HKSAR v. Hung Kwan Fong

DCCC 36/2021

[2022] HKDC 1269

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 36 OF 2021

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REASONS FOR SENTENCE

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1.Before me Mr Hung pleaded guilty to Charges 1, 2, 4, 5 and 6 on a Charge Sheet and pleaded not guilty to the remaining charge thereon, namely Charge 3.

2.Charges 1, 3, and 5 are charges of Possession for sale or for any purpose of trade goods to which forged trade marks were applied, contrary to sections 9(2)  and 18(1)  of the Trade Descriptions Ordinance, Cap 362.

3.Charges 2, 4, and 6 are charges of Possession of poison included in Part 1 of the Poisons List, contrary to sections 23(1)  and 33(1)  of the Pharmacy and Poisons Ordinance, Cap 138.

4.Prosecution asked that Charge 3 be left on court file not to be proceeded with without the leave of this court or the Court of Appeal.  I so ordered.

5.Particulars of Charge 1 are that Mr Hung, on 10 December 2019 at Room A5, 15/F, Kam Man Fung Factory Building, 6 Hong Man Street, Chai Wan, in Hong Kong, had in his possession for sale or for any purpose of trade goods to which forged trade marks were applied, namely:-

(i)  417 numbers of proprietary Chinese medicine, to each of which a forged trade mark, namely, “Bull Head Brand” was applied;

(ii)  16 numbers of proprietary Chinese medicine, to each of which a forged trade mark, namely, “SINLANIL” was applied;

(iii)  5 numbers of pharmaceutical product, to each of which a forged trade mark, namely, “Lilly” was applied; and

(iv)  4 numbers of proprietary Chinese medicine, to each of which a forged trade mark, namely, “Wong To Yick” was applied.

6.Particulars of Charge 2 are that Mr Hung, on the same day at the same Room A5, in Hong Kong, had in his possession a poison included in Part 1 of the Poisons List, namely 200,200 tablets containing Diclofenac.

7.Particulars of Charge 4 are that Mr Hung, on the same day, at Room A7 of the same floor of the same building, in Hong Kong, had in his possession a poison included in Part 1 of the Poisons List, namely 799,200 tablets containing Diclofenac.

8.Particulars of Charge 5 are that Mr Hung, on the same day, at Room A8 of the same floor of the same building, in Hong Kong, had in his possession for sale or any purpose of trade goods to which forged trade marks were applied, namely:-

(i)  408 numbers of proprietary Chinese medicine, to each of which a forged trade mark, namely, “Tong Ren Tang” was applied;

(ii)  236 numbers of pharmaceutical product, to each of which a forged trade mark, namely, “CIALIS” was applied;

(iii)  3,616 numbers of pharmaceutical product, to each of which a forged trade mark, namely, “Lilly” was applied;

(iv)  334 numbers of proprietary Chinese medicine, to each of which a forged trade mark, namely, “南聯” was applied;

(v)  1,331 numbers of proprietary Chinese medicine, to each of which a forged trade mark, namely, “Wong To Yick” was applied;

(vi)  11,600 numbers of proprietary Chinese medicine, to each of which a forged trade mark, namely, “Bull Head Brand” was applied;

(vii)  36 numbers of pharmaceutical product, to each of which a forged trade mark, namely, “RICQLES” was applied; and

(viii)  36 numbers of proprietary Chinese medicine, to each of which a forged trade mark, namely, “SINLANIL” was applied.

9.Particulars of Charge 6 are that Mr Hung, on the same day, at the same Room A8, in Hong Kong, had in his possession poisons included in Part 1 of the Poisons List, namely 103,950 tablets containing Phenacetin, 804,000 tablets containing Diclofenac, 11,090 tablets containing Sildenafil, 3,492 tablets containing Tadalafil.

Facts admitted by Mr Hung

10.Mr Hung was the tenant and person-in-charge of three units on 15/F Kam Man Fung Factory Building, respectively Room A5, Room A7, and Room A8.

Room A5 (Charges 1 and 2)

11.On 10 December 2019, at about 2:42pm, Mr Hung opened the gate of Room A5 using one of the 3 keys on his key chain.  Customs officer PW1 intercepted him.  By virtue of a search warrant, PW1 gained entry to Room A5.

12.Upon search, PW1 found and seized the items listed in the particulars of Charges 1 and 2.  PW1 cautioned and arrested Mr Hung.  PW1 also seized the key chain with the 3 keys.

