HKSAR v. Wong Chiu Kwan and Others

[English Translation – 英譯本]

HCMA 274/2021

[2022] HKCFI 1887

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO 274 OF 2021

(ON APPEAL FROM TMCC 1975 / 2019
AND TMS 9966-9967 / 2019)

________________________

BETWEEN

________________________

_________________

Judgment

_________________

A.  Background

1.The appellants were charged with the following offences:

(1)  The 1^st appellant (D1) was charged with one count of “Assisting in managing a gambling establishment”, contrary to section 5(c) of the Gambling Ordinance, Cap 148 of the Laws of Hong Kong;

(2)  The 2^nd appellant (D4) to the 4^th appellant (D6) were each charged with one count of “Gambling in a gambling establishment”, contrary to section 6 of the Gambling Ordinance, Cap 148 of the Laws of Hong Kong;

(3)  The 5^th appellant (D10) was charged by way of two summonses, which alleged that he was the licensee of an amusement game centre where the following two conditions were contravened:

(a)  Condition 13: No prizes or cash refund shall be offered (sic) or given to any person in consequence of the result of any game;

(b)  Condition 12: The result of any game shall also not be used for the purposes of offering or receiving any advantage.

2.I will continue to use their defendant numbers at trial.

3.D1 and D10 were represented by counsel at trial. D4 to D6 were unrepresented and conducted their own defence. The appellants denied all charges and were convicted of all the charges after trial. They all appealed against conviction.

B.  Facts of the case

4.Ms CHAN Shuk Yi Bertha, Christal, Assistant Director of Public Prosecutions, and Mr WONG Chun Man, Geoffrey, Public Prosecutor, representing the respondent, have presented in their written submission the gist of the facts of both the prosecution and defence cases, which I basically adopt.

B.1.  Prosecution case

5.Putting the prosecution case briefly, in an anti-gambling operation conducted by the police on 12 April 2019, Jing Na TV Game Centre (hereinafter referred to as “Jing Na”) involved in the case was operated as a gambling establishment, and points gained by playing games on game machines could be redeemed for cash; D1, D4 to D6 and D10 were a staff member assisting in managing the gambling establishment, gamblers and the holder of the amusement game centre licence of Jing Na respectively.

6.The prosecution and D1 and D10 agreed on the majority of the background facts of the case by way of admitted facts, including the identities of D1 and D10 as a staff member and the licensee of Jing Na respectively, the seizures of exhibits and the capacity of PW10 (gambling expert) as an expert.

7.The prosecution called a total of 10 witnesses to testify.

8.PW1 was Detective Police Constable 12987.  In this anti-gambling operation, he was deployed as an undercover agent disguising as a customer to collect evidence at Jing Na TV Game Centre.  The evidence of PW1 included:

(1)  D1 sold a point card to PW1 and explained to him that the point card could be used to play games on game machines and pointed out that he had to add value to the point card using money in order to play games;

(2)  The 2^nd defendant (D2) [1] of the case had cash transactions with other customers, and subsequently used cash to exchange for points in PW1’s point card and indicated that no “commission” would be “drawn” from PW1 that day;

9.PW2 was Sergeant 3984.  In this anti-gambling operation, he arrested 11 gamblers including D4 to D6 in Jing Na.

10.PW3 was Detective Inspector LEE Ka Wing.  In this operation, he obtained a written authorization under section 23(1) of the Gambling Ordinance, on the strength of which [he] entered Jing Na.

11.PW4, Detective Police Constable 59008, was responsible for arresting D1 and taking a cautioned statement from D1.  Under caution, D1 confessed that [she] worked at Jing Na, and admitted that [she] knew someone redeemed points for cash for customers at Jing Na.

12.PW5 was responsible for arresting other defendants who pleaded guilty or did not lodge the present appeal.

13.PW6, Detective Police Constable 48080, and PW7, Detective Police Constable 14595, were responsible for making enquiries of D4 to D6 and taking cautioned statements respectively.  Under caution, D4 to D6 all admitted playing games on game machines for gambling and redeeming the points gained for cash at Jing Na.

14.PW8, Detective Police Constable 14973, was responsible for registering the particulars of all the persons present at the scene of the case.

15.PW9, Detective Police Constable 16694, was the police officer responsible for handling exhibits.

16.PW10 was the gambling expert. His expert report was submitted in court with the consent of all defendants pursuant to section 65B of the Criminal Procedure Ordinance. PW10, based on the information of the case including the ways of playing on game machines, was of the view that the games of several types of game machines in Jing Na were games of “winning by chance and skills combined” or “winning by chance”; and gaining points by playing the aforementioned games to redeem for cash was “gaming”.

17.D1, D4 to D6 all objected to their cautioned statements being admitted in court. They all elected to give evidence on the special issue. After the alternative procedure, the magistrate ruled that all admissions were admissible.

B.2.   Defence case

18.On the general issue, D1 elected not to give evidence. D4 to D6 and D10 elected to give evidence.  In addition, the defence called D2 as a defence witness.

