some act to his or another person’s prejudice’, then, if I found either that:
		(1)	on the balance of probability, the evidence shows D2 was acting on his own to deceive [Leung] and 3Com; or
		(2)	[Leung], to cover his role in the SPQ applications, convinced D2 to produce the false documents only for internal filing purpose, and D2 did not realise this was to cover up for [Leung];
		then the prosecution has failed to prove the charge beyond reasonable doubt.” (Appeal bundle pp. 43-44)

4.  In the earlier judgment in this matter, when Leung’s appeal was allowed, Beeson J said:

“	13.	In support of Ground 1, Mr Oderberg, counsel for [Leung], submitted that the judge had considered the appropriate test whether D2 had the requisite knowledge of the alleged forgery for the purposes of conspiracy, and said inter alia that the appropriate test as to doubt leading to acquittal is the balance of probabilities and, presumably, the judge had applied the same test to [Leung], or at least believed that to be the appropriate test.
	14.	This being so, if the judge had a reasonable doubt about the case against [Leung], she would have convicted if she believed that the case (in particular the requisite knowledge) had been established on the balance of probabilities.  It was submitted that the judge’s reasoning was erroneous and was fatal to the conviction.
	15.	Mr Shiu, for the Respondent, submitted that the portion of the judge’s reasons complained of, which he accepted had been very poorly expressed, did not reflect any error of reasoning.  He submitted that the judge appeared to be identifying the issues pertaining the 2nd charge and, in particular, that the evidence might point circumstantially to one or other of the accused creating false documents; but was reminding herself that she should be alive to any lack of evidence inferring a conspiracy with the other to create the same false documents.
	16.	Further, he submitted, for a judge with lengthy experience, this could not have been an error as to the burden of proof.  Mr Shiu pointed out that the judge’s comments were made after she had reviewed much of the evidence and found a strong substantive case against [Leung].
	17.	It is precisely because this is a judge with significant trial experience that this ground has caused us some concern.
	18.	We have not attempted to speculate about the precise meaning of the passage quoted.  The balance of probabilities was plainly wrongly referred to in the context and, more worryingly, it may have been relied on.  We are puzzled why the judge departed from the standard phraseology which would, if she had adopted it, have ensured that her Reasons for Verdict spelt out clearly what she meant.  We have concluded, therefore, that the judge may have applied the wrong standard in assessing the burden of proof.”

5.  In the concluding paragraphs of the judgment, Beeson J returned to this ground and a 2^nd ground which provided a further reason for allowing Leung’s appeal.  Again, for ease of reference, we will set out these paragraphs here:

“	CONCLUSION
	26.	Overall, we could not be satisfied that the judge had applied her mind correctly to the burden of proof, or that her use of D2’s statement vis-à-vis [Leung] had been proper.  We could see no reason to use the passage from D2’s interview unless it was for the purpose, as [Leung’s] counsel contended, of bolstering the case against [Leung].
	27.	Although it is possible, in respect of Ground 1, that the judge may have expressed herself infelicitously by departing from tried and tested forms of words, such departure raised the very real prospect that she had applied the wrong test in convicting [Leung].
	28.	The uncertainty as to whether the judge had applied the correct standard of proof, coupled with what can only be seen as an improper use of D2’s Video Interview convinced us that this was not a safe conviction.  Accordingly, we gave leave to appeal and, treating the hearing [as] the appeal, we allowed the appeal.”

6.  It was submitted in these proceedings that the same considerations should equally apply to the present applicant although he is considerably out of time in making his application for leave to appeal.  The reasons for this may in part be due to the fact that the applicant, like Leung, received a non-custodial sentence.

7.  Having considered the merits of the application, we are prepared to entertain the application out of time and furthermore to give leave.  Mr Gavin Shiu, on the respondent’s behalf, responsibly did not oppose this course accepting that the judge’s reference to the ‘balance of probabilities’ was made in circumstances which suggest that the wrong standard of proof had been applied.  However, he submitted that it was the combination of two errors made by the judge, in regard only to Leung, which led to the quashing of Leung’s conviction whereas there was, in the applicant’s case, strong evidence which independently established his guilt such as would inevitably have led to his conviction.  This, in the main, took the form of a confession recorded in the notebook of an ICAC investigator.  In addition, the applicant provided answers in 3 video-recorded interviews and he testified along the same lines at the trial itself.  The judge disbelieved his account that his whole purpose in making false documents was to cover up for internal purposes only, without any fraudulent intent.  This brings us back, in a full circle, to the incorrect burden of proof which was possibly applied by the judge.

8.  Whilst we accept that there was a strong case against the applicant, we do not consider that it would be appropriate in the present circumstances to apply the proviso.  Treating the hearing as the appeal, the appeal is allowed and the conviction is quashed for the same reason given in Leung’s case, namely that an incorrect burden of proof may have been applied to the judge’s assessment of the evidence.