HKSAR v. Li Ka Ho Tommy

HCMA 825/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 825 OF 2004

(ON APPEAL FROM FLCC 1473/2004)

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BETWEEN

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Before: Deputy High Court Judge E Toh in Court

Date of Hearing: 21 December 2004

Date of Judgment: 13 May 2005

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J U D G M E N T

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1.This is an appeal against conviction and sentence.  The Appellant was convicted after trial of one charge of exposing for sale infringing copies of copyright work for the purpose of, or in the course of, any trade or business without the licence of the copyright owner contrary to s.118(1)(e)(ii) and s.119 (1) of the Copyright Ordinance Cap.528, Laws of Hong Kong and for possession for the purpose of, or in the course of any trade or business of infringing copies of copyright work with a view to committing any act infringing the copies of copyright without the licence of the copyright owner contrary to s. 118(1)(d) and s. 119(1) of the same Ordinance.

Evidence

2.In the afternoon of 24 October 2003, Customs and Excise officers raided a shop in the Sino Centre at Nathan Road, Mongkok and found the Appellant inside the shop and the Appellant claimed that he was the person in charge of the shop.

3.A Customs Officer, PW1, picked up some suspected DVDs and asked the Defendant if he had the authorization from the copyright owner of those cartoons and the Appellant replied in the affirmative and said his lawyer will come with the authorization.  Shortly thereafter, the Appellant’s lawyer appeared and spoke to the Appellant.  Subsequently the Customs and Excise officers seized 379 cartoon DVDs and arrested the Appellant who still could not produce any authorisation.  Under caution, the Appellant elected to say nothing.

4.The prosecution called the Senior Investigating and Copyright Enforcement Officer of the International Intellectual Property Protection Centre.  His job was to classify infringing copies of the copyright works, having been provided with information by the owners of the copyright works to a member of the company.  PW4 gave evidence and said he had received the requisite training to identify and classify infringing copies.  He said that he had examined the seized DVDs and subsequently the learned Magistrate accepted the evidence contained in his two affirmations that the 282 DVDs seized from the Appellant’s shop were infringing copies of copyright works.  It was worth noting here that the evidence showed that PW4 did not play nor view the contents of each of those 282 DVDs certified as infringing copies.  But the learned Magistrate was, however, satisfied that it was not necessary for him to view each and every of the 282 DVDs because PW4 had viewed 87 DVDs and also examined the packaging of the relevant DVDs and had drawn his conclusion from that examination.

5.The Defendant gave evidence and said that the shop was situated in a place which was notorious for selling illicit copyright works so Customs and Excise Department officers inspected his shop 5 to 6 times a week and sometimes even as frequently as twice a day, but on those previous occasions no DVDs had ever been seized from his shop.  The Defendant said that he was employed by a person called “Ah Chi” who visited the shop once in every 2 to 3 months.  The only contact he had with his boss is the boss’s mobile telephone number.  The Appellant said he had worked in that same shop for about 3 years and he was the only sale person employed there.

6.When the stock was running low, the Appellant said he would then inform his boss and then subsequently the stock would arrive in carton boxes and the Defendant will then check the goods against invoices.  The Appellant said that he was concerned whether the DVDs in his shop were duly authorized and he said his boss had told him that the authorization for the DVDs was with him but the Defendant was never allowed to see this authorization and the Appellant said that such refusal had never aroused his suspicion.

7.The Defendant had continued working in this shop until February 2004 when he lost contact with his boss. 

8.The learned Magistrate after hearing the evidence of the Appellant found that his evidence was unbelievable and did not accept the Appellant’s evidence.  The learned Magistrate accepted the evidence of PW4 that the relevant DVDs were infringing copies of copyright works and she also found that although there was no evidence to suggest that the Defendant knew that these were infringing copies, nevertheless, she found that it would be reasonable for the Defendant to have made enquiries and  she was satisfied that the Defendant did not make such enquiries or investigation and had never asked for the authorisation for sale of the DVDs from anyone.  Thus the learned Magistrate concluded that the defence had failed on a balance of probabilities to show that the Appellant had no reason to believe that the copies of DVDs in question were infringing copies.

9.The learned Magistrate found that the prosecution had proved that the copyright owners of the works in question had not consented to the sale of their works to the Defendant and thus convicted the Defendant of both charges.

