SECRETARY FOR JUSTICE v. CHEUNG CHUNG CHIT

HCAL 172/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST
NO.172 OF 2002

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J U D G M E N T

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Introduction

1. On 3 April 2002, the respondent in this matter was arrested by police officers at a hotel in Kowloon. The respondent had come to the hotel reception asking to see a man named Nakamori. When the respondent was searched, an envelope was found in his possession. That envelope contained what appeared (to the layman) to be United States bank notes. There were 88 of these notes in the envelope, each of them having a face value of one million United States dollars. I am told that the bank notes purported to be what are known as silver certificates. After the arrests, these certificates were examined by an expert who declared them to be counterfeit. That they were counterfeit has never been disputed.

2. In the result, the applicant was charged with the criminal offence of possessing false instruments contrary to s.75(1) of the Crimes Ordinance, Cap.200, or, in the alternative, with possessing false instruments contrary to s.75(2) of the same Ordinance. The particulars of offence of the principal charge were stated in the following terms; namely that respondent

"... had in his custody or under his control instruments, namely eighty-eight $1,000,000.00 United States currency banknotes, which were, and which he knew or believed to be false, with the intention that he or another would use them to induce somebody to accept them as genuine, and by reason of so accepting them to do or not to do some act to his own or any other person's prejudice."

3. On 4 September 2002, the respondent appeared for trial before Her Honour Judge Chua in the District Court. The respondent appeared with two co-accused, a man named Tarazona and a man named Nakamori, the latter being the one in respect of whom the respondent had made inquiries at the hotel reception. Both those men had been arrested at the hotel the same day.

4. The trial did not proceed on 4 September 2002 but was adjourned to the following day. On the following day, counsel for the respondent, Mr Cheng Huan SC, made an application for a permanent stay of proceedings in respect of the respondent. The application was not described as an application for a permanent stay but was clearly considered to be such by the judge and counsel.

5. The application for a stay was made on the basis that there was a witness of considerable assistance to the respondent who declined, however, to attend the trial to give evidence. This witness, a man named Wang Li Xin who lived in the Mainland, had made a detailed witness statement. The statement, dated 19 August 2002 and witnessed by a legal practitioner in Guangzhou, was to the effect that Wang, himself doing a favour for a friend, had in all innocence persuaded the respondent to bring the counterfeit silver certificates to Hong Kong, assuring him that there was nothing illegal in the venture. Wang, however, was concerned that if he himself came to Hong Kong he would be arrested by the authorities here. In this regard, Wang said the following in his statement :

" Although Mr. Cheung [the respondent] called to ask me to go to Hong Kong to testify for him, I was afraid that I might be detained or arrested by the Hong Kong Police when I come to testify and thus I would be unable to return to mainland China and my parents and children would be left unattended. I had to decline Mr. Cheung's request unwillingly. However, this trouble was indeed caused by me. Therefore, I write the whole course of this event in this statement and hope to tell the truth to Hong Kong court and free Mr. Cheung from all the injustice."

As to the lack of mens rea on the part of the respondent, Wang said :

" ... I did not know those US dollars were fake because Mr. Chen [the friend from whom the silver certificates were obtained] told me those US dollars were genuine. While Mr. Cheung [the respondent] had no idea about it from very beginning to the end. He did not take it out for an inspection for the envelope I delivered to him was folded and he only saw the face of the envelope and felt it before putting it into the inner pocket of his suit. He took the old US dollar to Miss Cheung in Hong Kong based on is complete trust in me."

6. On 6 September 2002, having heard submissions, Judge Chua ordered that there be a permanent stay of proceedings against the respondent. The respondent was then discharged. It is this order of the District Court judge staying proceedings against the respondent that the applicant, the Secretary for Justice, now seeks by way of an order to certiorari to have quashed, the matter to be remitted to the District Court for fresh determination in accordance with law.

7. The application for judicial review is based on two grounds. First, that the decision to make the order was wrong in law, both in substance and procedurally, and, second, that it was Wednesbury unreasonable in that, in coming to her decision, the judge failed to take into account matters of material relevance.

The appropriateness of judicial review

8. Leading counsel for the applicant, Mr Zervos SC, asserted that there exists no provision in any statutory instrument which allows for the applicant to appeal a decision of a District Court judge granting a stay. In the face of that lacuna, the only avenue open to challenge the validity of the decision is by way of proceedings for judicial review. That assertion was not contested by counsel for the respondent. In the circumstances, it was not contended that it was wrong in law to seek the supervisory jurisdiction of this Court.

