TWO policemen had their convictions for conspiring to handle stolen cars quashed yesterday after the Court of Appeal ruled the trial judge had made a serious error of law and failed to follow binding precedents. However, the court ordered a retrial. Poon King-chung, 31 and Chan Kin-fai, 31, had been sentenced to four years' jail in the District Court by Deputy Judge Chain after trial in August. Yesterday, the Chief Justice, Sir Ti Liang Yang, who said he had difficulty understanding parts of the trial judge's reasons for the verdict, did not call on the appellants to argue their case. Prosecutor Andrew Bruce eventually conceded the case, but asked for a retrial. Opposing a retrial, Gerard McCoy, for the officers, said the judge's reasons for the verdict were 'totally confused' and he could not understand much of the judgment. He said the judge appeared to be guilty of failing to follow precedents set by the Court of Appeal. He said his clients had been denied the opportunity of an acquittal because of the judge's misdirection. Giving the court's reasons for quashing the conviction, the Chief Justice said Poon and Chan were found in suspicious circumstances when what appeared to be car smuggling activities were going on. They made statements to their superiors - which appeared to be lies - claiming to be acting undercover so they could arrest the smugglers. Although the judge's judgment was not easy to understand, it seemed that a number of procedures on the question of lies were not followed, he added. Poon and Chan were allowed bail, pending retrial.