HKSAR v. LEUNG YEE WUN

[English Translation – 英譯本]

HCMA 290/2020

[2022] HKCFI 1083

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 290 OF 2020

(ON APPEAL FROM WKCC NO. 88 OF 2020)

____________________

____________________

JUDGMENT

Introduction

1.  The appellant was D1 at trial, D2 was Kera Global Limited (“the Defendant Company”) and the latter was the owner of Kera Baby Outlet (the appellant’s employer).

2.  The appellant was charged with one count of ‘Selling goods to which a forged trade mark was applied’[1] (“Charge 1”) and one count of ‘Possession for sale or for any purpose of trade or manufacture goods to which a forged trade mark was applied’[2] (“Charge 2”).  The respective particulars of the two charges allege that the appellant:

Charge 1:    on 10 January 2019, in Room 1215, 12/F, Nan Fung Centre, Tsuen Wan, sold a garment to which the forged trademark “Champion” was applied.

Charge 2:    on the same day and same place, for sale or for any purpose of trade or manufacture possessed 374 pieces of merchandise to which forged trademarks including “Burberry” (1 in quantity), “Chanel” (1 in quantity), “Armani” (2 pairs), “Champion” (365 in quantity/pairs) and “UCC” (5 pairs) were applied.

3.  The Defendant Company faced two summonses[3], the basis of prosecution of which was the same as that of the appellant’s two charges.  The case was fixed for hearing before Deputy Magistrate Lydia Lau (“the Magistrate”).  On the day of the trial[4], the appellant pleaded not guilty to the charges whereas the Defendant Company pleaded guilty, therefore the trial was only concerned with the appellant. The Magistrate found the appellant guilty on 29 September 2020 and sentenced her to the following:

Charge 1:    imprisonment of 7 days suspended for 2 years;

Charge 2:    imprisonment of 3 months suspended for 2 years, to run concurrently.

4.  The appellant appealed against the convictions as well as the sentences in relation to the above charges. Because of the pandemic the court directed on 4 March 2022 that the hearing on 29 March would be vacated and this appeal dealt with on paper instead.

Facts

Admitted facts

5.  Most part of the prosecution case was agreed by way of Admitted Facts (P23).  According to P23:

(1)  On the day of the offence, the Customs conducted a test purchase at a retail shop of Kera Baby Outlet on 12/F, Nan Fung Centre, Tsuen Wan.  PW1, a Customs officer, who took a children’s garment with the trade mark “Champion” printed on it (P1) off the display rack, was received by the appellant.  PW1 purchased P1 at HK$109 using marked banknotes of HK$200 (P2) for payment, and then received change of HK$91 (P3) and a receipt (P4) from the appellant.

(2)  Immediately afterwards PW1 revealed his identity to the appellant and arrested her.  Under caution the reply given by the appellant was recorded in PW1’s notebook (P22), and its voluntariness and accuracy were not in dispute.

(3)  On the same day PW2 conducted a search in the shop and seized exhibits P2-P21. After an examination of the exhibits by the authorized examiners of the various trade mark owners, it was confirmed that forged trademarks were applied to P1, P5, P6a, P7a, P8, P9, P10, P11a, P12a, P13a, P14, P15 and P17, which totalled 375 pieces of goods, and they were counterfeit goods (the goods set out in Charge 1 and Charge 2), whereas P6b, P7b, P11b, P12b and P13b (all printed with the “Champion” trade mark) were genuine.

(4)  The appellant did not have any criminal record in Hong Kong.

The prosecution case

6.  In his testimony, PW1 said that when he purchased P1, he asked the appellant about the price, and also that if the size did not fit whether an exchange was possible. The appellant was able to answer PW1’s enquiries without looking up any records or hesitating.  There was no challenge from the defence on PW1’s testimony[5].

7.  PW2 said that he found upon search shipping documents (P19), a notebook (P20) and rental documents (P21) inside the shop.  He said that the shop in question (including the display area and the storeroom) had an area of about 600 square feet in total. He was unable to recall the exact number of pieces of goods in the shop. Under cross-examination, he agreed that the number of pieces of goods in the shop was in thousands, even up to ten thousand[6].

