HKSAR v. Wong Wan Sang and Others
Read the full judgment text of HCMA 652/2011 on BabelCite. This High Court CFI judgment was delivered on 24 December 2012.
1. The three appellants in the present case were each charged with one count of supplying goods to which a false trade description was applied, contrary to sections 7(1)(a)(ii) and 18(1) of the Trade Descriptions Ordinance (hereinafter “the TDO”) [1] .
Cites 8 cases
|
[English Translation – 英譯本] IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE (Appellate Jurisdiction) MAGISTRACY APPEAL NO. 652 OF 2011 (ON APPEAL FROM KCCC 632 OF 2011) --------------------------
--------------------------
------------------------- J U D G M E N T ------------------------- 1.The three appellants in the present case were each charged with one count of supplying goods to which a false trade description was applied, contrary to sections 7(1)(a)(ii) and 18(1) of the Trade Descriptions Ordinance (hereinafter “the TDO”)[1]. 2.The three charges originated from the same incident. 3.The 1st and 2nd appellants were partners of one Chung Kiu Bird Nest and Medicine Co. (hereinafter “Chung Kiu”)[2] whereas the 3rd appellant was a salesman at Chung Kiu[3]. 4.The prosecution alleged that on 12 November 2009, at Chung Kiu, counterfeit cordyceps, to which a false trade description“冬蟲夏草”(the Chinese term of cordyceps) was applied, was supplied in the course of trade or business. 5.The three appellants, represented by Mr Raymond Yu of counsel, pleaded not guilty. After a 4-day trial, they were all convicted as charged by the temporary magistrate (hereinafter “the Magistrate”). They now appeal their convictions. Prosecution case 6.The prosecution called three witnesses. PW1 was a Chinese Medicine Assistant from the Department of Health, PW2 was an Assistant Trade Controls Officer from the Customs and Excise Department, and PW3 was an officer from the Chinese Medicines Identification Unit of the Department of Health. 7.On 12 November 2009, officers of the Customs and Excise Department and the Department of Health arrived at Chung Kiu and bought some cordyceps. The shop sold, among other items, goods marked “特選冬蟲夏草”(English translation: “Specially Selected Cordyceps ”) and“一級冬蟲夏草”(English translation: “Grade One Cordyceps ”), which were respectively displayed inside two glass bottles. 8.The officers purchased 26 pieces of each of the above two types of goods. 9.At the time of the transaction, the officers were received by the 3rd appellant, and the 1st and 2nd appellants were not present. 10.PW3, who gave evidence as an expert, pointed out that some of the cordyceps purchased was fake. Defence case 11.In exercise of their rights, the 1st and 2nd appellants did not testify at trial. 12.The 3rd appellant gave evidence in court and his testimony can be summarized as follows. 13.He had been employed in ginseng and dried seafood shops since 1997, and he had worked at Chung Kiu as a salesman since mid-2008. 14.He had the requisite knowledge in respect of the purchase of the goods concerned. 15.He would not purchase goods from salespersons who peddled business. The goods in question were bought from Sun Shing Company[4] in June 2009, with the knowledge of the 1st and 2nd appellants. It was a good shop from which his previous employer also purchased goods. 16.At that time, he inspected the goods and arranged for delivery only after he was satisfied with the quality of the goods. When he took delivery of the goods, he checked them again to confirm they were what he purchased and met the required weight. He never knew, nor did he suspect, that this batch of goods was fake. 17.The 1st appellant had been reminding him that he should only purchase goods upon careful selection from major and reputable wholesalers in the Western District. 18.The 2nd appellant seldom went to Chung Kiu, doing so only once or twice a month. 19.Although the 2nd appellant did not testify in court, she had written the following statement under caution:
The Magistrate’s ruling 20.The Magistrate accepted as credible the testimonies of all prosecution witnesses. He found that:
21.The Magistrate did not accept the 3rd appellant’s testimony. 22.He found that the three appellants had failed to prove the circumstances set out in section 26 of the TDO and hence could not rely on the defences under that section. 23.Therefore, he convicted the three appellants as charged. Grounds of appeal 24.On appeal, the 3rd appellant is represented by Mr Richard Wong and Mr Danny Chan of counsel. The appellants have advanced four grounds of appeal:
Discussion First ground of appeal 25.Section 19 of the TDO provides that:
26.The Magistrate found that the time limit should run from the date when the genuineness or otherwise of the goods was known. Therefore, in respect of the exhibits TDTB/TDS/0049/09(A), the time limit had already expired at the time of prosecution, but in relation to the other batch of exhibits, the time limit had not yet expired and the prosecutions could proceed. 27.Mr Wong for the appellants submits that in respect of both batches of exhibits, the time limit had expired by the time of prosecution. 28.This ground of appeal hinges on the following two key issues:
Prosecutor 29.The Magistrate pointed out that, as this was a joint operation, both the Department of Health and the Customs and Excise Department were prosecutors; and that, as the expert who identified the exhibits (PW3) was from the Department of Health, her knowledge of the genuineness or otherwise of the cordyceps represented the prosecutor’s knowledge. 30.The TDO does not define “prosecutor”. In my view, it refers not only to the Department of Justice who is in charge of criminal prosecutions in Hong Kong, but definitely also to the relevant law enforcement agencies. 31.The Magistrate found that both the Department of Health and Customs and Excise Department were prosecutors. With respect, this is correct in the present case. Upon discovery of the offence by either one of these two departments, the time limit started to run. The date of discovery of the offence 32.The Magistrate held that the date on which PW3 identified that the exhibits were fake was the date of discovery of the offence. 33.The material dates in the present case are set out below:
34.At trial, the defence submitted that the time limit for prosecutions had expired by the time when the three appellants were charged. 35.Likewise, the TDO does not state how the date of discovery of the offence can be ascertained. 36.In R v Yau Hing Ping [1992] 1 HKCLR 188, Yang CJ (as he then was) pointed out that the limitation period started to run when the prosecutor first discovered the offence. 37.In Brooks v Club Continental Ltd[5], McNeil J held that time started to run when an officer-in-charge at the relevant authority became aware of all the material facts leading to the discovery of the relevant offence, and that the word “discovery” did not import any investigation.[6] 38.Becoming aware of the relevant information may be an active process, e.g. through investigation by the authority, or a passive one, e.g. by receiving a report, or a combination of both. 39.In the English case R v Beasonsfield Justices ex p Johnston and Sons Ltd.[7], Stuart-Smith J pointed out that in considering the time limit for prosecutions, a distinction has to be drawn between the awareness by the prosecuting authority of the facts of the relevant offence and the gathering of evidence to prove the relevant offence. Time should start to run from the time of becoming aware of the facts, and the period prior to the expiry of the statutory time limit is the time during which the statute allows the authority to carry out investigations and gather evidence.[8] 40.What are the nature and extent of the facts required to trigger the time limit? In Viva Magnetics v SJ [9], Hartmann J (as he then was) pointed out that such facts must be:
41.Furthermore, it has been pointed out in many decided cases[11] that time starts to run when the prosecuting authority has got hold of sufficient information of the likelihood of an offence to justify an investigation. If it were otherwise, the statutory time limit would be of little practical significance because too much room would then be left to the prosecuting authority in deciding when to start the investigation, which might result in a postponement of the time limit, and that could not have been the intention of the legislature. 42.Having examined a series of judicial authorities, Hartmann J identified the following principles to be borne in mind when considering the issue:
43.In HKSAR v Wan Wah Tong[13], Deputy High Court Judge Barnes (as she then was) also applied these principles in determining the date on which the statutory limitation period should start to run. 44.The above principles, which have consolidated the essence of the opinions expressed in judicial precedents over the years, should be applied in the present case. 45.In my view, in the present case, the question to focus on is the date on which the prosecutor became aware of the facts which covered the essential elements of the offence and upon which reliance might be placed. 46.Mr Wong contends that the prosecutor became aware of those facts after PW1 seized the Exhibits. 47.Mr Wong’s submission rests upon the fact that both PW1 and PW3, who subsequently examined samples of the Exhibits seized, were Chinese Medicine Assistants from the Department of Health. Moreover, PW1 testified that:
48.Mr Wong submits that under such circumstances, the information of which the prosecutor became aware satisfied the conditions as set out in the decided cases for triggering the time limit. 49.The information provided by PW1 was no doubt credible. Her veracity was not challenged at trial and there was nothing to suggest that she would mislead the authority. 50.Ms Chiu, Senior Public Prosecutor for the respondent, refers to the case of R v Stoke-on-Trust Magistrates Court, es p Leaf United Kingdom Ltd[21]. The issue in that case was whether the goods in question had violated the regulation, and the information relevant to answering that question could only be obtained by chemical analysis. In delivering judgment, Smith J pointed out that where the actual constituents of the product in question was a material element in the case which must be proved, it could not be said that the prosecutor had reliable information about the facts until he received the relevant analyst’s certificate, and therefore it could not be said that the prosecutor had discovered the offence until that date.[22] 51.Hartmann J agreed with Smith J’s opinion[23]. He took the view that the judgment in ex p Leaf United Kingdomdid not go against the relevant principles and, instead, was made by applying the principles to the facts of that case. 52.Mr Wong seeks to distinguish the present case from ex p Leaf United Kingdom on the facts, particularly in two aspects. First, the examination of the cordyceps was done without the aid of any chemical test or equipment, and PW3 also did the examination with naked eyes only. Second, PW1 and PW3 were both Chinese Medicine Assistants. 53.Each case should be determined on its own facts by applying the principles enunciated by Hartmann J. 54.In my view, although PW1 and PW3 were of the same rank, they belonged to different sections after all. More importantly, although she said that she had picked out samples by drawing on her professional knowledge, there was no sufficient evidence to prove that she was an expert in this area — indeed, there was no evidence at all regarding her education qualifications, training or experience. Furthermore, she said she had merely done preliminary observations and picked out some questionable samples. This is a far cry from a thorough examination by an expert. 55.Although the final examination result was obtained by checking with naked eyes, I agree with the views of the Magistrate and Ms Chiu. As the genuineness or otherwise of the relevant samples covered an essential element of the offence, the prosecutor was, prior to identification by the expert, not to be regarded as knowing the facts which covered the essential elements of the offence and upon which reliance might be placed. 56.Therefore, the Magistrate’s finding in this regard is, in my view, correct. 57.The Magistrate found that the prosecutor discovered the offence on the date on which PW3 confirmed the genuineness or otherwise of the goods, not the subsequent date on which the examination reports were formally issued. 58.On the facts of the present case, this ruling is reasonable, proper and fair. 59.For the above reasons, I hold that the first ground of appeal fails. Second ground of appeal 60.This ground concerns whether the statutory provisions underlying the offence in question involve a derogation from the presumption of innocence. 61.Presumption of innocence is a constitutionally protected right[24]. 62.However, this right is not absolute and can be derogated by legislation, although any such derogation must be justified by compelling reasons. 63.Regarding the proper approach to legislation which appears to derogate from the presumption of innocence, the Court of Final Appeal has in a number of cases[25] laid down the following applicable principles and considerations:
Legislative intent 64.I have referred to the Court of Final Appeal case of LEE TO NEI v HKSAR[26]. In that case, the Court considered, in the context of the Trade Descriptions Ordinance[27], a trade mark related offence[28]. Ribeiro PJ pointed out that in order to understand and grasp the gravamen[29] of the offence, section 9(2) which establishes the relevant criminal liability and offence must be read together with section 26(4) which sets out the defence. 65.In my view, in understanding and grasping the gravamen of the offence in the present case, it is proper and necessary to take the same approach. Hence, sections 7(2) and 26(3) of the TDO should be read together. 66.The combined effect of sections 7(2) and 26(3) is that, unless the person charged with an offence under section 7(2) can satisfy all the three conditions set out in section 26(3) which enables him to establish a defence, he will be convicted of the offence. 67.Therefore, in my view the clear legislative intent is to reverse the burden of proof. Whether derogation from the presumption of innocence 68.Having regard to the analysis given by the Court of Final Appeal in LEE TO NEI, I am of the view that the gravamen of the offence in question is that, if a person who supplies or offers to supply or is in possession of the goods in question:
he should be criminally liable. 69.This suggests that an accused will be convicted even if the prosecution fails to prove beyond reasonable doubt that the appellant [sic] knew or had reason to suspect there was inconformity of description, or that the appellant [sic] should with reasonable diligence have become aware of such situation. 70.Hence, I am of the view that this provision derogates from the presumption of innocence. Whether in pursuit of a legitimate societal aim 71.In my view, whether for the protection of commercial or trading interests or for the protection of consumers, it must be a legitimate societal aim to ensure that traders do not apply false trade descriptions when supplying goods, and notwithstanding the derogation from the presumption of innocence, the provision is enacted in the pursuit of this aim. Rationality 72.It was in the pursuit of a legitimate societal aim that the legislature enacted the provision which reverses the burden of proof and derogates from the presumption of innocence. 73.In my view, requiring a trader who supplied goods to prove he neither knew nor had no reason to suspect that the false description had been applied, and could not even with reasonable diligence have ascertained that the goods did not conform to the description or that the description had been applied to the goods, is rationally relevant to what is necessary in achieving the legitimate aim, and is rationally connected with such aim. Therefore, this provision satisfies the rationality test. Mr Wong does not take issue with this. Proportionality 74.The key issue in the present case is whether the provision satisfies the proportionality test where the reversed burden of proof is a “persuasive” burden. 75.The Magistrate pointed out in the present case that the appellants bore the burden of proof and it was necessary to consider on a balance of probabilities whether they had discharged the burden. This is tantamount to imposing a “persuasive” burden of proof on the appellants and is adopting the common law approach to legislative interpretation. 76.In HKSAR v Lam Kwong Wai [30], the Court of Final Appeal said:
77.The question for me to consider is whether the imposition of a “persuasive” burden of proof on the appellants exceeds what is necessary to pursue the relevant aim. 78.I have taken into account what the Court of Final Appeal said in HKSAR v Ng Po On[31], as follows:
79.The above does not exhaustively set out all the factors to be considered by the court. The court has to take into account all the facts and circumstances of the provision as applied in the case[32], with the focus to be placed on the provision itself. 80.In LEE TO NEI, the Court of Final Appeal considered the defence provision under section 26(4). That provision is the same as section 26(3), with which the present case is concerned, in that an accused who wishes to rely on the statutory defence has to prove:
81.The third condition is what the Court of Final Appeal was most concerned about. 82.Ribeiro PJ pointed out that even if the prosecution bore the burden of proof, it would not be difficult to discharge the burden: the prosecution would only have to prove to the satisfaction of the court that, taking an objective view, the accused could in all the circumstances of the case have discovered the falsity. 83.Therefore, the Court of Final Appeal found that in respect of section 26(4), an accused who wished to rely on the statutory defence merely bore an “evidential burden” which was discharged by adducing credible evidence to prove the three conditions set out in the provision. Where the accused managed to do so, it would be for the prosecution to adduce sufficient evidence to prove beyond reasonable doubt that[33]:
84.If the reversed burden of proof imposed a “persuasive” burden on the accused, then it could not pass the proportionality test. 85.In order to preserve the validity of the legislation, the Court of Final Appeal adopted a remedial interpretation. 86.Ms Chiu for the respondent has fairly pointed out that there is no substantial difference between the circumstances in the present case and those in LEE TO NEI. 87.In my view, in considering whether the reversed onus of proof imposed by sections 7(1) and 26(3) is constitutional, the analysis in LEE TO NEIcan be adopted in its entirety. If the imposition of a “persuasive” burden on the appellants was disproportionate, then it would not justify derogation from the presumption of innocence. On the other hand, if the appellants merely bore an “evidential burden”, the relevant legitimate societal aim could still be pursued without unduly impeding the enforcement of the law against the relevant offence. 88.Notwithstanding the reversal of the onus of proof, such a remedial interpretation serves to preserve the validity of the law without having to declare it unconstitutional or invalid. Reading down the relevant provisions as imposing an “evidential burden” on the appellants will not undermine the fundamental or essential elements of the legislation and is also consistent with the presumption of innocence and the right to a fair trial. 