Shiu Chen-chuan v. The Queen
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CACC000785/1981 IN THE SUPREME COURT OF HONG KONG (Appellate Jurisdiction) CRIMINAL APPEAL NO. 785 OF 1981.
----------------- Coram: Addison, J. in Court Date of Judgment: 26th October, 1981. ----------------- JUDGMENT -----------------
1. The appellant, who is the manager of a firm trading as Ivory and Gem Arts Diffusion of Carnarvon Road, Kowloon pleaded guilty on the 7th August 1981 to four summonses alleging contraventions of regulation 12(2)(b) of the Export (Certificates of Origin and Commonwealth Preference Certificates) Regulations, Cap. 60 and was fined $22,875 on each summons, making a total penalty of $91,500. He now appeals against sentence. 2. In substance the informations laid against him alleged, in the usual long-winded manner that is difficult, if not impossible, to avoid in prosecutions for offences under these Regulations, that he had falsely stated in a document that ivory goods had been manufactured in a registered factory in Hong Kong whereas they had been manufactured in Hong Kong in his own factory which was not registered. 3. The law is clear. Persons who manufacture goods which require certificates of origin must first register their factory where the goods are made with the Trade, Industry and Customs Department. Unless this is done no certificate of origin can be issued. 4. The facts showed that in making this false declaration the appellant had acted in collusion with the owner of the registered factory but what action, if any, was taken against him is unknown. 5. Suffice it to say that the appellant, knowing he was not entitled to certificates of origin, wilfully mislead the Department and was able to send four shipments of ivory carvings to France. 6. The four shipments were the subject of the four summonses. The first was on the 27th June 1980 when he exported 8 pairs of carvings for $95,000, making a profit of $7,600. The second summons related to a shipment of ivory carvings on the 12th August, 1980 when approximately an amount half the size of the earlier consignment was despatched for $50,000, yielding him a profit of $4,000. Next came a consignment of 29 pairs of ivory carvings on the 27th August, 1980 for $120,000 and from this transaction he netted a profit of $16,000. The fourth and last shipment took place on the 20th August, 1980 when he shipped 20 pairs of ivory carvings for $117,400 realizing a profit of $9,000. 7. These figures were accepted as correct by the court below with the result that the facts admitted by the appellant showed that between the 27th June 1980 and the 20th October, 1980 he exported to France goods worth $473,300 deriving an illegal profit of $36,600. Had he been upright in his business and followed the law not a cent would have come his way. 8. The learned trial magistrate rightly took the view that the appellant should not be allowed to profit from his crimes and in arriving at a total fine of $91,500 which he divided by four for each summons he did not pluck a figure from the sky but carefully considered the guidelines laid down in the two unreported cases of Gold Peak Electric Co. Ltd. v. The Queen (Criminal Appeal 411/71) and Popular Machinery Co. Ltd. v. The Queen (Criminal Appeal 950/71, Full Court). 9. He analysed those cases ascertaining from each the ratio of the penalty to the net profit. The magistrate who imposed the fine in the Gold Peak case imposed a fine of 8½ times the net profit and this was reduced on appeal by Pickering, J (as he then was) to a ratio of 5:1. 10. In the Popular Machinery Co. case, an appeal heard by the Full Court comprising Rigby, C.J.; Briggs and Pickering JJ. (as they then were) the Court of Appeal approved a penalty which was two and a half times the net profit. 11. Pickering, J in delivering the judgment of the Full Court said:
12. In the Gold Peak case the Company was summonsed upon thirteen informations ten of which related to offences contrary to section 8(1)(a) of the Protection of Non-Government Certificates of Origin Ordinance and three to offences contrary to regulation 11(2)(b) of the Exportation (Certificates of Origin and Commonwealth Preference Certificates) Regulations, Cap. 50. The Company in that case was fined a total of $95,000 by the learned magistrate who drew a distinction between the fines for those offences where the goods were made in Taiwan and those where the goods were manufactured in Hong Kong but not, as stated in the application for a certificate of origin in the defendant company's own premises. 13. In respect of the former, fines of $10,000 each upon six summonses were imposed but only fines of $5,000 were inflicted for the latter. 14. In his judgment, Pickering, J said:
15. At first blush it might be thought that smaller fines should be imposed where the goods are not manufactured abroad but in Hong Kong and on unregistered premises. However, I do not read the judgment in the Gold Peak case as laying that down in principle. Nor do I agree with Mr. Mackay who argued that this offence is a technical one. 16. Pickering, J in the Popular Machinery Co. case said:
17. For one reason or another goods manufactured in Hong Kong might not meet international safety standards; a new method of production might present hazards to users of the goods abroad. It is of vital importance that the Authorities in Hong Kong who are concerned with upholding commercial standards should be able to locate the premises where the fault originated and this is hardly facilitated by false declarations such as were made in this case. 18. In the instant appeal the learned magistrate utilised a ratio of 2½:1 and this resulted in a total fine of $91,500 which he divided equally between the four summonses. 19. Mr. Mackay has argued that notwithstanding the adoption of that ratio the fines are manifestly excessive. First he points out that the maximum punishment for breach of regulation 12(2)(b) is a fine of $50,000 and imprisonment for 1 year. He contends that the maximum fine which could have been imposed for all 4 offences would be $200,000 and, compared with that maximum, the fine inflicted in this case is almost half that amount. Next Mr. Mackay contends that if the offender had been a limited company operating a large business it could not have been imprisoned but, at most, could only be fined $50,000 for each offence. 20. I do not, with respect, see the logic of this argument. So far as liability of principals is concerned there is the specific enactment of liability under regulation 13, quite apart from the ordinary criminal responsibility attaching to executive directors of a fraudulent company. Furthermore the offence is one which may also be visited by imprisonment. The fact a magistrate decides not imprison an offender does not mean he must, when assessing the fine, treat the offence as if it were one which the legislature enacted was finable only. 21. I think Mr. Mackay was on much stronger ground when he argued that the learned magistrate erred in not having regard to the appellant's ability to pay. I was told that the magistrate did not invite the appellant to address him in mitigation of sentence, when, if that opportunity had been given, the appellant would have shown that he could not pay that sum. Whether he was given an opportunity to address the court or not I cannot say but the record of the learned magistrate has no note to that effect. To remedy this alleged omission the appellant gave evidence before me as to his financial circumstances but, in keeping with a practice which has grown up in Hong Kong, counsel for the appellant did not produce any independent evidence to confirm that evidence. No books of account or income tax returns were produced to substantiate the appellant's dubious evidence of his income. If counsel wish the courts to give full credence to this type of evidence then it should obviously be confirmed by reliable accounting documents and tax returns. For an appellant to say on affirmation that his meagre income is $1,500 per month from which he is only able to save $100 a month when he is running a business allegedly exporting goods amounting to $600,000 a year is unlikely to be accepted by any court in the absence of supporting documents which everyone knows can be readily made available. 22. Nor was the appellant altogether truthful. At one stage he said his firm had never made a profit since its formation in 1977 but later he contradicted this and said he had declared a "few" thousand dollars profit in his tax return. He cannot complain if this court treats his evidence with reserve. However the picture which genuinely emerged is that although the income he derives from the firm is enough to support him and his family nevertheless the firm is run on a shoe-string. 23. The fine imposed must be one within his capacity to pay. (R. v. Churchill & ors. (No. 2) [1966] 2 All E.R. 215, C.A.). Hence this court is obliged to have regard to his ability to pay such fine as it imposes although such fine can, if necessary, be paid by instalments. Taking into account, then, the gravity of these offences, the profit he made and his financial circumstances (as believed by this court) I am nonetheless satisfied that the overall fine of $91,500 is excessive. I shall treat the appellant as having an income of $5,000 a month and if this estimation exceeds his actual income he only has himself to blame. In my judgment the overall fine will be reduced to $52,000 which on each summons means that the appeal against sentence is allowed by the substitution of a fine of $13,000. 24. In conclusion I wish to make it abundantly clear that I do not consider the ratio of 2½:1 as applied by the learned magistrate to be wrong in principle. What has happened here and which has led to this appeal being successful is that the magistrate overlooked the ability of the appellant to pay that sum.
Representation: Mr. Mackay for the Appellant. Mr. Bodor for Crown. |