Re Flying Crane Ltd

Case No.HCMP 426/1985

Court

High Court CFI

Date—

Judge—

Case Document

100%Judiciary

HCMP000426/1985

HEADNOTE

Does the word "article" in s.21 of the Customs & Excise Ordinance Cap. 60 include documents relating to "the article"?

Are the powers referred to in s.20 of the Ordinance exercisable separately and independently of the powers in s.21?

Held: "Article" does include documents relating to the "Article" and sections 20 and 21 of the Ordinance should be read together. Accordingly no declarations would be made that the officers of the Customs & Excise Department had exceeded their powers when they seized documents during the course of an investigation undertaken under s.20.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS N0. 426 0F 1985

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IN THE MATTER of an application by Flying Crane Limited and Kindon Garment Manufacturing Company Limited to apply for Judicial Review

and

IN THE MATTER of a search and seizure of documents conducted by one Cheung Ping Hung of the Customs and Excise Department at the premises of the said Flying Crane Limited and Kindon Garment Manufacturing Company Limited at 2G Hok Yuen Street, 2nd floor, Phase II, Flat A, Kowloon, purportedly pursuant to Section 21 of the Import and Export Ordinance, Capter 60, Laws of Hong Kong.

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Coram: Hon. Mayo, J.

Date of hearing: 25th February, 1985

Date of delivery of Judgment: 5th March, 1985

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JUDGMENT

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1. On the 13th February 1985 officers of the Customs and Excise Department attended at the Applicants' factory premises for the purpose of conducting an investigation of the Applicants' records pursuant to section 20 of the Import and Export Ordinance Cap. 60. Initially, they requested copy documents. They remained on the premises some hours and later conducted a search of the premises and seized a large volume of documents. On the 14th February Deputy Judge Barnett granted leave to the Applicants to apply for a Judicial Review of the action taken by the Customs and Excise officers. The Applicants are seeking three declarations. The first declaration they seek is that the search and seizure were not undertaken in a bona fides manner and was therefore unlawful. The second was that there was no power to seize the documents and the third is that only relevant documents should be seized and that as too many documents were taken, the seizure was unlawful. By agreement between the parties I was invited only to consider the second declaration sought as this raised an issue of law namely the proper construction of the relevant sections of the Import and Export Ordinance Cap. 60. The other two declarations involved questions of fact. There is considerable doubt whether questions involving issues of fact can satisfactorily be the subject of a Judicial Review.

2. Mr. Neoh who is representing the Applicants submitted that it was necessary to look carefully at the provisions contained in section 20 and 21 of the Ordinance. He argued that section 20 was primarily concerned with the powers of the Customs and Excise Department in relation to documents and section 21 was intended to confer upon the Department rights of seizure in relation to ''articles" and that "articles" did not include any documents which may exist in relation to the "articles".

3. Unfortunately, the word "article" is not defined in the definition section of the Ordinance. It is, however, defined in section 20A. Here "article" is defined as meaning an article of cargo. "Cargo" is defined in the definition section. Here it is defined as follows:

' Cargo' means any article which is imported or exported other than

................

any document relating to (i) the carriage of cargo in or on such vessel, aircraft or vehicle or (ii) the inter-office business transactions of the owner of such vessel, aircraft or vehicle, and

................."

Interestingly, the documents exempted from the definition of "cargo" do not extend to the classes of documents which were seized by the Customs and Excise officers.

4. Clearly, it is vital to a determination of the issues before me to decide whether "article" can include documents relating to the "article". In making his submission to me, Mr. Neoh attempted to distinguish the difference between an "article" and documents. He suggested that "articles" should be treated as real evidence. By way of analogy, he referred to the definitions contained in Ch. 1 of Phipson On Evidence 13th Edition on p. 3. Real evidence is defined as:

"	Material objects other than documents, produced for inspection of the court, are commonly called real evidence. This, when available, is probably the most satisfactory kind of all, since, save for identification or explanation, neither testimony nor inference is relied upon. Unless its genuineness is in dispute, the things speaks for itself.
	Unfortunately, however, the terms "real evidence" is itself both indefinite and ambiguous, having been used in three divergent senses:
	(1)	Evidence from things as distinct from persons.
	(2) Material objects produced for the inspection of the court. This is the second and most widely accepted meaning of "real evidence." It must be borne in mind that there is a distinction between a document used as a record of a transaction, such as a conveyance, and a document as a thing. It depends on the circumstances in which classification it falls. 0n a charge of stealing a document, for example, the document is a thing.
	(3) Perception by the court (or its result) as distinct from the facts perceived. Although the physical production of objects is a valuable factor in juridical proof and of use in technical classification, it is questionable whether the term "real evidence" is a very helpful one by which to express it. The phrase is hardly ever used in practice, material objects being referred to either by name, or, more loosely, as circumstantial evidence. In textbooks, especially when dealing with classification, the phrase is occasionally convenient. Which of its meanings then should be retained? It seems advisable to adhere to the more usual definition "material objects, other than documents, produced for the inspection of the court." "

5. This definition is certainly of assistance. It indicates the different approaches which have been made by the courts to consider the evidential nature of "articles" and of the differences which can arise in treating documents as evidence. What it does not do is to assist us in resolving whether a document is an "article".

