HKSAR v. Li Cheung
Read the full judgment text of CACC 375/2004 on BabelCite. This Court of Appeal judgment was delivered on 11 January 2005.
1. On 3 August 2004, the applicant was convicted after trial before Deputy Judge Dufton in the District Court of three copyright infringement offences. The applicant was the first defendant (“the applicant or D1”) whereas Shine Gold Limited was the second defendant (“D2”) on trial before the judge.
Cites 4 cases
|
CACC 375/2004 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CRIMINAL APPEAL NO. 375 OF 2004 (ON APPEAL FROM DCCC NO. 1101 OF 2002) ______________________ BETWEEN
______________________ Before : Hon Woo VP, Cheung JA and Lugar-Mawson J in Court Date of Hearing : 5 January 2005 Date of Judgment : 11 January 2005 __________________ J U D G M E N T __________________ Hon Woo VP (giving the judgment of the Court): Introduction 1.On 3 August 2004, the applicant was convicted after trial before Deputy Judge Dufton in the District Court of three copyright infringement offences. The applicant was the first defendant (“the applicant or D1”) whereas Shine Gold Limited was the second defendant (“D2”) on trial before the judge. 2.Both defendants faced the following four charges:
The prosecution’s case 3.The prosecution’s case was that on 15 October 2001, officers of Customs & Excise carried out an inspection at the factory premises of D2, which was also its registered office. D2 was a licensed manufacturer of video compact discs (“VCDs”). The applicant was the registered licensee and one of the two directors of D2, the other director being the applicant’s wife. The applicant held 70% and his wife 30% of the shares in D2. At the time of the inspection, the applicant was not present at the premises. 4.The following articles were found and seized from the said premises:
5.The applicant and D2 did not testify and did not call any witness at the trial. The judge convicted the applicant and D2 of Charges 1, 3 and 4. He sentenced the applicant to concurrent terms of imprisonment of 12 months, 15 months and 18 months respectively. 6.The applicant now seeks leave to appeal against the three convictions. Grounds of appeal 7.On behalf of the applicant, counsel Mr Graham Harris and Ms Mahindar Panesar have raised eight substantive grounds of appeal. The first three grounds relate to the propriety of each of the charges. The other five grounds relate to the weight of the evidence of the possession of the items, the subjects of the charges, as well as the relevant knowledge on the part of the applicant required for substantiating the charges against him. The propriety of the charges 8.The first ground of appeal contends that the charges were duplicitous and it was an abuse of process for the applicant to be charged pursuant to both ss 118 and 125 of the Ordinance, “because to succeed under the former charge the applicant had the burden of establishing statutory defences and under the latter he had no such burden.” It is contended that it was inappropriate and improper that the two matters be joined in the same charge. 9.The second ground of appeal contends that the judge erred in holding that the prosecution (the respondent) was not restricted to proceed against the applicant under s 125(1) of the Ordinance. 10.The third ground of appeal contends that the charges were insufficiently particularised in relation to matters relied upon by the prosecution to support such part that might have triggered the application of s 125 of the Ordinance. 11.Counsel argue that the charges that the applicant faced were duplicitous and it was an abuse of process for him to be charged pursuant to both ss 118 and 125 of the Ordinance, for the following reasons:
12.In our judgment, these arguments are flawed. Charges 1 (including Charge 2 in the alternative), 3 and 4 were laid against the applicant and D2. Insofar as the charge was in contravention of s 118, the statutory defences under s 118 were available to each of the defendants. The statutory defences are that the defendant did not know and had no reason to believe that the copy (the 78,226 VCDs in this case) was an infringing copy of the copyright work (s 118(3)), and that he did not know and had no reason to believe that the article (the 19 stampers in this case) was used or was intended to be used to make the infringing copies for sale or hire or for use for the purpose of, or in the course of, or in connection with, any trade or business (s 118(5)). With the exception of Charge 4, which was for contravening s 118(8), s 118 offences are strict liability ones: see HKSAR v Mega Laser Products (HK) Ltd & Ors [1999] 3 HKC 161 and HKSAR v Winners Laser Production Limited & Ors, CACC 620/1999, unreported, at p 5. Charges 1 and 3 are such offences. On the other hand, Charge 4, being an offence under s 118(8), is not a strict liability offence and requires the proof of knowledge that the article (the 3 production lines) were used or intended to be used to make infringing copies. 13.There are different elements to be proved by the prosecution in respect of each of the offences under s 118, which elements the judge had correctly identified in his Reasons for Verdict, as follows:
14.Section 125 of the Ordinance provides as follows:
15.Regarding the reference to s 125 of the Ordinance in each of the charges, the judge said:
16.After finding the applicant and D2 guilty of Charges 1, 3 and 4 under the relevant provisions of s 118 of the Ordinance, the judge reverted to deal with s 125. He said:
17.We agree with the judge that s 125 does not create an offence and therefore strictly it need not be referred to in the statement of offence. It is true that s 118 and s 125 contain different aspects of actus reus and mens rea and require the prosecution to prove different ingredients, but they do not amount to two different offences as contended by the applicant. If the applicant had been charged only under s 118, the various elements as mentioned by the judge in paragraphs 11, 13 and 14 of his Reasons for Verdict, cited above, would have to be proved against him. If, on the other hand, s 125 of the Ordinance was the only section relied upon by the prosecution, the prosecution must prove the same elements against D2, but not necessarily against the applicant, and the prosecution would be required to prove that the applicant was a director of D2 and that the offences were committed by D2 with the consent or connivance of the applicant. It is therefore clear that s 125 provides an alternative way of proving the same offence as having been committed by an accused who was a director of a limited company which had committed an offence under s 118 with his consent or connivance. There was no duplication of offences against the applicant in any of the charges laid against him. It is not the case that he would be found guilty of a different offence if he were convicted on the basis of s 125(1); he would still be guilty under s 118. The effect of referring to s 118 and s 125 of the Ordinance in each of the charges laid against the applicant was that the applicant was charged with the offences personally and as a director of D2. 18.The contention that the applicant was, by reason of being charged under s 118 and s 125, somehow hampered in the exercise of his right to rely on the statutory defences available under s 118 or prejudiced in anyway is cryptic. In our judgment, even if a person (a director or any other individual referred to in s 125) is charged under s 125, the statutory defences under s 118 are available to his company and likewise to him. There is no prejudice in that regard. It should also be noted that in his written submission on No Case to Answer, Counsel for the applicant at the trial referred to both bases of proof under s 118 and s 125 and never made any complaint of prejudice in any way. 19.It is, however, correct for counsel for the applicant to point out that the particulars of each of the charges before the judge against the applicant did not contain the required elements to be proved by the prosecution under s 125, namely, that the applicant was a director of D2 and that the offence charged against D2 was committed by D2 with the consent or connivance of the applicant. In our judgment, the charges laid against the applicant should have been framed in such a way that he was charged with having committed the offence personally (under s 118), or alternatively with having committed the offence as a director of D2 in that he consented to or connived at the offence being committed by D2 (under s 125). The particulars of offence under each charge, without referring to the applicant’s capacity as D2’s director and without alleging his consent to, or connivance at, D2’s permission of the offence, are therefore technically defective as they are devoid of those particulars. However, this defect, in our judgment, does not make any of the charges duplicitous as contended by the applicant’s counsel. Nor does it deprive the applicant of his possible reliance on the statutory defences available under s 118(3) and (5) of the Ordinance. This can fairly be described as a technical defect without any consequence in the circumstances of this case. The reference to s 125 of the Ordinance was specifically made in the statement of offence of each of the charges and had also been referred to in the opening of the prosecution before the judge. The applicant’s counsel at trial also addressed the aspects of proof under both sections. It was thus clear to the defence at a very early stage of the trial that the prosecution intended to rely on the alternative mode of proof conferred by s 125 of the Ordinance. Counsel for the applicant at trial conducted his defence accordingly, without any prejudice to the applicant. There was no application for any further and better particulars either. 