19.D4 testified that he went to Jing Na only for using the toilet and taking a rest, and did not play games at all.

20.D5 testified that he was only playing car racing games using tokens at Jing Na.  He also stated that [he] saw D1 and D10 inspecting at Jing Na and telling customers that points could not be redeemed for money.

21.D6 testified that at the time in question, she had just arrived at Jing Na and was arrested before starting to play on any game machine.

22.D10 testified that he acted as the licensee of Jing Na for a friend, without receiving any remuneration.  As far as he knew, no one would redeem points for cash at Jing Na, and the preventive measures that he could take included giving advice, conducting inspection[s] and posting notice[s] [stating that] point redemption was prohibited.

23.D2 testified that in early 2019, she came to know a male called “Fei Lo [transliteration]”, and arrangements were made for [her] to redeem points for cash for customers, making profits from price differences.  D2 stated that [she] always saw D1 advising customers not to smoke or redeem points in the establishment.  D2 believed that D1 and D10 did not know that she redeemed points for money for players in Jing Na.

C.  Verdict of the magistrate

24.Having considered all the testimonies and evidence, in respect of the special issue, the magistrate ruled that D1, D4 to D6 all made admissions of their own free will.  In respect of the general issue, he found that D1 assisted in managing Jing Na (premises presumed to be a gambling establishment under section 19(1)(c) of the Gambling Ordinance).  D4 to D6 were presumed to have been gambling in that gambling establishment under section 19(2) of the above ordinance.

25.Regarding D10, the magistrate pointed out that the relevant issue was whether D10 knew or had reason to suspect that there were contraventions and whether the contraventions could have been prevented by the exercise of reasonable supervision and diligence. The magistrate said:

“67. Issue 3: Did D10 know or have reason to suspect that there were contraventions and whether the contraventions could have been prevented by the exercise of reasonable supervision and diligence.

68. The prosecution relied on sections 19(3) and 19(5) of the Amusement Game Centres Ordinance to prosecute D10, the licensee. Pursuant to section 19(3) of that Ordinance, where a condition of a licence is contravened the licensee commits an offence unless he proves that:-

(a) [he] did not know and had no reason to suspect the existence of the circumstances giving rise to the contravention; and

(b) he could not, by the exercise of reasonable supervision and reasonable diligence, have prevented those circumstances arising.

69. The defence provided by section 19(3) above clearly stipulates that it can be applied only if both items (a) and (b) have been proved. However, the prosecution also has to prove beyond reasonable doubt that:-

(a) the licensee knew or had reason to suspect the existence of the circumstances giving rise to the contravention; or

(b)  the licensee, by the exercise of reasonable supervision and reasonable diligence, should have been able to prevent the circumstances giving rise to the contravention.”

26.The magistrate did not specifically point out that D10’s burden of proof was a “persuasive burden” or “evidential burden”, but consideration is taken that the magistrate mentioned that “defence” had to be “proved” in order to be applicable. In addition, the counsel representing D10 at that time also pointed out in his closing submission that D10’s burden was a “persuasive burden”[2]:

“47.  Section 19(3) of the Amusement Game Centres Ordinance, Cap 435 of the Laws of Hong Kong (Section “19(3)”) provides a statutory defence for some accused licensees. In short, if (a) the licensee did not know and had no reason to suspect the existence of the circumstances giving rise to the contravention; and (b) he could not, by the exercise of reasonable supervision and reasonable diligence, have prevented those circumstances arising, even though a condition of a licence is contravened, the licensee does not commit an offence.

48.  As the normal standard of proof applicable to the statutory defence, the burden of proof is on the defence, and the standard is a ‘balance of probabilities’.”

It appears that the magistrate adopted a “persuasive burden”, namely D10 failed on a balance of probabilities to prove that he did not know and had no reason to suspect the existence of the circumstances giving rise to the contraventions of the licence conditions and that he could not, by the exercise of reasonable supervision and reasonable diligence, have prevented those circumstances arising.

27.The magistrate did not accept D10’s evidence and convicted D10.

D.  Grounds of appeal

D.1.  Appeals of D1, D4-D6

28.I will deal with the appeals of D1, D4 to D6 first. D1, D4 to D6 were unrepresented and acted in person. Their grounds of appeal adopted only the general grounds already printed on Forms 101. They did not provide perfected grounds of appeal, nor did they provide any written submissions.

D.2  Discussion

29.A magistracy appeal is conducted by way of “rehearing” on the evidence before the trial court (supplemented by such further evidence as the appellate court may admit): see Chou Shih Bin v HKSAR[3]. In respect of the facts, an appellate court has to take into account the advantage enjoyed by a trial magistrate of seeing and hearing the witnesses’ testimonies. The appellate court should be slow to interfere with the findings of facts made by the magistrate unless it is found by the appellate court to be plainly wrong. If the magistrate makes an error constituting material irregularity in dealing with a case, the appellate court may quash the conviction after considering whether it is just for such an order to be made. Even if the appellate court does not or cannot identify any error made by the magistrate or the grounds of appeal fail, the appellate court must still determine whether the evidence adduced by the prosecution establishes the guilt of the appellant beyond reasonable doubt, failing which the appeal must be allowed: see HKSAR v Ip Chin Kei and Others[4].

