HKSAR v. HO CHI HO

CACC 468/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 468 OF 2002

(ON APPEAL FROM DCCC 702 OF 2002)

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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 11 September 2002, following a trial in the District Court before Deputy Judge Mackintosh, the Applicant was convicted of three charges under the Copyright Ordinance, Cap. 528, and was subsequently that day sentenced to a total term of two and a half years' imprisonment. The Applicant's co-defendants (D1 and D2) each pleaded guilty to the charges they faced.

2. The Applicant now seeks leave to appeal against conviction on all charges.

3. The facts could not have been more straightforward and the issues over which there existed any dispute were equally simple. The judge set out the essential framework of the case in succinct terms when delivering his verdict. He said:

"2. On the 1st Floor of Peony House in Foo Kwai Street, Tai Kok Tsui, are two flats, Nos. 128 and 130. On 29 June 2001 customs officers were keeping them under observation. In due course a man called Wong Kwok-man, who is D1 in this case, came out of Flat 128 carrying a cardboard box in which there were 450 CD-ROMs, of which 10 were ultimately proved to be infringing copies.

3. Inside Flat 128 was another man called Wong Sai-wing, D2. Customs officers discovered that the flat was being used as production centre for CD-ROMs, VCDs and music CDs. This was not a large factory with huge machinery and CD manufacturing plants. This was of the cottage industry variety becoming more and more familiar, I might say, to judges in these courts. Production was by the use of computers, CD-writers and replicators: CD-burners. There were three sets of computers driving a total of 24 CD-writers and there were five sets of replicating machines, each with five CD-writers. So that is nearly 50 devices capable of producing optical discs. Some of them were actually in operation at the time of the raid. Also in flat 128 was a large number of already recorded optical discs, nearly 10,000 in all, of which some 770, which are those listed in the charges, were infringing. And there were 4,500-odd blank recordable CDs. All this is graphically illustrated in the photographs of Flat 128 (Exhibit 15, Nos. 1 to 20 and Exhibit 17).......

5. At the time of the raid on Flat 128, D3 was in the other flat being targeted by Customs & Excise, Flat 130, two doors along the corridor. Customs officers gained entry to that flat. ....... Inside they found a total of 6,000 blank recordable CDs (shown in photographs Exhibit 15, Nos. 20 to 27). They also found a bunch of keys, one of which fitted Flat 128.

6. These facts are not in issue. Indeed, they form the bulk of the written admitted facts which have been agreed in this case. D3 was arrested and interviewed. The interview record is Exhibit 21. Its admissibility was not challenged. The defendant said that Flat 130 was his home and that he lived there alone. The 6,000 blank discs, which he knew to be blank recordable discs, belonged to his friends Ah Man and Ah Wing who lived next door. They had said that they did not have enough space for them and they asked him to store them. At first he said that he did not know the full names of these neighbours because he was 'not quite acquainted' with them, and then he said that he himself had previously rented No. 128 but he owed rent and so he moved to No. 130 and recommended the others to rent 128. The key to 128 was in his possession because earlier in the month he had hurt himself in his own shower/lavatory cubicle because it was too small, so he has asked Ah Man to let him use the bigger bathroom at 128. Ah Man agreed and gave him the key. He had gone there several times but only to use the bathroom. He had never done more than go in through the front door and into the bathroom, and he could not therefore 'clearly see' the set up inside........

8. ....... He said that he turned left to go into the bathroom and immediately after using it he would leave so as not to disturb the occupants. He could see the two of them playing computer games and watching TV.

9. This then was the defendant's account in June 2001. He has elected not to give evidence in this trial......

10. So there is no question that there was an illicit CD production operation ongoing in Flat 128. The question is whether the defendant was a party to it and the ordinary criminal burden and standard of proof are to be applied to that question. The charges must be considered separately. There is no direct evidence of the defendant's participation, it is a question of what inferences can properly be drawn from the proven facts, proper inferences being the only reasonable inferences." (Appeal bundle pp. 22-25)

4. The judge then dealt with some of the evidence given by witnesses called on behalf of the prosecution and defence. In particular, dealing with the tenancy at Flat 128, the judge said:

"12. ....... PW2 was the landlord, PW3 his son who said he dealt with the collection of rent. DW2 was the son-in-law of the landlord who claimed it was he who had dealt with the rent, and DW3 was the tenant who was in fact at the material time the wife of this defendant. This issue goes to the defendant's association with Flat 128 at the time of the raid, whether he had effectively severed his links to it or not.

13. The uncontroversial evidence in this respect is that in October 2000 PW2 let Flat 128 to DW3, Li Fei-yin. She signed the tenancy agreement (Exhibit 24) although not in his presence...... A deposit of $6,600 was paid. The rent was $3,300. According to PW2, the landlord, it was reduced to $2,500 from April 2001. He said that there were no arrears of rent up to the time of the raid and that the rent was collected by his son, PW3.

14. PW3 himself said that he collected the rent almost always from DW3, the tenant, and usually in a restaurant. DW3 on the other hand maintained that he had never collected the rent from her, that she moved out in January 2001 because she was divorcing the defendant and she said that she had paid the deposit to DW2, the landlord's son-in-law.

