Viva Magnetics Ltd. and Others v. Secretary for Justice
Read the full judgment text of HCAL 3369/2001 on BabelCite. This High Court CFI judgment was delivered on 25 July 2002.
1. In this application for judicial review, the applicants, who face criminal proceedings in the District Court, seek by way of an order of certiorari to quash a ruling made against them in the course of those proceedings. They seek to quash the ruling on the basis that it is wrong in law.
Cited by 1 case · Cites 3 cases
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HCAL003369/2001 HCAL 3369/2001 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST -------------------
-------------------- Coram: Hon Hartmann J in Court Dates of Hearing: 20 and 21 June 2002 Date of Handing Down Judgment: 25 July 2002 ---------------------- J U D G M E N T ---------------------- Introduction 1.In this application for judicial review, the applicants, who face criminal proceedings in the District Court, seek by way of an order of certiorari to quash a ruling made against them in the course of those proceedings. They seek to quash the ruling on the basis that it is wrong in law. 2.In July and December 2000, the applicants (together with a fourth accused) were charged with various offences contrary to section 118(4)(a) as read with section with 119(2) of the Copyright Ordinance, Cap. 528 ('the Ordinance'). Section 118(4)(a) of the Ordinance provides that -
3.A prosecution under section 118(4) is subject, however, to the limitations prescribed by section 120A of the Ordinance. Section 120A - the meaning of which lies at the heart of this application - reads :
4.In broad sweep, what has been alleged against the applicants is that they have made or aided and abetted in the making of a number of master compact discs (stampers, as they are called) which contain copyright material - music, video games and the like - and that these stampers, from which many hundreds of compact discs may be produced, were intended to be used not for legitimate purposes but for the making of compact discs which infringed copyright, such discs to be disposed of commercially; that is, by way of trade or business. The allegations arose out of the following history. 5.In February 1999, in Anchorage, Alaska, the United States Customs searched a parcel that was en route by post to the city of Cuidad Del Este in Paraguay. The parcel contained a number of stampers and an equal number of documents called stamper reports. The reports, which contained technical information, bore the name of the first applicant; that is, the company, Viva Magnetics. 6.Following this seizure, in June 1999 the authorities in Paraguay raided a factory in Cuidad Del Este and discovered that it was a production plant for infringing compact discs. Thereafter, the authorities allowed investigators of the international music industry to have access to the factory. These included representatives of the International Federation of the Phonographic Industry ('the IFPI'). 7.The Hong Kong Customs and Excise Department were advised of what had occurred in Anchorage and Cuidad Del Este. In July, August and September 1999 representatives of the IFPI met with officers of the Department. In August and September the IFPI representatives, professional investigators experienced in copyright matters, supplied detailed reports to those officers. In the second of those reports the first applicant was identified by name together with the fact that it was known to have 'stamper manufacturing capabilities' at its Wong Chuk Hang premises. The report further name the second applicant as its Chief Executive Officer. 8.Although detailed reports were made, the stampers themselves were not delivered to the Department until later. It appears that one stamper was delivered in November 1999 (after which the Department opened a formal investigation file) while the balance were delivered in May 2000. 9.In late December 1999, after delivery of the first stamper, the Department executed a search warrant at the premises of the first applicant, a further search being conducted in June 2000 after the delivery of the balance of the stampers. 10.As to the speed of prosecution, the evidence indicates that the representatives of the IFPI were dissatisfied. There was some thinly veiled acrimonious correspondence. 11.In July 2000 the first charges were laid. In December 2000 the balance of the charges were laid. All the charges concerned stampers that were seized either in Anchorage or Cuidad Del Este and later delivered to Hong Kong. It was alleged that the applicants (together with a fourth accused) made those stampers in Hong Kong, their purpose being to forward them to the factory in Cuidad Del Este where they would be used to manufacture infringing copies. 12.When the criminal proceedings came before the District Court, it was contended on behalf of the applicants that, with the exception of one offence alleged against the first and second applicants, the prosecution of the remaining offences had been commenced more than one year after their discovery by the prosecuting authority, the Customs and Excise Department, and, as such, were time-barred in terms of section 120A of the Ordinance. 13.A direction was given that this issue - one which went to jurisdiction - should be determined as a preliminary issue. In October 2001, after a three-day hearing (during which a great many documentary exhibits were placed into evidence and prosecution witnesses were called to testify), the judge, Deputy District Court Judge Mackintosh, ruled that of the offences in question only one was time-barred in terms of section 120A, that being a charge brought against the third applicant. He ordered that the applicants be tried in respect of all the remaining charges. 14.The applicants contend that this ruling in respect of the remaining charges is wrong in law. They therefore seek an order of certiorari to quash that ruling and the orders made under it. If the order of certiorari is made, the applicants further seek :
