HKSAR v. Lam Mei Ling and Another

HCMA000494/2004

HCMA494/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.494 OF 2004

(ON APPEAL FROM KTS14954-14958 AND 14962-14971 OF 2003)

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Coram: Hon Nguyen J in Court

Date of Hearing: 20 August 2004

Date of Judgment: 26 August 2004

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J U D G M E N T

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1.The 1st appellant was convicted of 12 summonses, each of which alleged an offence under section 6D(1) and (3) of the Import and Export Ordinance, Cap.60 ("the Ordinance"). The particulars in each offence were that she had exported textiles which were prohibited articles to a country specified in the third column of the Second Schedule otherwise than under and in accordance with an export licence issued by the Director-General of Trade and Industry, in that she exported certain garments to a country under an export licence when the said textiles were not covered by a valid Certificate of Hong Kong Origin.

2.The 2nd appellant was convicted of three summonses laid under section 36(1)(a) of the Ordinance. The particulars of each offence were that he, in respect of an application for the issue of a licence, made a statement which was false or misleading in a material particular, namely, in an Exporter's Declaration on an application for the issue of Export Licence (Textiles) Form 5 he made a false or misleading statement that he was the exporter of certain goods described in the said application and that he undertook to abide by the "Conditions of Licence (Form 5)" issued by the Director-General of Trade and Industry.

3.It was accepted by Mr Wan, appearing for the appellants, that the offences of which the 1st appellant was convicted were offences of strict liability. The defence relied upon by the 1st appellant at her trial was the common law defence enunciated in AG v. Fong Chin Yue & Others [1995] 1 HKC 21, namely that it would be a defence if the accused could prove, on a balance of probabilities, that he believed for good and sufficient reason, though erroneously, that the provisions of an Ordinance had been complied with.

4.The evidence that the 1st appellant gave at the trial was that she was the wife of the 2nd appellant and because her husband at the time was working for another company, it was not convenient for him to be the proprietor of a trading company. The 1st appellant was therefore asked to use her name to be the proprietor of two companies. She said that she took no part in the running of the two companies, she was a housewife, all the trading of the two companies was handled by her husband, she never asked him anything about the business and she did not know anything about the business. She said that she completely trusted her husband and because she had come from the Mainland, she did not understand Hong Kong laws. The defence also said that she derived no benefit from the two companies because she had only lent her name to them.

5.The learned magistrate did not accept this, because she was the 2nd appellant's wife, because the 2nd appellant in running the two companies must have derived some benefit and the 1st appellant either derived a benefit from the monthly payments that her husband gave her for the household expenses or because he might have allowed her to share some of the profits. The magistrate held that the fact that the 1st appellant did not care about the affairs of the companies and completely trusted her husband, might be a reason but it was not a good and sufficient reason to enable her to successfully rely on the defence.

6.Mr Wan submits that the magistrate was wrong in coming to that conclusion and was also wrong in deciding that the 1st appellant did derive a benefit from the running of the companies. I do not agree. In my view, the magistrate was correct and was perfectly entitled to come to the conclusion that he did. To allow a defendant to be able to successfully rely on that defence by saying that he only lent his name and took no part in the affairs of a company and made no inquiries whatsoever about its business would be, to my mind, to make a mockery of the law. No reasons were advanced by the 1st appellant to fortify what she said was her implicit trust in her husband, for example, that he had done similar things in the trade in the past and those things were always proper and legitimate. As the 2nd appellant's wife, the 1st appellant obviously derived a benefit from the business activities of the two companies because whatever her husband made would have benefited the family as a whole.

7.The 1st appellant's appeal against conviction is therefore dismissed.

8.The 2nd appellant at his trial relied on the defence provided for in section 36(1) of the Ordinance which is that if he satisfied the court or magistrate that he did not know and had no reason to believe the statement or information to be false or misleading, then he was not guilty of the offence.

9.The 2nd appellant gave evidence which was consistent with that given by the 1st appellant. He explained the procedure adopted in the companies which was that after an overseas buyer placed an order with the company, he would find a manufacturer to manufacture the garments. He would go to the factory to inspect and to ensure that that factory indeed manufactured the garments for him. He also saw that the factory successfully obtained the Production Notifications. He said he and the manufacturers together would apply for the certificates of origin, after which, they would together apply for the export permit. In each case after the documents were obtained, the 2nd appellant would immediately send the original to the overseas buyers because the overseas buyers needed to apply to their respective governments for the import permit.

