HKSAR v. SHING TAK SHUN

CACC 170/2004

 IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 170 OF 2004

(On Appeal from DCCC 1005 of 2003)

____________

____________

__________________________________

REASONS  FOR  JUDGMENT

__________________________________

Lugar-Mawson J (giving the judgment of the court):

I.  Introduction

1.  On 8 March 2005, we granted the Appellant, Shing Tak Shun, leave to appeal against his conviction by Deputy Judge Lin in the District Court on 23 March 2004 on a single charge of handling stolen goods, contrary to section 24(1) and (2) of Theft Ordinance, Cap 210, and, treating the hearing as the appeal itself, we quashed that conviction.  We now set out our reasons for our decision.

II.  Prosecution’s Case

2.  The particulars of the charge alleged that between the 19 & 21 December 2002, the Appellant dishonestly received 205 boxes of leather materials and 30 bales of leather (the goods) knowing or believing them to be stolen goods.

3.  The prosecution’s case was as follows: in October 2002, Kwan Hon Kwok (PW1) and Ng Kai Tak (PW2) purchased the goods and had them shipped to Hong Kong.  They arrived in Hong Kong on 10 December 2002.  The 205 cartons of leather materials were stored in the Hop Lik warehouse in Ta Kwu Ling and the 30 bales of leather were stored in the Sun Hing Godown in Kwun Tong.  According to PW1 and PW2 they only had 7 to 10 days’ grace period of free storage at this warehouse.

4.  After the goods arrived in Hong Kong PW1 and PW2 contacted Law Chi Keung (PW3) and asked him to find somebody who could store the goods for them while they found a purchaser for them.   Through the introduction of Tse Shing Yau (PW4) PW3 found a man called Chan Hing, who said that he would arrange for the goods to be taken to his own warehouse and that he would deliver them to the purchaser in due course.  Chan Hing did not tell PW3 where this warehouse was.  Just after Christmas 2002, PW3 was unable to contact Chan Hing.  He informed PW1 and PW2 about this and a report was made to the police. 

5.  On 19 December 2002, on the Appellant’s instructions, Ng Chi Chuen, nick-named ‘Ah Sai’, (PW6) collected the 205 cartons of leather materials from the Ta Kwu Ling warehouse and took them to the Appellant’s warehouse Room 320, on the 3^rd floor of Block B, Cambridge Plaza, Sheung Shui.

6.  On 21 December 2002, PW6, again on the Appellant’s instructions, collected the 30 bales of leather from the Kwun Tong warehouse and took them to a warehouse at Room E9, Block E, Tsing Yi Industrial Centre Phase 2, Cheung Tat Road, Tsing Yi.

7.  A few days after 21 December, PW6, again on the Appellant’s instructions, took 30 of the cartons of leather materials and delivered them to a man called Ah Hing.  And on an unknown date after 21 December 2002, PW6, again on the Appellant’s instructions, delivered a further 20 cartons of leather materials to an unknown man in a car park in Tai Po.

8.  Later, again on an unknown date, PW6, again on the Appellant’s instructions, took the remaining 155 cartons of leather materials from the Sheung Shui warehouse to the Tsing Yi warehouse where he repacked them into 150 cartons.

9.  On several of the occasions on which PW6 transported the goods, or part of them, he used a goods vehicle (registered number HA 9329) owned by So Sum Sing (PW5).  PW5 had allowed the Appellant to use this lorry since 5 August 2002, on the condition that the Appellant paid the monthly hire-purchase payments for it.   That goods vehicle had been handed over the man in Tai Po car park.

10.  On 8 January 2003, after the police had obtained the Appellant’s contact details from PW5, the Appellant went voluntarily to the Border Police Headquarters to assist the police in their inquiries.  And in the afternoon of the same day he led the police to the Tsing Yi warehouse where 150 of the cartons of leather materials, all 30 bales of leather and 4 empty cartons were recovered.  The Appellant was arrested at 7:30 pm the same day.

11.  On 9 January 2003, the Appellant consented to taking part in a video recorded cautioned interview.

12.  On 15 January 2003, police officers went to a warehouse at the 5^th floor of Block B, Cambridge Plaza, where they recovered 30 of the cartons of leather materials.

