Chan Chi-keung and Others v. The Queen

CACC000168/1981

Pawnbrokers Ordinance - principles on which Court should act in deciding conditions for return of stolen properties to owners - what inquiries can reasonably be expected to be made.

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

CRIMINAL APPEAL NO. 168 OF 1981

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Coram: Penlington J. in Court

Date of Judgment: 20th March 1981.

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JUDGMENT

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1. This is an appeal brought by four pawnbrokers against a Magistrate's order under which he ordered that certain articles which had been unlawfully pawned should be returned to their respective owners without any compensation being paid to the pawnbrokers.

2. The circumstances of these cases were somewhat unusual. The accused had in each case either taken or borrowed articles from members of his own family before pawning them. In the charge in which Mr. Chan Chi-keung is the Appellant, the Magistrate found that the accused took his mother's ring on or about the 4th July 1980 and pawned it on the same day for $300. In the brief facts tended by the prosecution it is said that the Defendant's mother did not make any report to the Police although she said that she found the ring missing towards the end of April, which on the effects cannot be correct. However the important thing is that she did not make any report to the Police.

3. The second charge on which the proprietor of the Tung Tak Pawnshop appeals involves a radio/cassette recorder which the accused stole from his brother on the 3rd June 1980 and which he pawned the same day for $150. There was no evidence as to when it was found to be missing but in any event no report was made to the Police.

4. The 3rd and 4th charges relate to a camera and a slide projector which the accused borrowed from his brother. Having done so he pawned the camera at the Tung Fung Pawnshop for $300 and the slide projector at the Woo Fung Pawnshop for $70.

5. In each case the pawnbrokers' representatives gave evidence on oath as to the way in which they had accepted these pledges. As the Magistrate said the evidence was similar in each case that is-

The Magistrate comments that in only one instance (relating to the camera) did the pawnbroker ask the accused any question as to who owned the property. The Magistrate found that there was no degree of blame to be attached to any of the owners of the property and that therefore they should be entitled to receive their property back without penalty. He said that it was common knowledge that pawnbrokers provided a fertile ground for thieves to dispose of stolen property and the law should endeavour to discourage such activity. It should be made as difficult as possible for a thief to dispose of stolen articles. The Magistrate was of the view that the pawnbrokers should have done more to ascertain whether or not the accused was legally entitled to pawn the articles which he was offering.

6. The relevant provision is Section 30 of the Pawnbrokers Ordinance. It reads as follows-

In this case the Magistrate did afford the pawnbrokers the requisite opportunity of being heard and there is no challenge as to the manner in which the proceedings were conducted. What is challenged is the way in which the Magistrate has exercised his discretion. It is said that the pawnbrokers did all that could reasonably have been expected of them under the circumstances and that if they are not given some compensation it would discourage pawnbrokers from conducting their affairs properly and in particular co-operating with the Police in the recovery of stolen property. It is pointed out that in none of the instances involved here did the owner of the goods report the matter to the Police when they discovered that their property was missing.

7. I am satisfied that the section gives the Magistrate dealing with the disposal of unlawfully pawned goods a very wide discretion indeed. For an Appellant to succeed in upsetting an order it is necessary for him to show that the Magistrate has acted on completely false principles. I indicated after the hearing of this matter that I did not consider that the Magistrate has so acted and that the appeals must be dismissed. It did however say that I would set out in writing my reasons therefore in some more detail.

8. It seems to me that in the normal case which comes before the Court, that is where goods have been stolen and pawned, if the owner has done everything which could reasonably be expected of him, and in particular he has reported the loss as soon as he became aware of it, has attended identification parades and generally co-operated with the Police in their efforts to recover the property and to discover who was responsible for the offence, such a person should not have to pay in order to recover his property. If there has not been a report made when one would expect it or if there has been a lack of co-operation by the owner of the goods then, depending on the circumstances and the facts of each case, it may well be the owner of the goods should have to pay some - or perhaps even all - of the money which the pawnbroker has lent. In this particular case the articles were either taken from other members of the accused family without their knowledge or were, in the case of the (c) and (d) charge, articles which had been borrowed and then pawned. I did not consider, on the fact of these particular cases, that there was a duty on the owner of the articles to report the matter to the Police. I did not therefore consider that the conduct of the owner in these cases is the subject of criticism.

9. The Magistrate said that he considered the pawnbrokers had not taken all reasonable precautions to see that the accused person did have authority to pawn the articles. I think that that is something of a counsel of perfection. I think there is a distinction here between this case and Kung Ting Kai and others v. the Queen,⁽¹⁾ where the Learned Chief Justice also upheld an order for the return of stolen goods without compensation. In that case however the articles which were pawned were very expensive brand-new watches and the amount given by the pawnbrokers was very considerably less than the real value. There the facts of a case were such that the pawnbrokers clearly should have been put on inquiry. Here the articles, with the possible exception of the ladies gold ring belonging to the accused's mother, were ordinary articles of no great value, such articles such as are no doubt pawned daily. They were not by any means new and I do not think the pawnbrokers could reasonably have taken any greater precaution than they did except that in the case of the finger-ring perhaps they should have inquired further as to how a young man obtained a lady's ring. I think each case must be dealt with on its own particular facts but where ordinary common place articles are pawned I do not consider that there is any practical steps which a pawnbroker can take apart from seeing and noting the particulars of the person's I.D. Card who is pledging the goods and also of course checking the stolen goods register. I do however share the Magistrate's view that pawnbrokers must accept that losses of this sort are part of the inevitable risks of their trade. The general principle is "Nemo dat quod non habet" and all other things being equal I think a person is entitled to recover his property which has been unlawfully pawned by some other person unless it can be shown that he has been negligent, notwithstanding that no great fault can be attributed to the pawnbroker.

10. It may be that some distinction can be drawn between the case of a person who has had property stolen from him and where he has lent the property, as was in a case charges (c) and (d) here. The Courts are often faced with having to decide between the rightful claims of innocent parties where one of them must bear the loss resulting from the dishonest action of a third party. This has often happened in a case of motor cars where the owner has allowed somebody to obtain possession of the car without paying the purchase price. If such a person then re-sells the car the trend of authority has been to say that, by placing that 3rd party in a position where he can defraud by purporting to transfer the property, the owner must bear the loss. I think therefore it is perhaps a matter for consideration when a question of compensation to pawnbrokers has to be decided and considered whether the owner of the property has in any way been negligent in a way in which he has lent his goods to a person who has unlawfully pawned them. Such might be the case for instance were valuable property which can easily be disposed of was lent to a stranger. I did not however consider that in this present case there was any such negligence.

Representation:

Mr. Kenneth Ho instructed by Raymond Tang & Co. for Appellants.

Mr. S.J. Mawson (C.C.) for Respondent.

(1) 1974 H.K.L.R.P. 214