Wong Man-shun v. The Queen
Read the full judgment text of CACC 968/1979 on BabelCite. This Court of Appeal judgment was delivered on 17 April 1980.
1. WONG Man-shun was convicted of seven charges of aiding and abetting, counselling and procuring the Frogs Garment Factory Ltd. ("Frogs") to make false declarations in connection with applications for the issue of licences to export textiles. He was fined $4,000 on each charge.
Cited by 9 cases
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CACC000968/1979 [Validity of textile quota system.]
----------------- Coram: Roberts, C.J., Leonard, J.A. and Garcia, J. Date of Judgment: 17 April 1980 ----------------- JUDGMENT ----------------- Roberts, C.J.: Introduction 1. WONG Man-shun was convicted of seven charges of aiding and abetting, counselling and procuring the Frogs Garment Factory Ltd. ("Frogs") to make false declarations in connection with applications for the issue of licences to export textiles. He was fined $4,000 on each charge. 2. The defendant appealed to the High Court against conviction and sentence but later withdrew his appeal against sentence. Power J. directed that the appeal against conviction be argued before the Court of Appeal. Facts 3. The defendant is the agent in Hong Kong for the Hillingdon Shirt Co. Ltd., a United Kingdom firm, which entered a number of contracts with Frogs during 1978. 4. Under these contracts, Frogs were to manufacture or supply the quantities of shirts listed in the seven charges. The contracts were signed on behalf of Frogs by Miss Fung (P.W.2). The contract price was C.I.F. to the United Kingdom. 5. Regulation 4 of the Import and Export (General) Regulations provides that no person shall export textiles to any country except under and in accordance with a licence, issued by the Director of Trade, Industry and Customs under section 3(1) of the Import and Export Ordinance (Cap. 60). 6. By Regulation 5 of the same Regulations, a licence may not be issued for the export of textiles to a country which is subject to a quota system or an export authorization system, unless the applicant is the holder of a quota allocation certificate or an export authorization. 7. The Director's power to issue licences, and to attach thereto such conditions as he may think fit to impose, is contained in section 3(1) of the Import and Export Ordinance (Cap. 60). 8. Miss Fung submitted applications for the issue of export licences for the seven consignments referred to in the charges, using Export Licence (Textiles) Form No. 4. 9. She signed each application as "principal official" of Frogs and appended the rubber stamp, or chop, of Frogs. In each of the application forms, the country of destination was shown as Singapore, save in the form on which the seventh charge was based, where it was shown as Jakarta. 10. Miss Fung's evidence was that she completed the application forms in this manner on the instructions of the defendant. The latter, in a statement which he furnished to an investigating officer of the Trade Industry and Customs Department and which was tendered in evidence and not disputed, agreed that he had given these instructions to Miss Fung. 11. In his statement, he further admitted that the destination of the shirts referred to in the charges was the United Kingdom:
12. In order to achieve his object, the defendant arranged for two bills of lading to be issued in relation to each consignment by W.T. Shipping (Far East) Ltd., his shipping agents. One bill would show that the consignment was destined for Singapore (or Jakarta); the second bill would arrange for the consignment to be shipped onward to the United Kingdom. 13. There is no direct evidence of the arrival of any of these consignments in the United Kingdom but it was a reasonable inference for the magistrate to draw from the contracts, from the insurance which covered the carriage of the goods from Hong Kong to the United Kingdom, from the two sets of bills and from the defendant's admissions that each of the consignments did arrive there. 14. Nor is there direct evidence as to whether or not the goods were offloaded in Singapore or Jakarta. However, it is highly unlikely that they would have been, since the documentary evidence establishes that the goods went all the way from Hong Kong to the United Kingdom in the same ships. Destination 15. The first defence put forward was that the description of the destination of the shirts in the application forms was not inaccurate. It was argued that Singapore was the country of destination of the goods, because the goods were going to pass through Singapore. Indeed, it was argued that if a ship, carrying goods on their way to the United Kingdom, was known to be visiting several ports, it would be accurate to describe any of them as "the country of destination". 16. We have had no difficulty in rejecting that argument. We have no doubt that "destination" in Form No. 4 means the country of ultimate destination of the goods. The defendant himself admits, without qualification, that the ultimate destination of all these shipments was the United Kingdom. Materiality 17. It was submitted that, even if the description of Singapore as the country of destination was inaccurate, it was not material; and that consequently the defendant should be acquitted, because the offence of giving false information under section 36(1) of Cap. 60 can only be committed if the information given is false in a "material particular". 18. The Import and Export (General) Regulations, to which we have referred above, distinguish between export licences for countries generally and export licences to countries in relation to which an export quota allocation scheme is in force. 19. The evidence was that licences for the export of textiles to non-quota countries are granted more or less automatically. But before a licence is issued for export to a quota country, the applicant must show that he holds a quota allocation certificate. 20. Therefore, the Director, when he considers whether or not to issue an export licence for textiles, must know whether the ultimate destination of the goods is a quota or non-quota country. The statement of destination is one of the most important elements in the application form and a material particular in it. Illegality of quota system 21. The argument was advanced that the defendant could not be convicted because the system of quotas is illegal and without any authority at law. Because of the conclusion which we have reached, that this conviction must be quashed for other reasons, it is not strictly necessary for us to consider this ground. However, because it is a matter of some public importance, we feel that we should indicate that we see no substance in that argument. 