13.  On 1 April 2003, the Appellant consented to taking part in a further video recorded cautioned interview.

14.  In his first video recorded interview, the Appellant told the police that a man called Ho Man had contacted him by telephone saying that there was a batch of ox leather for him to deliver to the Mainland.  On his instructions his foki, Ah Sai, (PW6) and Chan Hing had taken the 30 bales of leather to the Tsing Yi warehouse on 20 December 2002.  He had instructed PW6 to pack the leather materials into smaller cartons to save space.  Since the quantity of the goods was too large, he had instructed two people to deliver the goods to the Mainland for him.  Thirty of the cartons had been delivered to Ah Hing at his warehouse on the 5^th floor of Block B, Cambridge Plaza.  Ah Hing had his “own way” of delivering them to the Mainland.  Twenty of the cartons had been given to a man called Ah Shui.  He knew a man called Law Keung through Ho Man and believed that Law Keung was “some sort of goods owner”.   He was not sure if this was the same man as Law Chi Keung (PW3).  Ho Man had told him that Chan Hing would hand over 30 bales of ox leather to him when he collected them.  He had met Chan Hing once and also had phone contact with him.  He had no idea of the whereabouts of the missing 50 cartons and he needed to find “them”.  He did not specify who “them” were.

15.  In his second video recorded interview, the Appellant told the police that on 24 December 2002 he had instructed PW6 to deliver 20 cartons of leather materials, as well as PW5’s goods vehicle, HA9329, to Ah Shui in Tai Po.  He had been unable to locate Ah Shui up to the time of this second interview.  He then said that he was unwilling to answer further questions about the vehicle.

III.  Defence case

16.  The Appellant elected to give evidence.  In examination-in-chief he said that on 17 December 2002, Ho Man had telephoned him asking for a quotation for transporting a batch of cowhide to Shenzhen.  The Appellant quoted a rate of $12 a kilogram and said that the goods would reach Shenzhen between 10 to 14 January 2003.  He had also said that he would be responsible for the storage charges up to the time the goods were delivered to Shenzhen and for filing in the necessary customs’ documents.  If Ah Hing was to do the transport, then it would be Ah Hing’s responsibility to fill in the documents.  He had known Ah Hing for about half a year and Ah Hing’s warehouse was in the same building (Block B, Cambridge Plaza) as the Appellant’s warehouse.

17.  On 18 December 2002, Ho Man telephoned him and asked him to get ready. The Appellant said he would ask his employee, Ah Sai, to collect the goods.  Ho Man telephoned him again on 19 December and said that the goods would be collected in Fanling. The Appellant told Ho Man to contact Ah Sai.  Ho Man replied that a man surnamed Chan would contact Ah Sai.

18.  On 25 December 2002, 30 cartons were delivered to Ah Hing at his warehouse on the 5^th floor, Block B, Cambridge Plaza.  The Appellant asked Ah Hing to transport these 30 cartons to Shenzhen for him in January 2005.  On either 26 or 27 December 2002, Ah Hing told him that the price he had quoted for transport was too high, as the type of leather in question would incur a higher tax.  Ah Hing asked the Appellant to wait for a few days before he transported the goods to Shenzhen.

19.  The Appellant admitted asking Ah Sai to deliver 20 of the cartons to Ah Shui in the Tai Po car park and that he had lent PW5’s goods vehicle to Ah Shui.  The Appellant said had known Ah Shui for about half a year and had delivered goods to him on a previous occasion in June 2002.  The Appellant only knew that Ah Shui lived in Shenzhen.  He did not have Ah Shui’s full name, or his full address; he only had his telephone number.

20.  The Appellant said that he believed that Ho Man was the owner of the goods and at no time had he suspected that Ho Man was not their owner.

21.  In cross-examination, the Appellant accepted that he had never told the police that Ho Man was the owner of the goods.  The reason why he said that the man he knew as Law Keung was “some sort of goods owner” was because Law had asked him for a quotation for transporting the goods to the Mainland.

22.  The Appellant accepted that, although he knew that the 30 cartons were in Ah Hing’s warehouse on the 5^th floor of Block B, Cambridge Plaza, and he had told the police in his first video recorded interview that he had delivered them there, he had not told the police that he knew or believed them still to be there, although he knew at the time of his interview that the police were interested in finding all of the missing goods. 

23.  The Appellant also accepted in cross-examination that he had not told the police about Ah Shui and the 20 cartons going missing, as he thought that he could locate Ah Shui and recover the cartons.  That Ho Man had not told him exactly where in Shenzhen he was to send the goods.  That he had told both Ah Hing and Ah Shui that he, the Appellant, was the owner of the goods.  That he did not know Ah Hing’s full name.  That he had separated the consignment of 50 cartons into two as Ah Hing could not manage the whole lot of 50 cartons.  That he had delivered the goods to Ah Shui, via Ah Sai, in the Tai Po car park on 25 December 2002, expecting that Ah Shui would receive the goods in the Mainland by 27 December 2002.  He went on to say that, towards the end of December 2002, Ah Shui had asked him for a few days more.  He said that it was his understanding was that Ah Shui would receive the goods on 5 or 6 January 2003.