D.3.  Appeal of D1

30.The evidence shows that D1 sold point cards at the cashier’s counter of Jing Na, and explained to customers how to play. The magistrate set out what she said under caution in the video-recorded interview[5]:

“(b) D1 made the following admissions under caution in the record of interview made by PW4:

(i) ‘I was employed to work here only. I did not take part.’

(ii) ‘I know that someone redeemed points in point cards for cash for customers playing video games in this place of mine (sic). I did not know her. [I] only know that other people called her Co Co. [namely D2]’

(iii) ‘[I] have seen this woman for a period of time. In (my) recollection, she showed up here in September last year, in 2018.’

(iv)  ‘By showing up, it means she did come here … Since January this year, in 2019, I saw that she occasionally went over to the value adding machine to tap point cards for customers. Then [I] saw that she gave money to the customers. However, I am not sure about the details of how they redeemed the points for money actually.’”

31.After careful consideration and analysis of the evidence, the magistrate found that D1 made the admissions of her own free will.  I have no ground to interfere with this finding.

32.On the general issue, D1 elected not to give evidence.

33.Given the magistrate’s acceptance of the evidence of the “undercover” police officer, coupled with the admissions made by D1 under caution, the magistrate found that D1 assisted in managing [a] gambling [establishment].  This finding by the magistrate is correct.  I also make the same finding.  The prosecution did prove all elements of the offence beyond reasonable doubt.

34.I dismiss D1’s appeal against conviction.

D.4. Appeal of D4

35.The magistrate adopted the evidence of the “undercover” police officer: when the police officers entered the establishment, D4 brushed a point card from the game machine down to the floor.  The magistrate also set out the admissions made by D4 under caution[6]:

“(d) In the record of interview, prosecution exhibit P57, he admitted under caution that [he] played the fishing machine in Jing Na (the reply made to Question 7): ‘Depending on the luck that day, when [I was] about to leave, [if] there were points remaining, redemption for money [would] be made from someone …’ (the reply made to Question 7); ‘I know that [I] was to approach a lady for redemption for money, and the lady sometimes would be sitting in Jing Na’ (the reply made to Question 18); ‘I often went to the Jockey Club [Branch] above Jing Na for gambling, and so [I] often went to Jing Na, well, [I] often went down there also, and [I] saw someone redeeming for money and [I] knew that gambling was available’ (the reply made to Question 22).”

36.Having considered the evidence in detail, the magistrate found that the admissions concerned were made by D4 of his own free will.  I have no ground to interfere with the magistrate’s finding.

37.The magistrate found that D4 gambled in a gambling establishment.  The magistrate’s finding is correct.  I also find that the prosecution did prove beyond reasonable doubt that D4 gambled in a gambling establishment.

38.I dismiss D4’s appeal against conviction.

D.5.  Appeal of D5

39.The magistrate adopted the evidence of the “undercover” police officer: D5 was sitting at a fishing machine in Jing Na.  There was a Jing Na point card on the card reader of the fishing machine.  The magistrate set out what D5 said under caution[7]:

“(c) In the record of interview, prosecution provisional exhibit PP51, he replied under caution, ‘I played the fishing machine in Jing Na, gambling.’In the subsequent reply section, he admitted that when points had been gained, he would approach the elderly lady to redeem points for money (the reply to Q9), and admitted that [he] asked the elderly lady to exchange points for money on two occasions (the reply to Q16).”

40.Having considered and analysed the evidence in detail, the magistrate found that D5 made the admissions of his own free will.  I have no ground to interfere with this finding.

41.The magistrate found that D5 gambled in a gambling establishment. The magistrate’s finding is correct. I also make the same finding. It is found that the prosecution did prove beyond reasonable doubt that D5 gambled in a gambling establishment.

42.I dismiss D5’s appeal against conviction.

D.6.  D6’s appeal

43.The magistrate adopted the evidence of the “undercover” police officer: D6 was at a fishing machine in Jing Na. There was a Jing Na point card in the reader on the machine. The magistrate set out what D6 said under caution[8]:

“(c) In the record of interview, prosecution provisional exhibit PP54, she admitted under caution that [she] played a fishing machine in the amusement game centre involved in the case. Having gained points, [she] redeemed the points for money from a lady on the premises (the replies to Q3, Q4 and Q8).”

44.After careful consideration of the evidence, the magistrate found that D6 made the admissions of her own free will. I have no ground to interfere with this finding. I also find that the prosecution did prove beyond reasonable doubt that D6 gambled in a gambling establishment.

45.I dismiss D6’s appeal against conviction.

E.  D10’s appeal

46.I now deal with D10’s appeal.

