HKSAR v. LAM SHUEN SHUEN AND ANOTHER

HCMA 435/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 435 OF 2004

(ON APPEAL FROM TWCC 3031/2003)

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J U D G M E N T

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1. The Appellants were convicted in the Magistracy of charges relating to infringing copies of copyright works. The 1st Appellant (A1) was convicted of one charge of Offering to Sell Infringing Copies of Copyright Works, contrary to section 118(1)(e)(ii) and section 119(1) of the Copyright Ordinance, Cap. 528. This related to the sale of 1 music compact disc.

2. She was also convicted of Possession of Infringing Copies of Copyright Works, contrary to section 118(1)(d) and section 119(1) of the Copyright Ordinance, Cap. 528. (Charge 2). This related to 2 music compact discs and 1,885 video compact discs which were found to be infringing copies.

3. The 2nd Appellant (A2) was charged with one charge (Charge 3) of Possession of Infringing Copies of Copyright Works, contrary to section 118(1)(d) and section 119(1) of the Copyright Ordinance, Cap. 528. This related to 3 music compact discs and 1,885 video compact discs.

Background

4. Most of the evidence at trial was agreed and the Appellants admitted facts under section 65C of the Criminal Procedure Ordinance.

5. Customs and Excise officers conducted an anti-piracy operation and saw A1 sitting in front of a counter, at the entrance of a shop selling VCDs and compact discs in Kwai Chung Plaza. One of the officers effected to purchase two suspected infringing music compact discs and, on A1's advising the price of thirty dollars for them, she was arrested and cautioned. A search warrant was produced and the search revealed the infringing copies the subject of charges 2 and 3.

6. Soon afterwards, A2 arrived back at the shop, approached one of the officers and claimed that she was the proprietor of the shop. The officer declared his identity and arrested and cautioned A2. A2 handed over a key which was later tested and found to open the door of the shop.

7. Neither Appellant answered questions when interviewed. Subsequent examination of the compact discs and VCDs seized, confirmed the number of infringing copies set out in the charges. The total value of the seizure was $334,312.90.

8. After a trial, at which A1 gave evidence and A2 elected to remain silent, both Appellants were convicted and sentenced; A1 to a total of ten months' imprisonment on Charges 1 and 2 and A2 to ten months' imprisonment on Charge 3. The Magistrate had sought Probation and Community Service Reports for both Appellants prior to sentencing. They appealed against conviction and sentence.

Appeals Against Conviction

9. The Grounds of Appeal alleged the convictions were unsafe and unsatisfactory:

Ground 1

(1) because the Magistrate's reasoning process was seriously flawed as was his evaluation of the evidence. This related to his finding that there was no cash till, nor any invoice or receipting system operating in the shop. Further, he found that A1 had not received proper training as a shop assistant; he also found A1 knew her brother was going to China and that as a result, she must have known the discs on display were coming from China and were infringing copies, as infringing was rampant in China

(2) As the matters set out in (1) formed the core of the Magistrate's reasoning, his findings and his disbelief of A1's evidence were unsafe and unsatisfactory;

(3) If the Magistrate had wrongly reasoned his findings, he had also wrongly rejected A2's defence;

(4) The evidence showing A1's truthfulness was;

(a) the existence of a Business Registration Certificate and the shop's logo being printed on its bags;

(b) the small percentage of infringing copies in a shop full of merchandise;

(c) the apparent high quality of the merchandise;

(d) A1's low level of education;

(e) the fact that trained Customs Officers selected a disc for purchase which turned out not to be an infringing copy, highlighted the difficulties facing a poorly educated, temporary, stand-in worker such as A1;

(f) it was unlikely that A2, if genuinely the owner of a shop who knew of the infringing copies, would admit to being the proprietor.

Ground 2

That the Magistrate's various statements show he did not properly direct himself on the issue of possession in relation to A1 and A2. His Statement of Findings of 14 April 2004 (related to A1) refers to "possession i.e. both knowledge and control" as contrasted with his Statement of Findings of 22 April 2004, (related to A2) which refers to A1 being in "physical possession" thus indicating ex post facto reasoning.

Further, those later statements show he had not considered the issue or directed himself properly when giving his oral judgment on 4 March 2004.

Ground 3

The Magistrate wrongly admitted into evidence the witness statement of Casey Chant Kai Chue, (Exh P.15) when no certified English translation of the Chinese characters was available, this being a trial in English.

10. For those reasons, counsel submitted that the verdicts were unsafe and unsatisfactory. (Ground 4)

Ground 1

11. Counsel submitted on behalf of the Appellants that the Magistrate's flawed reasoning process in his evaluation of the evidence resulted in his applying standards which were unreasonably speculative, or unrealistic.

12. The main complaint was the Magistrate's finding that because there was no cash till, nor any invoice or receipting system operating in the shop, that A1 should have been put on notice it was not a legal operation.

13. The Magistrate was entitled to draw those inferences from the evidence of A1, because they were matters that went to the consideration of the statutory defence she put forward. Further, the Magistrate was entitled to infer that if A1 knew her brother was making regular trips to China it could be the likely source of discs displayed in the shop and possibly included infringing copies.