24.  The Appellant further accepted in cross-examination that he had not told Ho Man that the 20 cartons had disappeared, because he thought he could still contact Ah Shui.  That he had not reported the lorry’s disappearance to the police, or notified PW5, its owner, that it was missing, as he thought Ah Shui would be able get the lorry out of the Mainland.  He went on to say that before his arrest, he had gone to Wong Kwong Estate, where Ah Shui lived, to try to locate him, but had failed to do so.

IV.  Reasons for verdict

25.  The judge found himself unable to accept the Appellant’s evidence in view of what he saw as the many discrepancies and inconsistencies in it.  He was of the view that the prosecution witnesses were truthful.  He found the Appellant’s repacking of the goods to be inconsistent with the act of a mere bailee and that he had no credible innocent explanation as to how he came to be in possession of the goods.  The Judge applied the doctrine of recent possession in finding the Appellant guilty and sentenced him to 2½ year’s imprisonment.  We have more to say about the doctrine of recent possession later.

V.  Grounds of appeal

26.  The Appellant had abandoned his earlier application for leave to appeal against sentence.  On his behalf, Mr. Michael Poll raised six substantive grounds of appeal against conviction in submitting that the Appellant’s conviction was against the weight of the evidence and was unsafe or unsatisfactory.   Essentially, all of the six grounds invited us to reassess the case.

VI.  Discussion

(a) 1st to 3rd grounds

27.  We were not persuaded by the 1^st to 3^rd grounds, which read:

“	1.	The learned Judge erred in that he failed to properly evaluate the likelihood of the prosecution evidence not being the complete truth, in the light of its inherent improbability. In particular:
		(i)	That ‘bona fide’ businessmen would entrust leather goods worth HK$2.2 million to a person (CHAN Hing), that they had not met and who was the friend of a friend’s friend.
		(ii)	That no documentation was demanded from CHAN Hing to show his receipt of the goods.
		(iii)	That CHAN Hing was not required to provide the address to which the goods were taken nor did the owners require or demand a site visit to ascertain the suitability of the storage facilities.
		(iv)	That the only means of contact with CHAN Hing was by mobile telephone.
		(v)	That CHAN Hing was not required to enter into any bond or provide details of insurance that would cover the owners of the goods in the event of loss or damage.
	2.	The learned Judge erred in failing to draw the obvious inference from the mentioned facts above 1(i)-1(v) that this was an operation designed to transfer goods through the “gray channels” and where by design no paper trail would be left to incriminate the persons involved.
	3.	The learned Judge erred in failing to draw the obvious inference from the evidence of PW4, (TSE Shing Yau) that PW3, (LAW Chi Keung) acting on behalf of the owners of the goods, was seeking to locate a person who would be in touch with transporters using ‘gray channels’ to get goods past the customs and into China. The person commissioned by PW3 being CHAN Hing and the goods being the leather goods, subject of the charges.”

28.  In support of these grounds Mr. Poll argued that PW1 & PW2 were not telling the truth.  The Judge dealt with this, saying in his reasons for verdict:

“	17.	As submitted by the defence counsel, the trading arrangements seemed to be a bit too cavalier, especially in view of the value of the said goods. No insurance was taken out. PW1 and PW2 had not even established a proper firm or company to carry out their trading. Every arrangement was done by word of mouth, and trust could be easily placed in a vicarious manner.
	18.	I agreed to all these observations. Yet the fact that their practice would probably not be recommended by the Harvard School of Business did not necessarily mean that it did not happen. In fact, the defence did not suggest that in its cross-examination.”

29.  Mr. Poll argued that the Judge had misunderstood the point, which was that bona fide businessmen do not deal with their goods in the way that was described, and the reason why the defence had not challenged their evidence on this issue was because the defence contention that PW1 & PW2 were involved in an illegal business was the only reasonable explanation for their actions.

30.  We did not agree with these contentions.  The fact that PW1 and PW2 failed to insure the goods, or form a limited company to carry on their businesses, or contacted the various parties by telephone is no more than an indication of the casual way in which they chose to conduct their business, it does not suggest that they were engaged in an illegal business.

