HKSAR v. HO SIK KUEN AND ANOTHER

CACC 92/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 92 OF 1999

(ON APPEAL FROM DCCC 1014 OF 1998)

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J U D G M E N T

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Leong, J.A. (giving the judgment of the Court):

1. The applicants Ho Sik-kuen (D1) and Leung Yee-chiu (D2) together with a third defendant were convicted after trial by Judge Wilson of handling two stolen Mercedes cars knowing or believing them to have been stolen. They were each sentenced to two and a half years imprisonment. They now seek leave to appeal against conviction.

2. The events leading to the arrest and subsequent charging of the two Applicants of this offence are these:

3. On 8th December 1997, a party of police officers on routine patrol at a remote spot in Chau Tau, near Lok Ma Chau border found a container truck and a private car and four men loading two left-hand drive Mercedes Benz cars with no registration number plates into an empty container on the truck and tying them up inside the container. The four men were the 2nd Applicant, the driver of the container truck. Chung Tsz-lung (PW5), Lee Yiu-sun (D3) and one Wong Fung-kwai. D3 told the police that he was the driver of the private car and the Mercedes cars were being loaded to go to an unknown buyer in the Mainland and that he had no export papers in respect of the two Mercedes cars. The officers did not suspect anything improper. After noting down the registration numbers of the container truck and that of the private car and the details of the Mercedes cars and the men, the officers left the scene.

4. Subsequently, the police received information that the two Mercedes cars were stolen in early November 1997, just a month ago in San Francisco, United States. On 11th December 1997, the police searched the Dragon Container Yard in San Tin, New Territories and found the two left-hand drive Mercedes cars in a container stored in the yard under the name of a San Fat Company. A BMW and a Mitsubishi, both left-hand drive vehicles, were found in another container in the yard, also stored under the name of San Fat Company. But these two cars were not stolen vehicles.

5. When the 1st applicant was interviewed by the police, he told them that he was a scrap metal merchant operating from a yard near Yuen Long and for his business he used the company name of San Fat Company. After some initial denials, he admitted to the police that he also exported left-hand drive cars to the Mainland. He did so in association with the 2nd Applicant. He was only responsible for co-ordinating between the 2nd applicant and the container truck drivers.

6. The truck driver (PW5) gave evidence that he knew both applicants and had often done haulage work for them. On 29th November 1997, the 1st applicant asked him to transport some loaded containers for the 1st applicant. He was reluctant to take it up because his vehicle might be overloaded and there were no proper documents. As a result the 1st Applicant assured him by giving him a letter from a non-existing company purporting to absolve him of all legal responsibility. On the instructions of the 1st Applicant, PW5 purchased an empty container. On 8th December 1997 the 1st Applicant told him to take the newly purchased container to Chau Tau where it would be loaded and to haul it to the Mainland. He did not know where Chau Tau was, even though he was a truck driver well versed in the geography of the New Territories. He therefore contacted the 2nd Applicant who dispatched a private car to direct him to the spot where subsequently the two Mercedes cars were loaded into the container. The 2nd applicant was there with him at the scene when the police came and checked their identities. After the police went away, the 1st Applicant told PW5 that there was a change of plan and he was to transport the loaded container back to Dragon Container Yard and to store it there in the name of San Fat Company.

7. The two Mercedes cars were driven to Chau Tau bearing "Trade" plates owned by PW6, a proprietor of a motor company who dealt in left-hand drive vehicles. PW6 gave evidence that on 8th December 1997, he lent the plates to a person having the same surname as D3.

8. PW5 had on another occasion done work for the two applicants and that was on 5th December 1997 when the 2nd Applicant instructed him to take an empty container from the Dragon Container Yard to the 1st Applicant's scrap yard. There the BMW and the Mitsubishi were loaded into that container. After that he took the loaded container back to Dragon Container Yard for storage in the name of San Fat Company.