89.For the above reasons, I hold that an accused charged with a section 7(1) offence who wishes to rely on the defence under section 26(3) bears only an “evidential burden”. 90.It follows that the Magistrate erred in holding that the standard of proof required of the appellants was one on a balance of probabilities. 91.However, this does not necessarily mean that the convictions have to be overturned. A magistracy appeal is conducted by way of a rehearing, and I will apply the appropriate legal principles to reassess the evidence already adduced so as to determine if the conviction of each of the three appellants is safe and satisfactory. That this approach is proper and necessary has been confirmed by the Court of Final Appeal in LEE TO LEI. 92.I have considered the evidence adduced at trial in order to determine:
93.In respect of the first question, there is no doubt that the 3rd appellant has, by giving evidence in court which went to the conditions for establishing the defence, discharged the evidential burden. 94.The other two appellants did not testify in court. However, one may discharge the evidential burden without testifying in person. Provided that there is credible evidence in the case showing that he did not know, had no reason to suspect, and could not with reasonable diligence have ascertained the contravention of law, the burden of proving his guilt will go back to the prosecution, who will have to prove beyond reasonable doubt that one of the above matters was not the same as what the defence evidence sought to show. 95.In his testimony, the 3rd appellant did mention the roles and conduct of the other two appellants in the shop and their participation in or knowledge of this purchase of goods. 96.The evidence given by the 3rd appellant in this regard cannot be said to be detailed and comprehensive, but Mr Wong submits that it was enough to discharge the evidential burden borne by the three appellants. 97.Ms Chiu for the respondent has not taken issue with this. 98.The evidential burden is not nominal, and the defence has to put forward sufficient evidence to raise the relevant issue. 99.Having considered the evidence in the present case and in light of the submissions from the parties, I accept that the three appellants have discharged their evidential burden. 100.I now turn to consider whether the prosecution has put forward sufficient evidence to prove beyond reasonable doubt that each of the three appellants:
101.The evidence in the present case cannot possibly be sufficient to prove the first point. 102.As to the other two points, I have taken into account that the prosecution was unable to prove that:
103.Besides, perhaps by reason of its failure to correctly understand the onus of proof, the prosecution has not done much in adducing evidence to show that the appellants could have with reasonable diligence discovered the falsity. 104.Solely by looking at the photographs produced, I am in no position to tell the degree of falsity of the fakes or whether they were obviously false. The respondent has also failed to point out what circumstances there were in the present case which clearly showed that the falsity could have been discovered with reasonable diligence. 105.In addition, the goods might at least have been purchased from a reputable supplier, and the goods had been checked by the 3rd appellant who was responsible for purchasing and taking delivery of them. It had taken PW1 as long as 30 minutes to pick out samples from only two bottles of goods. Only 20 to 30 pieces were picked out and, upon examination, only some of them were found to be fake. In the present case, the 1st and 2nd appellants could not be criticised for delegating daily responsibilities to the 3rd appellant. 106.For the above reasons, by applying the appropriate yardsticks for assessment, I find that none of the convictions of the three appellants is sustainable. Third ground of appeal 107.The appellants submit that the Magistrate should not have found that both the 1st and 2nd appellants had supplied the goods. With respect, I do not agree. Even if they were not often in the shop, they had been operating this drug store in partnership and acquired a retailer licence for Chinese herbal medicines. On the 3rd appellant’s testimony, he had discussed with the 1st appellant and obtained the 1st appellant’s approval before he purchased the goods. As to the 2nd appellant, although she had not taken part in the discussion regarding the purchase, she did know that those goods would be purchased from Sun Shing. 108.The Magistrate’s findings in this respect are correct and amply supported by evidence. Both the 1st and 2nd appellants had supplied the goods in question. Fourth ground of appeal 109.This is a catch-all ground. In light of my ruling on the second ground of appeal, the convictions of the three appellants are neither safe nor satisfactory. Conclusion 110.Therefore, the three appellants’ appeals are allowed, with the convictions quashed and sentences set aside.