31.  The Judge went on to say that he saw no evidence to suggest that the goods were to be smuggled to the Mainland, saying about this:

“

19.

The defence counsel further suggested that the existing arrangement might be the result of some unscrupulous business practice, and the goods were meant to be transported to China via illegal means to avoid paying import duties, and that the said goods were dealt with by the defendant with the approval, of the owner. While this might be possible, I saw no evidence to justify such a quantum leap into such wild conjecture. There was no evidence from the prosecution from which I could infer that PW1 to PW3 in any way agreed that the said goods were to be received by the defendant and dealt with by him in the manner described in the course of the hearing.”

32.  Mr. Poll said that this passage cannot stand up to critical analysis.  It was not the defence case that PW1, PW2 and PW3 had agreed that the Appellant was to receive the goods.  The defence case was that PW1, PW2 and PW3 had either entrusted their goods to Chan Hing for him to smuggle them into the Mainland, or that PW3 was a rogue who intended to deceive PW1 and PW2 and had entrusted the goods to CHAN Hing for him to smuggle them into the Mainland, or (alternatively) that Chan Hing himself intended to deceive PW1, PW2 and PW3 and had decided to smuggle the goods to the Mainland and had employed Ho Man to arrange it.

33.  Mr. Poll argued that evidence in support of the defence case could be found in PW4’s cross-examination where he was questioned about the meeting at which he introduced PW3 to Chan Hing, where he said the following:

“	Mr. Law (PW3) said to me that some goods needed to be transported to the mainland but the problem was it was… it got some problem and he needed someone familiar to help with him.
	… …
	What I meant was that Mr. Chan would be more familiar with the procedures in connection with transportation of goods to the mainland.
	… …
	Q.	During the meeting did Mr. Chan at any time ask you to find someone who can find storage for him?
	A.	No.
	Q.	As far as you’re aware did he (Chan) own a warehouse or storage area?
	A.	As far as I know, No.
	Q.	As far as you were aware was he (Chan) involved in the transportation business?
	A.	No.”

34.  Mr. Poll made the point that the Judge made no reference to this cross-examination in his reasons for verdict and made no attempt to reconcile it with either the prosecution, or defence case.

35.  Again, we did not agree.  We believe that in the impugned passage in his reasons for verdict, the Judge was saying that whilst it may be possible that someone intended to smuggle the goods to the Mainland with the approval of their owner, there was no evidence to justify such a finding.  In particular that there was no evidence from which the Judge could infer that PW1, PW2 and PW3 had agreed to that being done.  It was PW1’s evidence that the goods were to be sold in Hong Kong.  This assertion appears not to have been challenged and was accepted as true by the Judge.

36.  Neither did we agree that PW4’s answers, in the passage from his cross-examination just quoted, support Mr. Poll’s claim that they prove that PW3 was looking for someone to smuggle the goods to the Mainland.  The word “problem” he used could mean a problem other than the evasion of duty.  And even if it did refer to that, there was no evidence that PW3 was acting on PW1 and PW2’s instructions.

37.  Further, and perhaps more importantly in respect of these grounds of appeal, the Appellant’s defence at trial was none of the three scenarios Mr. Poll put forward.  The fact that someone had stolen the goods was not disputed at trial.  It was the Appellant’s defence that he was not aware that they were stolen goods.  Whether or not anybody intended to smuggle them to the Mainland was irrelevant.

(b)  The remaining grounds of appeal

38.  We were however persuaded that there was merit in the remaining grounds of appeal.  It is unnecessary to set out the 4^th and 5^th grounds verbatim, for we were persuaded on the 6^th ground alone that this appeal had to be allowed.

(c)  6th ground

39.  The 6^th ground reads as follows:

“

The learned Judge erred in his identification of inconsistencies in the Appellant’s account of events given to the Court in evidence when compared with the account given to the police on a video tape. The learned Judge also failed to fully understand the sequence of events subsequent to the Appellant reporting to the police. As a result of these matters the learned Judge wrongly formed an extremely prejudicial view of the Appellant’s evidence.”