15. The landlord himself, PW2, had a book of receipts. PW3 said that he had checked those receipts at the time and handed them over to DW3, and he insisted that his brother-in-law did not collect the rent.

16. DW2's evidence was that he collected the rent from the defendant and that is to say that the defendant was paying throughout the relevant period. Then in about early February, according to DW2, the defendant said that he wanted to give up the flat because it was too big. He then took on the other flat at 130 but continued to pay the rent of 128.

17. The other evidence in the case came from D1 who was called by the defendant as DW1. He said that he and D2 rented Flat 128 from D3 for $3,500 in April, that he moved in in April and that the defendant then moved to Flat 130.......

19. It can be seen from this narrative of the evidence that the prosecution case relies on the inferences to be drawn from three elements: (a) the defendant's close association with Flat 128, (b) his possession of the key to that flat, and (c) his possession of equipment, that is the large number of blank recordable CDs, in Flat 130. These elements are not to be seen in isolation from each other; simply putting them into compartments would be wholly unrealistic. This is a course of conduct which, it is alleged, leads inevitably to the conclusion that the defendant was party to the operation in Flat 128 and therefore party to the offences which were thereby committed." (Appeal bundle pp. 25-27)

5. Against this background, Mr David Ma, on the Applicant's behalf, submitted firstly that when the judge said, in relation to who collected the rent and from whom, that this was an issue which went to whether the Applicant "had effectively severed his links (with the flat) or not", this suggested that the burden had shifted onto the Applicant to prove that he had done so.

6. The judge had made no such error and, when giving his reasons for arriving at his verdict, the judge went into considerable detail setting out precisely his approach to this important issue in the case. As to this, the judge said:

"20. The defendant's links to Flat 128 are well established. He was the husband of the nominal tenant and he lived there for a time. The defence submit that the evidence shows that he had largely severed those links by the time of the raid. I am sure that is not the case.

21. There are conflicts as to who paid the rent for Flat 128 and whether it was in arrears. PW3, the landlord's son, insists that it was DW3 who paid and that she paid mostly on time and that any late payments were subsequently made up. I have considered carefully whether he is a witness that I can trust. I am sure I can. He has no possible motive to lie about the matter and none has been suggested. He was able to specify not only that it was the tenant, the defendant's wife, with whom he dealt on all but two or three occasions, but also that the transactions usually took place at a restaurant. He was asked in cross-examination to look at the defendant in the dock. He had never even seen him before he said, and he did not know the names of the other defendants. He was able to say from the rental receipt book kept by his father, which he had checked contemporaneously, that the rent had been reduced at the request of the tenant in about March or April 2001. His brother-in-law had not been involved in collecting the rent but he did have the job of fixing faults in the premises if necessary.

22. This evidence from PW3 has all the hallmarks of an unvarnished account of the facts. There was no hint of embellishment or exaggeration. I am sure that he had not made some sort of mistake. He was too careful a man to have done that.

23. The contrary evidence comes from DW2, his brother-in-law, with his account that he collected the rent from the defendant, either at Flat 128 when he went and knocked on the door, and subsequently when the defendant had moved to Flat 130. DW2's evidence did not coincide with the defendant's account in interview in that he said the defendant had moved out because 128 was too big for him. The defendant said that it was because he was in arrears with the rent.

24. But DW2 was not a believable witness for other reasons. Firstly, when he was asked in-chief who gave him the rent, he said it was a man called Lam, then he corrected himself, 'It should be a man called Ho,' he said. Ho is D3's name. He recognised him, he said, as the defendant in the dock. But he did not reveal anywhere in his evidence a fact which DW3, the defendant's wife, let slip: that he and the defendant were friends from before the time when the flat was let to her. The whole tenor of DW2's evidence was that he did not know the defendant very well. He kept referring to him as 'the man surnamed Ho'. He did not know the relationship between the defendant and the tenant. Yet DW3 agreed that of course he knew they were husband and wife because they were friends.

25. When he was asked in-chief the general question, 'Did anything else happen?', DW2 suddenly volunteered that in early June the defendant had hurt his leg. This of course is an essential part of the defendant's case because it is the means by which he justifies his possession of the key to Flat 128. When DW2 was asked by me why he had mentioned that in the context of the case and why he thought it was significant, he tried to suggest that he had been directly asked about it, but he had not. When asked how he knew he had hurt his leg, he said that he saw him limping when he came to answer the door - the door happened to be half open, a contrived explanation in my judgment. This aspect of his evidence was plainly 'made to order'. It was not a spontaneous recollection of events. It was said because he had been primed to say it. DW2 was not truthful.

26. I have not lost sight of the fact that DW3, the wife, also said that she had not paid the rent to PW3, the landlord's son. I disbelieve her with regard to this. Not only was her evidence on the matter at odds with DW2, it cannot stand against that of PW3. I am sure that the rent was paid and it was paid by DW3 and payments continued, if not always on time, then with regularity up to 10 June 2001 when the last payment before the raid took place. The defendant was not paying it directly himself, but he was closely associated with it. He had not broken his links in this regard to Flat 128.

