The Queen v. Ng Kwan Pui

HCMA000223/1988

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H E A D N O T E

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Copyright - S. 9 affirmation admissible even when owner of copyright testifies - duty of cassette publisher to make enquiries from producer of artwork.

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

MAGISTRACY CRIMINAL APPEAL NO. 223 OF 1988

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BETWEEN

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Coram: Hon. Bewley, J. in Court.

Dates of hearing: 21st June and 15th July 1988.

Date of handing down judgment: 28th July, 1988.

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J U D G M E N T

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1. The appellant was convicted by Miss Wong at South Kowloon Magistrates Court of possession, for the purposes of trade or business, of infringing copies of artistic work in which copyright subsisted, contrary to section 5(1) of the Copyright Ordinance, Cap. 39. He was Also convicted, under section 5(2) of the Ordinance, of possession of plates used, or intended to be used, for making such infringing copies.

2. The appellant is the sole proprietor of Korman Record Trading Co. He publishes cassette tapes. On 27th May, 1986, Customs & Excise Officers seized 1,235 cassette inlaid cards, entitled 'Chung Kwok Ching Wai' (Exh. P2), in Korman's premises in Portland Street. On the same day eight printing films, or plates (Exh. P8), were seized at A.F. Offset Printing Co., which had been delivered by Korman for printing cassette inlaid cards. These plates had been used for making Exh. P2. An invoice dated 28th August, 1985, had been issued to Korman for printing the cards. These facts are not disputed.

3. It is also accepted by Mr Waley, for the appellant, that the photograph of a 'reasonably well-known' singer, Miss Stella Chee, which appears on the cards, is an infringing copy of artistic work if - which he does not accept - copyright in the work subsisted.

4. Section 5(1) of the ordinance provides:-

"Without prejudice to section 21 of the Act, any person who for the purposes of trade or business has in his possession any infringing copy of a work or other subject matter in which copyright subsists under the Act or this ordinance shall, unless he proves to the satisfaction of the court that he did not know and that he had no reason to believe that it was an infringing copy of any such work or other subject matter, be guilty of an offence and shall be liable on conviction to a fine of $1,000 in respect of each such infringing copy and to imprisonment for 12 months."

Section 5(2) is in similar terns.

5. The prosecution first had to prove, beyond reasonable doubt, that copyright subsisted in the photograph.of Miss Chee. The two charges stand or fall together.

6. Evidence was given by Mr Chung Nam-pui, managing director of Fung Hang Record Co. Ltd, a producer of records and cassettes, that his company had commissioned that particular photograph of Miss Chee (Exh. P12(a)). He had purchased it from the freelance photographer who had taken the photograph it was Mr Chung who made the initial complaint to the Customs & Excise Department.

7. The photograph had been used on a record cover, which had been sold widely in Hong Kong and overseas. Fung Hang had naturally incurred expenditure in the production and promotion of this record and the cover. It had not given any person permission to make use of the photograph.

8. Mr Chung said he had bought the copyright from the photographer, but he was unable to point to any document supporting the purchase, except the invoice from the photographer; which he said he had given to the Customs & Excise Department.

9. Mr Chung produced an affirmation (Exh. P12), based on information that he had supplied, signed by hire, exhibited to which is the photograph of Miss Chee, The affirmation is headed:-

It is a short affirmation and its essentials are contained in the following three paragraphs:-

"3.    Fung Hang Record Limited is the owner of the artistic works named in Column 1 of the Schedule to this affirmation and of which true copies are exhibited hereto.

4.    From the date of first publication of each of the artistic works as set out in Column 2 of the said Schedule up to and including the present date, copyright subsisted in the said artistic works under the United Kingdom Copyright Act, 1956.

5.    Fung Hang Record Limited is the owner of the copyright of the artistic works and was the copyright owner thereof since their respective dates of first publication up to and including the present date."