20.The facts that the applicant was the registered licensee of D2’s factory at which the contravening VCDs and articles were seized by the Customs officers, that D2 was a company incorporated in Hong Kong, that the applicant and his wife were the only directors of D2, and that D2 was a majority shareholder and his wife being the holder of the remaining shares in D2 were all facts admitted by both parties pursuant to s 65C of the Criminal Procedure Ordinance, Cap 221. All these matters were clearly considered as relevant by both parties and were relied upon by the judge in concluding that Charges 1, 3 and 4 had been proved beyond reasonable doubt against the applicant personally under s 118 of the Ordinance. The judge also found the elements required to be proved against the applicant under s 125 had been proved. 21.Mr Harris has not been able to demonstrate to us any reason why the prosecution should have been restricted to proceeding against the applicant under s 125 only. 22.Despite the lack of particulars in support of the prosecution’s reliance on s 125 in the charges, we are not persuaded that the first three grounds of appeal have in any way affected the propriety of the convictions against the applicant. Other grounds 23.The fourth to eighth grounds of appeal relate to the quality of the evidence for proving the ingredients of the offences under s 118 and s 125 of the Ordinance. The fourth ground asserts that there was insufficient evidence in respect of each of the charges to raise a prima facie case and the judge erred in finding that the applicant had a case to answer on all or any of the charges. As neither defendant gave evidence or called any witness at the trial, the effect of this ground is merged with the strength or otherwise of the other grounds. The quality and weight of the evidence will be considered below in relation to each of the ingredients of the charges now challenged. Possession 24.The fifth ground contends that the judge erred in finding that the applicant was in possession of the items the subjects of the charges. 25.We were referred to R v Lewis (1988) 87 Cr App R 270, where the English Court of Appeal remarked:
26.On behalf of the applicant, Mr Harris submits, in our view correctly, that possession is shown when the suspect had the opportunity to learn and discover in a general way the nature of the items in his possession and failed to avail himself of that opportunity. Alternatively, possession could be on the basis of an irresistible inferences drawn from all the primary facts before the trial judge: R v Law Wai Choi [1997] HKLRD 555. 27.Mr Harris’s arguments on the factual evidence are as follows. The undisputed evidence is that the applicant was not at the factory at the time of the inspection by Customs officers. The applicant arrived only after the inspection commenced. He made no admissions whatsoever. There was no evidence as to when he was last in the factory before the inspection. There was no evidence whatsoever that he had anything to do with the operation of the production lines. The prosecution witness, Mr Chung (PW6) gave evidence that the applicant was frequently in China and the manager, Mr Poon, was responsible for the production. Mr Chung did not know who gave orders to Mr Poon. It cannot be shown that the applicant was aware of the order to manufacture or even of the existence of the infringing VCDs or equipment at the relevant time. 28.Before dealing with the evidence of possession against the applicant, it is to be noted that there is no challenge that the prosecution had proved beyond reasonable doubt that the company D2 was in possession of the VCDs, the stampers and the three production lines. 29.There are the following facts found proven by the judge that had given rise to the irresistible inference of the applicant’s possession, despite the fact that when the inspection by the Customs officers of the factory premises commenced, the applicant was not present in the premises, namely,
30.With the aforesaid evidence in mind, the judge found the applicant in possession of the VCDs and the infringing articles. In his Reasons for Verdict, he enumerated the above evidence and then gave a summary as follows:
31.On behalf of the respondent, Mr Tam also points to certain items of evidence to which he had drawn the judge’s attention when replying to the submission of No Case to Answer, together with the submissions he made in reliance on these items:
32.The judge also relied on Li Defan v HKSAR [2002] 5 HKCFAR 320. He said:
33.The only evidence that the applicant can possibly have relied on to show that he was not in possession of the infringing VCDs and articles was that he was not present when the inspection of the factory premises commenced and Mr Chung’s evidence that he frequently travelled to the Mainland. In our judgment, these pieces of evidence, taken at the highest, do not cast doubt on the judge’s finding that the applicant was in possession and which is supported by the strong evidence enumerated above, in respect of which he proffered no explanation at all. The fifth ground of appeal fails. The mental element 34.The sixth ground of appeal asserts that the judge erred in finding that the applicant knew that the production lines were being used, or were intended to be used, to make infringing copies of copyright works. The seventh ground contends that there was insufficient evidence that the applicant knew of, or consented to, or connived at, the production of the infringing copies. These grounds relate to the required mental element for the commission of the offences. They will be dealt with together. 35.Mr Harris contends that for the required “consent”, the prosecution had to adduce evidence that he knew the material facts, which constituted the offence of D2, and to have agreed to the conduct of its business on the basis of those facts: A-G’s Reference No. 1 of 1995 [1996] 4 All ER 21. The applicant, therefore, must be proved to have been aware of the relevant facts. As against a director, it is necessary to prove that he knew and applied his mind to the relevant facts: Secretary of State for Trade and Industry v Hart [1982] 1 WLR 481. As to connivance, the director must also be aware of what is going on but his agreement is tacitly, not actively encouraging what happens but letting it continue and saying nothing about it: Huckerby v Elliot [1970] 1 ALL ER 189. 36.Mr Harris stresses that there was no evidence whatsoever to show that the applicant knew of the material facts constituting the offence of D2, that he agreed to business being conducted on that basis, or he knew of and agreed with D2 having possession of the infringing items without the licence of the copyright owner, and there was thus no evidence of connivance. 37.As the judge has correctly remarked, Charges 1 and 3 are strict liability offences and the prosecution did not need to prove that the defendant knew that VCDs were infringing copies. There he referred to Mega Laser Products and Winners Laser Production. Insofar as the applicant’s possession of the VCDs and the stampers, that the VCDs were infringing copies and that the stampers were used to make them were proved, and they were, Charges 1 and 3 were made out. 38.As to Charge 4, relating to the three production lines, the judge correctly pointed out that the offence under s 118(8) is not a strict liability offence and that the prosecution must prove that the defendants knew that the copies were infringing copies. 39.Having examined certain letters of assignment (exhibits P10, P11, P12, P13 and P14), which were produced for the inspection of the Customs officers during the inspection, the judge had the following to say:
40.The judge concluded:
41.As said before, the judge also relied on Li Defan in strengthening the inferences that he drew from all the evidence against the applicant. 42.The evidence, in our judgment, is so strong as to amply justify the findings made by the judge that all the ingredients of Charges 1, 3 and 4 were proved beyond a reasonable doubt against the applicant. The sixth and seventh grounds of appeal fail. SID code 43.The eighth ground of appeal challenges the judge’s finding that the infringing copies, exhibits P8 and P9, did not have SID (Source Identification Code). It is submitted that in fact the said code was clearly marked on these exhibits. 44.We do not think it necessary to deal with this ground as its subject matter was not operational in the decision making of the judge who stated:
Conclusion 45.In view of the lack of particulars in support of the prosecution’s reliance on s 125 to prove the charges, referred to above, we are of the view that leave should be granted to the applicant to appeal against conviction, but since all the grounds of appeal do not affect the propriety of the convictions, which are neither unsafe nor unsatisfactory, the appeal must be dismissed.
Mr William Tam, SGC of the Department of Justice, for the Respondent Mr Graham Harris and Ms Mahindar Panesar, instructed by Messrs Peter Cheung & Co, for the Applicant |
Cases cited in this judgment