14. The Magistrate may have expressed this view rather clumsily and with a heavier emphasis than justified, but the effect of what he said was correct. A1's knowledge that her brother was making trips to China should have put her on notice that she should make enquiries about the status of the discs on sale. She did acknowledge her awareness of what she should do when she said, in giving evidence, that she had made enquiries of her brother as to whether he sold counterfeit discs [B41 para 12].

15. No specialist knowledge was required of A1 for her to believe that pirating was rife in China, or that Temple Street traders were known to deal in infringing copies. The Magistrate had the opportunity to assess A1's evidence and he rejected it as he was entitled to do.

16. At paragraph 1(4)(a-f) of his Grounds of Appeal counsel for A1 set out reasons why the Magistrate should have accepted that A1 was telling the truth in her evidence. The matters which, allegedly, supported the truthfulness of A1's evidence were the existence of a Business Registration Certificate; the shop's logo and address being printed on bags used for merchandise; the small percentage of infringing copies; the merchandise appearing to be of high quality; A1's low level of education which affected her ability to read characters; the decoy customer (PW1) selecting a disc for purchase which was not an infringing copy showing that, A1 would have had even less chance of identifying infringing copies.

17. Counsel also submitted there was no sense in a person, such as A2, making an admission that she was the proprietor of the shop in the circumstances in which, allegedly, she did. The reality was that A2 did make such an admission; that it formed part of the Admitted Facts [Exh P.13] and that the Magistrate rejected A1's evidence that A2 had attended the shop only to assist, at her brother's request, by bringing the key.

18. All those points were made before the Magistrate who considered them in his oral Reasons for verdict, and in his subsequent Statement of Findings. It was for him to decide having heard the evidence and submissions whether or not he accepted A1 was a truthful witness.

19. There is no justification for interfering with his findings. Ground 1 does not succeed.

Ground 2

20. This ground alleges that the Magistrate misdirected himself on the question of possession and in particular his oral reasons of 4 March 2004 and the written reasons given on the 14 and 22 April 2004, showed he did not direct himself properly on this issue. Counsel suggested that the differences indicated ex post facto reasoning by the Magistrate or, that the Magistrate had not considered, or properly directed himself on, the issue of A1's and A2's possession.

21. The transcript shows the Magistrate originally intended to give judgment some days after the trial, but at defence counsel's specific request gave a brief oral judgment on the afternoon of the day the trial concluded (4-3-04).

22. He stated expressly in giving his oral judgment that his reasons were brief and because of time constraints did not contain full details of all his findings. In particular, he did not set out all his findings on the law involved.

23. A reading of his Statements of Findings show the Magistrate understood the distinction between physical possession and possession coupled with knowledge of the possession. He directed himself correctly on these matters in respect of A1 and A2, recognising that for A2 constructive possession had to be established. This ground of appeal fails.

Ground 3

24. The statement of PW2, Mr Casey Chant Kai Chue, Exh 15, was admitted under s 65 C of the Criminal Procedure Ordinance, Cap 221. Mr Chant was able to give evidence about whether or not infringing copies had been made of his company's products. The Magistrate treated him as an expert on the design and packaging of products produced in China and Hong Kong by his company. His statement was in English, but counsel for the Appellants complained that as no certified translation of the Chinese characters denoting film titles set out in tables in the statement had been produced, the document was inadmissible.

25. The Appellants' counsel relied on R v Lam Kwing-kei [1987] 3 HKC 10, in which case it was stated per curiam that an uncertified translation or a document in a language other than English and unsupported by a certified translation should not be admitted in evidence whether produced by the prosecution or the defence. The court in Lam Kwing-kei, inveighed against the practice whereby the defence tendered documents which were not in English without a translation and did so without complaint from the prosecution.

26. Whilst it is correct that several tables of titles were contained in the statement, counsel for the Respondent pointed out that English counterparts for the Chinese titles were contained in the document and thus the need for translation did not arise. Further, 2 of the tables were repetitions in different forms of the table which had been translated.

27. Having considered the document and the purpose for which it was produced I find it was clearly admissible in its existing form. Even if the document was inadmissible, it is to be noted that the existence of copyright in relation to the infringing copies was never disputed at trial. This ground of appeal is not made out.

28. Having considered counsels' submissions, I am satisfied there are no grounds to justify interfering with the convictions of either Appellant. Accordingly, the appeals against conviction are dismissed.

Appeal Against Sentence - A1

29. A1 was sentenced to a total of 10 months imprisonment, for Charges 1 and 2, which was appealed as being manifestly excessive and/or wrong in principle. Particulars were given:

(1) the Magistrate wrongly took into account his belief that the Appellant lied to the court in her evidence;

(2) he should not have called for a Probation and/or Community Service report if there was no realistic prospect of giving effect to any positive recommendation;

(3) wrongly failed to follow the Probation Officer's recommendation that A1 be put on probation given her physical condition, family circumstances, previous good character and that she was only a temporary worker;

(4) wrongly failed to consider, or take into proper account, mitigating factors set out in (3) and that A1 admitted the majority of the prosecution case;

(5) failed to be properly aware of the facts of the case when sentencing, or created the suspicion that he was not properly prepared for sentencing;

(6) adopted manifestly excessive starting points for sentence.

