The Queen v. Lau Chi Wan

HCMA000098/1984

IN THE SUPREME COURT OF HONG KONG

(APPELLATE JURISDICTION)

MAGISTRACY APPEAL NO.98 OF 1984

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BETWEEN

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Coram: Hon. Macdougall, J. in Court

Date: 16 March 1984

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JUDGMENT

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1. The appellant pleaded guilty on 3rd November 1983 to three offences against section 9(1)(b) of the Trade Descriptions Ordinance Cap.362.

2. In respect of the first offence which involved his being in possession for the purpose of trade of 327 dozen cotton jeans to which a mark so nearly resembling a trade mark as to be calculated to deceive was falsely applied, the appellant was fined $10,000. In respect of the second offence which was similar to the first but which related to a quantity of denim cut pieces, metal buckles, metal buttons, rivets, paper and plastic tags he was fined $10,000. As the Magistrate took the view that the third charge was in effect a duplication of the charge relating to the first offence, he recorded a conviction but made an order discharging the appellant absolutely.

3. Had the matter rested there this appeal would not have been lodged. However, section 30 of the Ordinance provides that any goods in respect of which an offence under the Ordinance has been committed shall be liable to forfeiture whether or not any person has been convicted of any such offence, and it was in pursuance of subsection (3) of that section that the Director of Trade Industry & Customs subsequently served a notice on the appellant requiring him to notify the Director in writing within the time specified under subsection (5) if he claimed that the goods were not liable to forfeiture. This the appellant did.

4. In the event the Director declined to release the goods to the appellant and on 17th November the Attorney General on behalf of the Director made an application under section 30(1) to the magistrate for their forfeiture.

5. At the hearing of the application on 10th January 1984 the Director argued that as "the offending false trade mark was all over the goods" and that as he had no time to supervise its obliteration, the magistrate should make an order for destruction of the goods pursuant to section 31(6)(ii) of the Ordinance.

6. The relevant subsection reads as follows:

7. The appellant contended that in the circumstances an order either for forfeiture or for destruction would result in a severe and totally unjustifiable financial loss to him. He offered to remove at his own expense the offending label attached to each denim piece and pair of jeans.

8. The Magistrate, having observed that "the false representations on the items concerned in the commission of the second offence including the denim pieces were gross, and that as their forfeiture coupled with the total fine of $20,000 imposed in respect of both offences would not result in the imposition of a penalty which could be regarded as too severe in the circumstances." made an order under subsection (6) (ii) for their destruction.

9. As to the 327 dozen cotton jeans, however, the Magistrate concluded that as "the false representation thereon was not gross, consisting as it did of a single paper tag," forfeiture was not appropriate. He therefore made an order under subsection (6)(iv) that the forged trade mark on the goods be obliterated and that thereafter they be released to the appellant.

10. It is against the order for destruction that this appeal now lies. Mr. Lunn submitted for the appellant that it is plain from what the magistrate said that he wrongly interpreted subsection (6) as conferring on him a power to inflict a penalty on the appellant additional to the fine imposed on 3rd November 1983 in respect of the offence to which the appellant had pleaded guilty.

11. I agree. Although it may be true that the indirect consequence of an order for forfeiture or for destruction is that the claimant against whom such an order is made actually suffers a financial penalty, it is my view that the object of the subsection is not to penalise claimants but to protect both the public and the owners of registered trade marks.

12. Proceedings brought for the forfeiture and destruction of goods are separate and distinct from proceedings brought against an offender by way of a prosecution. At the hearing of the prosecution the magistrate has all the relevant facts before him and it is on the basis of these facts that he imposes a penalty on the offender appropriate to the seriousness of the offence committed by him.

13. Where forfeiture proceedings are later commenced in respect of the goods that were the subject of the prosecution, it is entirely wrong for a magistrate to impose yet another penalty on the offender with the object of punishing him further.

14. One of the purposes of the Ordinance is to prevent goods, bearing false trade descriptions or false trade marks from being released into the market either to the detriment of the public or to the disadvantage of the person in whose name the genuine trade mark has been registered. This is so whether or not the person who has committed an offence in respect of the trade mark or trade description relating to those goods has been convicted and punished. Section 30 and 31 simply provide the machinery by which this object can be achieved. That the magistrate is empowered under sub-paragraphs (iii) and (iv) of section 31(6) to make an order that the offending false trade description or forged trade mark be obliterated and that thereafter the goods be released to the owner or disposed of in a manner other than by way of forfciture or destruction, is a further clear indication that proceedings under sections 30 and 31 were not intended by the legislature to be of a punitive nature.

15. Where it is practicable to obliterate the offending mark or marks and the circumstances are not such that it would be appropriate for the court to make an order under sub-paragraph (iii), there seems to be no obvious reason why the goods should not be released to the owner.

16. As it is plain that the magistrate applied the wrong principles in making the order for the destruction of the goods, this appeal must succeed.

17. Accordingly I quash the destruction order and order that the false trade descriptions applied to the goods be obliterated or removed by the appellant or his authorised agent under the supervision of and to the satisfaction of the Director, and that thereafter the goods be released to the appellant subject to payment of $2,000 to the Director in respect of supervision charges, a fee which Mr. Lunn indicated that the appellant was perfectly willing to pay.

Representation:

Mr. Michael Lunn instructed by Robert Wang & Co. for the Appellant.

Mr. Hartmann, Crown Counsel for Crown.