9. Another container truck driver who had done work for the 1st Applicant was PW13. On 11th December 1997 the 1st Applicant instructed him to collect the container containing the BMW and the Mitsubishi from the yard and to take it to Tsing Yi Container Shipping Terminal. After he did so the 1st Applicant told him to abandon the trip because there was some problem with the documents and to take the container back to the yard.

10. The 2nd Applicant was arrested when he went to the police together with the lawyer on 16th December 1997. He told the police that his business was dismantling cars. He and the 1st Applicant shared the same scrap yard. On 8th December 1997, he was instructed to assist in dismantling cars. He went to the spot in Chau Tau following two Mercedes cars bearing "T" plates. But after the police came, he found out that there were no proper documents for dismantling the cars and it was then decided not to dismantle them but to put them into the container. He then drove one Mercedes car into the container and tied it up inside. He denied any knowledge that these cars were stolen cars.

11. Both Applicants called no evidence nor did they give evidence.

12. Thus the evidence shows the 1st Applicant exported left-hand drive cars to the Mainland. He gave instructions to purchase the container and he dispatched it to this remote spot of Chau Tau for loading the two left-hand drive Mercedes cars which had no registration plates and to take them over the border to the Mainland. After the visit by the police, there was a change of plan and he instructed that the container with the stolen cars to be taken back to the yard and stored in the name of the company from which he operated his business. The two Mercedes cars were not the only cars he dealt with in the course of his business. The evidence also shows the 2nd Applicant knew the 1st Applicant and he dispatched the private car to guide PW5 to this remote spot for loading the two Mercedes cars. He was present when this operation was carried out.

13. The evidence certainly shows that there were suspicious circumstances in the events leading to the handling of these two Mercedes cars on 8th December 1997 and both Applicants were involved in the operation.

14. The Judge found the 2nd Applicant was in physical possession of the stolen Mercedes cars and the 1st Applicant was exercising control and direction over them. He found that, having regard to the distance from the United States and barely one month after they were stolen, the two Applicants were in "recent possession" of the two Mercedes cars.

15. The Judge also found the 1st Applicant was familiar with the procedure for legitimate export of left-hand drive cars, that the 1st Applicant controlled the San Fat Company and that his role in the company was not merely passing instructions to the drivers but that the irresistible inference was that the 1st Applicant dishonestly exercised control over the two stolen cars knowing or believing them to be stolen.

16. As regards the 2nd Applicant, the Judge found that he had directed the truck driver, PW5 to the spot where the two Mercedes cars were loaded into the container and had participated in loading the cars; thus he played an active role in the operation. The Judge found there were no mechanical tools for dismantling purposes, and he rejected the 2nd Applicant's defence that he was there to dismantle cars.

17. The first two grounds of appeal of the 1st Applicant are that the Judge was wrong in applying the doctrine of "recent possession" in respect of the stolen cars and that the Judge failed to direct himself in law as to how to approach the evidence when he applied the doctrine to the 1st Applicant.

18. Mr. Marash, S.C. for the 1st Applicant says that the Judge was wrong to find that the 1st Applicant was in "recent possession" of the cars because of the distance between Hong Kong and the United States. It is submitted that if the property stolen in burglary is found very soon afterwards in the possession of a defendant, it is open to infer he was the burglar. But in the present case, there is no evidence as to when and how the cars came into the possession of the 1st Applicant. There was no connection between the 1st Applicant and the jurisdiction from which the cars were stolen. The fact that he was in possession of them one month after they were stolen in the United States, without more, is insufficient to found the application of the doctrine. No inference can logically be drawn that the 1st Applicant knew the cars were stolen. In fact, Mr. Marash submits that this was an obvious operation of smuggling left-hand drive cars into the Mainland without an export licence and the logical inference was that they were smuggling the two Mercedes cars over the border.

19. We pause here to say this: smuggling was never suggested by the Applicants in their interviews nor any such defence had been raised at the trial. On the contrary, the Applicants in their interviews maintained at all times, they were legitimate businessmen. In any case, from what he said on p.15 of his Reasons for Verdict, the Judge was aware that smuggling could be involved in the present case. What he said on p. 15 is this:

"There was other evidence that these vehicles, the BMW and the Mitsubishi, which were both left-hand drive vehicles, were not the subject of any missing reports and were in fact a potential legitimate export to China with proper documentation."

