HKSAR v. LEI PEI CHI AND ANOTHER

bjbj HCMA592/1999 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE (Appellate Jurisdiction) MAGISTRACY APPEAL NO.592 OF 1999 (ON APPEAL FROM KTS NOS.16919 16922 OF 1998) ------------------------- BETWEEN HKSAR Respondent and LEI PEI CHI 1st Appellant YAU YICK KNITTING 2nd Appellant FACTORY LTD -------------- Before : Hon Gall J in Court Dates of Hearing : 17 and 18 May 2000 Date of Judgment : 8 June 2000 ---------------------- J U D G M E N T ---------------------- The appellants were convicted on 18 May 1999. The 1st appellant was convicted of furnishing false or misleading information to an authorized officer, contrary to section 26(2) of the Import & Export Ordinance and the 2nd appellant was convicted of giving or causing to be given false or incorrect information in a document that might be used in support of a certificate of origin application, contrary to section 7(2)(b) of the Protection of Non Government Certificates of Origin Ordinance and of exporting prohibited articles without a licence, contrary to sections 6D(1) and 6D(3) of the Import & Export Ordinance and importing prohibited articles without a licence, contrary to sections 6C(1) and 6C(2) of the Import & Export Ordinance. The 1st appellant was fined the sum of $7,000 and the 2nd appellant was fined the sum of $20,000 on each summons together with costs of $10,000. Both the appellants appeal against both conviction and sentence. The 1st appellant s appeal against conviction was based upon two grounds, firstly, that the learned magistrate wrongly exercised her discretion in permitting the prosecution to re open its case after the defence had closed its case and delivered its final submission; and secondly, that the learned magistrate erred in admitting the record of interview of the 1st appellant because the prosecution failed to establish that it was a voluntary statement. The second ground of appeal was abandoned. The first ground of appeal arose in this way. Section 4A of the Import & Export Ordinance, Cap.60 states The Director may appoint in writing any public officer to exercise any of the powers and perform any of the duties conferred or imposed on an appointed officer by this Ordinance. Those duties were carried out in respect of this matter by Miss Chan Yin hong ( ). In the course of her evidence chief, she was asked this Q. So you are authorised to perform such duties under the Import and Export Ordinance and Certificate of Non Government Certificate of Hong Kong Origin Ordinance? A. Correct. In his closing address, defence counsel argued that whilst the officer had given evidence of being authorized pursuant to the Ordinances, she had not given evidence that that authorization was in writing. Out of what may have been an excess of caution, the magistrate permitted the prosecution to open its case and for the witness to be recalled to exhibit her warrant card which was an authorization in writing to carry out her duties under the Ordinances. The magistrate ruled that it was a technical matter in permitting the recall of the witness. The matter was squarely before the magistrate and she had considered whether or not any injustice would flow from the course of action she adopted. In R. v. McKenna 40 Cr App R 65, Byrne J said, in respect of the re opening of the case of the prosecution and the recalling of a witness, ...It is, in the opinion of this court, sufficient to say that the course taken by the learned Commissioner is one which has been recognised as being a perfectly proper course for many years. It is only necessary to refer to SULLIVAN (1922) 16 Cr.App.R.121; [1923] 1 K.B.47, where it is at once to be seen that a judge, in the circumstances in which the learned Commissioner acted in this case, has complete discretion whether a witness shall be recalled, and this court will not interfere with the exercise of his discretion unless it appears that thereby an injustice has resulted. Clearly the magistrate in this case considered the exercise of her discretion and considered whether an injustice could or might be done by her granting of the application, determined that there would be none, and granted leave to re open the prosecution case and recalled the witness. I agree that no injustice was done and can find no reason to disturb the exercise by the magistrate of her discretion. This ground of appeal must fail and with it, the appeal by the 1st appellant against his conviction must also fail. The first ground of appeal of the 2nd appellant was an adoption of the second ground of appeal of the 1st appellant which has been abandoned. Mr Acton Bond similarly abandoned this ground of appeal. The 2nd appellant is a limited company and the 1st appellant is one of three directors of that limited company. In the course of the trial, the magistrate admitted in evidence a statement made under caution by the 1st appellant as being a statement made on his own behalf and on behalf of the 2nd appellant as a director of the 2nd appellant. The first arguable ground of appeal, which is the second ground, is that the magistrate was wrong to rule the statement was admissible or that it had any weight as against the 2nd appellant. The third ground of appeal is that the magistrate does not show adequately or at all why she considered that the statement of the 1st appellant had been made with the authority of the 2nd appellant in a manner in which any admission of the 1st appellant was evidence in the case of the 2nd appellant, or alternatively, in the fourth ground, that if she was correct to rule that it was admissible and was of weight, then it did not implicate the 2nd appellant in