40.  This ground attacked the Judge’s findings in rejecting the Appellant’s evidence.  What he said was this:

“	32.	After I had ruled that there was a case to answer, the defendant elected to give evidence. As was stated before, the defendant had to give some sort of explanation; but the defendant only had to give rise to a reasonable doubt as to his truthfulness. The overall principle was that the prosecution had to prove the case beyond all reasonable doubt. It had to provide evidence from which the court could only infer beyond .a reasonable doubt that in the circumstances presented in this court, the defendant must have known that the goods were stolen.
	33.	In that respect, the defendant had failed miserably. What the defendant said during his evidence-in-chief was in contradiction with what he told the police. For example, as to what he thought who the owner was, he stated that it was Chan Hing in evidence-in-chief, whereas he told the police something different. And at the time he admitted that when he was interviewed on the next day, he knew that some of the missing goods were stored in different godowns, yet he failed to explain in court why he failed to mention that to the police. Furthermore, at the time when the police interviewed him, he already knew that the vehicle he borrowed from PW6 (the reference should have been to PW5) had gone missing along with 20 boxes of the said goods, yet he failed to mention that to police during the interview. One would rather imagine that if the defendant was the victim he described himself to be, one would have come up with some sort of explanation concerning the whereabouts of the goods, which he knew for a fact.”
	34.	I could go on with the unsatisfactory aspects of his evidence. However, for our purpose it would be sufficient to cite the above as examples. I rejected his evidence insofar as it was inconsistent with that of the prosecution.”

41.  We agreed with Mr. Poll that the Judge was incorrect in saying that in evidence-in-chief the Appellant had said that Chan Hing was the owner of the goods.  He had in fact said that he believed Ho Man to be the owner and he repeated that in cross-examination.  He had never “…told the police something different.”  The only “different” thing (if it may be so termed) that he said is found in his evidence at trial.  When cross-examined about the contents of his first video recorded interview he said that he regarded whoever gave him the goods as their owner, and it was Chin Hang who had given him the goods.

42.  We also agreed with Mr. Poll that the Judge was incorrect in saying that the Appellant had failed to mention in the first video recorded interview that some of the goods were stored at different warehouses.  It was he who had led the police to the Tsing Yi warehouse where the bulk of the goods were found.  He had told the police that 30 cartons of leather materials had been delivered to Ah Hing’s warehouse on the 5^th floor of Block B, Cambridge Plaza.  It was no doubt as a result of him telling the police that they were able to recover them from that warehouse on 15 January 2003.   The only part of the goods that he was unable to account for were the 20 cartons handed over to Ah Shui in the Tai Po car park, and even in respect of that batch of cartons the Appellant did not seek to hide what he knew about them from the police. 

43.  The Judge claimed that he had convicted the Appellant after applying the doctrine of recent possession.  This doctrine is firmly entrenched in the common law.  Under it, although the onus of proving guilty knowledge or belief always remains upon the prosecution, where the only evidence against the defendant facing a charge of handling stolen goods is that he was in possession of recently stolen property, the jury should be directed that they may infer guilty knowledge (a) if the defendant has offered no explanation to account for his possession of the property, or (b) if they are satisfied that any explanation consistent with innocence which has been given is untrue.  The jury should also be told that if an explanation has been offered which leaves them in reasonable doubt as to the knowledge of the defendant that the property had been stolen, the offence has not been proved, and their verdict should be not guilty.  Regardless of how firmly entrenched in the law it is, the doctrine of recent possession is no more than a specific, common-sense, instance of the application of circumstantial or inferential evidence. 

44.  In this case, the Judge in rejecting the Appellant’s explanation inadvertently misstated what the evidence was, which indicates to us that he may have misunderstood it.  On two major issues - the Appellant’s belief as to who the owner of the goods was and the Appellant’s accounting to the police for the whereabouts of the goods - the Judge failed to state with accuracy something which was crucial to his determination of the case against the Appellant.  We also agree with Mr. Poll that in rejecting the Appellant’s explanation the Judge failed to take into account the fact that Ah Sai (PW6), the Appellant’s foki, acted in an open manner in obtaining the goods from the two warehouses where the goods were originally stored on their arrival in Hong Kong.  Proper documents of title were produced to the warehouse employees who then released the goods into PW6’s custody.  This issue formed the basis of the 4^th ground of appeal. 

45.  We also agreed with Mr. Poll that the Judge, in commenting adversely on the fact that the Appellant could produce no documents supporting his right of possession to the goods and had only Ho Man’s phone number, overlooked PW1, PW2 and PW3’s failure to obtain proper documentation from Chan Hing, the man they entrusted them to, as well as their failure to obtain details of the place where Chan was to store the goods and Chan’s contact address.  In short the Judge seems to have ignored the fact that both the goods’ owners and the Appellant behaved in an almost identical way.  This issue formed the basis of the 5^th ground of appeal.

VII.  Decision

46.  For the reasons given, we were satisfied that Appellant’s conviction was unsafe.  We therefore granted him leave to appeal and quashed his conviction.