E.1.  Grounds of appeal

47.D10 was represented by Mr Hectar H. Pun, S.C., and Ms Leung Lai Kwok, Yvonne.  The appellant put forward two grounds of appeal in total.

Ground of appeal (1):  The magistrate erred in applying the burden and standard of proof for the defence under section 19(3) of the Amusement Game Centres Ordinance; and

Ground of appeal (2):  In his verdict against D10, the magistrate erroneously relied on non-admissible hearsay evidence, namely D1’s record of interview, to reach a conclusion adverse to D10.

E.1.a Ground of appeal (1)

48.On Ground of appeal (1), the appellant’s submission was basically that according to the defence under section 19(3) of the Amusement Game Centres Ordinance, D10 was only required to bear an “evidential burden”, and not a “persuasive burden”.

49.Section 19(3) of the Amusement Game Centres Ordinance sets out the defence that a licensee may rely on:

“ Where a condition of a licence is contravened the licensee commits an offence unless he proves that—

(a) he did not know and had no reason to suspect the existence of the circumstances giving rise to the contravention; and

(b) he could not, by the exercise of reasonable supervision and reasonable diligence, have prevented those circumstances arising.” (emphasis added)

50.The appellant’s stance was that the existing section 19(3) of the Amusement Game Centres Ordinance imposed a “persuasive burden” on a licensee. “Unless he proves that” was an undue infringement of the right to “presumption of innocence”, and therefore failed the “proportionality” test, infringing the licensee’s right that was protected by the constitution. The court should adopt a remedial interpretation of the burden of proof imposed by section 19(3) and hold that the licensee only bore an “evidential burden”.

E.1.b. “Evidential burden” or “persuasive burden”

51.On the basis of a disagreement of the appellant’s view, the respondent submitted that even if the defence in section 19(3) imposed a “persuasive burden” on the licensee, it could satisfy the “proportionality” test, and that the standard of the defence was a balance of probabilities, which was not a stringent requirement and would not be unfair to the appellant. I am of the view that this issue should be dealt with first.

E.1.c. The appellant’s argument

52.The appellant cited the discussions on whether the “presumption of innocence” should be supplanted and whether the defence imposed on the accused should be a “persuasive burden” or an “evidential burden” in HKSAR v Lee To Nei[9] (relating to section 9 of the Trade Descriptions Ordinance) and HKSAR v Diao Rui[10] (relating to section 18(2) of the Import and Export Ordinance).

53.The appellant submitted that the findings in those two cases (namely that the defence was an “evidential burden”) applied similarly to section 19(3) of the Amusement Game Centres Ordinance, which was involved in the present case.

54.The appellant cited the considerations set out by Deputy Judge Albert Wong (as he then was) in Diao Rui after making reference to a number of cases, including but not limited to:

(1)  the seriousness of the offence;

(2)  the penalty prescribed in the Ordinance;

(3)  whether the accused was the only person having knowledge of the facts constituting his defence (the defendant’s peculiar knowledge), for example, whether evidence of the facts to be proved by the licensee could be readily collected; and

(4)  whether the prosecution was able to adduce evidence in rebuttal.

55.The appellant also cited Lee To Nei, in which Ribeiro PJ mentioned in the judgment (paragraphs 83 to 86) that even if the licensee only had an “evidential burden”, he must adduce evidence sufficient to raise a reasonable doubt as to the relevant defence.  If the evidence was insufficient or incredible, it did not matter whether the defence was a “persuasive burden” or an “evidential burden”.

56.The appellant contended that the defence in section 19(3) was similar to the defence in section 9 of the Trade Descriptions Ordinance in Lee To Nei and that the decision in Lee To Nei was therefore equally applicable to the present case[11].

57.The appellant contended that for the purposes of section 19(3), the prosecution could adduce evidence that the contraventions were discovered if diligence was exercised, and therefore the imposition of a “persuasive burden” on the licensee could not satisfy the proportionality test, which unduly derogated from the “presumption of innocence”.

58.The appellant also cited two other cases, submitting that the Court of First Instance adopted the magistrates’ interpretation of the defence in section 19(3), namely that it was only an “evidential burden”, at the trials.

59.The first one was the recent judgment of Wong J on an application for costs in HKSAR v Koo Ka Chun [transliteration][12]. The appellant contended that the factual background of that case was the same as that of the present case, both involving contraventions of licence conditions by amusement game centres in 2019 and the interpretation of the defence in section 19(3) of the Amusement Game Centres Ordinance. Neither at trial nor on appeal did the prosecution/respondent challenged the position that the evidential burden rested solely on the defence as agreed by both parties at trial.  On this premise, Wong J adopted this position.  And Wong J was also the judge who wrote the judgment in Diao Rui.

60.The second case cited by the appellant was HKSAR v Tsang Lap-shing [transliteration][13], which was dealt with by me. The factual background of that case could be said to be the same as that of the present case, and it was an appeal on costs also involving breach[es] of licence condition[s] by an amusement game centre in 2019 and the interpretation of the defence in section 19(3) of the Amusement Game Centres Ordinance. In reaching the conclusion that the appellant was not “bringing suspicion to oneself”, I also considered the magistrate’s view that the defence had discharged the “evidential burden”, and then it was necessary to consider the point of “whether the prosecution could prove beyond reasonable doubt that the defendant could, by the exercise of reasonable supervision and reasonable diligence,have prevented point redemption”[14]. I did not raise any doubt on this.