8.  According to P22, the appellant said under caution that she was only responsible for collecting money and tidying up the goods.  She only knew that the boss’s surname was Cheung but not the full name.  The goods in the shop all belonged to the boss, and the boss was responsible for the sourcing and pricing, which the appellant knew nothing about.  The goods would be delivered to the shop by Shun Feng, and she would not know when the goods would arrive. After the goods arrived, she would tidy them up for shelving or putting them in the storeroom.  Her monthly salary was about $13,000. As for the goods in the shop which were in question, she did not know whether the shop was authorized by “Champion” for the sale of them[7].

The defence case

9.  The appellant elected to testify but did not call any witnesses in defence.  The appellant said that she came to know Cheung Kei-sam (“Mrs Ng”), the boss of the shop, through a good friend of hers, and that good friend was Mrs Ng’s brother-in-law [the younger brother of Mrs Ng’s husband]. The appellant attended a job interview on 5 May 2018, and was employed as a salesperson on the same day. Her daily duties included shop floor operation, handling online orders, shop cleaning, goods counting, racking new arrivals, etc.  She alone was responsible for the daily operation of the shop[8].

10.  The appellant said that Mrs Ng was responsible for the ordering and pricing of the goods. Regarding the authenticity of the goods, she offered a series of reasons to explain and support her view, and they included: brand name tags were attached to the goods in question, there was good response from the customers, the materials used were comfortable, etc.  She said she had enquired the boss about the authenticity of the goods, and the boss said that the goods were genuine, and she even took out her cell phone to search the websites of the brand names in question, and the websites showed merchandise of the same styles.  The boss also gave away the goods for sale in the shop to the appellant, and it was a “Northface” down jacket.  The appellant saw the same jacket put up for sale in a specialty store, therefore she did not suspect that the goods for sale within the shop were counterfeits[9].

The magistrate’s reasons for conviction

11.  At trial the counsel (“the trial counsel”[10]) for the appellant did not dispute that the appellant had sold and possessed goods to which counterfeit trade marks were applied.  Moreover, she confirmed with the Magistrate that the defence would only rely on the defence in section 26AAB and not the defence in section 26 of the Trade Description Ordinance (“the Ordinance”)[11]. In other words, the crux of the present case lay in whether there was sufficient evidence before the Magistrate to raise the issue that the appellant had no knowledge, no reason to suspect, and that even if due diligence had been performed she was still unable to be certain that the goods in question were counterfeits[12]. On that, the Magistrate reminded herself that the defence only had an evidential burden, whereas the persuasive burden all along fell with the prosecution[13]: Lee To Nei v HKSAR[14].

12.  Because of the fact that the appellant had no criminal record and a good family background, she was less prone to commit crimes and was more credible.  Moreover, if the court was to come to any adverse inference against the appellant, it has to be certain that the inferences were the only reasonable ones in accordance with the evidence acceptable by the court[15].

13.  After an analysis of the appellant’s testimony, the Magistrate found her not an honest and reliable witness, and rejected her testimony.  Because the content of P22 was no different from what the appellant said in court, the Magistrate did not attach any weight to it[16]. Based on the existing evidence which was accepted, the Magistrate took the view it was insufficient to bring out that the appellant did not know, had no reason to suspect, and that even after due diligence she was still unable to be certain the goods in question were counterfeits[17].  Moreover, even according to the appellant’s own contention, actually one month or so after she had been employed, it was exactly because there was an increasing number of brands for sale, she was of the view that she needed to know whether the goods for sale were genuine and therefore she needed to enquire with the boss. The Magistrate took the view that this rightly showed that the appellant was already suspicious about the authenticity of the goods, and was unable to rely on the defence in section 26AAB of the Ordinance at all[18].

14.  Based on the above, the Magistrate found that the prosecution proved beyond reasonable doubt that the appellant sold goods to which forged trade marks were applied, and possessed goods to which forged trade marks were applied for the purpose of sale or for any purpose of trade or manufacture, and convicted the appellant of both charges[19].

Grounds of appeal

15.  Mr Yim (and Mr Wong), counsel representing the appellant, put forward the following grounds of appeal against the convictions:

(1)  [applicable to Charge 2 only] in the lack of direct evidence on the “possession” of the 374 counterfeit items involved in Charge 2, the conviction was unsafe and/or unsatisfactory; and

(2)  [applicable to Charges 1 and 2] the appellant’s legal team was “flagrantly incompetent” during trial, because they were unaware of the substantial or potential conflict of interests between the appellant and the Defendant Company, causing the appellant to suffer substantial and grave injustice.