6. I regret that I have come to the conclusion that the Customs and Excise Ordinance is not a very satisfactorily drafted piece of legislation. The words ''article" and "document" are used fairly indiscriminately in different parts of the Ordinance and I do not believe that it is possible to come to any definite conclusion whether "articles" include documents on all occasions. In my view, the only possible approach is to examine each of the relevant sections individually and then attempt to determine its true effect. It is therefore necessary to consider in detail both section 20 and 21 of the Ordinance. I reproduce these sections here:

"	20. (1) Without prejudice to the powers conferred by section 21, any member of the Customs and Excise Service and any authorized officer may, for the purposes of this Ordinance -
		(a)	enter at any reasonable time and search any premises (other than domestic premises) or place registered under this Ordinance or occupied by a person who has been registered under this Ordinance or a person who is the holder of a licence;
		(b)	stop, board and search any vessel, aircraft or vehicle;
		(c)	require the production of -

	(i)	any licence;
	(ii)	any document which relates to the origin or nature of any article or which he suspects to be relevant to an offence under this Ordinance; or
	(iii)	any record or other document required to be kept by this Ordinance;

	(d)	examine and take copies of any licence or of any record or document referred to in paragraph (c);
	(e)	take, without payment but subject to the issue of an official receipt for it, such sample of any article in respect of which any licence may be issued under this Ordinance as may be required by the Commissioner for the purpose of examination and investigation;
	(f)	examine any article if he considers it necessary to do so to ascertain whether or not the provisions of this Ordinance are being, or have been, complied with by any person in respect of that article; or
	(g)	stop and search any person entering or leaving Hong Kong:
		Provided that no person shall be searched except by a person of the same sex or be searched in a public place if he objects to being so searched.

(2) Any member of the Customs and Excise Service and any authorized officer may require -

	(a)	any person to whom a licence has been issued;
	(b)	any person who has been registered under this Ordinance, and
	(c)	any servant, employee or agent of any person referred to in paragraph (a) or (b),

	to furnish such information or take such action as may be necessary to enable the member of the Customs and Excise Service or the authorized officer to exercise the powers conferred on him under this Ordinance.
	(3) When a sample of any article has been taken by a member of the Customs and Excise Service or an authorized officer pursuant to subsection (1)(e) the Commissioner may, after examination and investigation of it, direct that the sample be returned to the owner thereof or disposed of in such manner as the Commissioner thinks fit.
	21. (1) Subject to section 22, any member of the Customs and Excise Service and any authorized officer may, if he reasonably suspects that there is, in or on any premises or place, vessel, aircraft or vehicle, any article in respect of which an offence has been committed under this Ordinance or which is, or contains, evidence of the commission of such offence -

(a)

enter and search any such premises or place;

(b)

stop, board, remove, detain and search any vessel, aircraft or vehicle.

(2) Any member of the Customs and Excise Service and any authorized officer may seize -

	(a)	any article -
		(i) in respect of which he reasonably suspects that an offence has been committed under this Ordinance; or
		(ii) which he reasonably suspects to be, or to contain, evidence of the commission of such an offence; and

(b)

any vessel which has a tonnage not exceeding 250 gross tons and any vehicle, if he reasonably suspects such vessel or vehicle to have been used in connexion with the commission of an offence under this ordinance.

	(3) Subject to section 22, any member of the Customs and Excise Service or any authorized officer may enter and search any premises or place connected with the manufacture, processing, production, storage, distribution or sale of any article in respect of which a licence has been issued under this Ordinance.
	(4) The owner of any article, licence or other document seized by a member of the Customs and Excise Service or an authorized officer under this section may, on application to the Commissioner and subject to such conditions as the Commissioner may impose, photograph or make any other form of copy of the seized article, licence or document."

7. Mr. Neoh argued that the true construction of these sections was that each dealt with separate and distinct situations. In overall terms section 20 dealt with the position relating to documents and section 21 dealt with the position concerning "articles". on this basis, the powers of the Customs and Excise office were clearly limited in relation to documents. When they attended at premises for the purpose of inspecting documents, their powers were circumscribed and they had no authority to remove documents. If I understood him correctly, he agreed that much wider powers were conferred by section 21 in relation to "articles". Here the Customs and Excise office could seize articles. I regret that I see very little merit in this contention. I can see no reason why these two sections should not be read together. There may be many cases where Customs and Excise officers enter premises with a veiw to inspecting documents and then their suspicions are aroused that an offence may have been committed triggering off a situation where it is appropriate that the sanctions referred to in section 21 can properly be invoked. In this connection, it is particularly relevant to have regard to section 21(4) which specifically envisages a situation where documents are seized.

8. I have come to the conclusion that it is highly artifical and unsatisfactory to attempt to distinguish between "articles" and "documents". Having regard to the provisions contained in section 19 of the Interpretation and General Clauses ordinance Cap. 1, I have no doubt that I must attempt to interpret sections 20 and 21 in accordance with the stated objects of the Import and Export Ordinance. It would lead to a potentially unsatisfactory and inconvenient result if Customs and Excise officers were not able to remove documents from premises where they were making inspections if they had reason to believe that an offence or offences had been committed. It may well be the case that voluminous documents would have to be scrutinized and it would be impracticable for detailed investigations to take place at the premises. I am satisfied that the only realistic construction to be placed upon these sections is for them to be read together and not separately. I am further satisfied that in the context of particularly section 21 "articles" do indeed include documents and accordingly the answer to the point of law posed by 'tae parties is that the Customs and Excise officers were legally entitled to seize documents at the premises. I hope that this answer sufficiently resolves the matter raised in the second declaration which is sought. I will hear the parties on any further directions which may be sought in the matter and on costs.

	(Simon Mayo )
	Judge of the High Court

Representation:

Mr. Anthony Neoh inst'd by (Messrs. S.K. Wong & Co.) for Applicants

Mr. N. Strawbridge for the Attorney-General