HKSAR v. Yuen Lai Kwan Abby

CACC000278/2002

CACC 278/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 278 OF 2002

(ON APPEAL FROM DCCC 589 OF 2001)

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Coram: Hon Stuart-Moore VP, Stock and Yeung JJA in Court

Date of Hearing: 8 November 2002

Date of Judgment: 8 November 2002

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J U D G M E N T

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Hon Yeung JA (giving judgment of the Court):

Backgrounds

1.The applicant, Yuen Lai-kwan, Abby appeared before Judge Sweeney in the District Court together with 5 others on the 1st charge of making for sale or hire infringing copies of copyright work, the 2nd charge of possession for the purpose of trade or business infringing copies of copyright work, the 3rd charge of possession of an article specifically designed or adapted for making infringing copies of the copyright work for sale or hire and the 4th charge of possession of articles knowing or having reasons to believe that they are used or intended to be used to make infringing copies of copyright works for sale or hire.

2.The 2nd charge was an alternative charge to the 1st charge.

3.The other defendants jointly charged with the applicant were China Optimize Holdings Limited (COHL), Siu Man Kei (D3), Lam Chi-keung (D4), Chan Cheong-wai (D5) and Yeung Wai-sang (D6).

4.The prosecution offered no evidence against D3 and D4 and they gave evidence for the prosecution as PW1 and PW2. In the course of the prosecution case, D5 was acquitted for insufficient evidence.

5.COHL was convicted of the 1st, 3rd and 4th charges and fined a total of $1.1 million. The applicant and D6 were convicted only of the 1st and 3rd charges. They were both sentenced to concurrent terms of 10 months imprisonment.

6.The applicant seeks leave to appeal against conviction only. Her application initially went before Stock J on 19 September 2002. Due to the shortness of the sentence imposed on the applicant and the further information required, Stock J adjourned the application to be heard before a full Court.

The Facts

7.COHL was a manufacturer of optical discs with its factory at Flat 1B, Shui Wing Industrial Building, 12 Tai Yuen Street, Kwai Chung (the factory). COHL was granted a licence to manufacture optical discs by the Optical Disc Licence Division, Intellectual Property Investigation Bureau, Customs and Excise Department. At the material time, Mr. Lam Chor-wong was the majority shareholder of COHL holding 80% of its issued shares.

8.Under the Prevention of Copyright Piracy Ordinance, a licence is required for the manufacture of optical discs as a means to control counterfeited optical discs.

9.D6 was one of the directors of COHL and holder of the licence. The manufacture code assigned to D6 was IFPI DMXX, where X represents an alphanumeric digit.

10.On 1 June 2000, Customs officers conducted a surprise inspection of the factory. The applicant, PW1, PW2 and D5 were present. The applicant told Custom officers that the licensee, D6 was not there and she was the manager and person in charge of the factory.

11.Of the two production lines in the factory, only one was in operation. PW1 was repairing the injection-moulding machine of the idle production line and claimed to be the line operator. PW2 was standing next to a silk screen-printing machine and claimed to be responsible for silkscreen printing. D5 was standing near the entrance of the warehouse and claimed to be responsible for packing and delivery of goods.

12.9,000 VCDs on 20 titles of films were found in the factory. 7,770 VCDs on 14 titles were proved to be infringing copies. There was a stamper used for making infringing copies.

13.The applicant produced purported authorization documents issued by two Mainland companies for making the VCDs in question and the production records of the factory for inspection by Customs officers.

14.The Mainland companies in fact had no licence to make the infringing VCDs.

15.The applicant was arrested and cautioned. The applicant said in the presence of her lawyer, "The items in the factory were not related to me. Those were matters of China Optimize Holdings Limited. I am of China Union Trading Limited."

16.D6 surrendered himself to the Customs and Excise Department on 24 June 2000 with his legal representative. He declined to answer questions put to him.

17.30 VCDs randomly selected from the 7,770 discs in question were sent for examination together with 4 mould heads. The Government Chemist concluded that 24 discs were made from 2 of the mould heads with 10 discs produced from one of the mould heads removed from one of the production lines. The remaining 2 mould heads did not lead to any conclusion because of the presence of scratches.