22. There was, as we have found, information on the application forms which was false in a material particular - i.e. the destination of the goods. On the face of it, therefore, an offence was committed (whether by Frogs or by Miss Fung or by the defendant falls to be considered later). Nevertheless, it was submitted that the falsehood as to destination could only be a material particular if the export quota scheme is lawful and that it is not. 23. We were invited to find that the Governor-in-Council's power under section 31(1)(q) to make regulations "providing for the imposition and administration of quota controls in respect of the import or export of any article" is exclusive and that the Director has no power to devise any quota system, nor to administer or enforce it. 24. We agree that the Director has no power under the Ordinance to make regulations having the force of law, for the imposition or administration of quota controls. Instead, he has devised and promulgated instructions of an administrative nature, governing the creation and administration of a quota allocation scheme. We can see no objection in law to this. 25. Although no quota allocation scheme has been established by the Ordinance, or regulations made thereunder, Regulation 5 of the Import and Export (General) Regulations, made by the Governor-in-Council, refers to such a scheme, though it does not define it. The Regulation can thus properly be said to recognize the existence of such a scheme. From this it may be inferred that the Governor-in-Council has given approval to such a scheme being devised outside the framework of the Ordinance. Of course, if at any time the Governor-in Council sees fit to exercise his powers to make regulations under section 31 (1) (q) of the Ordinance, to the extent to which the Director's administrative practice conflicts with any such regulations, the administrative practice will cease to be of effect. Was Miss Fung acting as Frogs 26. As the charges were drafted, it was necessary for the Crown to establish that the defendant had procured Frogs to furnish false information. 27. The charges could have been framed in a different way; for example, they could have asserted that the defendant had procured Miss Fung to furnish the false information; or the Crown might have charged the defendant and others with conspiracy; but the Crown did not do so. 28. What is more, the magistrate, at the outset of the trial, warned the Crown that there might be difficulties arising from the fact that the charges asserted that the procurement was of a corporation and not of any individual. Nevertheless, Crown counsel decided to proceed on the charges as drafted. 29. If Miss Fung could be shown to be Frogs, the charges against the defendant could be established. But if Miss Fung was no more than a servant of Frogs, the latter, in the absence of any evidence (and there was none) that Frogs had authorized her to give misleading information, could not be held liable for acts done by a servant of the company in excess of her authority. If that were the position, the charges fail because the wrong person has been cited as the object of the procurement and the principal offender. 30. Several passages were quoted from Tesco Supermarkets Ltd. v. Nattrass(1). They establish the general principle that the state of mind of the managers of a company is the state of mind of the company and that it is a question of law as to whether a person who is doing an act is the company or the company's servant or agent. If his mind is that of the company, his guilt is the company's guilt. 31. The test of whether the mind concerned is that of the company was set out in Bolton v. Graham(2):-
32. This is supported by passages in the Tesco Case, which suggest that, where directors leave the management of a business to others, the intention of those others can be imputed to the company. Has the Crown established beyond reasonable doubt that Miss Fung was the company? 33. The evidence as to this was meagre. There was no evidence as to structure of the company, as to its directors or as to the respective spheres of responsibility of Miss Fung and other persons employed by the company. 34. She described herself as the export manager. This suggests that she was not a director. She said that her duties as export manager involved dealing with exports and contracts relating thereto and that she was "authorised by the company to do this work." There was nothing in the evidence to suggest that she alone had the responsibility for dealing with export contracts or with the obtaining of export licences; nor is there any indication of her relationship with the directors and managers of Frogs. 35. She did negotiate the particular contracts concerned with the Hillingdon Shirt Co. Ltd. She had authority to sign bills of exchange relating to those contracts on behalf of Frogs. She had authority to apply for necessary export licences. But this falls far short of establishing beyond reasonable doubt that Miss Fung enjoyed such full responsibility for dealing with matters of this kind that she could properly be described as the directing brain of the company in this sphere. Perhaps such evidence could have been adduced; it was not. 36. We therefore find that the Crown did not establish that the procurement by the defendant of Miss Fung was a procurement of Frogs, as was alleged in the charge, rather than a procurement of Miss Fung in her personal capacity. 37. The Attorney General submitted that, if we reached this conclusion, it would still be open to us to amend the charge under section 27 of the Magistrate Ordinance so as to substitute Miss Fung for Frogs as the principal offender. 38. We do not think that this is a course which we should adopt. Save in exceptional cases, we regard it as undesirable to amend a charge on an appeal, except in minor particulars, since this would deprive an accused person of the protection of section 27 of the Magistrates Ordinance, unless the matter were referred back to the magistrate for rehearing. 39. We have come to the conclusion that we must quash these convictions, on this narrow ground, although it is clear that the devices to which the defendant resorted were, on his own admission, intended to evade the quota restrictions which have been placed upon the export of textiles, in the economic interests of the territory. Representation: Jackson-Lipkin, Q.C. & P. Cheung (Hampton, Winter & Glynn) for appellant Griffiths, A.G. & Reid for crown (1) (1972) A.C. 153 H.L. (2) (1957) 1 Q.B. 159 |