Trio in deleted files case request permanent stay of proceedings

PUBLISHED : Monday, 10 December, 2012, 4:39pm
UPDATED : Monday, 10 December, 2012, 4:40pm

Three defendants, who failed to thwart fraud prosecutions against them in the District Court on the grounds that files relating to their trial were deleted by a senior prosecutor, asked the High Court on Monday to grant a permanent stay of proceedings.

Kelly Cheng Kit-yin, her daughter Carmen Cheng Wei-ming and Ip Kin-man, former vice-chairwoman and directors of Hong Kong-listed Yueshou Environmental, wants the High Court to quash the District Court’s refusal to grant their application for a stay.

Their lawyers were in the Court of First Instance on Monday, seeking permission to lodge a judicial review, after filing their writ in October.

Kelly Cheng, 57, Carmen Cheng, 37, and three other company directors including Ip were earlier prosecuted for their alleged role in a misuse of letters of credit at Yueshou. They were charged with 11 counts of conspiracy to defraud and two counts of dealing with the proceeds of an indictable offence.

They based their application on the claim that they could not have a fair trial after Gavin Shiu, a senior assistant director of public prosecutions with 18 years’ experience in the Department of Justice, instructed his secretary to delete the files and transfer them to his USB thumb drive.

Their latest action came after District Judge Douglas Yau Tak-hong in September ruled that Shiu had not acted in bad faith, and refused their application for a permanent stay.

But barrister Jonathan Caplan QC, for the three, said the integrity of the trail was so undermined by Shiu’s action that a permanent stay should be ordered.

He repeatedly called Yau’s ruling in the lower court “unreasonably and wholly irrational”.

Caplan referred in particular to Yau’s reasoning that if Shiu was acting in bad faith, he could have deleted the documents and backup file by himself. He did not need to ask his secretary to do it, since she would probably be questioned in the matter.

“The ruling has consequences for the reputation of criminal justice in Hong Kong,” Caplan said. “The ruling needs to be reviewed.”

Another reason for stopping the prosecution, Caplan added, was the misconduct of a liquidator of a Yueshou subsidiary, who offered not to pursue a criminal complaint against the three in exchange for HK$38 million.

But Daniel Marash SC, for the Secretary for Justice, said the case did not involve a failure to provide relevant documents, but only the tardy supply of the information destroyed by Shiu – and later recovered.

The three complainants did not suffer any “actual prejudice”, he said. “The defendants were not deprived of any relevant documents,” he said.

If the court found that Shiu had acted in bad faith, it was possible to separate his conduct from that of the Department of Justice as a whole, Marash said, citing a case precedent.

Mr Justice Jeremy Poon Shiu-chor, of the Court of First Instance, reserved his decision.