18.Apart from Customs officers, three civilian witnesses were called to give evidence. They were all employees of COHL.

19.PW1, Siu Man Kei was the production line operator. He was initially recruited by the applicant and had worked in the factory for 18 months. He reported to the applicant on day shift and to D6 on night shift. He also said both the applicant and D6 gave him the production list of what VCDs should be produced.

20.PW2, Lam Chi-keung was a silkscreen worker. He said the applicant interviewed him when he joined COHL. He also reported to the applicant or D6 for day-to-day procedural matters.

21.PW6, Wong Kai-bo worked as a clerk for COHL under the supervision of the applicant. She said she had never heard of the company by the name of China Union Trading Limited. PW7, Tse Sai-lai who had worked for COHL just for one week prior to the raid said she had not heard of China Union Trading Limited either.

The Defence

22.In her evidence, the applicant said she had been involved in optical disc manufacturing for many years and had set up a few factories in Hong Kong before Lam Chor-wong engaged her as a consultant in setting up the factory.

23.The applicant said her duties included the installation of machinery, decoration of the factory premises, application for Government documentations and other related matters as well as the recruitment of staffs.

24.She was then hired as an Administration Manager at the basic salary of $28,000 per month which was increased to $36,000 with bonus.

25.The applicant agreed that she recruited PW1 and PW2 to operate the production line for manufacturing CDs on behalf of COHL and occasionally delivered daily production orders to them as a favour for others.

26.She said it was not her duty to check copyright authorizations. That was the duty of Joseph Yeung Ka-chi.

27.The applicant said she was not concerned with and had no idea about copyright matters, as it was not part of her duties. She agreed it was important for COHL to find out the copyright owners to seek their permission before producing their work and she had done it before.

28.However she had not tried to seek legal advice on copyright issues and she was not concerned with sales or deliveries. The applicant also denied the suggestion that she had given the production schedules for the infringing VCDs to PW1 or PW2.

29.The applicant claimed that she had stopped working for COHL since 1 April 2000 and had since started working as an Administration Manager for China Union Trading Limited, a company specialized in the production of tissue paper and "soap noodles" in Mainland China.

30.She said she was also employed by Lam Chor-wong on identical pay and was to work from the same desk. She produced a letter of appointment dated 31 March 2000. It was the applicant's case the COHL and China Union Trading Limited were closely linked and her colleagues would not be aware of the switch.

31.The applicant said she stepped forward to admit to be the person in charge of COHL because D6 was in China. She said she did not produce her letter of appointment by China Union Trading Limited because she was not asked for it and she signed documents on behalf of COHL because she was asked to.

32.In cross-examination, it was shown to the applicant what purported to be a pay slip made out to her from COHL for the month of April 2000. It was not clear who was the maker of the document. The applicant said "there were several companies and no clear distinction of duties between them."

The Findings of the Judge

33.The judge rejected the applicant's evidence and found that she was under the employment of COHL at the material times. The judge found that the applicant had in fact created the letter of employment dated 31 March 2000 after the raid of the factory on 1 June 2000.

34.The judge also found that the applicant was involved in the management of COHL.

35.The judge pointed out that under the relevant sub-sections of section 118 of the Copyright Ordinance, the 1st, 2nd and 3rd charges are offences of strict liability. Once it is established that the VCDs were infringing copies of copyright works and that a defendant (a) made them for sale (1st charge), and/or (b) possessed them for the purposes of trade or business (2nd charge), and/or (c) possessed the stamper to make such infringing copies (3rd charge), the burden shifts to the defendant to establish the statutory defence that the defendant does not know and has no reason to believe that the VCDs are infringing copies.

36.The judge concluded based on HKSAR v Mega Laser Products Limited [1999] 3HKC 161 that once the burden is shifted to the applicant, she must prove that she had taken positive steps to make such enquiries and investigations as she reasonably could to satisfy herself that the work was free from copyright infringement.