30. In considering mitigation the Magistrate knew of and took into account A1's clear record and family circumstances; that she limped as an after-effect of polio in childhood; that she helped in the shop for $200-300 a day; that a very small proportion of the 40,000 discs in the shop were infringing copies; that the shop had not been set up specifically to sell counterfeit goods and that stress and delay had caused considerable distress to A1. (Ground 4 is not made out)

31. He took a starting point of 9 months imprisonment for Charge 1 and because of the greater number of discs, 12 months imprisonment on Charge 2. He gave 2 months' discount on each charge for stress and delay before trial and for A1's clear record. He ordered the sentences to run concurrently making a total of 10 months imprisonment.

32. The Magistrate in sentencing did not rely on his belief that the Appellant lied in giving evidence to justify a more severe sentence, but was explaining why he did not accept that she was a victim of ignorance. (Ground 1 is not made out) It was for the Magistrate to decide whether he required a Probation or Community Service report, and whether or not he followed any recommendation made. His Statement of Findings and the transcript show that he had warned the Appellants that he would not necessarily accept a Probation Officer's recommendation. (Grounds 3 and 4 are not made out)

33. There were few relevant mitigating factors which the Magistrate could take into account. Those were A1's clear record for which she was given a discount, that she was a temporary worker, and that the proportion of infringing discs was small in terms of the shop's total stock. There is no substance in Ground 5, which apparently refers to the Magistrate inadvertently referring to D1 as D2 and vice versa. [B83 N-S] Nor is there any support for counsel's impertinent submission that the Magistrate was not properly prepared for sentencing.

34. It is also difficult to say that the Magistrate adopted manifestly excessive starting points given the comments of the Court of Appeal, in S.J. in Choi Sai-lok & Anor [1999] 4 HKL 334. (Ground 6 fails)

35. Counsel referred to statistics, complied by Customs and Excise, which show the range of sentences imposed on s.118 offences in 2002 and 2003. Those relevant to the present charges are as follows:

2002

36. The sentencing ranges for 2003 showed increases for immediate custodial sentences and some suspended sentences, but the range for fines remained the same. The relevant figures are as follows:

2003

37. Those figures do not support defence counsel's submission that the starting points adopted by the Magistrate were excessive.

38. On Charge 1, under Section 118(1)(e)(2), the quantity was 1 disc only. The possession charge (Charge 2) referred to 2 music compact discs and 1885 video compact discs as infringing copies. On Charge 2 the starting point may have been marginally higher than the average.

39. Having considered the particular circumstances of A1, however, a greater distinction between her sentence, given her role as a casual employee and that imposed on A2, the owner, can be justified. After taking into account the range of sentences, the number of discs and the comparatively lowly role of A1, justice would be served if A1 was sentenced to such term on each of charges 1 and 2 as would allow her immediate release.

40. Accordingly I allow the appeal of A1 and order that her present sentences be substituted with a term of imprisonment of such length as would allow her immediate release.

Appeal Against Sentence A2

41. A2 was sentenced to ten months' imprisonment on Charge 3. She was charged with possession of infringing discs, being 3 music compact discs and 1,885 video compact discs.

42. The grounds of appeal against sentence was similar to those of A1, that the sentence of ten months' imprisonment was excessive and wrong in principle in that the Magistrate:

(1) Should not have called for a Probation or Community Service Order Report unless there was a realistic prospect of his acceding to any positive recommendation;

(2) failed to make a Community Service Order as recommended;

(3) failed to take into account the mitigatory matters in the report;

(4) failed to be aware of the facts of the case when sentencing, or at least created the suspicion that he was not prepared for sentencing;

(5) failed to consider that A2 had agreed most of the prosecution case and had not given evidence or lied in court

(6) failed to give the weight to the fact that A2 surrendered to the Customs and Excise officer. Overall the starting point of 14 months was excessive.

43. In relation to Grounds 1, 2 and 3 it suffices to say that it was for the Magistrate to decide whether he needed reports and it was for him to decide whether or not a CSO was appropriate. There is no support for counsel's contention that the Magistrate failed to take mitigatory matters into account, or that he was not prepared for sentencing.

44. The Magistrate in his Reasons for Sentence stated that he took a starting point of 14 months' because A2's position as owner was more serious, but gave her two months' discount for delay prior to the trial and her clear record. Later, of his own volition he reviewed the resulting sentence of 12 months and reduced it by a further two months, to take account of A2's admitting her role by surrendering. Ground 6 has no substance; clearly the Magistrate did acknowledge her surrender.

45. The Magistrate did not consider that a fine, Probation, Community Service Order, or a suspended sentence, were appropriate in view of the seriousness of the offence. A2 was in a different position from A1, her sister, because she claimed to be the owner of the shop and possessed a key, whereas A1 was a paid employee.

46. In setting A2's sentence, the Magistrate took all relevant facts into account and imposed a sentence which was, if anything, lenient and there are no grounds for interfering with it.

47. A2's appeal against sentence is dismissed.