The central issue for determination by this Court 15.In his ruling of 2 November 2001, the judge in the District Court succinctly described the issues that lay for determination by him at that time in the following terms :
16.Flowing from this, and in light of the applicants' challenge, the first and essential issue to be determined by this Court may be summarized in the following question : 'Was the judge in the District Court correct in law in his interpretation of the phrase 'discovery of the offence by the prosecutor' as that phrase is used in section 120A of the Ordinance?' The appropriateness of the judicial review 17.Before moving to consider what I have described as 'the first and essential issue' in this judgment, something briefly must be said of an issue which was of some importance at the time leave to apply for judicial review was made pursuant to O. 53, r. 3 of the Rules of the High Court but which at the substantive hearing was accepted not to be so. That issue concerned the appropriateness (in this case) of proceeding by way of judicial review. 18.When leave was first sought, one of my concerns was the often difficult question of whether it was appropriate for the applicants to attempt to seek relief by way of judicial review rather than by way of appeal. The problem had been defined by myself in Chow Shun Chiu v HKSAR HCAL 763/2001 (unreported) in the following terms :
19.At the hearing in which leave to apply for judicial review was sought, having heard extensive submissions on the subject, I was satisfied that the issue of the appropriateness of judicial review was fit for further consideration at the substantive hearing. Leave was therefore granted. However, at the substantive hearing the matter was not further pursued, at least not in any depth. This arose because Mr Turnbull, lead counsel for the respondent, accepted that this was a proper case for judicial review. In light of that concession, and in light of the fact that what was challenged was the correctness of a ruling as to law made in respect of a preliminary issue which, if ruled in favour of the applicants, could well avert the need for a lengthy and costly trial, I proceeded on the basis that proceedings by way of judicial review were appropriate. In reaching that decision, I also took note of the fact that the English courts have entertained judicial review applications when the circumstances of the case and the issues of law arising from them were essentially similar. See, for example, R v S toke-on-Trent Magistrates Court ex parte Leaf United Kingdom Ltd (unreported, QBD, 6 November 1997). The meaning and intent of section 120A 20.It is the duty of prosecuting authorities, so far as is practicable, to proceed with the prosecution of cases expeditiously. Inordinate delay brings our system of criminal justice into disrepute. Justice delayed may, in a host of ways, for both the prosecution and the accused, result in justice denied. The principle, I believe, is well recognized in the common law. See, for example, R v Clerk to the Medway Justices, ex parte DHSS (unreported, QBD, 11 June 1986) in which Woolf LJ said (at page 8) :
21.In my judgment, in bringing section 120A of the Ordinance into law, the legislature has given effect to the principle that I have outlined. It has done so by ensuring that suspected offences under the Ordinance are both expeditiously investigated and prosecuted. That is why there can be no prosecution of an offence under the Ordinance later than one year "from the date of discovery of the offence by the prosecutor". In this regard, so that it may be read in whole, section 120A bears repeating :
22.The question, of course, is what is meant by the phrase "discovery of the offence by the prosecutor"? To my knowledge that phrase, as it appears in section 120A, has not been the subject of consideration by our courts. The phrase itself, however, and similar phrases have been used by law draftsmen in a number of different statutory instruments in a number of jurisdictions and in that broader context have come under scrutiny. 23.In the United Kingdom, section 19 of the Trade Descriptions Act 1968 contains essentially the same phrase - "no prosecution for an offence under this Act shall be commenced after the expiration of three years from the commission of the offence or one year from its discovery by the prosecutor, whichever is the earlier" - and, within the context of that legislation, has been the subject of judicial scrutiny on a number of occasions. 24.In the unreported decision of Brooks v Club Continental Ltd (QBD, 13 October 1981), McNeil J gave a definition of the phrase which has been widely cited in later cases. In respect of the word 'discovery', he said :
