HKSAR v. Leung Chung Man and Another

CACC 105/2023, [2025] HKCA 722

On Appeal From [2023] HKDC 589

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 105 OF 2023

(ON APPEAL FROM DCCC NO 722 OF 2021)

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J U D G M E N T

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Hon Macrae Acting CJHC (giving the Judgment of the Court):

1.The applicants, who were D4 and D5 at their trial in the District Court before HH Judge E Yip (“the judge”), were each convicted, on 17 May 2023, of a separate charge of assisting an unauthorised entrant to remain in Hong Kong, contrary to section 37DA(1) of the Immigration Ordinance, Cap 115 (“the Ordinance”)[1]. On 5 June 2023, they were sentenced to 6 months’ imprisonment and 8 months’ imprisonment respectively. They have each applied for leave to appeal against their convictions only.

2.These applications were initially listed before a Single Judge of the Chinese division of the Court of Appeal, the trial having been conducted in Chinese. However, since the particular question of law requires resolution in the light of several important authorities from the Hong Kong Court of Final Appeal, all of which are in English, the applications were directed to be heard by the full Court of Appeal and re-listed before the English division as presently constituted.

3.On 5 June 2025, having heard argument from the parties at the appeal, we reserved judgment and said we would hand down our decision in due course. This is our decision.

4.Section 37DA of the Ordinance, which contains two subsections, stipulates:

“(1) Any person who assists an unauthorized entrant to remain in Hong Kong commits an offence and shall be liable—

(a) on conviction on indictment, to a fine of $500,000 and to imprisonment for 10 years; and

(b) on summary conviction, to a fine of $250,000 and to imprisonment for 3 years.

(2) No person shall be convicted of an offence under subsection (1) if he proves that he did not know, had no reason to suspect and could not with reasonable diligence have discovered that the person he assisted was an unauthorized entrant.”

5.One of the grounds of appeal ([18] infra) relevant to both applicants raises a question of law concerning the statutory defence provided under subsection (2) of section 37DA; namely, which of the five alternatives propounded by the Court of Final Appeal in HKSAR v Hin Lin Yee[2], and subsequently modified in Kulemesin v HKSAR[3], should apply to the mental element required for the offence? Ancillary to that question is whether this Court should be bound by its earlier decision in HKSAR v Yeung Kam Yuen[4], which held that the same statutory defence but under subsection (2) of section 37D (dealing with arranging the passage to Hong Kong of unauthorised entrants) falls within the third alternative in Hin Lin Yee (and Kulemesin)[5]. We shall deal specifically with the correctness of that judgment at [44]-[48] infra.

The prosecution case

6.The present charges arose from a police anti-vice operation, which was conducted between 2 and 20 August 2020. Police officers had placed two particular hotels, namely, BP International, situated at 8 Austin Road, Kowloon, and Nathan Hotel, situated at 378 Nathan Road, Kowloon, under surveillance. The operation culminated in a raid on 20 August 2020 resulting in the arrests of a number of persons, including D1 and D2 at Nathan Hotel[6] and the applicants (D4 and D5) at their respective homes[7]. The prosecution alleged that the defendants had played the following roles in the offences:

(a)  D1 (Wang Yu, who allegedly claimed herself to be Ng Hiu Yu or Kitty; but hereinafter referred to as “Wang”) was a sex worker[8], who came to and remained in Hong Kong as an unauthorised entrant[9]. She was a key member of the alleged syndicate involved and the manager of other sex workers[10];

(b)  D2 (Huang Guxiang; hereinafter referred to as “Huang”) was also a sex worker[11], who came to and remained in Hong Kong as an unauthorised entrant[12];

(c)  D4 assisted Huang to remain in Hong Kong between 1 and 2 August 2020;

(d)  D5 assisted Wang to remain in Hong Kong between 8 and 24 August 2020.

It may be noted that Wang and Huang were themselves charged with various offences, to which they pleaded guilty in the District Court and for which they were convicted and sentenced by a different judge.

7.The prosecution alleged that D4 and D5 allowed Huang and Wang to stay in their respective hotel rooms and thereby assisted them to remain in Hong Kong, when they each knew, or had reason to suspect or could with reasonable diligence have discovered, that they were unauthorised entrants[13].

The defence case

8.So far as D4 was concerned, a voir dire was conducted, in which he gave evidence as to the voluntariness of certain admissions attributed to him by the police. Both D4 and D5 also gave evidence on the general issue.

9.D4 claimed in evidence that his two written records of interview[14] (“WRI”) and two video recorded interviews[15] (“VRI”) were obtained by the threats and inducements of police officers. As for the content of these interviews:

(a)  In his second WRI, D4 confirmed that he had been told by Huang in late July 2020 that she had entered Hong Kong illegally and wanted to stay the night; accordingly, he made a booking for her at BP International for one night[16].

(b)  In his first VRI, D4 added that the first time he met Huang was on a date he could not recall in July 2020[17] in a room at BP International[18], where he paid for sexual services (they had met on approximately 20 occasions up until 20 August[19]). He went to the same room to receive sexual services from her on all subsequent occasions[20] and only rented a new room for her at the same hotel on 1 August[21].

(c)  In his second VRI, when asked why his help in booking and paying for a room for Huang was needed, D4 first said “unclear”[22], before explaining that he was willing to help because they were by then in a relationship[23]. When asked when he knew she was an unauthorised entrant, he said he only presumed she was one (and did not enquire with her further) after she had told him that she had no valid travel documents[24].

10.In his evidence at trial, however, D4 testified that he only suspected Huang was an unauthorised entrant in mid-August 2020, sometime after he had booked a room for her. He admitted seeing a red passport together with an entry-exit travel permit in her room but did not deem it necessary to inspect the inner pages of the passport.

11.D5 did not take issue with the voluntariness of the contents of his WRI[25], in which, having confirmed his earlier admission under caution, namely, “I helped her to book (a) hotel room, but I did not receive any money”, he stated:

(a)  The room he booked was Room 2137 of BP International for the period from 8 to 24 August[26].

(b)  He booked the room for a female person called Ng Hiu Yu or Kitty[27] but did not know that her real name was Wang Yu[28], or that she was an unauthorised entrant or illegal immigrant[29]. He claimed to have seen her passport both on LineChat and physically[30].