the commission of any offence. The fifth ground was that she did not adequately show or at all why she concluded that the statement of the 1st appellant implicated the 2nd appellant in the offences alleged. Sixthly, in the absence of that statement, there is no evidence upon which the 2nd appellant could have been convicted. All the grounds of appeal revolve around the admissibility of that statement, the authority of the 1st appellant to make it, the weight to be given to it, the nature and relevance of the contents and the situation which would prevail if the statement were not admissible. I will, therefore, not deal with the grounds of appeal one by one but globally. The factual background of the trial was this. All the summonses faced by both the appellants involved 1,996 blouses. These were manufactured in the 2nd appellant s knitting company in Kowloon and on 27 February 1997 were exported to China without a licence. In China, work of looping and stitching were done to the blouses and they were then exported from China back into Hong Kong without a licence on 20 March 1997. While the work was being done in China, an application was made on 18 March 1997 for the issue of a certificate of origin in respect of the 1,996 blouses on the basis that all the work of manufacture had been done in the 2nd appellant s factory. The 2nd appellant is a limited company incorporated on 7 August 1990 and the 1st appellant was at all relevant times a director of the 2nd appellant. The application for the issue of a certificate of origin was chopped with the chop of the 2nd appellant and signed by a Mr cheung, another director of the 2nd appellant. On 18 April 1997, customs officers visited the 2nd appellant s premises where they saw the 1st appellant. They had the application for the certificate of origin and he produced documents which appeared to substantiate the claims made in the application for a certificate of origin that the work had been done on the 2nd appellant s factory. In the course of discussions between PW2, the customs officer and the 1st appellant, a point was reached where the 1st appellant changed his account and revealed that the stitching and looping work on the relevant items had been done in a factory on the mainland, the goods having been imported into China and exported therefrom without a licence. PW2 took a statement under caution from the 1st appellant in his capacity as a director of the 2nd appellant and in that statement he implicated the 2nd appellant in the offences. The first issue to consider is whether the magistrate was correct in finding that the contents of P5, the statement made under caution by the 1st appellant was evidence admissible and of weight against the 2nd appellant. The magistrate fully and carefully considered the voluntariness of the statement and ruled that statement had been made voluntarily. No issue therefore arises as to its voluntariness. When the magistrate had heard the evidence of Mr Lau Sum wong ( ), who is the third director of the 2nd appellant and the main shareholder, she again considered the admissibility of Exhibit P5, the statement made by the 1st appellant in the light of the evidence of that witness. She found no cause to alter the conclusion she had come to at the end of the case for the prosecution that the statement was voluntary. It is clear from the transcript and from her reasons that the issue of voluntariness was in the forefront of her mind. She adopted the alternative procedure, she gave an opportunity to the parties to call evidence in respect of the alternative procedure and to address on the question of voluntariness. Having heard all the evidence and all that the parties wish to submit to her on that issue, she considered it in a proper fashion and ruled the statement as being admissible. I can find no fault in her approach to this issue. The next issue that she had to consider was whether or not the statement made by the 1st appellant was proved to be the truth and sufficient to satisfy the element of the offence beyond reasonable doubt. She said this in her oral reasons I am satisfied that he was properly authorized to give the admissions on behalf of the company and I am satisfied that the contents of the cautioned statement are true and correct. I am satisfied that the four summonses had been proved beyond reasonable doubt so that I am sure. The magistrate had before her all the evidence and the issue of what weight to put on a statement that she has found to be admissible as an exercise of her function as a jury, and I would be slow to find that she has exercised that function improperly. There was nothing on the fact of the transcript or her reasons to indicate that she has done anything than consider that issue as she ought. I am satisfied that she was entitled to rely fully upon Exhibit P5, the statement made under caution by the 1st appellant and to find the contents were the truth beyond reasonable doubt. The last issue to be considered revolved around whether the 1st appellant was speaking on behalf of the company when he made that statement; whether it is evidence against the 2nd appellant, and if it is, whether the truthful contents are sufficient to convict the appellants. The magistrate, by virtue of her reasons and decision, answered each of these questions in the affirmative. Mr Acton Bond argues that she should not have done so. The 1st appellant is a director of the company which is the 2nd appellant. Directors of a company are its officers and upon a common sense approach when an investigating authority approaches a company and is spoken to by a director of that company who speaks to the company