25.As McNeil J recognized, the word 'discovery' does no more than define a state of knowledge. The discovery of an offence takes place when the prosecutor for the first time becomes aware of it. Discovery may therefore be active or passive or a combination of both. In so far as it is an act, it is the act of finding or being made aware of an offence. 26.The manner in which the required state of knowledge is reached is not relevant to the definition. The prosecutor may reach his state of knowledge on a purely passive basis, that is, by being informed of events or he may reach it on an active basis, that is, by seeking out information. 27.In the later decision of R v Beaconsfield Justices, ex parte Johnson and Sons (1985) 149 JP 535, it was confirmed that the discovery of an offence occurs when the prosecutor has knowledge of it, that is, knowledge of the relevant and material facts that found the offence, even if investigations are still required to obtain evidence of those facts in an admissible form. Stuart-Smith J said in this regard :
He concluded :
28.A decision which the District Court judge mentioned in his ruling, and to an extent which he relied upon, is that of R v Stoke-on-Trent Magistrates Court ex parte Leaf United Kingdom Ltd (supra). In his reference to that authority the judge commented :
29.As the District Court judge acknowledged, this again was a case which was determined on its facts. However, it would be wrong to view the ratio of Stoke-on-Trent Magistrates as in any way altering the principles set down in Beaconsfield Justices : namely, that there is a distinction between facts which are known to the prosecutor and admissible evidence to support those facts. The principles set down in Beaconsfield Justices were specifically approved in Stoke-on-Trent Magistrates and a close reading of the judgment reveals that they were, when applied to the facts of the case, in no way compromised. 30.But while there must be a distinction between facts known to the prosecutor and evidence to support those facts, for facts to be known to the prosecutor they must nevertheless be :
31.In respect of that first element, I do not see how the prosecutor can know of an offence unless he knows of facts which, if proved, would constitute that offence. By way of illustration, to know that a person is dead is not to discover an offence of murder. In R v Bexley Justices ex parte Barratt Homes Ltd (unreported, QBD, 11 December 1987), Schiemann LJ, again looking to the meaning of section 19 of the Trades Description Act 1968, stated what, in my judgment, must accord with the logic of the matter :
32.In respect of the second element to which I have referred in para. 27; namely, that the facts must be credible, I do not see how a prosecutor can know of an offence unless he can place some reliance on the facts which have come to his knowledge. If it was otherwise, a prosecutor would be bound to investigate every allegation of an offence received no matter how lacking in substance or credibility. That could not have been the intention of the legislature. As was said in R v Stoke-on-Trent Magistrates Court :
33.During the course of submissions, two Hong Kong cases were referred to me : R v Yau Hing Ping [1992] HKLR 188 and SFC v Chiu Su Ming Jason [2000] 3 HKC 425, both magistracy appeals. But, as the District Court judge commented in his ruling, both cases concentrate on their own facts and are of very limited assistance in seeking applicable principles. 34.One authority, however, which has been of assistance is that of Russell v Wirihana (1986) 2 FRNZ 461, a decision of the High Court in Auckland, New Zealand. The provision scrutinized in that case is section 128 of the New Zealand Social Security Act which requires that prosecutions be commenced within 12 months of the facts alleged in the charge being brought to the knowledge of the prosecuting authority. Thorp J held that time did not necessarily run from receipt of an allegation of the commission of an offence simpliciter, but will generally run from the time when an officer has sufficient information of the likelihood of the commission of an offence to justify an investigation. Thorp J, in seeking to define the test in a practical way, capable of everyday enforcement, explained his reasoning in the following terms :
35.If the purpose of section 120A is to ensure, in so far as is practicable, that suspected offences be investigated expeditiously, it cannot, in my view, be permissible for a prosecutor not to seek obvious and readily ascertainable information for the purposes of artificially extending the time limit. 36.How then, as a consideration of the authorities to which I have referred, is the phrase - "1 year from the date of discovery of the offence by the prosecutor" - to be interpreted? In my judgment, the following core principles may be distilled :
Was the ruling correct in law? 37.In my judgment, in his ruling the judge in the District Court failed to distinguish between discovery by the Customs and Excise Department of credible facts which, if proved, would constitute an offence under the Ordinance and discovery of the evidence to support those facts. To that extent, in my view, his ruling was wrong in law. 38.In para. 25 of his ruling the judge said :