In respect of ground (2), according to HKSAR v Apelete (No 1)[20], the appellant filed two affirmations at different times[21], attached a “Limited Waiver of Legal Professional Privilege” signed by her[22], issued a letter of enquiry to her trial counsel and solicitor through her present legal team and received a reply[23].

16.  The appellant’s appeal against sentence concerns Charge 1 only. Mr Yim submitted that if the 374 counterfeit items relating to Charge 2 were not taken into account, based on the background of the entire incident, coupled with the fact that the appellant was only an employee, a relatively huge fine would already be a suitable punishment: HKSAR v Fong Tat Wing (方達榮)[24] and HKSAR v Man Hoi Kee (transliteration）（文海基）[25].

The related legal principles on appeal

17.  A magistracy appeal is conducted by way of a ‘rehearing’, in accordance with the testimonies and evidence before the magistrate: Chou Shih Bin v HKSAR[26]. In HKSAR v Ip Chin Kei[27], McWalters J (as he then was) summarized certain legal principles on handling magistracy appeals, including:

(1)  The appellate court would only depart from a magistrate’s finding of fact or determination of a witness’s credibility if satisfied that it was plainly wrong;

(2)  The test in determining whether an error by the magistrate should lead to the appeal being allowed and the conviction quashed was whether it was just for such an order to be made;

(3)  Absent the appellate court identifying any error by the magistrate, the court must still perform its statutory duty of conducting a “rehearing”.  This required the court to examine the evidence whether it could prove the guilt of the appellant beyond reasonable doubt, failing which the appeal must be allowed.

18.  Regarding (1) above, the appellate court must take into account the fact that the trial magistrate was able to hear and observe the witnesses testifying, an advantage that the appellate court does not enjoy: Raymond Chen v HKSAR[28].  Generally speaking, whether a certain witness is credible and reliable comes under the remit of the magistrate’s ruling.  Just as Barnes J pointed out in HKSAR v Chan Wai Yip Albert（陳偉業）[29], if the facts found by a trial magistrate are unreasonable, illogical, inherently improbable, or that the trial magistrate has made erroneous quotes, omitted or given no consideration and analysis on important matters when handling the evidence, the conviction will be unsafe.

19.  In R v Kwong Wing On[30], Stock J (as he then was) pointed out that if a transcript of testimonies is dissected microscopically, matters that are unreasonable, unanswered, not mentioned in the witness statements or other bits and pieces which can be pieced together to form a ground of appeal are bound to appear. The same applies even to witnesses who testify honestly.  Therefore, the appellate court does not require magistrates to deal with the various details raised by the defence one by one. The court will also encourage magistrates to deal with criticisms against the testimony of a witness with a realistic attitude[31].

Discussion

Elements of the charges and exemptions

20.  Before this Court deals with the appellant’s grounds of appeal, it is necessary to discuss the elements of her charges and the related provisions of exemption.

21.  Section 9(2) of the Ordinance provides that:

“Subject to the provisions of this Ordinance, any person who sells or exposes or has in his possession for sale or for any purpose of trade or manufacture, any goods to which any forged trade mark is applied, or to which any trade mark or mark so nearly resembling a trade mark as to be calculated to deceive is falsely applied, commits an offence.”

Regarding Charge 1, according to the Admitted Facts (P23), which was signed by the prosecution and the defence and to which the appellant herself expressed agreement personally before the Magistrate[32], she actually “sold” P1 to PW1, and P1 was a piece of goods to which a forged trade mark, namely ‘Champion’, was applied.  Hence, the dispute on this charge only lies with whether the appellant’s case came within a situation to which the Ordinance made other provisions.