61.The appellant asserted that although the points in dispute in the above two cases were not the burden of proof of the defence under section 19(3), neither the two judges of the Court of First Instance nor the prosecution challenged the interpretation by the licensees/appellants. [The judges] even determined on this basis whether the acquitted defendants “brought suspicion to themselves”, and eventually allowed the licensees’/appellants’ appeals in the two cases with costs.

62.Besides, the appellant submitted that although in HKSAR v Kwok Kwun Ying [transliteration][15], the court ruled in relation to section 19(3) that the licensee was required to prove the two conditions set out in section 19(3)(a) and (b) under a standard of proof of balance of circumstances, since the decision in Kwok Kwun Ying was made prior to Lee To Nei and Diao Rui, the legal principles of that decision had been overtaken and departed from by new developments.

E.1. d. The respondent’s stance

63.The respondent concurred that in both cases of Lee To Nei and Diao Rui, the courts ruled that the “persuasive burden” placed on the defendants could not satisfy the proportionality test and therefore needed to be dealt with by the remedial interpretation method of reading down, namely the accused only had the “evidential burden” when relying on the defence.

64.The respondent emphasized, however, that it did not mean that the decisions in Lee To Nei and Diao Rui were applicable to the present case.  The respondent submitted that under the legal principles set out in Lee To Nei and Diao Rui, on the contrary, it could better illustrate that section 19(3), in placing the “persuasive burden” on the licensee in the present case, could also satisfy the proportionality test.

65.The respondent submitted that the court’s consideration of “proportionality” in the present case was totally different from that in Lee To Nei and Diao Rui.

66.Firstly, the two cases of Lee To Nei[16] and Diao Rui[17]involved section 9(2) of the Trade Descriptions Ordinance, Cap 362 of the Laws of Hong Kong and section 18(1)(a) of the Import and Export Ordinance, Cap 60 of the Laws of Hong Kong respectively. Both [provisions of the] ordinances are indictable offences. The present case involves section 19(3) of the Amusement Game Centres Ordinance, Cap 435 of the Laws of Hong Kong, which is only a summary offence[18]. In other words, when considering factors like “the nature and seriousness of the offence” and “the severity of the penalties and [social or professional] stigma carried by them”[19], the present case is obviously relatively minor.

67.Moreover, the defendants in Lee To Nei and Diao Rui were involved in some “goods”. Lee To Nei involved 26 bottles of Chinese herbal medicines with forged trademarks; whereas Diao Rui involved 81 endangered turtles under protection and some live crickets prohibited from importation which were not included in the manifest. The knowledge of the goods in question of the defendants in both cases was not comparable to that of the 5^th appellant in the present case, as a licensee, of the operations in his amusement game centre. On the issue of “the question to be asked is: what would a reasonable person expect the accused to do under the circumstances of that case?”[20], a reasonable person’s reasonable expectation of D10 as the licensee in the present case should have been much higher than that of the defendants in Lee To Nei and Diao Rui.

68.In addition, the goods that the defendants in Lee To Nei and Diao Rui were involved in might have a serious impact on the physical health of the people of Hong Kong; and therefore, in respect of “the prevailing societal conditions”[21], the number of people affected and the amount of money involved in Lee To Nei and Diao Rui were not comparable to the gambling acts in the amusement game centre involved in the present case.

69.Overall, the respondent was of the view that even if the defence in section 19(3) imposed a persuasive burden on the accused, it could satisfy the “proportionality” test; and that the standard of the defence of a balance of probabilities was not a stringent requirement and would not result in injustice to the defendant.

70.The respondent did not concur with the appellant’s submission that Kwok Kwun Ying had been overtaken by new developments and departed from. The respondent cited HKSAR v Cheung Hing Lung [transliteration][22], submitting that the circumstances were not as described by the appellant.

E.1.e. Discussion

71.As stated by the respondent in its written submission, the Court of Final Appeal laid down the following authoritative legal principles in relation to the “presumption of innocence” in HKSAR v Lam Kwong Wai and Another[23]. In that case, the Court of Final Appeal pointed out that the “presumption of innocence” was clearly protected by Article 87(2) of the Basic Law and Article 11(1) of the Hong Kong Bill of Rights Ordinance, Cap 383 of the Laws of Hong Kong. However, where there was a conflict between what was stipulated by statutory provisions and the Basic Law and the Hong Kong Bill of Rights Ordinance, the issues to be considered by the court were, in sequence, as follows:

(1)  The meanings of the relevant statutory provisions had to be ascertained in accordance with recognised principles of common law interpretation and any relevant statutory provisions associated therewith, for the purpose of considering whether such interpretation constituted a derogation from the “presumption of innocence”.