(c)  Due to their friendship and the fact that Wang did not have any credit card, he offered to book a room for her[31].

(d)  He went out with Wang for meals and accompanied her to exchange money on a few occasions[32].

12.D5 testified in court that he had become acquainted with Wang in June 2020 and had had regular sexual relations with her at BP International ever since. In August 2020, on being informed that her hotel booking was about to expire, he paid of his own volition for her renewed booking, since he thought “a man should pay the bill”[33]. On noticing her accent, he enquired if she was from Taiwan and was given a positive response. He never suspected that she was an unauthorised entrant, since he thought she looked like the person shown in her purported passport (Exhibit P4[34]) and, furthermore, she told him she would have to renew her permission to stay in Hong Kong with the Immigration Department every month; although he admitted knowing that she came to Hong Kong for the purposes of prostitution.

Reasons for Verdict

13.The judge found that the WRI and the VRI were taken from D4 voluntarily (no criticism has been levelled at that finding at this appeal), and gave full weight to the incriminating parts[35], in particular, his admission to knowing or suspecting that Huang was an unauthorised entrant by late July 2020[36].

14.In rejecting the evidence of each applicant, the judge considered “the prosecution’s version is more accurate and precise”[37], and then set out a summary of their respective evidence-in-chief, cross-examination and re-examination in his Reasons for Verdict.

15.In respect of certain specific complaints made on behalf of D4, the judge pointed out that:

(a)  There could be various possibilities as to why Huang was able to stay in BP International before 1 August 2020. It did not follow that her immigration status had been verified by the hotel in advance of her stay. In any event, the issue was “irrelevant” to the prosecution case[38].

(b)  There was no basis for D4 to confirm that the passport (which he saw in her room) belonged to Huang by merely looking at its cover without further inspecting its inner pages[39]. As to her actual possession of a PRC passport, which was seized by police officers, it could be inferred from her travel records that she illegally left PRC when she came to Hong Kong[40].

(c)  There was nothing to show that D4 had been coached as to what to say in his interviews. Absent any explanation in his testimony as to why he gave contradictory or incorrect answers in his interviews, the judge found him to be lying in court in order to have his incriminating admissions excluded[41].

16.In saying that D5 was an untruthful witness, the judge specifically found that:

(a)  When Wang showed D5 Exhibit P4, it was impossible for him not to notice that the particulars in the passport referred to a different female person. Furthermore, the person in the passport photograph did not look like Wang (as she appears in Exhibit P8) at all[42].

(b)  In light of his age and background, D5 could not have been so easily deceived by Wang’s Instagram post alleging that she had lost her passport and had had to pay a monthly visit to the Immigration Department to extend her permission to stay[43], nor could he have been led to believe that she had no credit card and was unable to make the room booking herself[44].

(c)  D5’s contention that a man should feel obliged to pay a bill for a woman was not a genuinely held belief[45].

17.The judge found that D4 and D5 each had reasonable grounds to suspect that Huang and Wang were unauthorised entrants but failed to exercise reasonable diligence to discover their status and even booked a room for each of them to remain in Hong Kong[46]. Accordingly, he convicted both applicants.

Grounds of appeal

18.Mr Melvin Ho, on behalf of D4, has put forward four grounds of appeal, while Mr Simon So, with him Mr Jack Hui, on behalf of D5, has put forward five grounds of appeal. Viewing them together, the grounds may be summarised as follows:

(a)  In considering the statutory defence of reasonable diligence, the judge:

(i)  wrongly imposed a more stringent requirement of “due diligence” than “reasonable diligence” (D5’s Ground 1); or a duty on the applicant to check whether the passport in Huang’s room actually belonged to her (D4’s Ground 2);

(ii)  did not adequately explain the standard of proof he applied and why the statutory defence had not been made out (D5’s Ground 2); and

(iii)  failed to appreciate that the facts in relation to how Huang came to reside at the hotel room was relevant to the assessment of the statutory defence (D4’s Ground 1).

(b)  The judge failed to consider the common law defence of reasonable and honest belief when considering the statutory defence (D5’s Ground 3). This engaged the issue of whether the statutory defence fell within the third or fourth alternatives set out in Hin Lin Yee and Kulemesin.

(c)  The judge wrongly equated an act of renting a hotel room for an unauthorised entrant (which was solely for the purpose of having sexual relations) with that of assisting her to remain in Hong Kong (D4’s Ground 4 and D5’s Ground 4).

(d)  In disbelieving the defence evidence, the judge failed to note that there were good reasons for any inaccuracies in their accounts (D4’s Ground 3); and for warranting the giving of a lies direction (D5’s Ground 5).

Applicants’ submissions

19.The judge found that D5 had “failed to exercise reasonable diligence to discover that [Wang] was not [an unauthorised entrant]”. Mr So’s complaint in Ground 1 is that, although the term “reasonable diligence” in section 37DA(2) was used, the judge effectively raised the requirement to an impermissible level of due diligence by requiring that, in order for the relevant defence to be made out, D5 should have positively done something or actually exercised reasonable diligence so as to confirm Wang was not an unauthorised entrant (as distinct from merely establishing that he could not confirm the negative even with the use of reasonable diligence)[47].

20.Regarding Grounds 2 and 3, it was submitted that, on a proper construction of section 37DA, and given the underlying policy considerations of the legislation, the Court in Yeung Kam Yuen correctly classified the statutory defence as falling within the third alternative in Hin Lin Yee (and Kulemesin), but wrongly imposed a legal (as distinct from an evidential) burden on the defendant to raise such defence. He contended that, if the third alternative was in fact the correct classification, D5 should have been acquitted since the judge did not find that he knew Wang to be an unauthorised entrant; nor did he reject his evidence or his belief that she was the holder of a valid passport and/or had permission to stay. Accordingly, D5 had proved on the balance of probabilities “the common law defence” of reasonable and honest belief.

21.However, if the fourth alternative in Hin Lin Yee and Kulemesin was the correct classification, D5 should also have been acquitted because he had already discharged an evidential burden and adduced sufficient evidence to show that he could not with reasonable diligence have discovered that Wang was an unauthorised entrant[48].