22.  Regarding Charge 2, it was also part of the Admitted Facts that all the 374 pieces of goods set out in the particulars of offence had forged trade marks applied to them, and those goods were “for the purpose of sale”, which was again not in dispute and there was no doubt about it.  Therefore, the dispute only lies with: (a) whether the appellant “possessed” those goods; (b) if yes, whether the appellant’s case came within a situation to which the Ordinance made other provisions.  When dealing with ground of appeal (1) I will discuss in detail what it means to “possess”, but to “possess” is different from to “own”, and the “possessor” is not necessarily the owner at the same time.  What is more is that there can be more than one “possessor” to the same item.  Therefore, if the prosecution was able to prove that the appellant did actually “possess” the goods set out in the charge, then even if she did not own those goods and was not the one responsible for ordering those goods for the shop, that did not necessarily mean that she was not guilty.  This is obvious.

23.  The exemption in section 26 of the Ordinance is as follows:

“26. Defence mistake, accident, etc.

(1) In any proceedings for an offence under this Ordinance, the person charged is, subject to subsection (2), entitled to be acquitted if-

(a) sufficient evidence is adduced to raise an issue that-

(i) the commission of the offence was due to-

(A) a mistake;

(B) reliance on information supplied to the person charged by another person;

(C) the act or default of another person;

(D) an accident; or

(E) some other cause beyond the control of the person charged; and

(ii) the person charged took all reasonable precautions and exercised all due diligence to avoid the commission of the offence by-

(A) the person charged; or

(B) any person under the control of the person charged; and

(b) the contrary is not proved by the prosecution beyond reasonable doubt. (Replaced 18 of 2014 s. 53)

(2) If in any case the issue raised under subsection (1)(a) involves the allegation that the commission of the offence was due to the act or default of another person or to reliance on information supplied by another person, the person charged shall not, without leave of the court, be entitled to rely on that issue unless, within a period ending 7 clear days before the hearing, the person charged has served on the prosecutor a notice in writing giving such information identifying or assisting in the identification of that other person as was then in the possession of the person charged. (Amended 18 of 2014 s. 53)”

(emphasis added)

Because of the two “ands” above, it is obvious that the three conditions in (a)(i), (ii) and (b) above must all be satisfied with none omitted before the accused is “entitled to be acquitted”.

24.  There used to be subsections (3) and (4) under section 26 of the Ordinance apart from subsections (1) and (2). The original section 26(3) is unrelated to the present case, and the original section 26(4) is as follows:

“In any proceedings for an offence under section 9(2) it shall be a defence for the person charged to prove that he did not know, had no reason to suspect and could not with reasonable diligence have ascertained, that a forged trade mark had been applied to the goods or that a trade mark or mark so nearly resembling a trade mark as to be calculated to deceive had falsely been applied to the goods.”

(emphasis added)

But the above provision was repealed under section 53 of Ordinance No.18 of 2014[33]. Regarding the legislative intent of the amendment in question, there is the following description in the paper of the Legislative Council House Committee meeting[34]:

“Amendments to the Trade Descriptions Ordinance (Cap. 362) (TDO)

13. Section 26(4) of the TDO provides that in any proceedings for an offence under section 9(2), it shall be a defence for the person charged to prove that he did not know, had no reason to suspect and could not with reasonable diligence have ascertained, that a forged trade mark had been applied to the goods or that a trade mark or mark so nearly resembling a trade mark as to be calculated to deceive had falsely been applied to the goods. In Lee To Nei v HKSAR (FACC 5/2011) and Lau Hok Tung and Others v HKSAR (FACC 7/2011), the CFA declared that section 26(4) of the TDO must be read down as imposing merely an evidential burden on the accused, with the persuasive burden remaining throughout on the prosecution. Part 8 of the Bill seeks to amend section 26(4), together with similar defence provisions in the TDO, to make it clear that these provisions impose only an evidential burden on the accused.”

25.  On 30 April 2014, the then Secretary for Justice made the following statement on the related amendment at the first reading of the Statute Law (Miscellaneous Provisions) Bill 2014[35]:

“Part 8 of the Bill seeks to amend certain defence provisions in the Trade Descriptions Ordinance (TDO) to reflect the Court of Final Appeal's rulings in the case of LEE To Nei. The amendments make it clear that only an evidential burden (but not a persuasive burden) is imposed on the person charged who wishes to rely on the grounds set out in the relevant defence provisions (that is, sections 12(2A)(a), 26(1), 26AA and 26AAB) in any proceedings for the offence concerned under the TDO.”