Grounds of Appeal

10.Mr Cheung submitted on behalf of the Appellant, in Ground 1 of his Grounds of Appeal, that the learned Magistrate had erred in law in admitting the affirmation Exhibit P7 in establishing the ownership of copyright of the 282 DVDs.  Since the author of the works is not a flesh and blood individual, s.121 of the Copyright Ordinance Cap. 528 is therefore not applicable.  Mr Cheung in Ground 2 also complained that the learned Magistrate erred in law in admitting the affirmation P8 in establishing the ownership of copyright of the 282 DVDs, since the authors are not flesh and blood individuals but are corporate bodies and thus did not comply with the condition laid down in s.121(1) of the Copyright Ordinance.

11.The issue in this appeal is therefore whether the prosecution has proved the existence of subsisting copyright in the works in question and that the infringing copies were made without the consent of the copyright owners.

12.Under s.118 of the Copyright Ordinance, Cap. 528(3), it is a defence for a Defendant charged under sub-section 1 to prove that he did not know and had no reason to believe that the copy in question was an infringing copy of the copyright work.

13.In the case of Tse Mui Chun v HKSAR 2004 1HKLRD 351 at page 358 their Lordships said this:

“In the present case, the prosecution took it upon itself to prove that the copyright owners of the work in question had not consented to the Appellant making copies of the works i.e. she had not been granted a licence.  We have no doubt that the prosecution was correct in shouldering that burden.  The absence of the licence by the copyright owner is an express, and therefore essential, ingredient in a s.118(1) offence.  The making of “infringing copies” is an express and essential ingredient in both s.118(1) and s.118(4) offences.  An “infringing” copy is a copy made without the consent of the copyright owners.  The absence of the requisite consent is not an “exception or exemption from or qualification to the operation of the law creating the offence” (see s.94A(1) of the Criminal Procedure Ordinance).  It is an ingredient of the offence itself.  It must therefore be established by the prosecution.”

14.The prosecution in this case sought to prove that copyright in each of the relevant DVDs subsisted and was individually owned by the named owner through two affirmations which were tendered under s.121 of the Copyright Ordinance. 

15.Section 121 provide that :

(1) An affidavit which purports to have been made by or on behalf of the owner of the copyright works and which states :

(a) The date and place that the work was made or first published:

(b) the name, domicile, residence or right of abode of the author of the work;

(c) the name of owner of the work;

(d) that copyright subsists in the work; and

(e) that the copy of the works exhibited to the affidavit is a true copy of the work.

shall, subject to the condition contain in sub-section 4 be admitted without further proof in any proceeding under this Ordinance.

16.Their Lordships in Tse Mui Chun’s case commented at page 362 :

“(3) The statements as to the identity of the copyright owner (para. (c)) and that copyright subsists (para. (d)) that are to be presumed true in the absence of evidence to the contrary (sub-section (3)) are all that a prosecutor/plaintiff will need.  But the details that paras.(a) and (b) require to be stated may assist the defendant, and also the court, in forming a view as to the weight to be attributed to the paras.(c) and (d) statements.  If, for example, it appeared from the para.(a) details that the work had been made over 50 years ago, the present subsistence of copyright would, in the absence of some knowledge about the longevity of the author, be in doubt.  The details in para.(b) would enable those doubts to be followed up.”

17.In Tse Mui Chun’s case the two affirmations were tendered in evidence under s.121 by the prosecution at the trial.  The recordings in that case were alleged to belong to Disney and Sony but the affirmations were made by an employee of the Hong Kong Company called Hong Kong Film and Video Security Limited (FVSL) who was affirming on behalf of that company and Disney.

18.Mr Lam in that affirmation said that the copyright of the relevant films belonged to Disney and when he gave evidence in court acknowledged that he had no personal knowledge as to any copyright subsistence or ownership of any of the copyright works and have only relied on information which Disney had provided to his employer, FVSL.  The other affirmation was made by a Mrs Tsang who was an employee of a Hong Kong company, International Recording Copyright Limited (IRCL) and Mrs Tsang named Sony as the owner of the subsisting copyright of the relevant work.  Mrs Tsang also when giving evidence acknowledged that she had no personal knowledge as to any copyright subsistence of ownership and that she had relied on her employer’s (IRCL) computer database compiled from information provided by Sony.

19.In the course of the hearing of Tse Mui Chun’s appeal, the Court of Final Appeal accepted that the s.121 affidavit or affirmation is not admissible in evidence unless it stated the matter required to be stated by paras. (a) to (e) of sub-section 1 and that each of these paragraphs must be complied with and that if it is not complied with the affidavit or affirmation is not admissible.  The court found, in answer to the question whether the “author” of a film can be a body corporate as opposed to a flesh and blood individual, that when s.121(1) (b) speaks of the “name, domicile, residence or right of abode of the author…” it is speaking “of a flesh and blood author and is not contemplating a corporate author”.  If that is right, it would follow that the s.121 means the proof of copyright subsistence and the ownership was not available where the author was a company.