13.Under caution, Mr Hung stated, in relation to Charge 1:-

(a)  He rented Room A5 at $7,500 per month;

(b)  He had rented this unit for 5-6 years;

(c)  Only he possessed the key accessing Room A5;

(d)  Room A5 was used for storing and packing of goods for distributions;

(e)  The goods in Room A5 belonged to him;

(f)  The goods in Room A5 would be distributed and sold to medicine stores;

(g)  The goods were sourced by him from unknown roving salespersons in Sheung Shui;

(h)  The cost of the “Bull Head Brand” proprietary Chinese medicine was around $15-$16;

(i)  He set the selling price of the “Bull Head Brand” proprietary Chinese medicine at $17-$18; and

(j)  He would distribute the medicine stored in Room A5 to medicine stores either by calling van service or by driving himself.

14.Under reminded caution, Mr Hung stated, in relation to Charge 2:-

(a)  He did not know or verify the authenticity of the seized goods; and

(b)  He did not obtain any registration in relation to the pharmaceutical products containing suspected Part 1 poison.

Room A7 (Charge 4)

15.Later the same day, Customs officers, using the keys seized from Mr Hung, gained access to Room A7 in his presence.

16.The Part I poison listed in the particulars of Charge 4 was seized in Room A7.

17.Under caution in relation to the Part 1 poison, Mr Hung stated:-

(1)  Room A7 was his storage;

(2)  The medicine found belonged to him;

(3)  He would sell the medicine to medicine stores at a selling price set by him;

(4)  He did not know or verify the authenticity of the medicine; and

(5)  He did not obtain any registration in relation to the pharmaceutical products containing the Part 1 poison.

Room A8 (Charges 5 and 6)

18.Subsequently on the same day, Customs officers, using the keys seized from Mr Hung, entered Room A8 in his presence.

19.The items listed in the particulars of Charges 5 and 6 were found and seized in Room A8.

20.Under reminded caution, Mr Hung stated in relation to Charges 5 and 6:-

(a)  The medicines found in Room A8 belonged to him and were for sale;

(b)  He would sell the medicines to medicine stores at a selling price set by him;

(c)  He did not know or verify the authenticity of the medicines;

(d)  He did not have any authorization from trademark owners to sell the medicines;

(e)  Products with tattered wrapping paper were “Viagra” and were for sale; and

(f)  He did not obtain any registration in relation to the pharmaceutical products containing the Part 1 poisons.

General

21.Government Chemist confirmed that samples of 7 products bearing forged trade marks of “Bull Head Brand”, “SINLANIL” and “南聯” and seized at Rooms A5 and A8 contained heavy metals including arsenic, cadmium, mercury and lead.

22.The total estimated market value of the goods in respect of Charges 1, 2, 4, 5 and 6 is about $10.7 Million.

Criminal record

23.Mr Hung has a clear record.

Antecedents

24.Mr Hung is aged 46 (almost 44 at the time of the offences), educated to F5 level.  He was a merchant.

Mitigation

25.Mr David Iu of counsel mitigated on behalf of Mr Hung.  The following is a summary of the mitigation submissions.

26.Mr Hung was born and raised in the Mainland; he came to Hong Kong for reunion with his parents in 1987.  After completing F5 here, he obtained a certificate in Electrical Engineering from IVE.

27.Mr Hung has a clear record in Hong Kong and elsewhere.  He had been a business man for the last couple of years, earning about $30,000 per month and had been contributing about $20,000 per month to his family for various expenditures.

28.Mr Hung has been married for 23 years and has a son (20), a BBA 3^rd year student in Hong Kong.  The family lives with Mr Hung’s parents (both in their 70s).

29.Other than suffering from ischaemic heart disease which requires him to take regular medication and have medical check-ups once every 3 months, Mr Hung is healthy.

30.Due to the current economic situation and the arrest, Mr Hung is unemployed and lives on his savings.

31.Mr Hung committed the offences due to financial reasons.  He has regretted his foolish deeds since his arrest.

32.Relying on the witness statement of Dr Chan Chi Keung (copy handed up), Mr Iu submitted that it has not been established that on normal consumption of the goods under Charges 1 and 5, there would be adverse effects on the human body.

33.Mr Iu emphasized that Mr Hung has a clear record and frankly admitted his guilt and pleaded guilty at the earliest opportunity.  Mr Iu urges the court to adopt a low starting point for each charge and to impose partly concurrent sentences upon consideration of the totality principle.