(2)  If it constituted a derogation from the “presumption of innocence”, the “rationality” test and the “proportionality” test had to be applied to consider whether the derogation was justified.

(3)  If there was no justification for the derogation, it was necessary to consider whether the relevant provisions would become invalid as a result. If the relevant provisions were likely to become invalid, the court would have to decide whether remedial interpretation could be applied. Techniques of interpretation included restricting their meaning or “reading down”, so that the relevant provisions could preserve their validity.

72.In other words, if certain statutory provisions, on their true interpretation and proper explanation, would derogate from an established basic legal right of a defendant, the court would consider whether the derogation was justified; if the derogation was not justified, the court must then further consider remedial interpretation of the relevant statutory provisions so that the validity of the legislation could be maintained.

73.There was no dispute between the appellant and the respondent that:

(1)  as a matter of statutory construction, it was the clear legislative intent to reverse the burden of proof in section 19(3);

(2)  as far as the offence against which section 19(3) was directed was concerned, such reversal aimed at pursuing a legitimate aim; 

(3)  such reversal also satisfied the rationality test.

74.Therefore, in considering the offence under section 19(3) in the present case, the main issue was whether the reversal of the burden of proof could satisfy the proportionality test.

75.The circumstances of the present case were exactly the same as those of Tsang Lap Shing, which I dealt with before, and I did not challenge the magistrate’s statement that the defence did discharge the “evidential burden”. However, from another perspective, the prosecution and the defence did not make any submissions on the burden of proof in respect of the defence at that time, and both parties accepted the magistrate’s view.

76.I concur with the considerations put forward by Deputy Judge Albert Wong (as he then was) in Diao Rui (see paragraph 54 above).

77.Firstly, in terms of the seriousness of the offence, although a contravention of the Amusement Game Centres Ordinance was not as serious as a contravention of the Trade Descriptions Ordinance or the Import and Export Ordinance, it could not be said to be not serious at all.

78.Secondly, in respect of the penalties prescribed in the ordinance, although the present case involves a summary offence, the sentence also involves a term of imprisonment (6 months’ imprisonment on first conviction and 1 year’s imprisonment on subsequent conviction).

79.Besides, as to whether the facts constituting the accused’s defence was something peculiarly within his knowledge, such as whether the evidence of the facts to be proved by the licensee could be conveniently collected; and whether the prosecution could adduce evidence in rebuttal, I am of the view that they can be dealt with together. Whether D10, as the licensee, knew or suspected that there were contraventions was, of course, known only to him. However, the prosecution may collect evidence and/or adduce evidence in rebuttal as to whether or not the contraventions could not have been prevented even if he had exercised reasonable diligence and supervision.

80.In Diao Rui, Deputy Judge Albert Wong (as he then was) accurately summarised in paragraphs 83 to 86 Ribeiro PJ’s decision in Lee To Nei:

“83. In relation to section 9 of the Trade Descriptions Ordinance, Ribeiro PJ considered that, as the accused must adduce evidence to satisfy the aforesaid three requirements, the perceived difficulty in disproving the accused’s claim of lack of knowledge would not present much of a problem because it was not sufficient for him to prove merely that he had no knowledge.

84. Ribeiro PJ further pointed out that, as far as the offence in that case was concerned, as long as the prosecution could prove that the accused should have been able to discover that the trade description was false if he had taken steps that were considered to constitute reasonable diligence, he would not be able to escape liability even if he could prove that he had neither knowledge nor reason to suspect.

85. In Ng Po On, Ribeiro PJ made it clear that even if the accused bears only an evidential burden, he must adduce or point to evidence sufficient to give rise to a reasonable doubt as regards the relevant excuse. If the evidence is not sufficient or credible, then he cannot rely on the excuse. Therefore, whether the burden of proof placed on him is persuasive or evidential, he has to adduce the best evidence to support his excuse. What the standard of proof is and what evidence the accused adduces are relevant only in so far as they affect how the fact-finding tribunal assesses the evidence relied on to support the excuse.

86.  Whether the diligence exercised is reasonable or not is to be assessed objectively. Therefore, the defence is not solely concerned about the personal knowledge of the accused.”

81.Having regard to the fact that D10, as the licensee, was required under section 19(3) to “prove” that he:

(1)  did not know the existence of the circumstances giving rise to the contraventions;

(2)  he had no reason to suspect the existence of the circumstances giving rise to the contraventions; and

(3)  he could not, by the exercise of reasonable supervision and reasonable diligence, have prevented those circumstances arising.

The prosecution might adduce evidence that the contraventions of the licence conditions could have been discovered if the licensee had taken steps considered to be reasonable diligence, and even if D10 could prove that he did not know and had no reason to suspect, that would not have exonerated him.

82.I concur with the argument in the appellant’s submission that the burden of proof on D10 was an “evidential burden”, and not a “persuasive burden”.