20.The Court of Final Appeal went on to say this:

“But we are quite unable to understand what possible legislative purpose there could have been in restricting s. 121 to cases where the author of the copyright was an individual, and barring its use where the author was a company.  It is not, however, for reasons which we will explain, necessary for the point to be decided on this appeal and prefer to leave the point of decision in a case where the decision has to be made.  For present purposes we will, therefore, assume without deciding that it is possible for s.121(1(b) to be liberally construed and applied to a case where the author of the copyright work is a company.

48. That liberal construction clearly requires some adjustment to be made to the words “… domicile, residence or right of abode…”.  A company can, for various purposes, be regarded as resident in a country.  For s.121(1)(b) purposes its “residence” should probably be taken to be the place where its principal place of business is to be found.  “Domicile” and “right of abode”, on the other hand, are concepts which make little sense when applied to corporate bodies…But even on the assumption that a liberal construction on these lines can be justified, Mr Lam’s affirmation is inadequate.  All that he has said in para. 3(e) and column 5 of schedule (a) is that “USA” is “the place of incorporation (or organisation)…” of the specified corporate author.  It is, however, very well known that US companies are not incorporated, or organised, under the laws of USA.  They are incorporated, or organised, under the law of some particular State in the United State of America, e.g. New Jersey, Delaware etc.  And while it is highly likely that the companies specified in column 5 of schedule (a) were resident somewhere or other in the USA, Mr Lam’s affirmation does not so state.  It follows that, insofar as the copyright works specified in schedule (a) of Mr Lam’s affirmation are concerned, the requirements of sub-s(1)(b) were not complied with and the affirmation should not have been admitted into evidence under s.121.(1)”

21.The Court of Final Appeal also found the same problem in Mrs Tsang’s affirmation and they found therefore that their affirmations had failed to comply with the requirement of s.121(1)(b) and should not have been admitted into evidence and the court had this to say:

“This has resulted from an unnecessary and regrettable sloppiness in the drafting of the s.121 affirmations.  The defects in the affirmations may be regarded as only technical.  But if a statutory shortcut to the proof of essential matters is to be taken advantage of it is essential that the conditions of the statutory shortcut be strictly observed (see Francis Bennion, Statutory Interpretation (4^th ed., 2002) at p.934).”

22.Mr Cheung, therefore, in view of the above submitted that, in the circumstances, the issue of whether proof of the ownership of copyright where the author is a company can be established by means of s.121 ought to be reserved for the Court of Appeal to consider pursuant to s. 118(d) of the Magistrates Ordinance Cap 227.

23.Mr W S Cheung, on behalf of the Respondent, submitted that this point had already been decided by the Court of Appeal in the case of HKSAR v Chan Tak Tim 2004 3HKLRD 112.  As Mr Cheung said, it is clear that the Court of Appeal in that case had decided that the word “author” under s.121(1)(b) of the Ordinance was not restricted to a live person and included a body corporate.  Pang J at page 116 said:

“The argument advanced by Mr Percy was this: s.121(1)(b) requires “the name, domicile, residence or right of abode of the author of the work” to be stated.  The authors of the computer programmes referred to in paras. 11, 13, 15 and 19 of the affirmation were however, corporations.  The wordings of para. (1)(b), it is said, contemplates a person rather than a corporate author.  That being the case, proof of copyright subsistence and ownership is not available by means of a s.121 affirmation in the cases where the author of the computer programme is a corporation.  In my view, to suggest the term “author” is only confined to a live person would only serve to defeat the purpose of the legislation.  It could not have been the intention of the Legislature that the word “author” appearing in s.121(1)(b) could have a meaning restricted to that of a live person only.  It must admit an interpretation including that of a corporate body.”

24.Further Mr Justice Cheung in the case of Chan Tak Tim distinguished Tse Mui Chun’s case from Chan Tak Tim’s case at page 126:

“Unlike Tse Mui Chun v HKSAR, in this case the companies involved are Japanese companies.  The problem discussed in Tse Mui Chun v HKSAR as to whether the companies were incorporated under the laws of USA separately or under the laws of the individual states of the USA simply does not arise here.  The description that these Japanese companies are residing in Japan complies with the strict requirement of s.121.”

25.It is clear, therefore, as Mr W S Cheung submitted, the issue raised in Grounds 1 and 2 have been settled by the Court of Appeal in Chan Tak Tim’s case.