26.  When construing legal provisions, the court has to have regard to the wording of the provision and the related legislative intent; this is a well-established legal principle: HKSAR v Cheung Kwun Yin[36]. Since the legislative intent of the related amendment of the Ordinance in 2014 was for the provisions after the amendment to conform to the Court of Final Appeal’s decision in Lee To Nei v HKSAR, that case is obviously pertinent to the construction of section 26 (as amended) and section 26AAB (as added). According to the judgment of that case, the appellant only had an “evidential burden” under section 26(a)(i) and (ii).  If the evidence in the case is able to raise the contention under (a)(i) and (ii), the prosecution will have to establish “the contrary beyond reasonable doubt”, otherwise (b) will also substantiate: see HKSAR v Telephone Est (HK) Co Ltd [37]. In other words, the ‘persuasive burden’ lies with the prosecution all along.  If the accused is to be prevented from relying on the defence under section 26, the prosecution will have to satisfy the court one of the following:

(1)  the accused’s commission of the offence in question was not due to the grounds set out in 26 (a)(i); or

(2)  the accused did not take “all reasonable precautions” or did not exercise “all due diligence” to prevent himself (or any person under his control) to commit the offence in question.

27.  However, the “evidential burden” mentioned above of the accused should not be seen as an illusory duty, because if the contention of (a)(i) and (ii) is to be raised, the related evidence (which could come from the prosecution or the defence) has to be “sufficient”. Moreover, if the accused did not “take all reasonable precautions and exercise all due diligence” at all, naturally he would not be able to satisfy the requirements in (a)(ii): see Lambert[38] and Henvey v HM Advocate[39].  As to what constitutes “reasonable precautions” and “due diligence”, these are objective standards, which are dependent on the facts of the individual case.  Regarding this point, Stock J (as he then was) said in HKSAR (sic) v Multiex (Exports) Ltd[40]:

‘Reasonable diligence does not mean it has to be perfect, nor “is it to do everything possible, but to do what can be reasonably required to be done under usual circumstances, taking into account expenses and difficulty.”’ (unofficial translation)[41]

28.  Regarding section 26(2), it is a procedural rule for the purpose of fairness to the prosecution, so that they have time to investigate the information furnished by the defence.  If the accused does not serve the notice on the prosecution in accordance with the procedural rules set out in section 26(2), the court can still deal with it by exercising discretion.

29.  The provision of the newly added section 26AAB, which was mentioned above, is as follows:

“26AAB. Additional defence (sale of goods to which forged trade mark is applied etc.)

Without limiting section 26, in any proceedings for an offence under section 9(2), the person charged is entitled to be acquitted

if—

(a) sufficient evidence is adduced to raise an issue that the person charged—

(i) did not know;

(ii) had no reason to suspect; and

(iii) could not with reasonable diligence have ascertained,

that a forged trade mark had been applied to the goods, or that a trade mark or mark so nearly resembling a trade mark as to be calculated to deceive had falsely been applied to the goods; and

(b) the contrary is not proved by the prosecution beyond reasonable doubt.”

(emphasis added)

30.  The previous version of section 26(4) highly resembles the provision above, and the main difference between the two is that in the latter the “persuasive duty” falls on the prosecution.  If the accused is to rely on section 26AAB, “sufficient evidence” has to be adduced in the case to raise the contentions in (a)(i), (ii) and (iii).  For the prosecution, on the other hand, if (b) has to be satisfied, the minimum standard of proof is to satisfy the court that if the accused has taken certain steps which constitute “reasonable diligence”, he is supposed to be able to ascertain that the trade mark in question is a forgery.  This is an objective standard, and does not involve an examination on whether he actually knew or believed that to be the case: see Lee To Nei v HKSAR (above)[42].  In HKSAR v Tsang Siu Pou[43], I pointed out the main distinction between section 26 and section 26AAB in the Ordinance:

•  In the former, the crux is whether there is sufficient evidence for the person charged to raise an issue – that is, he “took all reasonable precautions and exercised all due diligence”.  If he has in fact not done that, naturally he cannot rely on that section.

•  In the latter, what an accused has actually done is not crucial; even if he has done nothing, he may escape liability.  The essence of the matter is, where the exercise of reasonable diligence would not have resulted in the discovery of the contravention concerned, and other conditions set out in the section exist, the person charged may be absolved of the liability under section 9(2): HKSAR v Diao Rui[44] and HKSAR v Kong Hing Agency Ltd[45].

