HKSAR v. Melwani, Manish Vashdev
Read the full judgment text of HCMA 228/2005 on BabelCite. This High Court CFI judgment.
1. The Appellant was charged with an offence of “Possession for sale or for any purpose of trade or manufacture goods to which a forged trade mark was applied”, contrary to section 9(2) as read with section 18(1) of the Trade Description Ordinance, Cap. 362. He pleaded guilty and was sentenced to 6 months imprisonment. He appealed against sentence.
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HCMA 228/2005 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MAGISTRACY APPEAL NO. 228 OF 2005 (ON APPEAL FROM KCCC 1587/2005) ____________ BETWEEN
____________ Before: Deputy High Court Judge Barnes in Court Date of Hearing: 1.6.2005 Date of Judgment: 7.6.2005 _______________ J U D G M E N T _______________ Background 1.The Appellant was charged with an offence of “Possession for sale or for any purpose of trade or manufacture goods to which a forged trade mark was applied”, contrary to section 9(2) as read with section 18(1) of the Trade Description Ordinance, Cap. 362. He pleaded guilty and was sentenced to 6 months imprisonment. He appealed against sentence. Admitted facts 2.The admitted facts disclosed that two police officers disguised as buyers and attended a business premises in Tsim Sha Tsui. They were greeted by the Appellant and two other males. The Appellant produced 3 handbags and showed them to the officers. These handbags all bore “brand names”, i.e. “LV”, “Christian Dior” and “Chanel”. 3.The Appellant then showed computer images of handbags as well as some catalogues to the undercover officers. When one of the officers asked which products were in demand the Appellant made some markings on one of the catalogues. The Appellant also stated that the minimum quantity for each model was 100. 4.One of the officers selected 3 models from the catalogues whereupon the Appellant made a record on a piece of paper. The Appellant then telephoned to check the prices of those selected models. The Appellant told the officers that the prices would be available within an hour. 5.One of the officers asked the Appellant about the payment method. The Appellant replied saying a down payment of 30% was required, adding that the balance of the price could be settled by telegraphic transfer. After the Appellant prepared the invoice, one of the officers made a pretext to go to the bank and left. He later returned with other custom officers and a raid was conducted at the premises. 6.Under caution, the Appellant admitted, inter alia, that he was the sole proprietor of an export business dealing in toys and electronic goods. He bought the 3 handbags from Mainland China and he uploaded the photographs of the models onto his computer. The catalogues were for display to customers. He would order the handbags from Mainland China for customers. He has been trying to sell counterfeit handbags over the internet for 5 months and have sent out emails to prospective customers. However, he has not been successful with any sales and the undercover police was his very first customer. Grounds of appeal 7.Mr. David Boyton, counsel for the Appellant, advanced several grounds of appeal. In gist, Mr. Boyton submitted that the starting point of 10 months adopted by the learned magistrate was wrong in principle and/or manifestly excessive. While accepting that the learned magistrate could examine and take into account the surrounding circumstances which might aggravate the offence, Mr. Boyton complained that the learned magistrate treated this case as one of a wholesale business when the Appellant was convicted of possession of three handbags only. Mr. Boyton in his written submission further elaborated on this point. 8.To be fair to Mr. Boyton, after I have indicated to him what has been admitted and the proper reasonable inference to be drawn, with reference to the authority of Secretary for Justice v LAM Chi-wah [1999] 4 HKC 343, he conceded that the circumstances of the Appellant’s possession of the 3 handbags was such that the Appellant’s illicit business operation was somewhere between that of a “wholesaler” and a “hawker in the street”. Mr. Boyton submitted that the scale of operation in the Appellant’s case, when compared with those in LAM Chi-wah, was such that a starting point of 10 months was too high. 9.Whilst accepting that such an offence normally called for a custodial sentence, Mr. Boyton submitted that the ‘special circumstances’ of the Appellant warranted a non-custodial sentence, or to have the sentence suspended. Among the list of special circumstances submitted were the Appellant’s age (26); his previous clear record; his wife’s pregnancy; his illicit business being an opportunistic side-line which never got off the ground etc. Response by the Respondent 10.Mr. Jackson Poon, Senior Government Counsel for the Respondent, submitted that the Appellant’s scale of business was more akin to that of a wholesaler than a street hawker. While accepting the starting point of 10 months is on the high side when compared with LAM Chi-wah Mr. Poon submitted that it was not manifestly excessive. Judgment 11.The Appellant pleaded guilty to an offence of the possession of 3 handbags “for the purpose of sale or trade…to which a forged trade mark was applied”. The 3 handbags were counterfeit ‘brand name’ handbags. Although the Appellant was not charged with the sale of the 3 handbags (or the potential 300 handbags offered to the undercover police officer), the fact remains that the possession of the 3 handbags were for the purpose of sale or trade. The surrounding circumstances, particularly how the Appellant showed the computer images and catalogues to the undercover officers; the indication of a minimum quantity of 100 per model; and the requirement of a 30% down payment, all point to the only reasonable and irresistible inference that the Appellant was running a business of offering counterfeit handbags to potential customers. The fact that he has tried without success for 5 months and the undercover officers were the first and only customers he ever had were neither here nor there. 