20. Mr. Marash says that it was understandable that this defence was not raised at the trial since that would virtually amount to an admission by the Applicants of an offence under the Import and Export Ordinance, Cap. 60. Be that as it may, we note that this is something which is new to this appeal and if that were the Applicants' genuine defence, we ask why it was not raised earlier. Mr. Marash complains that the Judge in his Reasons for Verdict, did not make sufficient reference to the doctrine of "recent possession" and the burden of proof if that doctrine applies. In our view, if the Judge had correctly applied the doctrine, it would be sufficient if he had referred to it as he did. More elaboration on it would not take the matter further.

21. The following passage from Cross on Evidence 5th ed., p.49 which had been adopted in R. v. Smythe, 72 Cr. App. R. 8 CA and cited in this para. 21 - 125 of Archbold explains the doctrine of "recent possession" clearly:

"If someone is found in possession of goods soon after they have been missed, and he fails to give a credible explanation of the manner in which he came by them, the jury are justified in inferring that he was either the thief or else guilty of dishonestly handling the goods, knowing or believing them to have been stolen.... The absence of an explanation is equally significant whether the case is being considered as one of theft or handling, but it has come into particular prominence in connection with the latter because persons found in possession of stolen goods are apt to say that they acquired them innocently from someone else. Where the only evidence is that the defendant on a charge of handling was in possession of stolen goods, a jury may infer guilty knowledge or belief (a) if he offers no explanation to account for his possession, or (b) if the jury are satisfied that the explanation he does offer is untrue."

22. In R. v. Raviraj [1987] 85 Cr. App. R. 93, referred to in Archbold para. 21 - 319, the doctrine was further explained by Stocker, L.J. in the following terms:

"The doctrine is only a particular aspect of the general proposition that where suspicious circumstances appear to demand an explanation, and no explanation or an entirely incredible explanation is given, the lack of explanation may warrant an inference of guilty knowledge in the defendant. This again is only part of a wider proposition that guilt may be inferred from unreasonable behaviour of a defendant when confronted with facts which seem to accuse."

23. Mr. Marash refers to a number of cases on what amounts to "recent possession" in Hong Kong. In R. v. Liu Kam-wah [1987] HKLR 439, Roberts, C.J. considered that six weeks was too long to be considered as "recent" in the case of a stolen camera. However, he said this at p. 441:

"What constitutes 'recent possession' within the meaning of the above doctrine is a question of fact, which must depend upon the circumstances of each particular case."

24. And later he said:

"As a matter of common sense, the possession of a stolen article becomes less damning against the defendant as the interval of time, since the date of the theft, lengthens.

Without seeking to lay down any hard and fast rule, I should have thought that an interval of six weeks, save in special circumstances, was so long as to lower the probative value of the 'possession' of the defendant, within the meaning of the term 'recent possession', to a point at which prejudice so outweighs evidential value that it should therefore be disregarded."

25. In R. v. Lai Chi-shing [1987] HKLR 422, Cons, V.-P. considered that, because of the nature of the property involved in that case, ten days was sufficiently recent. Nevertheless he said at p.426:

"... It has been faintly suggested that even so ten days is not a time which can properly be called 'recent', as far as the doctrine of recent possession is concerned. Nowhere of course is it laid down what is recent in terms of days or any other period of time. It is something that must depend upon the individual circumstances of each individual case. One of the matters for particular consideration is the nature of the goods which are concerned. In this case they were of an unusual nature. In the circumstances we are satisfied that the judge was entitled to take the view that the possession was recent."

26. In R. v. Li Chi-ho, Mag. Crim. App. No. 1330 of 1996 (unreported), the court found that 3 months was too long to allow the doctrine to be invoked. Suffice it to say, these cases do not establish any general rule as to the length of time that may constitute "recent possession" for the purpose of the doctrine.