31.  With the above legal principles as the background, I will now turn to discuss the grounds of appeal the appellant has put forward.

Ground of appeal (2): the trial legal team was “flagrantly incompetent”

32.  Because this ground involves Charges 1 and 2 at the same time, for the sake of convenience, I shall deal with it first.

Related legal principles

33.  The Court of Final Appeal has expounded in Chong Ching Yuen v. HKSAR[46] the related legal principles where the accused based his ground of appeal on his lawyer’s incompetence.  I will simply quote from the headnote of the reported judgment, and they are as follows:

(1)  As a general rule, an accused person was bound by the way the trial was conducted by counsel, regardless of whether that was in accordance with the wishes of the client, and it was not a ground for setting aside a conviction that decisions made by counsel were made without, or contrary to, instructions, or involved errors of judgment or even negligence.

(2)  The crucial question was whether the appellant had a fair trial (the “fair trial” criterion) and not how severely defence counsel deserved to be criticised. It was unlikely that anything short of a very high degree of defence incompetence would ever reduce or contribute to reducing a trial to something less than a fair trial.

(3)  There was a direct correlation between the fairness of a trial and the viability of a conviction. No appellate court would lightly declare a trial unfair. But where it so concluded, that left little, if any, room for saying that the conviction was just.

(4)  Appellate courts would approach these situations with a sense of realism, and not in such a way as would put a premium on briefing incompetent defence counsel at trial and then criticising them on appeal.

(5)  The expression “flagrant incompetence” rightly underlined an appellant’s need to show much more than a mistake, an error of judgment, or a decision to follow one course when in hindsight another would have been preferable. But it should not deflect attention from the most critical point, namely to succeed, an appellant must be able to show that he received less than a fair trial.

34.  In Chan Fat Chu Raymond v HKSAR[47], the Court of Final Appeal reiterated certain principles, including the following: (1) One of the most important aspects of the rule of law was that a defendant should have the benefit of competent counsel when seeking to defend himself against criminal charges of any substance. If the appellate court considered that the defendant had not or might not have had a fair trial, as a consequence of having incompetent counsel, the failure must be corrected by setting aside a conviction or acquitting the defendant. It was not enough to show that the lawyer had fallen below the required standard. It must also be shown that this had resulted in unfairness or injustice; (2) In investigating such allegations, the court must also make allowance for the problems that could arise in trying to balance the continuing obligation which they owed to their clients with their obligation to the court, remembering that it was ultimately for the appellant to substantiate his or her grounds of appeal.

35.  In HKSAR v Li Xiaoxiang[48], in view of the trend of misconceived and inappropriate charges of flagrant incompetence levelled at trial counsel, the Court of Final Appeal stressed that counsel had a wide discretion in the conduct of criminal (and civil) litigation, but for which the machinery of timely advice and efficient but fair litigation would be undermined. A tactical decision which, in hindsight, ought to have been made differently, or other mere errors of judgment would not provide any ground for appeal. Nevertheless, in exceptional circumstances, an error of sufficient proportion and consequence would amount to “flagrant incompetence” and enable a court to intervene and avert a miscarriage of justice, and unless there was a palpably sound basis to do so, it was incumbent on appellate counsel never to advance allegations questioning counsel’s competence and integrity.

36.  In HKSAR v Lo Pui Yi Cat[49], the Court of Appeal indicated that if the appellant and the co-defendant are jointly represented by the same legal team so that there is, or might be, a “conflict of interest”, the legal representative must promptly advise the client to seek separate representation, which is a continuous duty in the whole legal process.  The crux of the problem lies with whether there is, or may be a real risk of “conflict of interest”, inhibiting counsel in the discharge of his duties on behalf of some or all the defendants.  In a practical world, however, wholly theoretical or fanciful risks can be disregarded.

