THE QUEEN v. WONG HOI CHIANG

1988, No. 642

(Criminal)

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H E A D N O T E

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Sentence - false statement in application for export license - fine must be within appellant's ability to pay - Collapse of business - guidelines in Marvel not applied.

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

MAGISTRACY CRIMINAL APPEAL NO. 642 OF 1988

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J U D G M E N T

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1. The appellant pleaded guilty to two charges of making a false statement in an application for an export license, contrary to section 36(1)(a) of the Import and Export Ordinance, Cap. 60. He was fined $80,000 on each charge.

2. In August and September, 1986, the Department of Trade received from an exporter two applications for an export license in respect of a shipment of 10,086 shirts to W. Germany. In the manufacturer's declaration, in support of these applications, the appellant stated that the goods were manufactured in the factory of which he was the manager and that they were of Hong Kong origin. A subsequent investigation by the Customs and Excise Department revealed that the garments had been manufactured in China.

3. According to the admitted statement of facts, the f.o.b. value of the goods was $563,180 and the factory's profit was $20,000. The Hung Cheung Garment Factory was owned by the appellant's wife and was established in 1984 with a capital of $200,000. The appellant told the customs officer that the factory resorted to sub-contracting production of the shirts in China because it had a tight production schedule.

4. The appellant was unrepresented in the court below. He told the magistrate that he was unemployed and his mother was paralysed and asked for a lenient sentence. He had a clear record.

5. In his reasons for sentence the magistrate referred to the guidelines laid down in the Attorney General v Marvels Clothing Co. Ltd.⁽¹⁾ in which the Court of Appeal held that the proper sentence, as a general rule, should be a fine equal to 40% of the value of the goods. The magistrate went on to say:

"In fact the penalty imposed upon the defendant was something less than 30% of the value of the goods concerned. This degree of reduction was I felt justified given the defendants personal circumstances. Those circumstances did not however in my view justify my ignoring the Court of Appeal guidelines altogether. To bring the fine down to a figure which bore no relation to the value of the goods but which instead was based solely upon his own personal circumstances would, apart from anything els, have destroyed the element of consistency I had endeavoured to maintain and made further proceedings for similar offences quite impossible to conduct."

6. The appellant has been granted legal aid on appeal and it is now apparent that the magistrate was not made fully aware of the appellant's financial situation. This court has had-the advantage of reading a comprehensive probation officer's report. Counsel has also submitted several documents concerning the financial affairs of the appellant and his wife. Counsel for the respondent accepts that the report and the documents represent the true situation.

7. The appellant came to Hong Kong in 1962 and worked in various garment Factories, eventually becoming a tailor specialising in mass-produced ladies wear. In 1974 he married a seamstress and they had two sons now aged 13 and 14. They are a happy family. Later they set up their own production outlet in Lam Tin Estate. They must have done well because, in 1985, with some help from the wife's family, they established the Hung Cheung Garment Factory with $240,000 capital. The business was registered in the wife's name and the appellant was employed as manager at a salary of $3,500,

8. In 1986, at the time of these offences, the factory was suffering from a shortage of workers. In addition the appellant had to make frequent trips to China to see his sick mother, which made it difficult for him to supervise things properly. In the case of this contract he took the easy way out and had the garments made in China. The appellant says his net profit was only a little more than $10,000.

9. Business had been declining and, in January, 1987, the factory was forced to close down. The whole investment was lost. The firm was unable to meet its obligations to its workers in respect of severance and other pay. A bankruptcy order was made against Madam Wong on 19th August, 1987.

10. The appellant found work as a packer in a garment factory at $120 a day only in April this year. His wage sheet for July shows that he earned $2,112 that month.

11. His wife is earning $2,200 a month from part-time work in a garment factory, which has been confirmed by her employer. On their combined income the couple have just enough to live. They have no savings or other assets.The appellant considers he could pay a fine of $20,000 in two to three years.

12. Had all this information been before the magistrate, he obviously would not have imposed such a heavy fine. A fine is clearly the proper sentence. Either prison or a conditional discharge would be wrong in principle. The offence is a serious one, but the fine must be one that is within the appellant's ability to pay.

13. The exceptional circumstances of this case justify a substantial reduction of sentence. The fines are reduced to $5,000 on each charge and the appellant is allowed six months to pay. To this extent the appeal is allowed.

(1) Application for Review No. 7 of 1984