10. Section 9 of the ordinance provides:-

"(1)    An affidavit which -

(a)    purports to have been made by or on behalf of the owner of a work or other subject matter in which copyright subsists under the Act; and

(b)    states that -

(i)    at a time specified therein copyright subsisted in the work or other subject matter;

(ii)    the person named therein is the owner of the copyright in the work or other subject matter; and

(iii)    a copy of the work or other subject matter exhibited to the affidavit is a true copy of the work or other subject matter,

shall, if it complies with subsection (3), be admitted without further proof in any proceedings under       the Act or this ordinance.

(2)      The court before whom an affidavit is produced under subsection (1) shall presume; until the       contrary is proved -

(a)    that the statements made therein are true; and

(b)    that it was made and authenticated in accordance with subsection (3)

(3)     An affidavit for the purposes of this section shall be -

(a)    made on oath -

(i)    before a magistrate or a notary public if it is made at any place within the Commonwealth, or

(ii)    before a consular officer of Her Majesty's Government in the United Kingdom or a notary public if it is made at any place outside the Commonwealth; and

(b)    authenticated, so far as relates to the making thereof, by the signature of the magistrate, notary public or consular officer before whom it is made."

11. The magistrate accepted both the evidence and the affirmation of Mr Chung. He found that copyright subsisted in the photograph of Miss Chee and that Fung Hang was the owner of the copyright from the date of first publication, 2nd January, 1981, up to and including the date of the affirmation, 20th February, 1987.

12. Mr Waley submits that the magistrate was wrong to place weight on the affirmation, having regard to the fact that Mr Chung also gave oral evidence. He says it is contrary to natural justice to bolster up oral evidence with an affirmation of such draconian effect and that the section is meant primarily to assist overseas owners of copyright. Two authorities are relied upon.

13. In Phonogra hic Performance (South Last Asia) Limited v. California Entertainments Limited⁽¹⁾, the Court of Appeal held that the application of section 9 was not restricted to criminal 'proceedings'. Having come to this conclusion., Clough, J.A. went on to say at p. 15:-

"Searching for the true intent; meaning and spirit of section 9, 1 can identify no more than an intention to provide a simpler way for an owner to prove his title in copyright proceedings, bearing in mind that the common experience in the courts in Hong Kong is that the owner of the copyright in such proceedings, be they civil or criminal is usually resident outside Hong Kong. The inconvenience to the non-resident owner of proof of title to copyright in the usual way with production of all relevant documentation is obvious."

14. Mr Waley points to this passage as support for his submission that the section is intended to assist nonresident owners of copyright, who would be severely disadvantaged were it not for the assistance provided by the section. He submits that there is no such disadvantage to persons resident in Hong Kong.

15. That, with respect, is not entirely true. Quite apart from the question of travel from overseas, there may frequently be difficulties in proving the subsistence of copyright. There may be matters of some technicality, such as the establishment of originality, which require strict proof beyond reasonable doubt.

16. I do not think Clough, J.A. was intending to say any more than that this section was intended to make it easier for the copyright owner to prove his title in both criminal and civil proceedings. The reference to the overseas title holder was in recognition of the fact that it will be he who benefits most from such a provision. It is certainly of considerable assistance to a plaintiff or prosecutor in copyright proceedings but,, having regard to the present extent of copyright infringment in Hong Kong, it is not surprising that the legislature has introduced such a measure.

17. Counsel has also cited R. v. Lee⁽²⁾. In that case no section 9 affirmation was before the court. The appeal was allowed under section 9(8) of the Copyright Act, 1956, because the court was not satisfied that "a layman ....... would regard the defendant's shears as a reproduction of the drawing exhibited in this case". The section provides:-

"The making.of an object which is in three dimensions shall not be taken to infringe the copyright in an artistic work in two dimensions, if the object would not appear, to persons who are not experts in relation to objects of that description, to be a reproduction of the artistic work."