27. He was of course in possession of the key to 128, he says because of his injured leg and the permission to use the bathroom. It should be noted that no injury was noticed by the arresting officer, PW4.

28. D 1 was called to give evidence and he too testified as to the bathroom story. He said he told the defendant only to use the bathroom, that he should not tamper with anything and should leave immediately after using the bathroom. He maintained that the defendant was not involved in the CD production and that he has asked the defendant if he could place the blank CDs in his Flat 130 because there was no room at 128. But this witness shifted his ground as he went along with regard to his own association with the flat and as to the defendant's involvement with it, from having moved in to live there to making rare visits with his girlfriend, as to whether he had got D2's agreement to lend him the key, and as to the reasons why he had asked the defendant not to tamper with anything.

29. Furthermore, the idea that two people involved in running a counterfeit CD operation would lend a key to someone unconnected with it, with a simple injunction that he was not to go further than the bathroom, is inherently unrealistic. The suggestion that the defendant would find his own bathroom cubicle so unsuitable, small though it was, that he had to go to another flat, is implausible. The nature of the alleged injury is unspecified and how it occurred is not explained. There is no evidence that any medical treatment of the sort one might expect was sought. I am sure that the injury claim is a bogus story put up to justify the defendant's possession of the key.

30. If he had truly moved out he would not have had the key. If he were making bathroom visits to the flat of people who claimed to be his friends, it is inevitable that he would have seen inside the main part of the room and would have seen the computers and other equipment. There can be no truth in his assertion in interview or in Dl's evidence that he went to the bathroom and no more." (Appeal bundle pp. 27-31)

7. This ground was without any substance.

8. In the second ground of appeal, it was submitted that the judge had erred in drawing inferences of guilt when the primary facts did not lend themselves to the conclusions he had drawn.

9. Again, this is a wholly baseless ground of appeal. The judge had referred to the importance of looking at the evidence as a whole. Not least amongst the vital pieces of evidence was, as Mr Ma accepted, the fact that Flat 128 was being used as an illicit CD production centre. The Applicant had a key to that flat and was living at Flat 130 which was being used to store 6,000 blank compact discs which were suitable for the process being undertaken in the neighbouring flat at 128. In relation to these discs, the judge said:

"31. The presence of the blank CDs in his flat was highly significant. He knew what they were as he admitted. It is clear from the photographs that there was enough space in Flat 128 for the boxes of CDs (see the photographs Exhibit 15) to be stored. Furthermore, Dl's claim that the defendant did not ask why Dl and D2 had 6,000 blank CDs, is inherently unbelievable. The defendant, even on the bathroom visits which he admits making, would have seen the blank CDs stored in the hallway of Flat 128 (see photographs 7 and 8 of Exhibit 15). I am sure that the claim that so far as the defendant was concerned, these were being stored in Flat 130 for some innocent reason is entirely false. They can only have been there because he was involved in what was going on at Flat 128." (Appeal bundle p. 31)

10. The Applicant's witnesses were disbelieved and the Applicant himself gave no evidence at all. The judge was fully entitled to have drawn the conclusions set out in his Reasons for Verdict.

11. Mr Ma complained in his third ground of appeal that the judge had wrongly used a number of "out-of-court lies" in coming to the conclusion that the Applicant was a party to the operation at Flat 128. Again, this ground, insofar as it suggested that the judge had approached this issue wrongly, had no proper foundation. In relation to this, the judge said, in words which are not open to criticism:

"32. It follows from what I have said that the defendant lied in his out of court statement to the Customs & Excise with regard to the reasons for his possession of the key to the flat and with regard to his claim that he did not see further than the hallway to Flat 128 and the bathroom, and with regard to the reason for the presence of 6,000 blank CDs in his flat. I have considered whether there could be any innocent reason for such lies, bearing in mind that innocent people sometimes do lie to bolster their position. I am satisfied that there is none. I am sure that these were deliberate lies relating to material issues and that the only explanation for them is that the defendant was seeking to conceal his continued association with Flat 128. The only available inference from the lies and from the combination of the facts of the possession of the keys and the blank CDs is that he was party to the production of the CDs in Flat 128.

33. The prosecution must of course prove more than that the defendant knew about the illicit CD production operation in Flat 128. Mere knowledge or even his presence in the premises is not enough to make him a party to any criminal enterprise. It must be proved that he joined in and was party to a common design involving the commission of the alleged offences.

34. I find that the only possible inference to be drawn from the facts is that the defendant was indeed engaged in a joint enterprise with at least D2 to produce the optical discs in Flat 128 by the means I have described." (Appeal bundle pp. 31-32)

12. There was nothing about the convictions recorded against the Applicant which was unsafe or unsatisfactory. The inferences drawn by the judge were inevitable once he had rejected the evidence called by the defence for the intended purpose of showing that D3 had severed his links with Flat 128.

13. This application has been wholly without merit and it is dismissed. Indeed, for the reason that it was wholly unmeritorious, we shall order, under the terms of section 83W of the Criminal Procedure Ordinance, Cap. 221, that two months of the time which the Applicant has spent in custody shall not be counted towards the sentence he is presently serving.