“Domicile”

26.Mr Jeremy Cheung on behalf of the Appellant also submitted in Ground 1(d) that Exhibit P7, one of the affirmations said the names of places of domicile of the producer of the films mentioned in IIPPC-T0041/CTF/1/6481/03b is Toei Animation Co Ltd. and that the word domicile is a concept which does not make sense when applied to a corporate body and he refers to paragraph 30-002 in Dicey & Morris on the Conflict of Laws (13 ed. 2000) vol 2.  The author had this to say:

“The notion of a home or domicile, depending as it does in part on an intention to reside, is in its primary sense applicable only to human beings; but statutes occasionally and infelicitously attribute a domicile to corporations.  The attribution is achieved by way of analogy with the domicile of origin which is ascribed to every natural person upon birth, and accordingly a corporation is domiciled in the country under whose law it was created.”

27.A proper reading of this paragraph in Dicey and Morris does not say that “domicile” is a concept which cannot apply to a body corporate, although, originally, it was not intended to.  I therefore do not agree with Mr Jeremy Cheung that P7 is inadequate because it had referred to the “places of domicile” of the producer of the film which is a company.

28.Mr Cheung also complained that in P8 in paragraph (2E) the affirmor, Mr Lam, had said this,“The author of the film and the place of incorporation of the author is set out in column 5” and when one looks at that column 5 the author is a flesh and blood individual and therefore the reference to the place of incorporation of the author is therefore wrong.  Mr W S Cheung on behalf of the Respondent accepted that this was an error on behalf of the affirmor and as the Court of Final Appeal said in Tse Mui Chun’s case,  although “the defects in the affirmations may be regarded as only technical, but if a statutory shortcut to the proof of essential matters is to be taken advantage of, it is essential that the conditions of the statutory shortcut be strictly observed”

29.I agree with both Mr W S Cheung and Mr Jeremy Cheung that Mr Lam, who made the affirmation in P8, was indeed “sloppy” and therefore the part in the affirmation in P8 which is “Schedule - IPPC-AI-0022/CTF/1/6481/03a” at page 57 of the Record referring to “Doraemon” should be deleted.  It is not admissible because of the above mistake.

30.At the appeal, Mr Jeremy Cheung did not argue Grounds 3 and 4 but in relation to Ground 5 Mr Cheung complained that the learned Magistrate was wrong in ruling that the accused ought to make further enquiries from the supplier, that is, Kwong Kei Trading Company, as the invoices (Exhibit D1) all stated that the goods referred thereto were not illicit and were original.  Mr Cheung also added that previous inspections by the Customs & Excise Department had proved negative and that would infer that what was offered for sale in the shop were not illicit DVDs.

31.The learned Magistrate at paragraph 7 of the Statement of Findings had set out the reasons why she found that the evidence of the Defendant was not to be believed.  One of the factors that the learned Magistrate had noted was that the Defendant had claimed to have stopped working in the shop in February 2004 but then contradicted himself by saying that in May he had returned to the shop to teach a colleague how to prepare the record which he produced as Exhibit D2 and because of the contradictions and inconsistencies in his evidence, the learned Magistrate found that she could not accept the defendant’s evidence.  Thus the defence had failed to prove on a balance of probabilities that the Defendant did not know and had no reason to believe that the copies in question were infringing copies of the copyright work.  Whilst it is true that Exhibit D1, which are invoices from a company called Kwong Kei, had stated on the invoices, that all the DVDs, referred to in the invoice are “lecit and original”.  The learned Magistrate in her Statement of Findings said that one of the reasons she did not believe the Defendant was that although the Defendant had worked in the Company for three years, he was unable to tell if the Company had other suppliers apart from Kwong Kei.  The fact that there had been previous raids by Customs and Excise officers which had proved to be negative did not in my view assist the defence, in anyway, except, perhaps, in mitigation.

32.This was a question of fact upon which the learned magistrate had sufficient grounds upon which to find that the Defendant had made enquiries and I can’t see that she is wrong in so finding.

Conclusion

33.For the above reasons, the appeal against conviction is only allowed to the extent that the DVDs relating to the title Doraemon should be deleted from the charge as the prosecution had failed to prove the copyright ownership of that particular title.  As for the rest, the appeal against conviction is dismissed.

34.At the hearing of the appeal, counsel had informed this Court that the appeal against sentence is abandoned so accordingly the appeal against sentence is also dismissed.

Mr Cheung Wai Sun, DPGC of Department of Justice, for the Respondent

Mr Jeremy Cheung Man Fai instructed by Messrs Johnny K.K. Leung & Co., for the Appellant