22.The applicants both relied on what was said during the second reading of the Immigration (Amendment) (No 4) Bill 1981, to argue that the purpose of enacting section 37DA was to deter traffickers of people who harboured illegal immigrants, not those who hired hotel rooms in order to have sexual relations.

Respondent’s submissions

23.Ms Samantha Chiu, with her Ms Betty Choi, for the respondent, submitted that when the Reasons for Verdict were read in context, it was clear that the judge had provided sufficient reasons for rejecting the exculpatory aspects of D4’s evidence. The judge could not be criticised for finding that D4 must have known that Huang was an unauthorised entrant prior to the date of the offence ([9(a)] supra), because he had initially confessed as much, and was therefore not to be believed when he subsequently qualified or retracted his admissions[49]. Once this piece of damning evidence relating to knowledge was accepted by the judge, all other subsequent exculpatory and inconsistent accounts, or excuses, given by him (such as the reasons why he did not verify the passport in Huang’s room and his purported belief that the hotel should have confirmed her lawful immigration status) became irrelevant and could not give rise to any reasonable doubt as to his guilt[50]; nor could they be sufficient to satisfy the statutory defence[51].

24.Ms Chiu submitted that, in light of the wording of section 37DA, the statutory defence should fall within the fourth alternative[52], which excluded the operation of the common law defence of reasonable and honest belief. By way of analogy with one of the offences in Hin Lin Yee, namely possessing for sale a drug which had not been registered by the manufacturer with the Pharmacies and Poisons Board, contrary to regulation 36(1) of the Pharmacy and Poisons Regulations, Cap 138A, she argued that, in terms of the standard of proving the statutory defence[53], whilst it was required under both offences that the defendant should establish he did not know or could not with reasonable diligence have discovered the facts underlying the charge, the present offence imposed a more stringent requirement than a Regulation 36(1) offence inasmuch as the defendant was required to further prove that he “has no reason to suspect”. If a Regulation 36(1) offence came within the fourth alternative in Hin Lin Yee and Kulemesin, it defied logic to suggest that the present offence did not; pace the decision in Yeung Kam Yuen, which, it was submitted, was wrongly decided.

25.The respondent contended that, in the case of D5, it would be sensible to ask what a reasonable bystander would expect him to do had he exercised reasonable diligence. She submitted that the judge could not be impugned for taking into account what D5 was reasonably expected but failed to do[54], nor could he be said to have taken into account any irrelevant factors.

26.Having rejected D5’s exculpatory explanation, including his assertion that Wang was from Taiwan and had a valid passport, the judge was entitled from the circumstantial evidence, such as her accent, his knowledge that she had no fixed abode in Hong Kong and that she had come to the territory for prostitution, to infer that he had reason to suspect that she was an unauthorised entrant[55]. Whilst the judge did not specify that the burden of proof imposed on D5 was an evidential one, D5 would have difficulty in discharging such a burden once his exculpatory account was rejected. What remained would not be sufficiently substantial to support a reasonable doubt as to his guilt[56]: see HKSAR v Ng Po On[57].

27.It was further submitted that, in the case of D4, the act of booking a room for a prostitute so that he could receive her sexual services, was consistent with, and supported an inference of, assisting her to remain in Hong Kong because the provision of such sexual services was predicated on her prolonging her unauthorised stay[58]. The word “assistance” should be given its ordinary meaning, which was not dependent on the length of time in assisting an unauthorised entrant to remain[59]. Ms Chiu contended that the judge did not rely on D5’s lies to prove guilt and it was unnecessary for an experienced professional judge to give himself a lies direction in the present case[60].

Discussion

Which alternative under Hin Lin Yee and Kulemesin?

28.In approaching any offence where the statute is silent or ambiguous as to the state of mind required for its commission, “the starting-point is that the statute must be construed adopting the presumption that it is incumbent on the prosecution to prove mens rea in relation to each element of the offence”[61]. However, where a statutory defence is stipulated, any analysis of whether, and to what extent, such defence displaces the presumption of mens rea must begin with a plain reading of the statutory defence itself. Section 37DA(2) of the Ordinance under consideration prescribes that no person shall be convicted of the offence, “if he proves that he did not know, had no reason to suspect and could not with reasonable diligence have discovered” that the person he was assisting was an unauthorised entrant.

29.Two matters are immediately obvious from the terms of this subsection. Firstly, the use of the conjunctive “and” means that all three conditions must be satisfied. Secondly, whilst the first condition is self-evidently subjective and the second condition partly subjective and partly objective, the third condition is purely objective. By contrast, the so-called “common law defence”, consistent (or, rather, not inconsistent) with the second and third alternatives in Kulemesin, and which permits the defendant to show that he had an honest and reasonable belief in a state of facts which, if they exist, would make the prohibited act innocent, is essentially subjective, although there is also an objective element inasmuch as the grounds for his belief must be reasonable.

30.Accordingly, the requirement that each applicant prove that he could not with reasonable diligence have discovered that Huang and Wang respectively were unauthorised entrants did not depend on their actual knowledge and/or belief as to the women’s status, irrespective of whether such knowledge or belief was honestly or reasonably held: it depended upon what objectively each applicant could have discovered. As such, the statutory defence goes beyond the second and third alternatives in Kulemesin and required not merely a subjective assessment by each of them but an objective assessment to be made by the court. As Ribeiro PJ made clear in Kulemesin, when setting out the fourth of the five alternative regimes[62]:

“Fourth, that the presumption [of mens rea] has been displaced and that the accused is confined to relying on the statutory defences expressly provided for, the existence of such defences being inconsistent with the second and third alternatives…”

He reiterated the same conclusion later, in HKSAR v Choi Wai Lun[63]:

“The fourth Kulemesin alternative is only adopted if the availability of the expressly enacted defences is inconsistent with the second and third alternatives also being available.”

31.Chan PJ had made the same point in his judgment in Hin Lin Yee[64]:

“One must examine the scope of such statutory defence and the purpose it is aimed at serving in deciding whether it is intended that the common law defence is replaced or excluded. Where the applicability of the common law defence is inconsistent with the presence and the terms of the statutory defence, the necessary implication must be that the legislature intended the exclusion of the common law defence”.

