HKSAR v. CHAN CHUN MAN

CACC 408/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

criminal APPEAL NO. 408 OF 2005

(ON APPEAL FROM DCCC NO. 259 of 2005)

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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 29 August 2005, the applicant was convicted of conspiring with Lee Yin-hang, Humbert (D1) and “other persons” to handle eight stolen motor cars between July and November 2004.  He was sentenced to 18 months’ imprisonment.  This followed a trial in the District Court before Deputy Judge W Lam.  The applicant now seeks leave to appeal against conviction.  It is not surprising there is no application in regard to sentence in view of the quite astonishingly low term of imprisonment which the judge imposed.

2.  All of the cars itemised in the particulars of the charge were stolen in Malaysia between July and October 2004.  They were then shipped in containers from Singapore to Hong Kong where they were delivered to Action Motor Service (AMS).  Business registration records described the nature of AMS’s business as trading in second-hand cars.  It was registered in the applicant’s name between 9 August 2001 and 11 August 2004 before the business was transferred into D1’s name on 12 August 2004.  The applicant continued in employment at AMS as a manager.

3.  It is apparent, therefore, that the four container shipments, on 17 August 2004, 24 September 2004, 5 October 2004 and 17 November 2004 respectively, occurred when D1 was the proprietor of AMS.  However, the applicant remained the holder of AMS’s bank account with the Bank of China throughout the period covered by the conspiracy and he signed cheques to cover the shipping charges in two instances.  None of the cars with which we are concerned was paid for out of the AMS account and the shipping charges in the other two cases were paid in cash.

4.  On 24 November 2004, the police raided the premises of AMS.  There, they arrested the applicant and D1.  Inside the applicant’s briefcase, the police found numerous documents (Exhibits P20-P101) relating to the transportation, testing and registration of the eight stolen vehicles.  When asked about the cars, the applicant said that he had collected a number of containers containing cars and, following his description of where the cars were to be found, these were duly located by the police.  The applicant added that he had acted on D1’s instructions when collecting the cars.  Later, when formally interviewed, he effectively declined to answer the questions he was asked.

5.  D1, by contrast, provided the police with a full account of AMS’s purchase of the stolen cars admitting that he “felt very much that the cars were not clean” because of their “so cheap” prices.  It also emerged from his interviews with the police that D1 was owed about USD65,000 by an Indonesian-Chinese friend of his called “Jeff”.  D1 had asked Jeff to find cars for him and this resulted in Jeff calling upon his Singaporean friend, “Bach Tyar”, to make the necessary arrangements.

6.  At trial, there was no evidence, admissible against the applicant, that the applicant had been in touch with either Jeff or Bach Tyar or that he was aware that the cars had been obtained cheaply.  Indeed, there does not even seem to have been any expert evidence called by the prosecution to provide a value for the eight quality cars which found their way to AMS.  In any event, the judge accepted that it was D1 who had arranged with Jeff for the importation of these cars to Hong Kong.

7.  The roles which it was proved the applicant had played in relation to the cars were that he had taken delivery of the cars, had signed two cheques to pay for transport costs and he was in possession of the relevant paperwork.

8.  The sole issue at trial, so far as the applicant was concerned, related to whether he knew or believed that the cars had been stolen.

9.  Neither the applicant nor D1 testified at trial.

10.  When assessing the evidence, the judge began by saying:

“I am told that [the applicant] has a clear record.  I assume that D1 has no criminal record.” (Appeal bundle p. 22)

This was, with respect, a bad start.  There was no basis for making such an assumption in D1’s case and it was, in any event, entirely wrong.  Where the character of one defendant has been mentioned but not the other’s, a ‘character’ direction should be confined to the defendant to whom it is relevant.

11.  The judge, correctly, then went on to indicate that no part of the interviews in D1’s case could be used against the applicant.  Turning next to the so-called doctrine of recent possession, the judge indicated that where a person who has received stolen goods has deliberately closed his eyes to the obvious, in a situation where the goods in question have been recently stolen, it may be open to draw the inference that he knew or believed the goods were stolen goods.  In the applicant’s case, the judge (referring to the applicant as D2) found that:

“… D2 had arranged all the documentation for the imports, and had taken delivery himself.  As proprietors in a second-hand car business the Defts cannot be ignorant about the source of their goods.  The stolen goods were received into both Defts’ possession. … I will now turn to the element of Conspiracy.

7.       On the basis of credibility and on the whole of the evidence, I find the following facts proved beyond reasonable doubt:

(1)     D2 transferred proprietorship of AMS to D1 only shortly before the stolen cars were imported into Hong Kong, but continued to operate at AMS.

(2)     D1 admitted he had taken over AMS for the purpose of receiving the cars.  It was he who initiated importation of the cars by raising this enterprise with Jeff.