Judicial review is not an appeal

9. Judicial review, however, is quite different from an appeal. It is concerned with the legality rather than the merits of a decision. This Court has no jurisdiction to substitute its opinion as to the merits for those of the learned judge. To do so would be to usurp the power vested in the judge. Judicial review is limited in its scope, looking essentially to whether a decision that is challenged is wrong in law, arrived at by a flawed process or is a decision that is so unreasonable that no tribunal, directing itself as to the relevant law and properly appreciating the relevant facts, could have reached. In a nutshell, the question is not whether this Court may disagree with the merits of the decision made by the District Court judge, the question is whether the decision of the judge has been vitiated by reason of some recognisable public law wrong.

The jurisdiction to stay criminal proceedings

10. It is unquestioned that District Court judges have the jurisdiction to stay criminal proceedings. The jurisdiction rests on the inherent power of the courts to prevent abuse of their own process.

11. In Hong Kong, the seminal authority as to the relevant law concerning applications for a stay of proceedings is HKSAR v. Lee Ming Tee and Another [2001] HKLRD 599, a decision of the Court of Final Appeal. It is to be noted that, in giving reasons for her decision, the District Court judge cited this authority.

12. While, to cite a phrase employed by the District Court judge, 'the touchstone in every case must be fairness', Lee Ming Tee states the principle in unambiguous terms that only in exceptional cases will that fairness be achieved in stopping a trial before it has begun. The exercise of judicial discretion to order a permanent stay of proceedings is, to put it plainly, a remedy of 'last resort'. Before ordering a stay, a court must be satisfied that a fair trial is no longer possible. As the Court of Final Appeal said in (at 614) :

"... the common thread in these authorities is the requirement that a fair trial has become impossible, making continuance of the prosecution an abuse of the court's process."

The Court of Final Appeal examined the 'cogent reasons' why in principle and practice stays are exceptional, the following being said (again at 614) :

"In the first place, it is only in very unusual circumstances that a court can properly be satisfied that a fair trial is 'impossible'. The 'fairness' achievable is judged in practical and not absolute terms. As Brennan J pointed out in Jago v District Court of New South Wales (1989) 168 CLR 23 at p.49 :

If it be said that judicial measures cannot always secure perfect justice to an accused, we should ask whether the ideal of perfect justice has not sounded in rhetoric rather than in law and whether the legal right of an accused, truly stated, is a right to a trial as fair as the courts can make it. Were it otherwise, trials would be prevented and convictions would be set aside when circumstances outside judicial control impair absolute fairness.

More importantly, the court's primary endeavour is to ensure that a fair trial takes place, employing the law's available resources, and not to abort it on the ground that fairness cannot be attained, save as a last resort. To quote Brennan J again :

A power to ensure a fair trial is not a power to stop a trial before it starts. It is a power to mould the procedures of the trial to avoid or minimise prejudice to either party. (Jago v District Court of New South Wales (1989) 168 CLR 23 at p.46)"

13. The Court of Final Appeal went on to emphasise the duty placed on a court to take practical steps when possible to avoid or minimise prejudice to either party; that is, to both the prosecution and the defence. In this respect, the court looked again to the words of Brennan J in Jago v. District Court of New South Wales (1989) 168 CLR 23 :

"When an obstacle to a fair trial is encountered, the responsibility cast on a trial judge to avoid unfairness to either party but particularly to the accused is burdensome, but the responsibility is not discharged by refusing to exercise the jurisdiction to hear and determine the issues. The responsibility is discharged by controlling the procedures of the trial by adjournments or other interlocutory orders, by rulings on evidence and, especially, by directions to the jury designed to counteract any prejudice which the accused might otherwise suffer." [my emphasis]

In summary, the Court of Final Appeal said (at 652) :

" ... the Court approaches stay applications where a fair trial is said to be impossible regarding 'fairness' in practical rather than absolute terms and placing its faith primarily in the efficacy of measures available to overcome any potential unfairness. It will only consider granting a permanent stay as a last resort."

14. If a stay is to be a matter of 'last resort' and is to be avoided if possible by the taking of practical measures, this indicates that invariably an inquiry is necessary. By that I do not mean that a formal inquiry, some form of voir dire, must always be held. But it speaks for itself, I think, that if the court is under a duty to attempt to control procedures to avoid or minimise unfairness then some inquiry must be made by the court as to how that can best be done. In this regard, the headnote to the decision of the Court of Appeal in R v. Takeshi Machiya [1990] 1 HKL 73 reads :

"In order to ascertain whether or not injustice would be done to the defendant if the trial were to proceed, and so that the exercise of the judge's discretion could be a properly informed one, it was clearly necessary for the trial judge to consider that which they would have said were they to live up to proof. The trial judge should have held a form of preliminary inquiry, considered the victim's statement, and any other evidence relevant to the issue before coming to a decision. A-G v Ma Chiu Keung [1988] 2 HKLR 64 applied."