Complaint against trial legal team

37.  Mr Yim stressed the point that the trial legal team did not deal with the “conflict of interest” between the appellant and the Defendant Company sufficiently and in a timely manner, causing the appellant not to have received advice for the adoption of certain legal and factual bases unfavourable to the Defendant Company/Mr Ng/Mrs Ng, with the consequence that she was unable to have a fair trial.  As mentioned above, Mrs Ng was the appellant’s boss, and Mr Kelvin Ng was the Director of the Defendant Company. The evidential basis of the above submission came from a Whatsapp screenshot[50] forwarded to the appellant by Mr Ng, and the original recipient was a law clerk of the trial solicitors’ [firm].  According to the Whatsapp screenshot, as early as on 6 August 2020, Mr Ng had already made it clear that the appellant was only an employee, whose main duties were to handle the shop’s day-to-day sales, receipt of goods, tidying up of goods, cleaning and dispatching goods for online orders.  Regarding the procurement of goods, it was always his and Mrs Ng’s responsibility, and the appellant never took part in it.  As for the suppliers of the goods, it was Mr Ng and Mrs Ng who picked the goods from, communicated with, procured from and made payments to them through certain garment wholesale groups on WeChat.  The goods for which the Customs charged them mainly related to the 300 plus garments of the brand “Champion”, and it was negligence on the part of their Company, in that they procured the batch of goods for sale without checking and confirming their authenticity.  Therefore, it was a genuine plea of guilty from the Company.  As for the appellant, she was “innocent”; she never took part in the work on procurement, whatever goods the Company had ordered, Mr and Mrs Ng would inform her of the retail price, and she would hang the goods on the racks for sale.  Hence, the Defendant Company was willing to take full responsibility and urged the court to find the appellant not guilty.

38.  According to the Confirmation of Testifying in Court and Calling Defence Witnesses[51], which the appellant has now submitted to court, she had given her trial legal team the following written instructions:

“I, Leung Yee Wun, have listened to my counsel’s explanation, advice and the pros and cons of testifying in court. After careful consideration, I have decided to testify / not to testify in court and to call / not to call witnesses in my defence in the case of WKCC 88/2020. I understand that I have the right to decide whether to testify in court and call witnesses.”

39.  Based on the above, Mr. Yim submitted that the trial legal team’s fees were actually paid for by the Defendant Company; therefore, the trial legal team might have been affected by the above conflict of interest and decided not to call Mr Ng and Mrs Ng as defence witnesses, which involved “flagrant incompetence”, details of which are as follows:

(a)  Mr Ng and Mrs Ng were not called, and the Whatsapp message screenshots were not produced;

(b)  The defences in section 26 of the Ordinance were not relied on;

(c)  Failure to dispute “possession” in Charge 2; and

(d)  Failure to take into account the Magistrate’s concern over the potential “conflict of interest”, and failure to consider the additional mitigating factor of providing assistance to the prosecution.

On the allegation in (a)

40.  On the issue of the appellant and the Defendant Company hiring the same legal team, causing her not having independent legal advice, the trial solicitors gave the following explanation[52] in their reply to the appellant’s lawyer:

“Refusal of independent legal advice

In relation to the matter of independent legal advice, Kera Global Limited instructed that it would plead guilty to the summonses and it pleaded guilty at the first day of trial. The instructions from Kera Global Limited and from your client were consistent with one another throughout the course of the captioned case. You will be aware that the ‘without-prejudice’ negotiations with the Department of Justice (‘DoJ’) in relation to the plea of Kera Global Limited and requesting the DOJ to dispose of this matter by withdrawing the charges against your client and subsequently by disposing of the case by way of Offering No Evidence Bind-Over. Your client had also explained her position in full at trial. However, the Deputy Magistrate did not believe your client’s evidence at trial. We are of the view that there was no actual or potential conflict of interest during the course of the captioned case.

Despite the foregoing, we verbally advised your client of her fight to seek independent legal advice on 8^th June 2020[53].  Your client signed the written confirmation prepared by Ms. Lo to which she confirmed that she did not require independent legal advice in the captioned case on 7^th September 2020.”

(emphasis added)

41.  The trial counsel gave the following explanation in her reply to the appellant’s lawyer[54]:

‘First Conference (14 August 2020)

…

6. In respect of Mr. Ng’s note, I explained that there was nothing stated therein which showed that what Mr. Ng and Mrs. Ng had done would exonerate Madam Leung of her liability under the law, and to make the situation worse there were admissions which would likely incriminate three parties namely, Mr. Ng, Mrs. Ng and the company (Kera Global Limited), however in the prosecution material there were no written documents or testimonies to support a criminal prosecution against Mr. Ng and Mrs. Ng.  Mr. Ng said both he and his wife could not and would not act as defence witnesses for Madam Leung, Madam Leung acquiesced.  From the prosecution papers provided to me which clearly showed that Mr. Ng and Mrs. Ng had exercised their right of silence during the interviews with the Customs & Excise Department, and therefore only the company was being prosecuted. Mr. Ng on behalf of the company said the company would plead guilty to the summonses.