(3)     The 8 stolen cars were the only cars acquired by D1.

(4)     D1 arranged via Jeff for the stolen cars to be imported into Hong Kong, some of which were placed into his possession at AMS, the reason behind the enterprise being to obtain cars at low cost in order that his friend Jeff’s debt be reduced or discharged.

(5)     A mere HKD400,000 to D1 to cover the cost of 8 cars of expensive brands and of excellent condition (see VIR₂ at Entries 588-596 and the photographs) points to D1’s knowledge about their stolen nature.

(6)     The transactions involved large sums of money, yet everything was paid in cash, with no money deposited into any banks: see D1’s VIR₁ (Entries 669, 700) ‘all in $1000 bills’ which did not suggest legitimate business dealings.

(7)     Shipping and other documents found in D2’s possession at AMS show that D2 was actively involved in the importation of the 8 stolen cars into Hong Kong for the purpose of sale.

(8)     On the cars having been imported, D2 arranged for them to be delivered to Lau Fau Shan in northern New Territories, and drove, or caused to drive, them away.

(9)     The stolen cars were subsequently located either at AMS’s showroom or other car exhibition centres, ready for sale to the public, and D2 had full knowledge of these locations because D2 was at AMS, and the Police went to the other 3 locations where the stolen cars were found, as a result from information gained from D2.

(10)   In the time period as stated in the Charge, there was an inextricable nexus between the roles played by D1 and D2, inter alia:

(a)   D2 was the previous proprietor of AMS, D1 was now the proprietor, proprietorship changing only a few days before the importation of ‘the 8th vehicle’ which was actually the first car in the series of 8 cars in terms of importation chronology.

(b)   D2 admitted to the Police he was the manager of AMS, but in any event his heavy involvement in the importation and subsequent handling of the cars was not in dispute.

(c)   D1 and D2 were not merely casual acquaintances.

(d)   Both D1 and D2 were physically operating at AMS.

(e)   D1 initiated the arrangement for the relevant cars to be imported.

(f)    All payment for the cars were done in cash, despite their prices.

(g)   All the cars had been stolen only a few days, at most only a few weeks, before they came into D2’s and D1’s possession.

(h)   D2 personally offloaded the cars on their arrival in Hong Kong.

(i)    The whole enterprise lasted not merely a day or two, but over several months, with D1 and D2 working closely together.

I find that the above matters could not have come together by mere coincidence.  In addition, as I have already stated, as businessmen in the second-hand car trade, D1 and D2 could not but know the source of their goods.  Examining the whole of the evidence, as jury I find that the only reasonable and irresistible inference is that D1 and D2 had agreed to import and take into possession the relevant cars, both Defts knowing that the cars had been stolen.

……

… The Defence also says the fact that D2 had used his real name and company chop, and had applied for government department emission clearances, tended to show that he had no guilty knowledge or belief.  However, there was no escape from such applications, because the cars were imported and destined for sale.  Of course if the cars had been smuggled into Hong Kong this would be worse for the Defts, but the documents say nothing either way about mens rea on the stolen nature of the cars.  The Defence arguments have not weakened the Prosecution’s case as against either Deft, or have caused me to feel any reasonable doubt as to guilt.” (Appeal bundle pp. 23-24)  (Emphasis added)

12.  The main point taken by Mr Bell on the applicant’s behalf in this application is that while there was a wealth of evidence upon which to convict D1, there was no reliable evidence of any sort against the applicant to indicate that he must have known or believed the cars were stolen.

13.  Ms Mary Sin for the respondent, on the other hand, took us to a number of features to be found in the evidence which she suggested revealed, in combination, enough to draw the inference of guilty knowledge on the applicant’s part.  In particular, she reminded us that the agreed background to the case showed that the applicant had ceased to be the proprietor of AMS only days before the first stolen car was imported; that the applicant had retained financial control over AMS; that while all of the cars were stolen, some had come into the applicant’s hands within days after the actual thefts; and that the applicant had possession of the paperwork and yet he claimed to have been acting under D1’s instructions.  Ms Sin then referred us to a number of “irregularities” relating to four dates shown in the paperwork taken from the applicant’s briefcase.  These irregularities, she suggested, were such that the applicant could not have failed to notice them and, having done so, this would have put him on enquiry about the purported seller of the cars.

14.  Even if we were to accept for present purposes that there were oddities about the dates shown on four of the exhibited documents, these were apparently obscure enough to have escaped anyone’s attention at trial and certainly the judge made no reference to any of them in his assessment of the evidence with which we have already dealt.

15.  We are satisfied that while a strong case was presented against D1, there was no evidence which could be said to add up to more than suspicion in the applicant’s case.

16.  Accordingly, we shall grant leave and, treating the hearing as the appeal, we allow the appeal and quash the conviction as well as the sentence imposed for it.