27. And Archbold neatly wraps this up:

"Every case depends on its own facts. There is no magic in any given length of time."

28. Mr. Bruce, S.C. submits that the present case is only one of purely circumstantial evidence. The question is whether the Judge was entitled to look at the circumstances in which the Applicants dealt with the article and drew the necessary inference of guilty knowledge.

29. The Judge found that having regard to the circumstances in which the two Mercedes cars were being dealt with by the Applicants, and the period of one month between the disappearance of the cars in California in the United States and their subsequent appearance in Hong Kong in the possession of the Applicants and the distance between Hong Kong and San Francisco, the Applicants' possession was sufficiently recent to invoke the doctrine. We think that in the circumstances of this case, the Judge was entitled to reach this conclusion. There was nothing special about the nature of the stolen property. Although there was no evidence that these Applicants were involved in the documentation and shipment of these cars to Hong Kong, in these circumstances, we consider that one month was sufficiently recent to invoke the doctrine. On the first two grounds the 1st Applicant failed.

30. The real question is: Was it, in the circumstances this case including the explanations given by the Applicants, that the only reasonable and logical inference was the Applicants knew or believed the Mercedes cars to have been stolen? That we will deal with later on.

31. The third ground of appeal of the 1st Applicant is that the Judge failed to direct himself on lies told by the 1st Applicant. Mr. Marash submits that the Judge had to be satisfied that he was in no doubt despite the explanations offered, the 1st Applicant had the necessary guilty knowledge. The 1st Applicant had given statements to the police containing denials and explanations and, it is submitted that in rejecting his explanations the Judge must have found the 1st Applicant had lied. That being so, the Judge should have directed himself in accordance with the decision of R. v. Goodway [1993] 4 All ER 894 in particular, that there was no innocent motive for the lies before he relied upon them.

32. The case of R. v. Goodway applying R. v. Lucas [1981] 2 All ER 1008 held in effect that where lies told by the defendant when interviewed by the police were relied upon by the Crown to support the identification evidence, the Judge should have directed the jury that the defendant's lies had to be deliberate and had to relate to a material issue and that there was no innocent motive for the defendant to lie before the lies were relied on to support the prosecution evidence.

33. The prosecution in the present case did not rely on lies to prove either possession or guilty knowledge. The Judge did not rely on lies of the 1st Applicant to convict the 1st Applicant. The Judge simply rejected the explanation given by the 1st Applicant to account for the possession of the two cars and as to the role he played in the San Fat Company and in directing and controlling the truck drivers. The Judge found that there was no satisfactory explanation as to the possession of the vehicles by the 1st Applicant and he inferred from the circumstances that the 1st Applicant knew or believed the vehicles were stolen. The case of Goodway has no application here. There is no substance in this ground.

34. The 4th ground is that the Judge gave insufficient reason for concluding that the 1st Applicant knew or believed that the cars were stolen rather than merely being smuggled to the Mainland.

35. It is submitted that the 1st Applicant's denials in his statements were equally consistent with his denial of being involved in an attempt to export left-hand drive vehicles to the Mainland without a licence and therefore it was not an irresistible inference that his denial must lead to the conclusion that he was guilty of handling stolen goods. Relying on R. v. Kwan Wai-hung and Anor. [1996] HKLR 446 Crim. App. No. 143 of 1995, Mr. Marash submits that a furtive loading of cars in the New Territories with inadequate export documents plus a denial of knowledge that they were stolen does not permit an irresistible inference of knowledge that the cars were stolen.

36. It should be remembered that the case against the 1st Applicant was that he was dealing with stolen Mercedes cars in suspicious circumstances. Was the Judge then entitled to draw the inference of him knowing or believing the cars were stolen?