Earlier, Chan PJ had explained what must be looked at when construing a statute, the wording of the offence and any statutory defence provided[65]:

“The subject matter of the statute that must be taken into account refers to the social context in which the offence was created and this includes: the purpose of the statute: whether the statute is concerned with an issue of social concern or public health and safety; the nature of the offence: whether it is truly criminal or merely regulatory and whether the penalty to be imposed for contravention is substantial or not; and whether the creation of absolute liability will be effective in promoting the objects of the statute by encouraging greater vigilance to prevent the commission of the prohibited act.”

32.In Kulemesin, Ribeiro PJ similarly held[66]:

“If the Hin Lin Yee approach had been adopted, the courts below would have proceeded to consider whether the presumption had been displaced as a matter of statutory construction. They would have engaged in an examination of the language and purpose of s. 72 and matters including the nature and seriousness of the offence; its attendant penalties and social or professional stigma; the utility of imposing sanctions; and the prevailing societal conditions, in so far as relevant[67]. They would also have considered what alternative legal regime governing the mental requirements might take the place of mens rea if the presumption were to be supplanted[68].”

33.If one approaches section 37DA of the Ordinance in this way, one finds that the section creates a serious criminal offence with a maximum penalty on indictment of 10 years’ imprisonment and a fine of HK$500,000. It is not a regulatory offence, but plainly a criminal offence, the penalty for which suggests that in an appropriate case, trial by jury in the High Court might even be the appropriate forum[69]. One can readily envisage, for example, that syndicated operations to bring unauthorised entrants to Hong Kong and/or keep them here to commit crimes would be a particularly serious manifestation of an offence under section 37D and/or 37DA of the Ordinance.

34.Furthermore, the offence deals with a matter, namely illegal immigration, in which there is an obvious public interest, and which manifests itself from time to time in a climate of grave public disquiet. Historically, illegal immigration has been a persistent issue in Hong Kong for several decades, although it has taken different forms at different times during that period. Elsewhere in the world, it has also clearly become a growing problem with which different countries are having to grapple, not least because of the modern concern about international terrorism and transnational crime. Accordingly, although the penalty and the stigma of conviction tend to militate in favour of full mens rea being required to be proved, the legislature have enacted a specific statutory defence designed to combat a particular social problem, without which the section would lack the teeth to tackle those who could easily claim they had no idea the person they were assisting to remain in Hong Kong was an unauthorised entrant. What the law requires is that the accused did not know (subjectively) and had no reason to suspect (objectively subjective), but also could not with reasonable diligence have discovered (objectively), that the person he was assisting to remain in Hong Kong was an unauthorised entrant.

35.In Choi Wai Lun, it was noted that sections 122(1) and 122(2) of the Crimes Ordinance, Cap 200 were both silent as to the mental element required regarding the knowledge of the other person’s age. Ribeiro PJ, giving the judgment of the Court, said of the offence[70]:

“It is a serious offence ‘in terms of penalty and social obloquy’, carrying a maximum sentence of 10 years’ imprisonment on indictment which is a feature tending to favour non-displacement of the presumption of mens rea.” (Emphasis supplied)

36.However, the Court considered that the reasonable belief defences provided by sections 122(3) and 122(4) did not relate to knowledge of the other person’s age and, like their English equivalents, the provisions did not form part of a single coherent legislative scheme, Ribeiro PJ remarking[71]:

“The legislative history of indecent assault and related offences in Hong Kong has no greater coherence. Thus, for instance, the maximum penalty of 10 years’ imprisonment for indecent assault (introduced in 1991) is twice that prescribed for unlawful sexual intercourse with a girl under 16 under s. 124, the latter offence potentially being far more serious, involving a risk of unwanted pregnancy.”

37.It was in these circumstances that the Court rejected the application of the fourth Kulemesin alternative to the sections in question[72]:

“The fourth Kulemesin alternative is only adopted if the availability of the expressly enacted defences is inconsistent with the second and third alternatives also being available. No such inconsistency arises here. Sub-ss. (3) and (4) provide defences in narrow and rare circumstances involving an honest and reasonable belief that one is married to the alleged victim; or the absence of any reason to suspect that the alleged victim is a mentally incapacitated person. The existence of such specialised defences is not inconsistent with having a defence based on belief that the victim was aged 16 or over, nor accordingly with construing s. 122(2) as accommodating the second or third Kulemesin alternatives generally in cases falling outside sub-ss. (3) and (4).”

38.The point the Court was making was that the particular subsections under consideration were not, by their language and their terms, inconsistent with the application of the second and third Kulemesin alternatives. However, the Court did not hold that by virtue of the 10 years’ maximum sentence, which was the same maximum as in the offence before us, the fourth alternative could never apply; although it did say that such penalty would tend to militate against the displacement of mens rea.

39.The authority, which to our mind, points more directly to the applicability of the fourth Kulemesin alternative in the present case, and which rather surprisingly was not cited or referred to by either party in the present appeal until it was brought to their attention by the Court, is Lee To Nei v HKSAR[73]. As a matter of historical context, the appeal in Lee To Nei was decided after the judgment in Hin Lee Yin (which was referred to in argument but not cited in the judgment itself) but before the judgment in Kulemesin. The authority is nevertheless important because Ribeiro PJ, again giving the judgment of the Court of Final Appeal in the wake of Hin Lee Yin, dealt with the construction of a very similar statutory defence under the Trade Descriptions Ordinance, Cap 362 (“the TDO”) to the one with which we are concerned.

40.The two appellants in Lee To Nei had each been convicted of possessing for sale goods to which forged trade marks had been applied, contrary to section 9(2) of the TDO. The maximum penalty for breach of the section is 5 years’ imprisonment on indictment and a fine of HK$500,000. At the time of the offence, section 26(4) of the TDO provided a statutory defence as follows[74]:

“In any proceedings for an offence under section 9(2) it shall be a defence for the person charged to prove that he did not know, had no reason to suspect and could not with reasonable diligence have ascertained, that a forged trade mark had been applied to the goods or that a trade mark or mark so nearly resembling a trade mark as to be calculated to deceive had falsely been applied to the goods.” (Emphasis supplied)

It will be seen that, apart from the word “ascertained” in place of “discovered”, what was required to be proved under the statutory defence, as italicised, was identical to that in the statutory defence with which we are concerned.