15. During the course of submissions much was said of the dangers of a judge assuming an inquisitorial role if compelled to make an inquiry. I find nothing of substance in that concern. Our courts have an obligation to control their own procedures so that, as far as possible and in accordance with law, a fair trial is assured. From time to time that places upon presiding judges the obligation to seek answers, implicitly thereby to make some form of inquiry. In guarding the integrity of the judicial process in their courts common law judges cannot be entirely passive.

The witness statement

16. In coming to her decision to order a stay of proceedings the District Court judge quite properly gave consideration to the witness statement of Wang Li Xin. In this regard, in her ruling she said :

" In an application to stay proceedings, because of the absence of defence witnesses, the Court of Appeal held in the case of HKSAR v Law Yip-lun [2001] 1 HKLRD 676 there must be an evaluation of the potential credibility and reliability of the potential witness. In the present case before me, unlike Law's case, there is no dispute as to the prosecution evidence. So far as I can see, the prosecution are not in a position to really challenge much of what [the respondent] and Mr Wang would say, nor that [the respondent] just returned from the Mainland that day and the various phone calls between Mr Wang and him. There are in Mr Wang's statement a detailed account. These details add verisimilitude to what is said and I am inclined to find the explanation credible."

17. Mr Zervos, for the applicant, submitted that, if the learned judge had considered not just the statement of the potential witness but 'other evidence relevant to the issue before coming to a decision' (see Takeshi Machiya, paragraph 15 supra) and had done so by making some form of limited enquiry, it would have been plain that in a number of material respects the prosecution was in a position to challenge what the witness, Wang, asserted in his statement. In the judge's ruling, said Mr Zervos, there was no indication that she had considered other evidence. For example, the clear thrust of Wang's statement was that he had asked the respondent to deliver the silver certificates to persons who were strangers to the respondent and yet, upon arrest, when the respondent was brought to a room where the other two arrested persons were being held, there was evidence that the respondent was known to one of them : in short, there was evidence of recognition, a matter that formed part of the prosecution opening.

18. For reasons which will become apparent, I find no purpose in examining Wang's statement in detail nor the other evidence that Mr Zervos submitted would plainly have been relevant. It is sufficient to record that, in my view, if the learned judge had sought submissions as to other relevant evidence, she may well have come to a view different from the one which I have cited in paragraph 17 above.

An alleged error of law : the s.65B issue

19. As I have said earlier, the trial of the respondent and his co-accused commenced on 4 September 2002. On that same day (the document at least bears the same date) the respondent's legal representatives filed a notice pursuant to s.65B of the Criminal Procedure Ordinance. The notice was couched in the following terms :

" Pursuant to Section 65B of the Criminal Procedure Ordinance, Cap.221, the 3rd Defendant namely Cheung Chung Chit gives notice of his intention to tender the written statement of Mr. Wang Li Xin at the trial of the 3rd Defendant commencing on 4th September 2002. Copy of the said written statement of Mr. Wang Li Xin together with its English translation are annexed herewith."

20. S.65B of the Criminal Procedure Ordinance allows for the admission into evidence of written statements 'to the like extent as oral evidence'. S.65B(1) and (2) reads :

" (1) In any criminal proceedings ... a written statement by any person shall, subject to the conditions contained in subsection (2), be admissible as evidence to the like extent as oral evidence to the like effect by that person.

(2) A statement may be tendered in evidence under subsection (1) if

(a) the statement purports to be signed by the person who made it;

(b) the statement contains a declaration by that person to the effect that it is true to the best of his knowledge and belief;

(c) before the hearing at which the statement is tendered in evidence, a copy of the statement is served, by or on behalf of the party proposing to tender it, on each of the other parties to the proceedings; and

(d) none of the other parties or their solicitors, within 14 days from the service of the copy of the statement, serves a notice on the party so proposing objecting to the statement being tendered in evidence under this section :

Provided that paragraphs (c) and (d) shall not apply if the parties agree before or during the hearing that the statement shall be so tendered."

21. The admission of the statement into evidence is subject to the provisions of s.65B(4) which reads :

" (4) Notwithstanding that a written statement made by any person may be admissible as evidence by virtue of this section

(a) the party by whom or on whose behalf a copy of the statement was served may call the person making the statement to give evidence; and

(b) the court may, of its own motion or on the application of any party to the proceedings either before or during the hearing, require the person making the statement to attend before the court and give evidence."

22. It is not disputed that Wang's witness statement met the necessary formal requirements of the Ordinance. Nor is it disputed that when the order for a stay of proceedings was made neither the prosecution nor the respondent's co-accused had objected to the admissibility of the statement into evidence. The being the case, as I read s.65B(1) and (2), when the order for a stay was made, Wang's statement was, potentially at least, admissible into evidence in the trial proceedings.