37. Mr. Marash says that the case of R. v. Kwan Wai-hung is similar to the present case. In R. v. Kwan Wai-hung, the defendant was found furtively loading cigarettes into containers in the New Territories. The Court of Appeal held that in the absence of other evidence, the circumstances did not give rise to the only possible inference of knowledge that the cigarettes were stolen; an equally likely inference could be that the cigarettes were smuggled. However, the circumstances of the present case are totally different. Here were two left-hand drive cars without registration and other documents for dismantling or otherwise and they were not suitable for the roads in Hong Kong. Any one dealing with these cars would have been put on notice as to the legitimate source of these vehicles. There were suspicious circumstances in the arrangement for the container for loading of the cars in a remote spot near the border, so remote that even PW5, a truck driver familiar with the roads in the New Territories had to be taken there by another driver sent by the 2nd Applicant; there was a sudden change of mind by the 1st Applicant and diversion of the vehicles to the yard for storage after the visit by the police. That the Applicants could be then involving themselves in an operation to smuggle the two cars to the Mainland is not inconsistent with an inference that they were smuggling cars which they knew or believed to have been stolen. These two inferences are not mutually exclusive. Smuggling does not confer an immunity for handling stolen goods. Equally the facts in HKSAR v. Kwong Cheuk-him Mag. Crim. App. No. 801 of 1997 (unreported), another case referred to by Mr. Marash are different. In this case cars are dismantled into car parts for exporting to the Mainland to avoid the prohibition on exporting left-hand drive cars and there was no evidence that stolen cars were involved. The circumstances of this case were such that the Judge was entitled to rely on "recent possession" and reach the inevitable conclusion that 1st Applicant knew or believed that the two cars to have been stolen when he dishonestly handled them upon his rejection of the explanations given by the 1st Applicant. The fourth ground of the appeal must fail.

38. In all the circumstances the conviction of the 1st Applicant is not unsatisfactory nor unsafe.

39. The application of the 1st Applicant for leave to appeal against conviction must be dismissed.

40. The first two grounds of appeal of the 2nd Applicant are that the Judge gave insufficient reasons for convicting the 2nd Applicant and the Judge was wrong to reject the 2nd Applicant's explanations that he went to Chau Tau to dismantle cars solely because there were no dismantling tools.

41. Mr. Macrae, S.C. submits that the prosecution case was the 2nd Applicant went there to dismantle the two Mercedes cars. It is submitted that if the prosecution opened the case on this basis, and the defendant was misled i.e. his case, that he went there to dismantle cars would not be disputed and he needs not have to lead evidence in that respect, it would not be open to the Judge to reject his explanations, otherwise it would be prejudicial to the 2nd Applicant.

42. The prosecution might have opened the case on that basis, nevertheless, there was no evidence from either party that the 2nd Applicant in fact went to Chau Tau to dismantle cars except what the 2nd Applicant said in his statement to that effect. There was also no evidence that there were mechanical tools at the scene or otherwise available to the 2nd Applicant to carry out car dismantling work if he were to do such work there. In these circumstances it was open to the Judge to reject the 2nd Applicant's explanations. Although the 2nd Applicant had spent four hours in his interview, the length of time he spent in giving his statement is not proportional to his credibility. Having found the 2nd Applicant was in "recent possession" of the stolen cars and that the 2nd Applicant played an active role in the handling of two stolen cars and having rejected the 2nd Applicant's explanations that he played no part in the escapade, the Judge was entitled to convict the 2nd Applicant.

43. The third ground of appeal is that the Judge's reasons for rejecting the 2nd Applicant's explanations was wrong in the circumstances of this case. An irresistible inference that the 2nd Applicant handled the two cars knowing or believing them to have been stolen could not have been drawn and the conviction is unsafe and unsatisfactory.

44. As said before, the Judge was entitled to reject the 2nd Applicant's explanations and to infer guilty knowledge by reason of the 2nd Applicant being in "recent possession" of the two cars and by reason of the Judge's rejection of his explanations. Therefore this ground must also fail.

45. The fourth ground of appeal relates to "recent possession" and the 2nd Applicant adopts the argument of the 1st Applicant in that regard. That argument has been dealt with above and for the same reasons, we reject this ground of appeal.

46. The conviction is therefore neither unsafe nor unsatisfactory.

47. The application for the 2nd Applicant for leave to appeal against conviction is dismissed.