Ms Samantha Chiu, Senior Public Prosecutor of the Department of Justice, for the Respondent. Mr Richard Wong and Mr Danny Chan, instructed by Messrs WK To & Co, for the Appellants. Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. Edmund Cham, Solicitor. [1] Cap 362, Laws of Hong Kong. [2] See the admitted facts. [3] See the admitted facts. [4] The invoice was adduced and marked defence exhibit D1. [5] An unreported case in which the judgment was delivered by the Queen’s Bench Division of the Supreme Court of England on 13 October 1981. The passage is extracted from Securities and Futures Commission v Chiu Sin Ming Jason [2000] 3 HKC 425 which referred to that case. [6] “I think it is sufficient for the purposes of this case to say that the word ‘discover’ means no more in this context than that all the facts material to found the relevant charge under the Act were disclosed to the appropriate officer. The word ‘discovery’ here does not import any investigation by the officer. It is simply his knowledge, from disclosure to him in some way, of the material facts which would found the offence.” [7] (1985) 149 JP 535 [8] “In my judgment, there is a difference between the information and facts which are known to the prosecution authority and admissible evidence to support those facts and to prove that the offence has been committed.
[9] [2002] 3 HKLRD 571 [10] (a) Sufficiently extensive to include the essential elements of the offence alleged, including the identity of the offender (or the means readily to obtain that identity) and
[11] See Viva Magnetics v SJ [2002] 3 HKLRD 572 [12] “(i) The legislative purpose of s.120A is to ensure that suspected offences under the Ordinance are both expeditiously investigated and prosecuted.
[13] [2006] 3 HKLRD 406 [14] Page 217S of the transcript. [15] Pages 218Q and 219J of the transcript. [16] Page 220S-U of the transcript. [17] Page 223H of the transcript. [18] Page 223S of the transcript. [19] Page 228K-P of the transcript. [20] Page 229G of the transcript. [21] An unreported case in which the judgment was delivered on 6 November 1997 by the Queen’s Bench Division of the Supreme Court of England. [22] “… In a case of this kind, where the actual constituents of the product are a material element in the case which must be proved, it cannot be said, in my judgment, that the prosecutor has knowledge, in the sense of reliable information about the facts, until he receives the relevant analyst’s certificate. Thus it cannot be said, in my view, that the prosecutor in this case had discovered the offence until that date.” [23] Viva Magnetics Ltd v SJ [2002] 1 HKLRD 571 [24] See Article 87 of the Basic Law: “Article 87 In criminal or civil proceedings in the Hong Kong Special Administrative Region, the principles previously applied in Hong Kong and the rights previously enjoyed by parties to proceedings shall be maintained. Anyone who is lawfully arrested shall have the right to a fair trial by the judicial organs without delay and shall be presumed innocent until convicted by the judicial organs.”, and Article 11(1) of the Hong Kong Bill of Rights Ordinance: “(1) Everyone charged with a criminal offence shall have the right to be presumed innocent until proved guilty according to law.” [25] See, for example, HKSAR v LAM KWONG WAI (2006) 9 HKCFAR 574, HKSAR v HUNG CHAN WA (2006) 9 HKCFAR 614 and HKSAR v NG PO ON (2008) 11 HKCFAR 91. [26] FACC 5/2011 [27] Cap 362, Laws of Hong Kong. [28] Section 9(2) of the Trade Descriptions Ordinance. [29] This is the word used in the original judgment. [30] (2006) 9 HKCFAR 574 [31] (2008) 11 HKCFAR 91 [32] Lord Bingham of Cornhill said in Sheldrake v Director of Public Prosecutions [2005] 1 AC 264, “The justifiability of any infringement of the presumption of innocence cannot be resolved by any rule of thumb, but on examination of all the facts and circumstances of the particular provision as applied in the particular case.” (Cited in HKSAR vNg Po On (2008) 11 HKCFAR 91.) [33] See paras 51 and 52 of the judgment. |
Cases cited in this judgment
Further hearings and rulings under HCMA 652/2011