41.In the course of his judgment, Ribeiro PJ had cause to compare section 26(4) of the TDO with section 92(5) of the Trade Marks Act 1994 (“the TMA”) in the United Kingdom[75]:

“34. A comparison of section 26(4) of the TDO with section 92(5) of the TMA reveals a crucial difference between the two defences. In the English provision, the defence is made out if the accused can show ‘that he believed on reasonable grounds’ that the way the false mark was used or to be used involved no infringement of the registered trade mark. The defence turns, in other words, on what the accused himself believed and the grounds for his belief.

35. The first two conditions in section 26(4) have a similar effect. The first relates to the defendant’s knowledge of the falsity of the marks. It is wholly subjective. The second has an objective element relating to the existence of facts which are said to give reason to suspect falsity but also an important subjective element concerning the defendant’s knowledge of those facts.

36. However, the third condition makes our section qualitatively different from the English provision. It requires the defendant to satisfy the court that he ‘could not with reasonable diligence have ascertained’ the falsity. This condition does not involve any inquiry into what the defendant actually knew or believed. It is immaterial whether he thought there was or was not any likelihood of him discovering the forgeries by using reasonable diligence. It depends on what the court finds that he could have discovered, using reasonable diligence.”

42.Ribeiro PJ concluded[76]:

“51. In Hong Kong, as in the United Kingdom, combating counterfeiting is strongly in the public interest. However, in our jurisdiction there is plainly a reasonable alternative to abrogating the presumption of innocence in the context of sections 9(2) and 26(4). It is to place the persuasive burden on the prosecution to prove either that the accused knows, or has reason to suspect or could with reasonable diligence ascertain that the goods bear forged trade marks. That would be achieved by reading down section 26(4) as imposing merely an evidential burden on the accused to raise as an issue the proposition that none of the three conditions apply, with the prosecution retaining the persuasive burden as to each element of liability throughout.

52. The accused would still have to adduce or be able to point to credible evidence indicating that he did not know, had no reason to suspect and could not, with reasonable diligence have ascertained that the trade marks were false. As pointed out in Ng Po On,[77] such evidence would have to be sufficiently substantial to raise a reasonable doubt as to his guilt. Where such evidence exists, it would be up to the prosecution to furnish sufficient evidence to prove the accused’s guilt beyond reasonable doubt at the end of the day. In cases where the prosecution is unable to prove that the accused did know or did have reason to suspect the falsity, it would still succeed if the evidence of what could have been done by way of reasonable diligence at the relevant time, satisfies the Court beyond reasonable doubt that the accused could have discovered the falsity by taking the appropriate steps.

53. Such a read-down scheme would not infringe the presumption of innocence. And there is no reason to think that it would unduly impede the effective enforcement of the law. I can accordingly see no compelling reason for permitting derogation from the presumption of innocence in the present case. I would therefore declare that section 26(4) must be read down as imposing merely an evidential burden on the accused, with the persuasive burden remaining throughout on the prosecution.”

43.In our judgment, the statutory defence in section 37DA(2) of the Immigration Ordinance, likewise falls under the fourth alternative in Kulemesin and imposes merely an evidential burden on the applicants to raise as an issue that all three conditions do not apply, leaving the prosecution to fulfil the persuasive burden of proving the subsistence of any of the three conditions.

Is HKSAR v Yeung Kam Yuen correct?

44.It is here that we should address the decision of this Court in Yeung Kam Yuen. The Court (differently constituted) was dealing with a similar statutory defence under section 37D(2) of the Ordinance, concerning the offence of assisting the passage to Hong Kong of a conveyance which carried unauthorised entrants. The statutory defence to a section 37D offence is in these terms:

“(2) No person shall be convicted of an offence under sub-s.(1) if he proves that he did not know, had no reason to suspect and could not with reasonable diligence have discovered

(a) that the person whose carriage on a conveyance or whose passage is the subject of the charge, was an unauthorized entrant; or

(b) that the conveyance in relation to which he is charged was carrying, or would carry, any unauthorized entrant, as the case may be.” (Emphasis supplied)

The Court had to consider, inter alia, under which alternative of Hin Lee Yee the mental requirement fell. Ultimately, the Court held[78]:

“(1) At the beginning of the submission made by counsel for the applicant, he said that the statutory construction of the statutory offence set out in s.37D required the prosecution to prove the mens rea in relation to each element of the charge beyond reasonable doubt. His argument implied that this statutory offence fell into the first alternative set out by the Court of Final Appeal in HKSAR v Hin Lin Yee (2010) 13 HKCFAR 142, para.96.

(2) In Hin Lin Yee, the Court of Final Appeal discussed thoroughly the defendant’s mental state that the prosecution is required to prove in various statutory offences. The Court of Final Appeal explained that when a statutory offence is silent as to the state of mind required, it is incumbent on the prosecution to prove mens rea in relation to each element of the offence (paras.40-41). This is the ‘presumption of mens rea’ (we are of the view that it is the same concept as the ‘presumption of innocence’).

(3) However, the Court of Final Appeal also pointed out that a statute may displace the ‘presumption of mens rea’ expressly or by necessary implication (para.43). The Court of Final Appeal listed out five possibilities that arise in respect of the mental requirement attaches to a statutory offence. The first (the strictest) alternative is that the prosecution must prove mens rea beyond reasonable doubt; the fifth (the loosest) alternative is that the presumption is displaced, so that the prosecution succeeds if the accused is proved to have performed the actus reus, regardless of his state of mind (para.96).

(4) In relation to s.37D in this case, we do not think that the mental requirement falls within the first alternative as suggested by counsel for the applicant. Instead, it falls within the third alternative listed by the Court of Final Appeal, which is also known as ‘the defence approach’, namely, that the presumption has been displaced so that the prosecution need not prove mens rea but that the accused has a good defence if he can prove on the balance of probabilities that the prohibited act was done in the honest and reasonable belief that the circumstances were such that, if true, he would not be guilty of the offence (para.96).

(5) Applying the above approach to the defence provided in s.37D(2), it means that the defendant has to prove on the balance of probabilities that his act was done in the honest and reasonable belief that the circumstances were such that he did not know, had no reason to suspect and could not with reasonable diligence have discovered that the passengers he carried in his taxi were unlawful entrants.

