HKSAR v. CHAN CHE KEUNG

CACC527/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 527 OF 2000

(ON APPEAL FROM DCCC 940 OF 2000)

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J U D G M E N T

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Hon Mayo VP (giving the judgment of the Court):

1. The applicant was convicted after a trial in the District Court before Deputy Judge H. M. Lee of two conspiracies. The particulars of the first charge were as follows:

"Chan Che-keung and Cheung Ka-chung, between the 17th day of June 2000 and the 18th day of June 2000, in Hong Kong, conspired together with Wong Hung-fai and other persons unknown to pass or tender as genuine things resembling HK$100 and HK$500 notes, which they knew or believed to be counterfeits of currency notes."

2. The second charge was that:

"Chan Che-keung and Kwok Kai-chiu, on divers days between September 1999 and June 2000, in Hong Kong, conspired together to make counterfeits of currency notes namely HK$100 and HK$500 with intent to pass or tender them as genuine."

3. There were two other defendants in the trial below. On the first conspiracy, the 2nd defendant was a co-defendant, and on the second the 3rd defendant was a co-defendant. They both pleaded guilty to their respective conspiracies. Wong Hung Fai ("Wong"), the person named as a co-conspirator in the first conspiracy, gave evidence at the trial.

4. Initially the applicant sought leave to appeal against his convictions on both conspiracies. His counsel has now confirmed that he only wishes to proceed with his application in respect of the second conspiracy. Leave to appeal against the conviction on the first charge is therefore refused and the appeal thereon is dismissed.

5. It was an agreed fact that Wong was arrested shortly after midday on 18 June 2000. He was caught depositing counterfeit $100-notes into a bank Instant Deposit Machine ("IDM").

6. There was agreed evidence concerning IDM machines. It is a service provided by banks. Customers can deposit $100-, $500- and $1,000-notes into the machine and a credit is recorded in the account which has been selected by the customer.

7. It is possible for the customer to immediately withdraw moneys from the account. It is also possible for the bank to identify which notes have been deposited in relation to the account in question.

8. When he was arrested Wong had on him two counterfeit $100-notes and a business card with the account No. 232-6-073513 written on it. This was the account which was being activated. He also had on him the ATM card for the account and two deposit slips indicating that deposits had already been made into this account.

9. On 1 August 2000 a search was conducted by the police at the premises occupied by the applicant. A key was found which fitted the outer door of the premises on the 3rd Floor of 135 Prince Edward Road, Kowloon which were occupied by the 3rd defendant. At this time the applicant was arrested.

10. On the same day a search was conducted at 135 Prince Edward Road and two computers were found there together with other equipment which could have been used to make counterfeit notes. Also 50 counterfeit $20-notes were found and 1 counterfeit $100-note.

11. It was also an agreed fact that on 18 June 166 counterfeit notes were deposited by Wong into the said account by IDM machines in different locations and substantial withdrawals had been made from the account.

12. Wong gave evidence concerning the deposit of $100 counterfeit notes in IDM machines. He also gave evidence to the effect that the applicant and the 2nd defendant had given him the counterfeit notes and requested him to deposit them in IDM machines, and when the machines rejected some of the notes they were returned to the applicant. However, Wong did not give any evidence which clearly indicated that the applicant was in any way involved in the manufacture of counterfeit notes.

13. One of the police officers, PW2, who arrested the applicant gave evidence that when he arrested and cautioned the applicant, he said,

"All the counterfeit banknotes were already burnt in mid-July. It was by a person called Ah Tat, nicknamed Ah Sing, a drug addict, who burnt them all so there are no counterfeit notes anymore."

PW2 recorded this but the applicant refused to sign the statement. He did, however, agree to give two video-recorded interviews later in the afternoon.

14. Although these were lengthy interviews they did not contain any admission by the applicant that he had participated in the manufacture of counterfeit notes.

15. There was a voire dire on the admissibility of the interviews as evidence. After hearing evidence the Judge admitted the interviews as evidence as he was satisfied that they had been made voluntarily.

16. The applicant and his wife gave evidence. This amounted to a denial of involvement in either conspiracy. The applicant admitted that he knew the other defendants but said that he took no part in their activities.

17. So far as the key to the 3rd defendant's premises was concerned he admitted that he had had it in his custody. He claimed that as a matter of convenience, he had been allowed to stay overnight at these premises. He had of course been aware of the existence of the computers but it had been his impression that they had been used for computer games.

18. From this evidence the Judge had been satisfied at the appropriate level that the applicant had been a party to both conspiracies.

19. The main ground of appeal which is advanced is that there was insufficient evidence to support the conviction on the second charge.

20. It is necessary to consider how the Judge reached his conclusion concerning the applicant's guilt. There would not seem to be any doubt that there was more than sufficient evidence of his participation in the conspiracy first charged. It is with the evidence in relation to the conspiracy secondly charged that problems are encountered. This was how the Judge considered the matter.

"I find as a fact that D1 lied when he denied having made the verbal admission. He lied as to the extent of his acquaintance with D3 and PW1 and I find no reasonable or innocent explanation for these lies. They lend support to the prosecution's case.

I remind myself again that the prosecution must prove the existence of all essential elements of the offences with which the 1st defendant is charged. The proof must be beyond reasonable doubt. The 1st defendant has to prove nothing. This requirement does not prevent me from inferring from the facts that had been subject of direct evidence the existence of further facts relating to the knowledge and intent of D1 which constitute and show elements of the crimes. The inference must be a compelling one and the only one that no reasonable person can fail to draw from the direct facts proved.

I have admitted as voluntary D1's verbal admission and the second video recorded interview. I find as a fact that a verbal admission had been made. I give full weight to them.

In the present case, I have no hesitation in drawing the inference that the 1st defendant, by his verbal admission, acknowledged that he was party to the scheme to make and pass as genuine counterfeit banknotes.

D1 denied being a close friend of D3's. There is no evidence of them being members of the family, or related in any way. From the facts, D1 was in possession of the keys to D3's home, in which counterfeit notes and implements for the making of counterfeit notes were found. D1's China re-entry permit and bankbook were in D3's home. The only inference that could be drawn was that D1 was in close association with D3. The further inference arising from that was D3 was in cohort (sic) with D1 in the enterprise."

21. With respect to the Judge, this simply will not do.

22. An adverse inference can only be drawn against a defendant if it is the only reasonable inference consistent with the evidence. Here the evidence the Judge refers to is equally consistent with his involvement in the matters referred to in the first charge.

23. There was no evidence that the applicant ever took part in the manufacture of counterfeit notes and it is not possible to validly draw an inference that he was. Certainly the fact that he may have told lies does not take matters further as the prosecution has to make out a case of his involvement before this can arise.

24. Before us Mr David Leung for the respondent informed us that he did not wish to argue that the conviction on the second charge should be upheld.

25. The conviction on the second charge is unsafe and unsatisfactory. The application in respect of it is allowed and treating it as the appeal, the conviction and sentence imposed upon it is quashed.