s business, on the face of it, that director speaks for the company. I was referred to R. v. Lolly Queen Co. Ltd [1994] 2 HKCLR 51. There customs officers had searched an appellant company premises and interfered a Mr Lam. Mr Lam having instructed an employee to produce certain documents and then made a statement under caution admitting, on behalf of the company, certain relevant facts in that statement. Mr Lam stated that he was the director of the appellant company, that his major duties were to handle company finance, personnel administration and import and export business. The appellant company on appeal maintained, inter alia, that the trial magistrate had been wrong to rely upon the admissions made by Mr Lam purportedly on behalf of the company. Macdougall JA, as he then was, sitting as an additional High Court judge said However, on the basis of the evidence before the magistrate concerning Mr s knowledge, his status in the company and the duties which her performed, I am satisfied that the magistrate was entitled to impute to the appellant company the requisite knowledge that the shoes were to be manufactured in China and that false trade descriptions that they were made in Hong Kong were to be applied to them. Reference was made to Edwards v. Brookes (Milk) Ltd [1963] 3 All 62 where an inspector of weights and measures took some cartons of milk from a vending machine to the defendant company where he had a conversation with a Mr Norman Jones who said that he was the depot manager. The justices refused to admit evidence as to admissions made by Mr Jones in the course of that conversation on the basis that it had not been proved that he was an agent of the defendant company whose admissions were evidence against the company or were authorized by the company to make admissions on his behalf. On appeal by way of case stated, it was held that evidence had been wrongly excluded and there was prima facie evidence from which the justices could infer Mr Jones was the company s agent and that he ostensibly had a status that would qualify him to make statements on behalf of the company. Mr Acton Bond argues that in neither R. v. Lolly Queen nor in the English case of Edwards v. Brookes was the case of Myers v. Director of Public Prosecutions [1964] 2 All 881 referred. That case related to the keeping of records of the number of cylinder box of particular cars when manufactured by the foreman in charge of manufacture and the production of those records to the court to show which particular engine was placed in a particular chassis. It was held the records were hearsay and Mr Acton Bond argues that insufficient evidence was available to the magistrate for her to find that the 1st appellant was an agent of the 2nd appellant and that the statement he made ought to be hearsay in respect of the 2nd appellant and not evidence admissible against it. I would distinguish the cases of R. v. Lolly Queen and Edwards v. Brookes. In the former, it was found that the person making the statement was not an agent of the company but was a part of the structure of the company itself in the person of a director. In Edwards v. Brookes, the person involved was a depot manager. The same argument applies also to the case of Tesco Supermarkets Ltd v. Nattrass [1972] 153 that was quoted to me. The magistrate was satisfied that the 1st appellant was one of three directors of the company. It is clear from the evidence that he had an intimate working knowledge of the details of the company and that he worked on company production. Against that, DW2 said that the 1st appellant was stationed on the mainland, that he did not know Cantonese and that his knowledge of the details of the company was incomplete and that he viewed the 1st appellant only as a partner. The magistrate placed little weight upon this evidence and was satisfied that the 1st appellant was a full director of the company and knowledgeable as to its business. Further, the magistrate had before her the document which is exhibited as P4 which reads as follows I LAU Yau Cheong, IC no.A904705(3), am director of Yau Yick Knitting Fty. Ltd. I hereby authorize another director Mr LEI PEI CHI, IC no.G277525(4), on behalf of the board of directors of this company to give information to officers of the Customs and Excise Department in respect of the matters about a Certificate of Hong Kong Origin, application receipt no.912262 dd 18 March 1997; and the delivery of 1996 sets of knit shape panels from Hong Kong to Mainland China on 27 February 1997 and the delivery of the ladies knitted garments assembled from 1996 sets of knit shape panels from China back to Hong Kong on 20 March 1997 without making application or submitting valid textiles export/import licence or export/import notification to the Trade Department of Hong Kong. This company will be liable for all the information given by Mr LEI Pei Chi in respect of the aforesaid matters. With regards, (chopped) Yau Yick Knitting Factory Limited (Signed) Lau Yau Cheong That authorization was from the second of the three directors of the 2nd appellant and was signed prior to the taking of the statement under caution by PW2 from the 1st appellant. Mr Acton Bond argues that on the face of the document, it purports to bind the board of the company but there is no evidence, he says, that any board meeting was held and no minutes were produced to the magistrate. In my view, the magistrate is not obliged to look beyond this document. She had before her the undisputed evidence that the 1st appellant was a director of the 2nd appellant company. She had before her the undisputed evidence that Lau Yau Cheong was a director