37.The judge found that the applicant had not adduced any evidence to meet the evidential requirements of the statutory defence.

38.The judge found that the applicant was actively involved in the management of COHL and she was therefore making for sale or hire infringing copies of copyright work and was in possession of article designed or adapted for making infringing copies of copyright work. The applicant was convicted of the 1st and 3rd charges.

39.The judge acquitted the applicant of the alternative 2nd charge and the 4th charge, giving her the benefit of the doubt.

The Application

40.The applicant has raised a number of grounds in support of her application.

41.In her revised grounds of appeal, the applicant suggests that she had not been given a fair trial due to the unavailability of Lam Chor-wong and the incompetence of counsel. She alleges that the interpreter was incompetent and her cautioned statement incriminated against her. She also complains that the judge had misunderstood her and that the facilities in Tai Lam Centre for Women was inadequate. She suggests that there were a lot of obstacles preventing her from having a fair trial and a fair appeal.

42.As Mr. Sean, Senior Government Counsel quietly right points out in his written argument, there is no evidence to support the suggestion that the defence counsel or the interpreter was in any way incompetent. The applicant's cautioned statement was not admitted as evidence.

43.It is not our duties to compare the effort put up by defence counsel in different cases but it is fair to say that the issues involved in this case are relatively simple and straightforward. There is also no indication that the alleged inadequate interpretation would in any way render the conviction unsafe or unsatisfactory.

44.Lam Chor-wong was not charged and was not listed as a prosecution witness as he could not be located. The applicant did not make any application arising out of his absence. She cannot now make any complaint about his absence. There was also no complaint about unfair trial before the trial judge.

45.The applicant's complaint about the judge is not justified and her complaint about the facilities in Tai Lam is not relevant. Her complaint about not being granted Legal Aid is not a matter we wish to comment on.

46.The only ground worth consideration is the suggestion in her original grounds of appeal that the judge had wrongly relied on the pay slip to support the finding that the applicant was under the employment of COHL at the time of the raid.

47.Mr. Sean has fairly conceded that the pay slip was not produced as part of the prosecution case and was only used in the cross-examination of the applicant who did not agreed with its content. In the circumstances, the judge should not have relied on the pay slip.

48.Yet the judge relied on the pay slip as one of the reasons for disbelieving the applicant.

The Analysis

49.The only issue in the case is whether the applicant was employed by COHL and whether she was actively involved in the management of the factory at the material times. There was no suggestion that the applicant had taken any steps to make enquiries and investigation to satisfy herself that there was no copyright infringement.

50.There is in our view, overwhelming evidence to support the suggestion that she was. She claimed to the Customs officers to be the manager and person in charge of the factory. She produced purported authorization documents and the production records of the factory for their inspection.

51.The applicant recruited PW1 and PW2 and she was one of the persons they reported to. PW1 and PW2 were of course deeply involved in the production of infringing copies. PW1 said the applicant gave him the production list of what VCDs to be produced.

52.PW6 said she was under the supervision of the applicant. Neither PW6 nor PW7 had heard of China Union Trading Limited.

53.The applicant for the purpose of this appeal has filed with this court a copy of her pay slip issued by China Union Trading Limited for the month of April 2000.

54.Such pay slip is of course fresh evidence and there is no explanation why it was not introduced at the trial. Nevertheless we are not of the view that such pay slip would have any significant bearing on the case.

55.On the evidence, with or without the pay slip, be it issued by COHL or China Union Trading Limited, the conclusion that the applicant was the person in charge of COHL and was actively involved in its production of infringing copies of copyright work could not be doubted. She was clearly aware of what was going on in the factory.

56.The suggestion that COHL produced the infringing discs not for sale or hire but so that they would be destroyed is not an argument we can accept.

57.Despite the fact that the judge had wrongly relied on the pay slip issued by COHL, the conviction against the applicant is a safe one.

Conclusion

58.The application for leave to appeal is therefore dismissed.

Representation:

Mr Eddie Sean SGC of Department of Justice for the Respondent.

Applicant in person, present.