23. The judge was at all times aware of the notice issued pursuant to s.65B. The transcript reveals that the respondent's counsel brought the document to her notice and, of course, Wang's statement (with its English translation) was attached to that notice. But, despite the fact that the application under s.65B was before her and that no objections had been received in terms of s.65B(2)(d), the learned judge appears to have been of the view that the statement was not at that time (even potentially) admissible into evidence. The transcript reveals the following brief exchange between the court and respondent's counsel :

"COURT : Now, I just need you to address me on this point, Mr Cheng Huan : Wang's statement would not have been admissible.

MR CHENG : No."

24. More importantly, in her ruling granting the stay the learned judge said :

" Wang's witness statement is not admissible in evidence. D3 [the respondent] is in no position to force Wang to come to Hong Kong. I see this as an obstacle in the way of a fair trial and one which cannot be remedied by 'remedial measures available at the trial' per Ribeiro PJ in Lee Ming-tee's case." [my emphasis]

25. In my judgment, the finding by the judge that Wang's statement was not at that time admissible into evidence was incorrect in law. The s.65B application had not yet been resolved. If no objection was received then the witness statement would have been received into evidence. That error in law was a material error. I say that because it is evident from the face of the ruling that it was one of the central matters taken into account in coming to a finding that a fair trial was not possible. Indeed, the ruling concludes :

" I rule in all the circumstances the defence has shown on a balance of probability that without the testimony of Wang, D3 [the respondent] would suffer serious prejudice and the continuance of the prosecution against him would amount to a misuse of process in the sense that it would not be a fair trial."

26. But is a point of substance being manufactured out of what was on the day no point at all? The transcript reveals that the s.65B issue does not appear to have been advocated in any way by the prosecutor. But, in my opinion, it was not inevitable that an objection would have been received. On the face of matters there appears to have been no reason for the co-accused to have objected and the prosecutor himself may well have deemed it best to raise no objection, allow the statement into evidence and look rather to inconsistencies between matters contained in the statement and matters contained in other forms of admissible evidence.

27. The authorities to which I have referred earlier in this judgment impose on a judge the duty to seek practical measures to avoid or diminish unfairness and if necessary in that endeavour to make some form of inquiry. That being the case, it seems to me that it was incumbent upon the judge to at least put the prosecution and the co-accused to an election : would an objection to the s.65B application be raised or not? If no objection was raised, the statement would have been admitted into evidence and the judge then would have been in a position to exercise her judicial discretion whether or not to grant a stay in a materially different factual context.

28. On this basis alone I am satisfied that the decision by the District Court judge was materially wrong in law and that the decision must therefore be quashed.

An alleged error of procedure : failure to consider remedial measures

29. Mr Zervos, for the applicant, submitted that the learned judge did not turn her mind to the matter of possible remedial measures that may have allowed the trial to proceed. In my opinion, there is substance in that submission. The scope of possible remedial measures may have been limited but that of itself in the circumstances of this particular case does not mean that the matter need not have been considered. For example, would the police have been prepared to give an undertaking not to arrest the witness for any alleged criminal offence in respect of the counterfeit silver certificates if he came to Hong Kong to testify? The answer is not known because the question was not asked.

30. Was it open to the judge in her final deliberations to determine if the prosecution had proved its case to avoid or minimise the risk of unfairness by directing herself in a manner designed to counteract such unfairness? That clearly, in the authorities, is a fundamental matter which must be considered in the exercise of judicial discretion. But the learned judge does not appear to have turned her mind to that specific issue. I accept, of course, that a District Court judge, in giving judgment, need not lay bare all of his or her thought processes, and while this matter alone would not have decided my determination of this judicial review application, it seems to me that when an exceptional step a step of last resort is taken, it is necessary to deal with such fundamental matters.

Conclusion

31. For the reasons given in the body of this judgment, I am satisfied that the decision by the District Court judge to order a stay of proceedings was wrong in law both procedurally and substantively. That being the case, no purpose is served in looking to the second limb of challenge; namely, that the decision was Wednesbury unreasonable. An examination of that second limb would in any event entail an examination of matters of evidence which may intrusive in respect of a fresh determination of this matter.

32. There will therefore be an order of certiorari bringing up and quashing the decision to order a stay of proceedings and to discharge the respondent. The matter is remitted to the District Court for fresh determination.

33. As for costs, I see no reason why costs should not follow the event. There will be an order nisi awarding costs to the applicant, that order to be made final 30 days after the date of the handing down of this judgment unless before that date application is made to vary that order.