HKSAR v. YIP YIU WING

DCCC892/2000

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 892 OF 2000

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RULING

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This is an application on behalf of the Defendant for costs following my earlier ruling of no case to answer. The reasons for my earlier ruling are already stated in written reasons handed down on 8 February 2001. In order to save costs, the parties have agreed that arguments over costs should be presented in writing without need for a formal hearing in court. I now have the parties' written submissions.

2. The Defendant relies on section 5 of the Costs in Criminal Cases Ordinance, Cap. 492 ("the Ordinance"). According to Mr. Lam, counsel for the Defendant, the Ordinance has altered the previous common law principle on costs in criminal cases:-

(a) Previously, the common law principle was that the prosecution should not apply for costs against a convicted defendant - see R v. Chan Chor [1968] HKLR 540. The entire Part III of the Ordinance (sections 11 - 14) has altered the previous common law position and laid down the rule that the court may award costs to the prosecution - there is no pre-condition for making an order for costs.

(b) Part II of the Ordinance confers unqualified power on the court to award costs to the Defendant.

(c) The court may award costs that is "reasonably sufficient to compensate any party to the proceedings for any expenses properly incurred by him in the course of those proceedings". See section 15(a) of the Ordinance In other words, a costs order is compensatory in nature.

(d) Of course, an order on costs must be "just and reasonable" - section 15(c) of the Ordinance.

3. Hence, the basic rule under the Ordinance is that an acquitted Defendant is entitled to an order for costs if he has incurred expenses in defending the charges against him. It is not necessary for him to justify his application.

4. Having said that, Mr. Lam accepted without any reservation that the court has a residual discretion to refuse an application of costs where, for example, a costs order in favour of the Defendant is "not just and reasonable". It therefore follows that the burden is on the prosecution, if it wants to, to establish the ground of "not just and reasonable".

5. Mr. Leung, counsel for the prosecution, did not quarrel with Mr. Lam over legal principles. Instead, counsel opposed the Defendant's application for costs on the basis that the Defendant by his conduct brought suspicion upon himself by setting up a firm with a name similar to that of the provider of transportation services and using the address and telephone number of that provider for his firm. Counsel said that this was to mislead others into believing that they were dealing with that provider.

6. I quite agree, indeed I have pointed out in open court, that the Defendant's use of a firm in the manner outlined above brought suspicion upon himself. However, it must also be noted that, whereas such suspicious circumstances justified investigation, suspicion alone is not always enough to mount a prosecution. For instance, a man having blood stain on his clothing seen running away from a murder scene may become a suspect. But if after investigation the police learn from independent witnesses that the suspect arrived at the murder scene only after the deceased had been slain and that the suspect ran away after stealing the deceased's wallet, obviously it would be grossly unjustified to prosecute the suspect for murder.

7. Mr. Lam summarized the weaknesses of the prosecution case as follows:-

(a) At the beginning of the trial, the prosecution case against the Defendant (as contained in the summary of facts), in a nutshell, was that he "inflated" or "overstated" the transportation costs from HK$360.00 per pallet of goods to HK$500.00 per pallet and "pocketed the price difference". The prosecution case necessarily contained an implied accusation that the Defendant dishonestly took the price difference because he did nothing other than issuing an invoice and he was not entitled to earn the price difference in a sum of HK$140.00.

(b) The court found that the (initial) prosecution case was not borne out by evidence called by the prosecution and, quite to the contrary, further found that the Defendant had done part of the transportation work in order to earn the money.

(c) When the court at the close of the prosecution case asked the prosecution to state its case clearly, the prosecution sought to argue a wholly different case against the Defendant. Nevertheless, the court rejected the (new) prosecution case.

(d) Most important, the court held that there was no dishonesty (whether in the legal or ordinary sense), which was the crucial and most culpable element in the charges, on the part of the Defendant.

8. In my view, the prosecution assumed that the Defendant was not entitled to pocket the "inflated" or "overstated" amounts. In fact all the witnesses called for the prosecution supported the Defendant's claim for the amounts. None of those witnesses were treated as hostile. The prosecution should have discovered or realized before trial that the charges (preferred) could not possibly be made out. The prosecution was warned at an early stage of the trial to re-consider whether it was proper to proceed. Since prosecution nonetheless proceeded, the Defendant was put to unnecessary expenditure by way of legal costs.

9. In the premises, I order the prosecution to bear the costs of the defence on party and party basis for preparation before trial and on indemnity basis for the trial including this application, such costs to be taxed if not agreed.