Hong Kong Dragon Co. Ltd. v. The Queen
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CACC000889/1971 IN THE SUPREME COURT OF HONG KONG (APPELLATE JURISDICTION) CRIMINAL APPEAL NO. 889 OF 1971 -----------------
----------------- Coram: Rigby, C.J., Briggs and Pickering, JJ. Date of Judgment: 12th April, 1972. ----------------- JUDGMENT ----------------- Pickering, J.: 1. In August 1971 certain warrants, issued by the Director of Commerce and Industry under the authority of the Merchandise Marks Ordinance, were executed at the premises of various retail shops in the Tsimshatsui tourist district of Kowloon and in the Central district of Hong Kong Island. This action followed a complaint by the French Consulate General to the effect that a large quantity of locally manufactured knitwear bearing marks indicating French origin was being retailed on the local market. 2. As a result of these raids various articles bearing suspected false trade descriptions and suspected forged trademarks were seized and, from documents obtained in the course of certain of the raids, it appeared that one of the suppliers of the goods in question was the defendant company. 3. On the 26th of August, 1971 a warrant issued under the Merchandise Marks Ordinance was executed at the premises of the defendant company, a garment knitting factory occupying a space of some 8,000 sq. ft. and with a normal labour force of approximately 60. At the time of the raid upon the defendant company's premises a number of employees were found to be engaged in cutting from finished garments labels bearing the mark 'Made in France". Goods bearing such marks were seized from the premises to a value of approximately $22,880; they comprised:-
all bearing the false trade description "MADE IN FRANCE". 4. Before the learned magistrate the defendant company, through its counsel, pleaded guilty to having these goods in possession for the purpose of trade the description "Made in France" having been applied thereto. The facts which we have related were admitted by counsel on behalf of the defendant company which had no previous convictions; in mitigation counsel said that the yarns from which the goods were made had in fact been purchased from France; that the officers of the defendant company, who had been very co-operative with the Department of Commerce and Industry, had thought that the labels meant something else, but then understood that they could be misleading; counsel also said that the defendant company was prepared to destroy the labels and the polythene bags and there had been no real intention to deceive. The learned magis rate imposed a fine of $25,000 and returned the garments to the company whilst ordering the destruction of the offending labels and the polythene bags. 5. This Court was informed that the cost price of the shirts seized is approximately $12 - and that they were sold by the defendant company at $20 - being retailed at between $35 to $45, whereas, according to the statement of facts in the court below, similar goods genuinely manufactured in France would retail in Hong Kong at between $85 to $90 per garment. 6. On the appeal before us Mr. Munro, for the appellant company, urged that the officers of the company did not think that the labels would mislead the public, and in pleading guilty, were not admitting that they had intended any fraud; counsel emphasised that the shirt yarn was in fact made in France and that the profit to be made from the offence would not appear to have been very large. The learned magistrate, Mr. Munro argued, had taken into account the number of shirts seized at the factory which was a wrong principle inasmuch as a raid carried out on another day might have yielded a haul remarkably different from the total number of shirts seized on the day in question; the company, although a large company, had incurred a loss during the financial year ending 31st March, 1971 and a very small loss during the preceding financial year. Counsel further argued that whilst there was admittedly a danger of the tourist trade being adversely affected by the conduct of the appellant company, that company distributed these goods over the whole colony and not merely in tourist area; he was, however, constrained to agree with the learned President's comment that the greater the distribution the greater the harm. The offence, Mr. Munro stated, was not prevalent and all the raids carried out had been the result of one complaint made by the French Consulate General after representations by a particular French firm: but the Magistrate appeared to have imposed a heavy sentence because the appellant company was a large manufacturer, because a large number of goods had been seized and because similar goods were demonstrated to have been sold to retailers in tourist areas; thus the argument ran, the appellant company was being punished three times over. 7. We are unable to agree with this ingenious but untenable argument. The appellant company was in fact punished once, although possibly for three different reasons and it requires no emphasis to understand that a manufacturer who lets loose upon the market over a wide area of the Colony goods bearing a false trade description damages the commercial image of the Colony both in regard to local purchasers and to the extremely important tourist industry. Nor does the damage end there for we were informed by counsel quite frankly that similar goods bearing similar labels are exported, and that the appellant company's export trade amounts to 80% of its purchases whereas only 20% is sold locally. We are unable to accept the suggestion that the responsible officials of the company did not fully appreciate the message of the labels. 8. The appellant company has a paid-up capital of $1,200,000. This was a case of a large scale manufacturer practising a large scale fraud upon the public, although possibly not upon the retailers involved since those gentlemen can no doubt be expected to be more sophisticated and knowledgeable about sources of origin than are typical individual customers. A large scale fraud by a large company merits a large sentence, and we are wholly unable to say that the fine imposed was in any way excessive or that the magistrate erred in principle in ordering such a fine. 9. Finally we would observe that commercial crime is just as endemic in Hong Kong as are crimes of violence and it has a longer history. Indeed commercial dishonesty may fairly be described as rampant. Whilst we have no warrant for saying, and indeed do not say, that our ensuing remarks have any application to the appellant in the present case, we do not think it fanciful to assume that some of those who decry allegedly lenient sentences imposed for crimes of violence, are themselves members of a commercial community the hands of many members of which are far from clean in regard to the criminal law. We find it ironic that representatives of those who complain of allegedly lenient sentences in the case of theft accompanied by violence, are the first to complain of perfectly reasonable sentences inflicted for more subtle and widespread methods of parting the victim from his money. Commercial honesty, if demontrably not the lifeblood of this community, should at any rate be so regarded, and in times of greater economic stringency than has obtained in recent years, may well be found to be increasingly an imperative. However that may be, those who transgress may expect appropriate penalties. 10. The appeal is dismissed. Representation: Munro for Appellant Eric Li, C.C. for Respondent (Judgment of the Court delivered by Pickering, J.) |