(6) However, counsel for the applicant submitted forcefully that it involved reverse onus of proof and therefore violated his human right to ‘presumption of innocence’. We are of the view that even if s.37D imposes an additional persuasive burden of proof on the defendant, this court should therefore read it down as imposing an evidential burden instead which is less harsh on the defendant (see HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574, HKSAR v Gurung Krishna (2010) 4 HKLRD 456). Nevertheless, in the present case, there is still ample evidence showing that the applicant knew full well that he was carrying unlawful entrants. The Trial Judge has already listed many pieces of prosecution evidence in this regard, for example, there were multiple contacts between the applicant and the other two taxis; the applicant, in the small hours, at a remote place, picked up people who were not waiting by the road side but came out from a water channel instead; and he even urged them to get in the vehicle quickly. All these show that the applicant in fact knew that his passengers were unlawful entrants. Under these circumstances, this ground of appeal cannot stand.”

45.With great respect to the reasoning in Yeung Kam Yuen, the Court appears at (5) of the above passage to have confused and conflated the third and fourth alternatives under Hin Lin Yee (and later Kulemesin), yet regarded them as one single third alternative. No reasons were given for its conclusion at (4), which was simply that the mental requirement under section 37D “falls into the third alternative listed by the Court of Final Appeal”. However, it cannot be correct to then go on to say, as the Court did, that the third alternative “means that the defendant has to prove on the balance of probabilities that his act was done in the honest and reasonable belief that the circumstances were such that he did not know, had no reason to suspect and could not with reasonable diligence have discovered that the passengers he carried in his taxi were unlawful entrants”. To say that a defendant could prove that his act was done in the honest and reasonable belief that he could not with reasonable diligence have discovered something is, with respect, to confuse the subjective with the objective and create a legal non sequitur.

46.To be fair to Mr So, he acknowledged when pressed the logical difficulty with the Court’s conclusion in Yeung Kam Yuen and ultimately conceded that the decision might not be correct. Indeed, in his own commendable book, Law of Evidence in Hong Kong (2^nd Ed)[79], Mr So had appeared to agree with the Court’s adoption of the fourth alternative in Hin Lin Yee itself[80]:

“…on the ground that the statutory defences required something over and above an honest and reasonable belief. The fourth alternative presupposes that a statutory defence may displace the common law defence of honest and reasonable belief. The exercise of statutory interpretation thus is not confined to the wording of the offence but also any defence which may be provided in the statute itself. The overlap in meaning between a ‘due diligence’ defence and an ‘honest and reasonable belief’ defence in the statute indicates an exclusionary legislative intent”.

We respectfully agree.

47.We note that prosecuting counsel in the trial below during his closing address cited Yeung Kam Yuen and what we conceive to be the Court’s conflated third and fourth alternatives under Hin Lin Yee (and Kulemesin) as the applicable law, which we have described as a legal non sequitur[81]. In his final remarks, counsel submitted[82]:

“The defence could not discharge their evidential burden to establish that both defendants honestly and reasonably believed that the circumstances were such that they did not know, had no reason to suspect and could not with reasonable diligence have discovered that (Huang) and (Wang), the persons they respectively assisted to remain in Hong Kong, were unauthorised entrants.”

48.In the circumstances of the use which is evidently being made of the decision in Yeung Kam Yuen, we consider we should make clear that the Court’s conclusion as to the appropriate Hin Lin Yee alternative applicable to the subsection cannot, with respect, be correct and, accordingly, we must regard its reasoning as having been made per incuriam.

49.Being satisfied that the statutory defence in the present case engaged the fourth alternative in Kulemesin, the question for this Court then becomes whether the judge’s reasons for finding the statutory defence not made out exhibit appealable error.

Appeals against conviction

General remarks

50.Although the cases of each applicant must be looked at separately, we have little doubt that uppermost in the minds of both D4 and D5, when hiring hotel rooms, was their purpose and intention of availing themselves of the respective sexual services of Huang and Wang. Incidental to that purpose and intention was the question of whether each knew that the woman concerned was an unauthorised entrant. Had it been the case that the primary purpose and intention was to assist Huang and Wang to remain in Hong Kong as unauthorised entrants, incidental to which the applicant had sexual relations with the woman concerned, as perhaps a favour or reward for helping her to remain as an unauthorised entrant, the case would have been presented differently and the culpability of each applicant would have been both more clear cut and more serious. That is not to say that where the purpose and intention of D4 and D5 was primarily to have sexual relations in a hired hotel room, whilst knowing that the woman in question was an unauthorised entrant, it was not a serious matter capable of constituting a section 37DA(1) offence. However, the distinction between the two situations will inevitably colour the way a court approaches its examination of the steps taken to fulfil the statutory defence under subsection (2).

D4

51.The point can best be illustrated in the case of D4, who made a hotel reservation at BP International for one night only so that he could continue to have sexual relations with Huang, she having already been registered as a guest at the same hotel in her own right and in her own name since 4 July 2020; as, indeed, she was to be after 2 August 2020 as well[83]. It was an Admitted Fact that Huang herself “between 4 July 2020 and 24 August 2020, both dates inclusive, booked hotel rooms and completed guest registration forms at BP International front desk in the capacity of Huang Guxiang”[84]. Furthermore, 12 such registration forms were produced at trial as Exhibit P3(1-12) and it was accepted that “the said guest registration forms accurately reflect their content”[85].

52.We have examined the originals of Exhibit P3 ourselves and on each of the 12 registration forms, Huang’s full name appears as the hotel guest together with her People’s Republic of China (“PRC”) passport number, produced at trial as Exhibit P5. This suggests that at least on one (or more) occasion(s), the hotel had inspected Huang’s PRC passport, which we know existed because it was found by police in Wang’s room on 20 August 2020[86].

53.It was D4’s evidence that when he first met Huang, she was already staying as a guest at BP International. Accordingly, “he had reason to assume that her eligibility to stay at the hotel had already been verified”[87]. However, the judge roundly rejected this assumption, holding[88]:

“I am of the view that this was irrelevant to the prosecution’s case, and there was no need to explain how Huang Guxiang came to stay at BP International when she first met D4. Common sense tells us that there can be several possibilities, including the possibility that someone else rented the room for Huang Guxiang.”