Leonard, J. concluded his judgment in these terms:-

"I would finally remark that I have been reluctant to come to the decision to which I have come. This was flagrant copying of a kind that must be stopped. I an relieved that my decision need not stand in the way of future prosecutions. Section 9 of our Copyright Ordinance is there to be used in appropriate cases."

18. It is on the final sentence that counsel relies. In my view, however, the judge was merely indicating that that section was available to assist the Crown in such cases in establishing the subsistence and ownership of copyright, although the Crown would still have to overcome the hurdle of section 9 (8) of the act in proving infringement in similar cases.

19. On the point that it is wrong to supplement oral evidence with a statutory affidavit, it is only necessary to refer to section 20 of the Evidence ordinance, which allows the production of bankers' records as prima facie proof of their contents, but does not prohibit the giving of oral evidence by a banker to supplement the evidence of the books. Cross-examination of, Mr Chung might, of course, have had the effect of 'proving the contrary' under section 9. This was the risk the Crown took in calling him. In the circumstances of this case there was no need to call him, but both his evidence and his affirmation were admissible.

20. Mr Waley also argues that this affirmation, although admissible evidence, was not put in specifically under section 9 of the Ordinance and therefore cannot have statutory effect. That, in my judgment, cannot be right. Not only is the document stated to be 'In the matter of section 9 of the Copyright Ordinance, Chapter 39', but it would have been inadmissible on any other basis, being a prior consistent statement by the witness. The only purpose in tendering the document was to take advantage of section 9 of the ordinance.

21. The contrary not being proved, the magistrate was entitled to rely on the affirmation - as she clearly did - to establish the subsistence and ownership of the copyright in the photograph of Miss Chee.

22. A burden then lay on the appellant to prove to the satisfaction of the court that he did not know and that he had no reason to believe that he was using an infringing copy.

23. The appellant gave evidence and said that Kapo had designed some 500 inlaid cards for his firm over a period of eight years. His practice was to give the name of the song and the lyric to an employee; who would take them to Kapo. Sometimes he also provided the negative or slide of a suitable photograph, but 90% of the time the photograph was supplied by Kapo. On this occasion he did not supply the negative or slide of Stella Chee皊 photograph.

24. The appellant said he had never before met any problem with copyright in respect of Kapo's work. He trusted Kapo and had never himself made enquiries. When Kapo had completed the design work, they telephoned Korman; an employee would go and collect the work and take the film to A.F. Offset Printing Co. for printing. The appellant himself would not inspect the film before it was printed and he did not do so in the case of Miss Chee's photograph. He had been selling cassettes bearing this photograph for about two years prior to the raid without complaint, and consequently thought that there would be no problem with copyright.

25. The magistrate found on this evidence that the appellant "did not care to know whether the completed design by Kapo comprised a photograph or other artistic work. He did not want to know about copyright in the artistic work of the design. He closed his eyes from whatever the design, closed his eyes to any subsisting copyright. He did not want to know that Exh. P2 were infringing copies of an artistic work in which copyright subsisted. He deliberately shut his eyes in the circumstances, I was not satisfied on balance of probabilities that he had no reason to believe that Exh. P2 were infringing copies of an artistic work in which copyright subsisted."

26. Mr Waley submits that the magistrate has failed to evaluate the evidence in terms of R. v. Chong Kam Sau⁽³⁾ and has given no reasons for her conclusion. Furthermore the magistrate has not said that she disbelieved the appellant. Mr Waley also says the magistrate was speculating when she found that the appellant had 'closed his eyes'; it was not an irresistible inference from the evidence.

27. He cities in support a passage from the judgment of Sachs, J. in Thompson v. Thompson⁽⁴⁾:-

"Thirdly, the test whether or not there is 'reason to believe that the other party has been living' must relate to the standards of belief of a reasonable man and not to those of the particular petitioner. The legislature could hardly have intended that on the same set of facts the right to relief might vary according to whether the petitioner happened to be a moron or a senior wrangler - with their differing approaches to what constitutes such 'reason'. Fourthly, facts from which the inferences are no more than 'pure speculation' do not constitute 'reason to believe'."