83.I also concur with the appellant’s submission that the decision in Kwok Kwun Ying has been overtaken by new developments. Although on appeal in Cheung Hing Lung, the court did not adopt the “evidential burden” in Lee To Nei to overtake the “persuasive burden” in the previous case of HKSAR v Vily Field Investment Limited[24], it is the burden of the defence under section 19(3) that I have to consider.

84.I am concerned that different magistrates, prosecutors and/or the defence counsel have different views in handling cases involving a contravention of section 19(3), which is undesirable. The Department of Justice may need to consider whether the issue should be referred to a higher court for a final decision.

E.2  Grounds of appeal

85.The two grounds of appeal will be dealt with together.

86.I have already ruled that the burden of proof on D10 was an “evidential burden”. Although the appellant argued that the magistrate had erred in this aspect, I must take into account the fact that at the trial the defence submitted that the burden of proof was a “persuasive burden”, which the prosecution did not dispute, and therefore the magistrate did not consider the testimonies and evidence on the basis that D10 was only required to bear an “evidential burden” at all.

87.During the “rehearing”, I have to consider the testimony of D10 and that of D2 called by the defence.

E.2.a. The appellant’s stance

88.The appellant’s stance is that:

(1)  It was specified in the prosecution’s Consolidated Brief Facts that D10’s contraventions of the licence conditions were that “the results obtained from playing the games were used to offer and refund payments”, namely contraventions of the second half of licence condition (12) and of licence condition (13).

(2)  The appellant quoted from the testimonies of D10 and D2 in detail, submitting that D10 had discharged the evidential burden and presented substantial evidence, through his own testimony and by calling D2 to testify in court, so as to prove that:

(a)  he did not know and had no reason to suspect the existence of the acts of point redemption giving rise to the contraventions of the licence conditions in Jing Na TV Game Centre at 8:43 p.m. on 12 April 2019; and

(b)  he exercised reasonable supervision and reasonable diligence, but could not prevent the acts of point redemption giving rise to the contraventions of the licence conditions arising in Jing Na TV Game Centre at 8:43 p.m. on 12 April 2019; and

(3)  The prosecution failed to adduce sufficient evidence to satisfy its persuasive burden under the standard of beyond reasonable doubt, in order to prove that:

(a)  D10 knew or had reason to suspect the existence of the acts of point redemption giving rise to the contraventions of the licence conditions in Jing Na TV Game Centre at 8:43 p.m. on 12 April 2019; or

(b)  D10 could, by the exercise of reasonable supervision and reasonable diligence, have prevented the acts of point redemption giving rise to the contraventions of the licence conditions arising in Jing Na TV Game Centre at 8:43 p.m. on 12 April 2019.

89.On the other hand, the appellant submitted that the magistrate had erroneously relied on what D1 said under caution (namely that D1 knew that someone asked customers to redeem points for money in the establishment), and then went on to say, “How would she not tell her employer(?)” and that the magistrate had therefore relied on the veracity of the statement made by D1 under caution in the interview.

E.2.b. The respondent’s stance

90.The respondent’s stance was that even if D10 only had an “evidential burden”, D10 could not satisfy the “evidential burden” because the magistrate did not believe his evidence.

91.The respondent submitted that the magistrate correctly found that the testimonies of D10 and D2 were exaggerated, untrue and not credible.

92.Regarding the cautioned statement of D1, the respondent submitted that the magistrate, in considering the allegations against D10, did not apply the record of interview of D1 for directly proving the veracity of the facts stated by the defendant, and that therefore the rule against hearsay evidence did not apply. The respondent quoted the Court of Final Appeal as stating in Wong Wai Man v HKSAR[25] that if the confession statement of the co-defendant was not applied for directly proving the veracity of the facts stated by the defendant, the rule against hearsay did not apply[26].

93.The respondent was of the view that the magistrate’s analysis in paragraph 71(d) of the Statement of Findings was precisely the situation referred to in Wong Wai Man where the cautioned statement of another defendant was not relied upon as direct proof. In the present case, the magistrate only used D1’s admission under caution in the record of interview to consider the credibility of D10’s testimony and not as a finding of factual veracity.

E.2.c  Discussion

94.I will deal with the issue of hearsay evidence first (Ground of appeal 2). I concur with the appellant’s submission. It is clear that the magistrate erroneously applied hearsay evidence when he did not accept D10’s evidence on the basis that what D1 had said under caution was true, and then inferred that it was not probable that D1 had not informed D10 of the circumstances.

95.Regarding Ground of appeal (1), it is true that the magistrate expressly stated that he did not accept D10’s evidence, but he erroneously considered hearsay evidence on which he could not rely and drew an adverse inference against D10, which then affected his finding.

96.Counsel representing D10 at the trial summarised D10’s testimony in his closing submission[27]:

“ D10’s testimony in examination-in-chief

43. D10 elected to give evidence in court voluntarily. His testimony in examination-in-chief was as follows: —

(1) D10 was working as the proprietor of 3 amusement game centres;

(2) D10 worked as the proprietor for about 10 years;

(3) D10 has ‘joined’ the industry of amusement game centres for 23 years;

(4) Up to the day when the case occurred, D10 had been the licensee of Jing Na for about 2 years, but he did not receive any remuneration. It was only that his friend ‘asked me to help’;

(5) D10 did not know that someone redeemed points for cash in Jing Na;

(6) The functions of the game machines determined whether they were activated by cash or point cards.