10.On this occasion, the garments involved were all manufactured by a company called Brilliant Star. The 2nd appellant said that on this occasion all the procedures mentioned above were complied with and all the goods were successfully exported overseas and were allowed to enter the overseas countries. He himself did receive payments from his clients and he also made payments to Brilliant Star. He said that in the year 2003, he came to know that something had happened but he could not find the responsible person of Brilliant Star, one Mr Fan, and after that, Brilliant Star ceased business.

11.As regards the two copies of the certificates of origin, the 2nd appellant said that they were kept by Brilliant Star. Because he was unable to contact Mr Fan, he was unable to obtain the copies of these certificates of origin. He himself did not keep any of the copies. Therefore, in respect of the 12 transactions in this case, the 2nd appellant had to ask the overseas buyers for the copies of the documents and he was able to obtain eight of them which were produced in the trial as exhibits. He said that at the material time Brilliant Star did not use computers, and so Brilliant Star and he had to fill out the forms to make application for the certificates of origin.

12.In respect of the copies of the certificates of origin which were obtained, he said that at the time he did look at them and he thought that there were genuine documents and he never suspected that they were false. He said that he had to rely on Brilliant Star. He did not ask and could not, in respect of each certificate of origin, have asked the issuing authority to check if each document was a genuine one. The 2nd appellant's case was that on each occasion that Brilliant Star obtained the certificate of origin, he had looked at the documents and regarded them to be genuine. He therefore did not know that they were false documents. With Brilliant Star, he had never encountered any difficulties nor any legal problems, with the goods involved in the instant 12 transactions. Therefore, the 2nd appellant said he had no reason to believe that the certificates of origin were false.

13.The magistrate accepted that the eight certificates produced were false but noted that a witness for the prosecution who was the manager of the certificate-issuing department of the Hong Kong General Chamber of Commerce which had issued the certificate was called by the prosecution in rebuttal and the witness, after looking at the eight certificates produced by the defence, said that if he had not checked against the computer he would not have been able to say that they were false.

14.The magistrate then found that under normal circumstances, the 2nd appellant would not have been in a position to know that the eight certificates were false. The magistrate accepted that the 2nd appellant in law was not required to ask the organization which issued the certificate or the Trade Department to certify that the document was genuine. The magistrate said that because the eight certificates produced had the same amount of goods and the same destinations as mentioned in the export certificates and in the 12 summonses, he came to the view that in respect of nine of the summonses the 2nd appellant had the necessary support to substantiate the legal defence provided for in the section. However, the magistrate was of the view that in respect of three of the summonses because the 2nd appellant was unable to produce any of the certificates of origin, the 2nd appellant could not show that he had no reason to believe that the certificates were false. Therefore, in respect of those three summonses the 2nd appellant could not rely upon the statutory defence.

15.Mr Wan submits that the magistrate was wrong in convicting the 2nd appellant of the offences in those three summonses. He submits that the evidence given by the 2nd appellant was the same in respect of all 12 summonses. In particular, he emphasized that the 2nd appellant had in each case inspected the document and satisfied himself that the document was genuine. He said it was not the case that at the material time the 2nd appellant only inspected these eight certificates and did not inspect the certificates issued in the transactions in the three summonses of which he was convicted. Therefore, he submits, the fact that the 2nd appellant at the trial was only able to produce copies of these eight certificates should not distinguish these transactions from the transactions in the three summonses that he was convicted of.

16.Miss Sin, for the prosecution, submits that the magistrate did not say that he accepted that the 2nd appellant having inspected the document in each case was satisfied as to its genuineness. She submits that the 2nd appellant's evidence was only accepted in those instances where at the trial he was able to produce copies of the certificates of origin because the documents supported his evidence that at the time he was satisfied as to their genuineness. I cannot agree with that submission. In my view, the fact that the eight certificates were produced should not have made any difference to the 2nd appellant's evidence that at the time he was satisfied that all the documents were true. The fact that copies of these certificates were produced at the trial should not have made those transactions any different from the transactions in the three summonses that he was convicted of. The thrust of the 2nd appellant's evidence was that he inspected the documents in every transaction and was satisfied that they were genuine.

17.I therefore allow the appeal against conviction by the 2nd appellant and those convictions are quashed.

Representation:

Ms Mary Sin, SADPP of the Department of Justice, for HKSAR

Mr Jason Wan, instructed by Messrs Fung & Fung, for the 1st and 2nd Appellants