54.Although the judge was unimpressed with this aspect of D4’s case, it seems to us, with respect, highly relevant that Huang had already been a registered guest in her own name at the very same hotel for 4 weeks before D4 himself hired the room on 1 August 2020 for one night so that he could have sexual relations with her. On 1 August, D4 personally registered at the front desk of BP International by writing his Identity Card number (in lieu of his passport number) and address before signing the registration form, which was produced at trial as Exhibit P1. The form was endorsed with the signature of a member of staff of the hotel. Thus D4 would know that the hotel required either a passport or Identity Card, and would check the document. It seems to us that this matter of checking a document of identity upon registration cannot be irrelevant: indeed, we would digress to point out that the judge did rely on the contents of the BP International registration forms when giving his reasons for convicting D5 (infra at [68]).

55.Moreover, the judge’s comment that[89]:

“Common sense tells us that there can be several possibilities, including the possibility that someone else rented the room for Huang Guxiang.”

was, with respect, speculative and contrary to the evidence (and, indeed, the experience of D4 on 1 August) because the Admitted Fact was that during the check-in process at BP International, not only would hotel staff inspect a guest’s passport or Identity Card, they would “take out a guest registration form and room key card(s), asking the guest to fill in his telephone number and address on the form and to endorse the form by signing”[90]. And we can see that when Huang first registered as a guest with BP International on 4 July 2020, that is exactly what happened, because the registration form (Exhibit P3(3)) has been filled in partially by hand (address and telephone number), signed by Huang and endorsed with the signature of the hotel staff who checked her in.

56.There is a further twist to the argument in D4’s case. As we have pointed out, D4 did not book the room for Huang as the hotel guest: he booked it in his own name for himself. That he stayed in the room with Huang that night was not only his own evidence[91], it accorded with the prosecution surveillance evidence[92]. The question, which never seems to have been addressed by anyone, is whether there was a material difference between D4 hiring a hotel room on behalf of an unauthorised entrant for one night so that she could remain illegally in Hong Kong, and then having sexual relations with her in that room; and D4 hiring a hotel room for himself in his own name for one night so that he could have sexual relations with a woman, whom he knew to be an unauthorised entrant. The answer may depend on the evidence but, generally speaking, it seems to us that the latter would be a more attenuated and less culpable form of any offence.

57.Nevertheless, there is a difference between booking a hotel room for someone else to stay, knowing that he or she is an unauthorised entrant, and booking it for oneself so that one can have sexual relations with someone who happens to be an unauthorised entrant, whether one knows his or her true status or not. It is true that D4 made admissions, which were found by the judge to have been voluntarily made, to the effect that he knew Huang had entered Hong Kong illegally at the time he booked the room. Assuming that is what Huang had in fact told D4 at some stage and that it was true, it was D4’s case that, although he came to suspect in August 2020 that Huang had entered Hong Kong illegally[93], he did not know or suspect she was an unauthorised entrant before he checked out of the hotel room on 2 August 2020[94]; and that the police officer had misunderstood what he meant. It is in the context of the judge’s finding that this aspect of D4’s evidence was a lie[95] that Exhibit P3 and its contents assume not only significant relevance but considerable importance.

58.The fact that Huang resumed booking a room at BP International in her own name and with her own passport from 2 to 24 August 2020 is surely significant in casting light on D4’s state of mind, as well as his true purpose and intention on the night of 1 August 2020.

59.It is here that we should observe a curiosity that has never been explained, either during the trial or at this appeal. Although D4 booked a room at BP International for the night of 1 August 2020 (Exhibit P1) in his name, namely Room 2041, it is also the case that Huang had already booked another room (Room 1733) at the same hotel for the same night in her own name (Exhibit P3(6)). If that is correct, and Huang was already residing as a registered guest in her own name at BP International on a particular night, as she had done previously and as she continued to do thereafter, we wonder how it can be said that D4 was assisting the remaining of an unauthorised entrant by having sexual relations with her in another hotel room on a different floor on the same night.

60.Be that as it may, in our judgment, the judge deprived himself, when considering whether the special defence had been made out in D4’s case, of an important body of evidence, which tended to support D4’s account that he did not know and had no reason to suspect that Huang was an unauthorised entrant at the time he hired the hotel room on 1 August 2020, intending to have sexual relations with her that night. Nor did his mind turn to such a consideration. The fact that Huang was residing at BP International in her own room in her own name, having produced her own passport and contact details, both before and after (and it would seem during) the time of the offence in question, was not an irrelevant matter. If D4 believed hotel staff would have already examined Huang’s passport before registering her as a hotel guest, on or, again, after 4 July 2020, and he had actually seen her passport, which we know existed, then it is a counsel of perfection to say that he should have examined the contents of the passport to see if the immigration chops made her a properly authorised entrant to Hong Kong or not.

61.Yet the judge suggested that D4 should have looked at the inner pages of Huang’s passport and not just its cover. However, a person whose intention and purpose is to resort to a hotel to have a sexual encounter with another does not normally think of inspecting the passport or Identity Card of the person with whom he is going to have sexual relations, unless there is some reason, such as an obvious concern about age, to do so.

62.That is why we say that the circumstances and factual framework are vitally important in assessing a case such as this. Such circumstances would include the underlying purpose and intention for which the hotel room was booked by D4.

63.In all the circumstances, we are not satisfied that the judge properly approached the evidence which bore on the special defence in D4’s case. By excluding what we conceive to be relevant evidence, we cannot say that the applicant could not have fulfilled the statutory defence applicable and we are not prepared to make our own finding in this regard without seeing and hearing the evidence which D4 gave. For these reasons, we would allow D4’s appeal against conviction.

D5

64.D5’s position is in one sense more favourable than D4 because he made no admissions at all as to Wang’s status[96] and, furthermore, testified that up until his arrest, he had never at any stage had any suspicion that she was an unauthorised entrant[97]. In another sense, however, it is less favourable because D5 hired the hotel room, not for one night, but for no less than 16 nights between 8 and 24 August 2020, in circumstances where, unlike Huang, there was no evidence before the court that Wang had in fact been registered as a previous hotel guest in her own right. Nevertheless, it was D5’s evidence, which does not seem to have been challenged by prosecuting counsel or rejected by the judge on this point, that when he first had sexual relations with Wang on 14 June 2020[98], and on two subsequent occasions culminating on 3 July 2020[99], she “was already an occupant at BP International”, and “furthermore, (he) thought that the hotel staff would verify each occupant’s identity”. Accordingly, he did not suspect that Wang was an unauthorised entrant[100]. If that is so, as in the case of D4, it was a relevant consideration.