of the 2nd appellant. She was satisfied on the evidence that the 1st appellant made a voluntary statement which included admissions in respect of the 2nd appellant. She had before her, in the shape of Exhibit P4, authority for him to do so. Clearly, the 1st appellant, by the nature of Exhibit P5, considered he had authority to make that statement and to speak to the activities of the company on the company s behalf. Equally clearly, Lau Cheong agreed that the 1st appellant was to speak on behalf of the company. Two out of three of the directors of the company, prior to the making of the statement, were therefore in agreement that the 1st appellant make that statement binding the company. That was more than an adequate amount of evidence for the magistrate to have before her to come to the decision that it was the intention of the company itself that the 1st appellant make the statement and that the company be bound by what he said in it. I am satisfied, therefore, that the magistrate was right in coming to the conclusion that the statement was admissible against the company. Having earlier found that she was entitled to rely upon the truth of the statement, she was therefore entitled to apply the contents to the case against the company in respect of each of the three summonses. I am further satisfied those contents satisfied the elements of the offences with which the 2nd appellant was charged. I am satisfied, therefore, that she was entitled to come to the conclusion she did, that the 2nd appellant was guilty of each of the three charges. The appeal against conviction is dismissed. In respect of the appeals against sentence, the learned magistrate said this about her reasons for sentence Clearly fines are the only appropriate way of dealing with these matters. In relation to the 2nd appellant s summonses, they all related to the same consignment of goods, but no credit could be given for a clear record or a plea of guilty. The goods were valued at HK$128,319.36. In accordance with the authorities I considered that a total of HK$60,000 was the appropriate fine, which I divided equally between the three summonses. I further ordered that they pay costs of HK$10,000. In relation to the 1st appellant I took into account his clear record, his earnings, and although no credit could be given for a plea of guilty, he was entitled to put the prosecution to proof. I therefore did not order that he pay any costs. In respect of the 1st appellant who was fined the sum of $7,000, although no starting point was given by the trial magistrate, I am satisfied in all the circumstances that a fine of this amount is an appropriate sum to be paid by him. His appeal against sentence is dismissed. In respect of the 2nd appellant, Mr Acton Bond argues that the guidelines in A.G. v. Marvels Clothing Co. Ltd [1987] HKLR 839 should not have been exceeded. In Marvels, Cons JA said We agree that as a general rule it is undesirable to assess fines upon a purely mathematical basis. Nevertheless, in the interest of uniformity there must be some basic guideline, which can then be adapted by the individual court to the individual circumstances. We would suggest as that guideline a figure of 40% of the value of the goods. We appreciate that this will result in substantial fines, but in our view these are substantial offences ... Mr Acton Bond argues that in passing a sentence of $20,000 in respect of each of the charges, the total fine is $60,000, whereas it ought, if the guidelines in Marvels had been followed, to have been the sum of $51,328. I must consider, therefore, whether the extra sum of $8,670 in excess of the sum quoted by Mr Acton Bond is wrong in principle and manifestly excessive. I consider that it is not. The guidelines are there as an indication to magistrates as to the sentence that they might pass. They are not a purely mathematical basis as was said in Marvels. Here, an attempt to obtain a certificate of origin for Hong Kong was made in respect of clothings sent for assembly in China. This strikes at the very heart of the certificate of origin integrity and I do not consider that the fine at the level imposed by the learned magistrate to be either manifestly excessive or wrong in principle. I am concerned, however, with the order as to costs. Having ordered the payment of costs by the 2nd appellant, no order for costs was made for the 1st appellant on the basis that he was entitled to put the prosecution to proof. The words used were In relation to the said 1st appellant, I took into account his clear record, his earnings and although no credit could be given for a plea of guilty, he was entitled to put the prosecution to proof. I therefore did not order that he pay any costs. (underlining mine) The clear inference to be drawn from the magistrate s decision not to award costs against the 1st appellant because he was entitled to put the prosecution to proof was that the 2nd appellant was not entitled to do so. It was of course entitled to put the prosecution to proof, and this unfortunate choice of words may give the impression to the 2nd appellant that it is being unfairly penalized. The appeal against sentence in respect of the 2nd appellant is allowed to the extent that the order of costs is quashed. (T.M. Gall) Judge of the Court of First Instance High Court Mr Cheung Wai Sun, DPGC, for HKSAR Mr Henry Ma, instructed by Messrs Siao, Wen & Leung, for the 1st Appellant Mr J. Acton Bond, instructed by Messrs Solomon C. Chong & Co., for the 2nd Appellant - PAGE - & 6" HCMA592/1999 ShiuHan SumNg Normal.dot Microsoft Word 8.0 HCMA592/1999 Title _PID_GUID Microsoft Word Document MSWordDoc Word.Document.8