39.As the judge recognized, the Department received complaints (that is, information alleging the commission of offences under the Ordinance) which were detailed in nature. Indeed, the evidence produced at the hearing indicated that detailed reports compiled by professional investigators were supplied to the Department. As the judge further recognized, the complaints came from respectable sources; the information supplied was therefore information upon which reliance could be placed. He went on to say, however, that there had been no discovery of an offence by the Department at that time and that such discovery only took place when the Department received into its custody the stampers upon which the later charges were to be based. But why were they first needed here in thong Kong? I cannot see that they were, not at least - to employ the approach of Thorp J in Russell v Wirihana - to enable the Department to be in possession of information sufficient to justify an investigation. 40.Much of the relevant information contained on the stampers had already been passed to the Department and any outstanding information, it was accepted during the course of submissions before me, could be obtained in the form of a request. There is nothing to suggest that the stampers needed to be subject to scientific analysis in order to reveal data which had not already been passed to the Department or was readily ascertainable upon request. In the circumstances, I am afraid I can only read the passage which I have cited in one way : that, because the information had been received from outside the jurisdiction, to avoid possibly acting in an 'arbitrary manner', the Department first needed the physical evidence of the stampers to support what was alleged. But, as Stuart-Smith J said in Beaconsfield Justices, there is a difference between facts known to the prosecutor and evidence to support those facts. 41.The judge continued in his ruling :
42.I am not sure what was meant by the phrase 'the actual constituents of the stampers were essential'. As I have said, it was not necessary to submit them to scientific analysis to obtain essential information from them and Mr Turnbull, for the respondent, conceded that relevant information contained on them not already in the possession of the Department (for example identification numbers) could have been obtained upon request. The physical presence of the stampers were not therefore necessary to 'discover' the offences even if they were necessary to prove those offences at trial. 43.The judge, however, continued by stating :
44.That is correct. 'Discovery' takes place when the prosecutor has knowledge of facts which cover the essential elements of an offence and that state of knowledge may, depending on the circumstances, only be reached over a period of time not necessarily at the time when a complaint is first made. But in the present case that statement of the law begs the question : 'what 'facts' material to the charges were to be obtained from physical possession of the stampers that had not already been divulged or could not, upon request, have been obtained?' From the evidence, there were none. 45.The judge concluded his ruling by saying :
46.It is true, that a prosecutor cannot have knowledge of an offence until information supplied to him has been comprehended. That may take time, especially when voluminous material is delivered. But as the judge had earlier recognized in his ruling, the burden of proving that charges have been brought within the period of time allowed by section 120A rests on the prosecution and it is evident from the passage cited that the prosecution failed to demonstrate how much time was required for that purpose. In the result, with the prosecution having failed to discharge its evidential burden, the judge was forced to seek a date that was identifiable but otherwise, with respect, in the context of the evidence, was somewhat arbitrary. I find it difficult logically to classify the raid as the conclusion of the process of consideration of the evidential material put before the Department. The execution of the search warrant can only have come after consideration of the material in order to find evidence in support of allegations already digested. In short, there is no evidence that the raid legitimately was part of the process of 'discovery' as opposed to the seeking of evidence to support what, in terms of section 120A, had already been discovered. 47.In all the circumstances, for the reasons outlined, I am satisfied that the ruling was wrong in law and, as such, must be quashed. Consideration of consequential orders 48.With the ruling quashed, the applicants seek an order declaring that all the charges in issue are time-barred and therefore no longer the subject of criminal prosecution. It is said that the court is entitled to take this course on the basis that, on a proper view of the law as read with the facts, no reasonable tribunal could arrive at any other decision. 49.Despite the persuasive arguments raised in support of the application, I do not believe I am in a position to accede to it. Factually, matters are not simple. What has been sought does not flow inevitably from my findings of law so that to remit the matter back would be a sterile exercise. Indeed, in determining the issue, I have found myself weighing and evaluating the evidence placed before me in a manner which, I believe, goes beyond what is permitted by a court of review. It is not for me to usurp what is properly the responsibility of the District Court. 50.I am also concerned that, by deciding matters 'on paper' at this time, I may be pre-empting the giving of new and relevant evidence if and when the matters in contention are considered again by the District Court. 51.Accordingly, I will order that the matter be remitted to the District Court to decide the preliminary issue in accordance with law. 52.My orders
Representation: Mr Michael Thomas, SC leading Mr Benjamin Chain and Ms Maggie Wong, instructed by Messrs Sit, Fung, Kwong & Shum, for 1st, 2nd & 3rd Applicants Mr R G Turnbull, SADPP and Mr Hayson Tse, GC of Department of Justice, for Respondent |
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Further hearings and rulings under HCAL 3369/2001