To determine if a specific document is admissible evidence as a business record document or supporting document, attention should be paid to its characteristic as records created on the spot or in real time based on observation or discovery in the normal course of business (Taiwan)

2019.3.21
Frank Sun

The Supreme Court rendered the 107-Tai-Shang-623 Criminal Decision of March 21, 2019 (hereinafter, the “Decision”), holding that to determine if a specific document is admissible evidence as a business record document or supporting document, attention should be paid to its characteristic as records created on the spot or in real time based on observation or discovery in the normal course of business.

According to the facts underlying this Decision, the Appellant (or the Defendant) intended to create the appearance of prosperous trading of the stock at issue by engaging in corresponding transactions in the name of nominees through continuous orders.  Therefore, the Defendant was found guilty of the crime of creating an appearance of prosperous securities trading and sentenced to imprisonment of three years and six months in accordance with Article 171, Paragraph 1, Subparagraph 1 of the Securities and Exchange Law.  Dissatisfied, the Defendant appealed.

According to the Decision, although the record documents or supporting documents which should be created by individuals conducting business in the course of their business or during a normal business process under Article 159-4, Subparagraph 2 of the Code of Criminal Procedure are written statements of individuals other than the defendant outside of a trial by nature, still such documents are continuous without interruption in the normal course of business and contain regular and accurate records, and most records are created before or after the conclusion of a business transaction without any foreseeable motive to falsify the records due to their likelihood to be produced as criminal evidence and are less likely to be false and untrue.  Therefore, except for circumstances obviously rendering their credibility questionable, their admissibility as evidence may be permitted on an exceptional basis.  Therefore, to determine if specific documents are admissible evidence for being record documents or supporting documents created in the course of business pursuant to the above requirements, attention should be paid to their characteristics as records created on the spot or in real time based on observation or discovery in the normal course of business.

It was further pointed out in this Decision that the Taipei Exchange’s analytical opinion on the trading of the stock at issue as adopted in the original decision was prepared after the district prosecutors office issued a letter to the Taipei Exchange to request its relevant analyses and opinions and sent further letters to it to correct numbers and data.  It appears that this contains records not created on the spot or in real time by individuals conducting business in the normal course of business based on observation or discovery, and that this document was obviously expected to be produced as criminal evidence in the future.  Moreover, contents such as the “Transaction Analysis,” “Turnover Ratio,” “Sales Analysis,” “Audit Data,” and “Conclusions” cited in the original decision did not simply present numbers and data but rather were summarized, deduced and analyzed based on relevant expertise and should contain the author’s understanding, analysis, judgment and opinions on the above matters.  Therefore, it is difficult to conclude that such records are uninterrupted, regular and accurate records created in the normal course of business.  In addition, the original trial court issued a letter to request the Taipei Exchange to send its personnel to appear in court and to be cross-examined as expert witnesses.  Therefore, whether the above-mentioned analytical opinion on the stock at issue meets the requirement for hearsay exception because it meets the requirement for record documents or supporting documents in the above-mentioned provision, or whether this document is admissible evidence pursuant to law because it contains the conclusions made by the Taipei Exchange, which has an expertise for stock trading, at the instruction of the prosecutor in accordance with Articles 198 and 208 of the Code of Criminal Procedure is still questionable.  Hence, the original decision was reversed and remanded.