65.Although Wang had her own PRC passport, produced at trial as Exhibit P9(1-2), D5’s evidence was that the person for whom he booked the hotel room and with whom he had sexual relations in that room was called “Kitty”, whose full name was Ng Hiu Yu, the holder of a Republic of China, Taiwan passport. A Republic of China, Taiwan passport was indeed found in Wang’s room, albeit in the name of Cheung Ya Tung, on 20 August 2020 and produced at trial as Exhibit P4[101]. D5’s case was that Wang, the woman with whom he had been having sexual relations inside the hotel room, was Kitty Ng Hiu Yu. Indeed, he had maintained this from the outset of his arrest and caution on the night of 20 August 2020[102]. He further testified that out of curiosity he had asked about her Republic of China, Taiwan passport and been shown the photograph in Exhibit P4 “for 3 to 5 seconds”, but out of respect did not inspect her other particulars[103].

66.The judge rejected D5’s evidence that he did not have the opportunity to see that the name in the Republic of China, Taiwan passport was not Ng Hiu Yu but Cheung Ya Tung. However, we fail to see why this should be so important. It was Wang who showed D5 the passport: she had earlier shown him her purported Republic of China, Taiwan passport during a LineChat exchange[104]. If she was engaged in dissembling her real identity, as seems rather probable, she would have been unlikely to allow him the opportunity to scrutinise the details of her passport. Moreover, we question why D5 should invent a different name by which he knew Wang so immediately upon his arrest, as well as maintain that the passport was a Republic of China, Taiwan passport, if that were not in fact what he had been told by Wang; particularly when we know a Republic of China, Taiwan passport was found in Wang’s possession on 20 August 2020.

67.In any event, if D5’s primary purpose and intention was to book a hotel room in order to have a place to visit and have sexual relations with Kitty (or Wang) (see [70] infra), as the surveillance evidence appeared to confirm happened on a regular basis[105], one again wonders to what extent there was a desire on D5’s part, let alone an onus on him, to analyse the contents of a passport to verify the holder’s status.

68.The judge also took issue with D5’s evidence that he felt he had to pay for the hotel room by credit card, saying that “given D5’s educational background and professional knowledge, he should have known that Kitty could have made the booking by herself and paid in cash”[106]. In this regard, he relied upon the contents of Exhibit P2 to say that the registration forms clearly allowed for payment by credit card or cash[107]. Again, with respect, we do not find this reasoning compelling. D5 testified that he knew Kitty (or Wang) was a sex worker: that is how they had come to meet[108]. If the purpose was to take a hotel room at BP International in order to have regular sexual relations, as he appears thereafter to have done, it was a little unrealistic to suggest that Kitty (or Wang) should have registered the room in her name and paid for it herself in cash, or that D5 should have expected her to do so.

69.On these and other matters, the judge found D5 to be lying; in fact he said so on four occasions in strong terms[109]. But, with respect, we are not so convinced by the examples the judge gave. Moreover, we feel that there is a danger that D5’s perceived lies became a substitute for the lack of any admission on his part that Wang was an unauthorised entrant; and may have been further used to counteract his evidence that he did not know and had no reason to suspect that she was.

70.Nor are we persuaded that such diligence as D5 exercised was unreasonable in all the circumstances, given his obvious primary purpose and intention of keeping a room to have regular sexual relations with someone he had met online through a social platform, and whom he evidently liked enough to want to form a more permanent relationship with. It seems the judge did not reject this latter aspect of D5’s evidence and it would go some way to explain why D5 was prepared to hire the same room for 16 days. Moreover, as we have pointed out, the judge did not reject D5’s evidence that he believed Wang was already a registered occupant of BP International and that the hotel would, in the normal course, have checked her credentials.

71.Accordingly, although the circumstances are different from those relating to D4, we have nevertheless concluded that the judge did not properly consider whether the statutory defence had been made out in the case of D5; particularly when there was never any admission by the applicant as to Wang’s status. For these reasons, we must also regard the conviction as unsafe and unsatisfactory, and allow D5’s appeal.

72.We have not addressed the other grounds of appeal urged upon us. Suffice it to say, we did not consider any of them to be reasonably arguable and it has not become necessary to extend this already lengthy judgment by considering them further.

Secretary for Justice’s consent

73.Finally, we wish to say this. Sections 37D and 37DA of the Immigration Ordinance are two offences which fall under Part VIIA of the Ordinance and require the Secretary for Justice’s formal consent to prosecution under section 37L. Such a consent is not a mere procedural detail or formality but requires a conscious, informed decision to be made based on the available admissible evidence and the application to that evidence of a particular offence. The purpose of the Secretary for Justice’s consent is to protect citizens from prosecution, which is reserved for only the most appropriate cases as the public interest may demand.

74.We say at once that we do not have the full facts and information that were available to the prosecution when the decision was made to prosecute these two applicants. However, if, and we stress the conditional, that information was no more than that these were two young men availing themselves in a hotel room of the sexual services of two women, whom they may or may not have known were unauthorized entrants, and nothing more, we think the Secretary for Justice would wish to give careful thought to whether the public interest warranted their prosecution for this specific offence. Many circumstances may be made to fit various criminal offences and it is important that a decision at an appropriate level is made to decide whether the facts of a case such as this were or were not intended to fit within this particular statutory offence and, ultimately, whether they justified prosecution in the public interest.

Disposition

75.The applications by D4 and D5 for leave to appeal against conviction are accordingly granted, their appeals are allowed, their convictions are quashed and their sentences are duly set aside.

Ms Samantha Chiu SADPP and Ms Juno Choi PP, of the Department of Justice, for the Respondent

Mr Melvin Ho, instructed by SY Wong & Co, for the 1^st Applicant

Mr Simon So and Mr Jack Hui, instructed by Johnny KK Leung & Co, for the 2^nd Applicant