(7) Fish-catching machines relied on the pure skills of the players to decide victory or loss.

(8) Regarding Exhibit D2, it was sent to each amusement game centre by the related department because according to the document, all game machines that allowed point return were legal and [it] was not regarded as gambling.

(9) As the licensee of Jing Na, D10 took the following measures to ensure that there was no redemption of points or gambling on money: —

(a) D10 or the establishment attendant would give the related warnings selling point before cards (sic) and ‘passing by’;

(b) D10 would inspect Jing Na and keep an eye out on whether there was redemption of points for money;

(c) D10 would visit Jing Na about 3 [or] 4 times a week, stay for about 6 to 8 hours each time, and conduct inspections and observation;

(d) There were no specific dates for D10’s visits to Jing Na, and visits would be paid when necessary;

(e) [Closed] circuit televisions(CCTV) were installed at Jing Na and connected to D10’s mobile phone, D10’s home and computer[s] in the establishment, and D10 would watch CCTV whenever [he] had time at different places;

(f) A number of notices were posted in Jing Na (stating that) redemption for cash was not allowed;

(g) D10 [sometimes] asked his friend[s] to keep an eye out when [they] visited Jing Na for fun;

(h) According to D10’s understanding, there was no suspected point redemption for money in Jing Na;

(i) D1, as the establishment attendant, would also conduct inspections and give the related (sic) advice; and

(j) D10 did not know D2 before the case occurred and had never heard of the English name CoCo.

D10’s testimony under cross-examination

44. D10’s testimony under cross-examination was as follows: —

(1) D10’s friend, proprietor of Jing Na, would visit Jing Na to conduct inspections and advise customers not to redeem points;

(2) Notice[s] were posted at Jing Na, “We (namely Jing Na) do more things only”, to prevent gambling;

(3) D10’s friend, proprietor of Jing Na, would visit Jing Na to conduct inspections at irregular times;

(4) The meaning of the words in the 3^rd line of Exhibit P7, the card, (‘the card’) was the same as that of the notice in the photograph Exhibit D1(G), (‘the notice’), namely that customers were not allowed to redeem points in the cards for cash;

(5) The reason why D10 kept reminding customers was that it was within the scope of his work;

(6) If a customer disobeyed the advice of D1 [or] D10 and broke the law, Jing Na would make a report to the police, and a report to the police would not affect the operation;

(7) If D10 found that a customer redeemed points [or] gambled, he would give advice first. But if the customer did not obey, he would make a report to the police for assistance;

(8) D10 had never seen any illegal activities such as gambling and smoking in Jing Na;

(9) D10 repeatedly disagreed with the prosecution’s allegations that he had not taken adequate measures to stop gambling [and] redemption of points; and

(10)  D10 disagreed with the prosecution’s suggestion that inspections and CCTV were not effective in stopping gambling.”

97.In addition, I note that the counsel representing D10 at that time stated in paragraph 51 of his closing submission that:

“51. More importantly, during D10’s cross-examination, when the prosecutor put the prosecution’s case to D10, the prosecutor never pointed out to D10 specifically and in depth the inadequacies of the measures taken by D10, namely, for example, insufficient manpower at Jing Na, insufficient number of inspections made by D10, insufficient duration of inspections made by D10, and so on. The prosecution did not even refute D10’s version, namely, for example, by putting to D10 that: he never conducted any inspections at all, he never gave any advice to customers at all, he kept on giving the related reminders to customers because he knew or suspected that there were the related illegal activities, and so on.”

98.Indeed, the prosecution never specifically pointed out to D10 the inadequacies of the measures taken by D10. Besides, D2 admitted that she conducted the goings-on of redemption for money stealthily. It appears that D10 did satisfy the evidential burden, and the prosecution failed to prove beyond reasonable doubt that D10 could not rely on the defence of section 19(3) and therefore failed to prove its case.

F.  Conclusion

99.For the above reasons, I allow D10’s appeal against conviction, quash the conviction and set aside the fine.

G.  Overall conclusion

100.I dismiss the appeals against conviction lodged by D1, D4, D5 and D6. I allow D10’s appeal against conviction, quash the conviction and set aside the fine.

Ms CHAN Shuk Yi Bertha, Christal,Assistant Director of Public Prosecutions, and Mr WONG Chun Man, Geoffrey, Public Prosecutor, of the Department of Justice, for the Respondent, the HKSAR

The 1^st, 2^nd 3^rd and 4^th appellants in person

Mr Hectar H PUN, SC, and Ms LEUNG Lai Kwok, Yvonne, instructed by HO TSE WAI & Partners, for the 5^th appellant

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. P. Y. Lo, Barrister-at-law.