28. There is of course no evidence that the appellant deliberately 'closed his eyes' to the question of copyright. The question is whether he was entitled to rely on Kapo, without making any enquiries, in the light of their incidentfree relationship over' several years. Mr Waley argues that it is unreasonable to expect the appellant to have checked the copyright position with Kapo in respect of each commission.

29. The other side of the coin, as Mr Dalgleish points out, is that it would be all too easy for a publisher to pass the buck and say that he relied on someone' else. He submits that, in order for the defence to succeed? it must establish that the defendant made enquiries somewhere along the line.

30. In support of this argument, counsel has cited several cases, only one of which I find at all helpful. This is Infabrics Ltd. and others v. Jaytex Ltd.⁽⁵⁾, an English Court of Appeal decision that was overruled by the House of Lords on another point. At page 295 Buckley, C.J. said this.

"It is, in my opinion, incumbent upon anyone who proposes to make use of any artistic work in a way which night infringe copyright, if it subsisted in the work, to make such inquiries and investigation as he reasonably can to satisfy himself that the work is free of copyright. No doubt every case must depend upon its own particular facts, but if no adequate inquiries or investigations are made, it must, it seems to me, be difficult to suppose that the person proposing to use the work has no grounds for suspecting that it may be subject to copyright. In the present case nothing was said and no inquiries were made about copyright in respect of the 'past the post' design, either in England on the occasion when Infabrics' representative visited the defendants, or in Hong Kong on the occasion when he selected the design. In these circumstances it does not seem to me that the protection of section 17(2) or section 18(2)(a) is available to the defendants."

31. This is persuasive authority that a person in the position of the appellant has a duty to make some enquiry about copyright from his artwork producer, when he is contemplating the production of a cassette containing songs by someone as well-known as Stella Chee.

32. The fact that the appellant had never before crossed swords with the Customs and Excise Department, in spite of his long-standing relationship with Kapo, during which his modus operandi had remained the same, and that no one had questioned his right to publish Miss Chee's photograph until August, 1986, makes no difference to his liability under section 5. In practical terms it is only the copyright owner that is going to take action in such circumstances. Inevitably it will take time for the necessary inquiries and executive action to be put in train it would be quite wrong, in my opinion, if a publisher were allowed to set up a defence that no complaints had been received during that period.

33. On the other hand, there is no hardship on someone in the appellant's situation if he should be required simply to ask his artwork designer whether he has checked the copyright situation when he is proposing to publish cassettes featuring reasonably well-known artistes. If he receives a satisfactory assurance, that is all he is required to do, in a normal case, to satisfy the burden of proof that lies upon him.

34. This is something that the appellant signally failed to do it follows, in my judgment, that the inference drawn by the magistrate - that he deliberately shut his eyes - was one that she was entitled to draw, although it was unnecessary for her to go so far.

35. She did not, it is true, spell all this out in her Statement of Findings, nor did she mention that it was the state of the appellant's mind at the date of the charge that was relevant but the issue was quite clear. She was not satisfied that the appellant did not know and had no reason to believe that he was using an infringing copy. The only way she could have been so satisfied was if the appellant had made the necessary enquiries. The criticisms of O'Connor, J. in CHONG Ram-sau do not therefore apply.

36. In my judgment the magistrate was right. The appeal is dismissed.

(1) Civ. App. No. 31 of 1988

(2) [1980] F.S.R. 314

(3) M.A. 859/85

(4) (1956) 1 A.E.R. 603 at 605

(5) (1980) 1 Ch. 282

Representation:

Mr R.A. Dalgleish, Senior Crown Counsel for Respondent.

Mr E. Waley inst'd by M/s Liu, Chan & Lam for Appellant.