12.The learned magistrate said the Appellant had ‘set up an office for the purpose of selling counterfeit goods and his targeted customers were not ordinary end users attracted by cheap veneers of vainglorious display”. If what the learned magistrate meant to say was that the Appellant had set up an office purely for the purpose of selling counterfeit goods, then such a statement is wrong. It is not in dispute that the Appellant was running a legitimate business of trading in toys and electronic goods. The Appellant has clearly made use of his business premises and office equipments to run such an illicit business. After viewing photographs of the premises and the amount of goods being displayed there, it would be quite fair to describe such illicit business was being run as a ‘side-line’ along the legitimate ones. 13.Further more, while the Appellant’s targeted customers were not ‘ordinary end users’ in the sense of ordinary shoppers browsing around the streets or shopping malls, this is not a case in which the Appellant was offering to sell counterfeit handbags as genuine ones to defraud buyers. A down payment of US$1,000 being a 30% deposit for 300 ‘brand named’ handbags illustrates such a point. 14.The learned magistrate has clearly indicated that these type of offences were prevalent (especially in the tourist areas such as Tsim Sha Tusi). I entirely agree with the learned magistrate’s observation that “…. such offences amount to thievery of the fruits of the wit and industries of legitimate, tax paying individuals and that such offences had the effect of damaging Hong Kong’s reputation in the international community had been thoroughly discussed by the higher courts and accepted as a truism”. 15.In LAM Chi-wah the Court of Appeal said (at page 350):
16.The learned magistrate made reference to LAM Chi-wah and cited the above-mentioned passage in his Reasons for Sentence. 17.In LAM Chi-wah the defendant was found to have 14,000 pieces of counterfeit goods of different trade marks for sale. He admitted having rented the premises mainly for storing goods with forged trade descriptions, which he had bought at the cost of $50 per item in Mainland China and would sell to hawkers in Hong Kong at $70 per item. Total value of the goods amounted to $498,930. The defendant was not a first offender either, having 4 convictions of similar nature. The Court of Appeal was of the view that the size of the operation could not be regarded as small. Having made reference to HKSAR v Fung Kin Chung, CACC213/1997 (10 months’ imprisonment for possessing 12,000 fake VCDs)and HKSAR v Wu Wei Cheng CACC173/1999 (3 years imprisonment for an operation of a much larger scale), the Court of Appeal was of the view that a starting point of 12 months was appropriate. 18.It is clear that the Appellant was acting as a ‘broker’, a ‘go-between’ in the present case. He ‘sourced’ items requested/required by his customers. The fact that he has not actually procured the 300 handbags he has offered to sell to the undercover police does not diminish the fact that he possessed the 3 counterfeit ‘brand named’ handbags for the purpose of sale or trade. The scale of his operation is clearly not as big as the one in LAM Chi-wah. Whilst I have some reservations as to whether the Appellant could be properly described as a ‘wholesaler’, the fact remains that as a broker or a trader, he is a rather substantial one; and the scale of his operation is closer to that of a wholesaler than a street hawker. 19.Having considered the circumstances of the case I am of the view that a term of imprisonment is inevitable. Neither a fine nor a Community Service Order is an appropriate alternative. 20.Having come to the conclusion that a term of imprisonment is inevitable and having distinguished the facts or circumstances of this case with those in LAM Chi-wah, in particular the scale of the operation, I am of the view that a starting point of 10 months is indeed too high. A starting point of 6 months for a first offender is appropriate here. The Appellant has pleaded guilty and is entitled to the usual 1/3 discount. The appropriate sentence is therefore one of 4 months imprisonment. 21.I now have to consider whether such a sentence should be either further reduced or suspended. 22.The fact that the Appellant is a first offender and has been running a legitimate business along with the illicit side-line one are not matters warranting a reduction or suspension of the sentence. The only relevant consideration here, in my view, is the fact that the Appellant’s wife is having a rather difficult pregnancy (having suffered a spontaneous miscarriage in August 2004). The Appellant wife, understandably, is feeling very distressed about the Appellant’s situation. Dr. Choy, who has prepared a certificate, was of the view that the Appellant’s wife should try to minimize stress to reduce the risk of miscarriage. 23.Family hardship which is usually attendant upon the conviction is, as a general rule, to be viewed as part of the price an accused has to pay for his/her crime. Family hardship should be disregarded when the offence involved is serious: see Sentencing in Hong Kong 4th edition, at pages 309 –340 and the cases cited therein. 24.However, I am satisfied that the situation of the Appellant’s wife is such that it amounts to exceptional circumstances to warrant, not a reduction, but a suspension of the sentence. I am satisfied that with a sentence hanging over his head for a period of time the Appellant will think long and hard before venturing out to commit any crime again. 25.For these reasons, the appeal against sentence is allowed. I set aside the sentence of 6 months and replace it with a term of imprisonment of 4 months, suspended for a period of 18 months.
Mr. POON Chin Ping, Jackson, Senior Government Counsel for the Respondent Mr. David Boyton, instructed by M/s Boase, Cohen & Collins for the Appellant |
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