The Commissioner of Customs and Excise v. Gold Way Enterprises Ltd and Another

DCMP 3157/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 3157 OF 2004

-----------------------

BETWEEN

-----------------------

Coram: Before Deputy Judge W K Lam in Court

Date of Application: 8^th February 2005

Date of Handing Down Decision: 27^th April 2005

DECISION

1.On 31/1/2005, I made an order that the scheduled items (‘the five machines’) be returned to the 2^nd Respondent (‘Sino Turbo Limited’) on condition that it should take back all the five machines that had been leased to the 1^st Respondent (‘Gold Way Enterprises Limited’) and never let the latter use them again. Otherwise, the machines would be forfeited to the Government. I also made an order nisi that the Applicant (the Commissioner of Customs & Excise) should pay the 2^nd Respondent costs while the 1^st Respondent should pay costs to the Applicant.

2.By a letter dated 8/2/2005, the 1^st Respondent applied to vary the costs order nisi so far as it related to the 1^st Respondent. On 22/2/2005, it filed submission in support of such request. The Applicant replied on 21/3/2005 with objection. The 1^st Respondent made further submission on 4/4/2005. Both parties were content with presenting their argument on costs in writing to save further appearance in court.

3.The 1^st Respondent argued that the forfeiture dispute was merely between the Applicant and the 2^nd Respondent. As the 2^nd Respondent could have the five machines back, the Applicant failed in its forfeiture application and should, therefore, pay costs to the 1^st Respondent as well or, at least, there should be no order as to costs between the 1^st Respondent and the Applicant.

4.In its submission dated 4/4/2005, the 1^st Respondent further stated that the related criminal conviction of the 1^st Respondent and its Factory Manager in DCCC 333/03 had been quashed by the Court of Appeal on 23/3/2005 under CACC 298/04. Therefore, the 1^st Respondent should not be deprived of the use of the machines and made to pay costs to the Applicant for the forfeiture hearing.

5.As I pointed out in paras. 9 and 10 of my judgment dated 31/1/2005, forfeiture did not depend on any conviction. Things are liable to forfeiture if they have been seized or detained by authorized officers in accordance with the provisions of the Copyright Ordinance (Cap. 528), regardless of whether anyone has been charged (s.131) or convicted (s.132). Thus, it was not right to say that forfeiture could not be ordered against the 1^st Respondent and that the 1^st Respondent should not be ordered to pay costs for its failed objection to forfeiture simply because the convictions against it and its Factory Manager had recently been quashed.

6.The 1^st Respondent said the forfeiture argument was merely between the Applicant and the owner of the machines, i.e., the 2^nd Respondent. That was not true.

7.According to s.131(5) of Cap. 528, not only the owner or its authorized agent can object to the forfeiture of things seized or detained by Customs & Excise, “a person who was in possession thereof at the time of seizure or detention, or a person who has a legal or equitable interest in it” also has a claim on the things seized or detained. Such persons may give notice in writing to the Commissioner of Customs & Excise to claim that the things are not liable to forfeiture.

8.The 1^st Respondent was in possession of the five machines when Customs & Excise seized them on 19/2/2002. It had rented the machines from the 2^nd Respondent for some time then.

9.By a letter dated 21/2/2003 (Bundle No. B6), Pang Wan & Choi, the solicitor of the 1^st Respondent served notice on the Commissioner of Customs & Excise to ask for “the return of all the items seized and detained”.

10.The 1^st Respondent was listed as a respondent of the forfeiture proceedings from the beginning. It appeared in court all the time and contested the forfeiture application filed by the Applicant. A director of the 1^st Respondent, Mr. Lau Dig Fung, made his affirmation “in opposition … to the Commissioner of Customs & Excise’s Notice of Originating Motion dated 3^rd September 2004 for forfeiture of the Scheduled Items listed therein”. (para. 1 of Bundle No. A23)

11.Hence, it is clear that the forfeiture dispute was not merely between the 2^nd Respondent and the Applicant. The 1^st Respondent was a party to the proceedings all the time and it unequivocally objected to such forfeiture application.

12.As stated in the Notice of Originating Motion, the Applicant was seeking an order to forfeit the five machines against both respondents pursuant to ss.132-133 of Cap. 528 and “ALTERNATIVELY that the respondents… be granted such relief as this Honourable Court determines to be applicable.”

13.The affirmation of Customs & Excise officer, Mr. Wong Shek, also prayed in his affirmation for a forfeiture order pursuant to s.132 and s.133 of Cap. 528. (para. 16 of Bundle No. A10)

14.According to s.133(12), the court may, if it is satisfied that things are liable to forfeiture, order those things “be delivered to the claimant subject to any condition which it may specify in the order”.

15.According to my order dated 31/1/2005, the innocent owner, i.e., the 2^nd Respondent had to remove the machines from the 1^st Respondent and never let the latter use them again. Should the 2^nd Respondent fail to do so, the machines would be forfeited to the Government. In this regard, the five machines were forfeited against the 1^st Respondent absolutely.

16.Costs should follow events. I, therefore, ordered the 1st Respondent to pay the Applicant costs while the latter was to pay the 2^nd Respondent costs.

17.The 1^st Respondent now applies to vary the costs order nisi. I am not persuaded by its submission. I uphold my costs order nisi dated 31/1/2005 and make it absolute. The 1^st Respondent’s application for variation is dismissed with costs to the Applicant.

Representation : -

Applicant : The Commissioner of Customs and Excise

1^st Respondent : Gold way Enterprises Limited represented by Messrs.  Pang Wan & Choi