34.Mr Iu submitted five mitigation letters and one medical certificate on behalf of Mr Hung.  The authors of the letters are Mr Hung’s son (the only letter that is in English), his wife, his parents, his elder sister and his younger brother.  The contents generally are that Mr Hung is a responsible father and a filial son, a kind person, and the sole bread winner. All asked for a lenient sentence for Mr Hung so that he may turn over a new leaf.

35.Upon enquiry as to what might be an appropriate starting point for the offences, Mr Iu found it difficult to give a number because, as he said, there were no guidelines for either the counterfeit goods offence or the Part 1 poison offence.  However, Mr Iu acknowledged that the scale of the operation was quite large albeit it was a home-based one-man operation.  With those in mind, Mr Iu suggested a global starting point of 4 years for all of the offences.

Sentence

36.I have seen the photographs of the three scenes of crime kindly supplied to me by the prosecution.

37.The maximum sentence for the counterfeit goods offence is a fine of $500,000 and imprisonment for 5 years.

38.The maximum sentence for the Part 1 poison offence is a fine of $100,000 and imprisonment for 2 years.

39.In a case of this scale, imprisonment is the only sentencing option.

40.I have had regard to the authority submitted by the prosecution, namely Secretary for Justice v Lam Chi Wah [1999] 4 HKC 343, a case on counterfeit goods. There at 350C, Chan CJHC (as he then was), giving the judgment of the Court of Appeal, said that deterrent sentences are called for in this type of offence.

41.However, there appears to be no sentencing guideline in respect of possession of counterfeit goods or Part 1 poisons.

42.Because of the statement of Dr Chan Chi Keung, I have ignored the fact that some heavy metals were detected in some of the products seized.

43.Mr Iu has helpfully added up the total number of counterfeit goods (including proprietary Chinese medicine (“PCM”)  and pharmaceutical products (“PP”))  under Charges 1 and 5, and the total amount of Part 1 poisons under Charges 2, 4 and 6 as follows:-

(a)  Counterfeit goods: 12,017 PCM Bull Head Brand, 52 PCM SINLANIL, 3,621 PP Lilly, 1,335 PCM Wong To Yick, 408 PCM Tong Ren Tang, 236 PP CIALIS, 334 PCM 南聯, and 36 PP RICQLES; and

(b)  Part 1 poisons: 1,803,400 tablets containing Declofenac, 103,950 tablets containing Phenacetin, 11,090 tablets containing Sildenafil, and 3,492 tablets containing Tadalafil.

44.These are not small numbers.  I am minded to take a global approach in relation to each of the two categories, namely counterfeit goods and Part 1 poisons.

45.I also bear in mind Mr Hung played the role of a wholesaler who was to sell to retail shops.

46.For the possession of counterfeit goods ie the subject of Charges 1 and 5, I shall adopt a global starting point of 30 months’ imprisonment.

47.For the possession of Part 1 poisons ie the subject of Charges 2, 4 and 6, I shall adopt a global starting point of 15 month’s imprisonment.

48.I take into account all of the offences were committed on the same day and in close proximity to one another.  I will also bear in mind the totality principle when arriving at the final sentence.

49.Individually, I will adopt the following starting points.

50.For Charge 1, I shall adopt a starting point of 12 months

51.For Charge 2, I shall adopt a starting point of 6 months.

52.For Charge 4, I shall adopt a starting point of 9 months.

53.For Charge 5, I shall adopt a starting point of 24 months.

54.For Charge 6, I shall adopt a starting point of 12 months.

55.Mr Hung pleaded guilty to the charges and so he shall be entitled to the 1/3 discount.  Other than that, I cannot discern any justifiable grounds from the mitigation for reducing his sentence further.

(Mr Hung, please stand)

56.For Charge 1, the sentence is 8 months’ imprisonment.

57.For Charge 2, the sentence is 4 months’ imprisonment.

58.For Charge 4, the sentence is 6 months’ imprisonment.

59.For Charge 5, the sentence is 16 months’ imprisonment.

60.For Charge 6, the sentence is 8 months’ imprisonment.

61.I order that 4 months of the sentence on Charge 1 is to run consecutively to the sentence on Charge 5.  Therefore, the aggregate sentence for the counterfeit goods offences is 20 months’ imprisonment.

62.I order that one month each of the sentences on Charges 2 and 4 are to run consecutively to each other and to the sentence on Charge 6 making an aggregate sentence for the Part 1 poison offences of 10 months’ imprisonment.

63.Lastly, I order that the two groups of sentences are to run wholly consecutively to each other making a final sentence of 30 months’ imprisonment.