…

Second Conference (20 August 2020)

…

10. In the 2^nd conference, Madam Leung invited Mr. Ng to elaborate what he knew about the source of the goods to be sold in the shop in addition to his note.  Mr. Ng only repeated what was written in his note and could not offer any other constructive information/material that would assist in Madam Leung’s defence, eventually they confirmed that neither Mr. Ng nor Mrs. Ng would be called as defence witness.  Finally Madam Leung instructed that she would give evidence in the trial, if there was a case to answer, and there would be no defence witnesses.

11. I also went through all contents of the conference note with Madam Leung.  …She agreed to the contents of the conference note without the need for addition, deletion or alteration. Madam Leung signed the conference note as her proof of evidence.

Trial hearing (25 August 2020)

…

13. After the Learned Magistrate ruled there was a case to answer, I took time to explain to Madam Leung her rights, to which she understood and she elected to give evidence.  She also said she would not call any witness.  I told [XX][55] to ask Madam Leung to sign to confirm her instructions.  then duly informed the Learned Magistrate of the same, i.e. Madam Leung would give evidence and there would be no defence witness.

…’

42.  With respect to the trial solicitor’s notes of meeting on 8 June 2020 (referred to above), which state that the appellant was informed of her right to obtain independent legal advice, she did not deny the correctness of the contents.  With respect to what the trial counsel said, that the appellant first acquiesced, and later on even made it clear again that she agreed not to call Mr Ng and Mrs Ng to testify on her behalf, there is in fact a discrepancy between the appellant’s affirmation and the trial legal team.  As to the three words ‘not to call’ on the Confirmation of Testifying in Court and Calling Defence Witnesses of the appellant, the trial solicitor explained that it was actually a clerical mistake[56].  What is worthy of note is that in relation to this document, the appellant did not allege the trial legal team of going against the clear instructions she had given, she only blamed them for “not advising me to call Mr Ng and Mrs Ng to appear in court”[57].

43.  Based on the overall weight of the related evidence before me, I accept the account and explanation of the trial legal team as fact, and take the view that the appellant’s not calling Mr Ng or Mrs Ng to testify in her defence was not an uninformed decision.  No matter what, I take the view that the more important factors for consideration are: (i) whether there was or might actually be the risk of “conflict of interest” between the appellant and the Defendant Company/Mr Ng/Mrs Ng; and (ii) whether the trial counsel’s assessment of Mr Ng’s and Mrs Ng’s testimonies, i.e., their testimonies were not helpful to the appellant’s defence, was correct.  It was because if the answers to both (i) and (ii) were in the negative, according to Chong Ching Yuen v HKSAR, even though the trial counsel went against the appellant’s wishes in the matter of not calling Mr Ng/Mrs Ng, the appellant would still be bound by the trial counsel’s decision.  Moreover, no unfairness would be caused by not calling Mr Ng/Mrs Ng to testify, nor would it affect the appellant’s convictions.

44.  In relation to (i), I agree with the submission by Ms Lai,Public Prosecutor for the respondent, that there was no real risk of “conflict of interest” between the appellant and the Defendant Company/Mr Ng/Mrs Ng.  The reason was that at the conference on 14 August 2020, the Defendant Company confirmed with the trial counsel that it would plead guilty, and the trial of the present case would be against the appellant only.  Therefore, the present case was not one in which different defendants advanced cut-throat arguments in defence.  Moreover, Mr and Mrs Ng had been maintaining that the appellant was only an employee, and she was not related to the procurement of the goods and was “innocent”, hence the position of the Defendant Company/Mr Ng/Mrs Ng and that of the appellant’s were no different.  The instruction the appellant gave to the trial legal team was not in contradiction to that from Mr Ng/Mrs Ng: see HKSAR v Lo Pui Yi Cat, as mentioned above[58]:

“80. Even assuming that the prosecution would have been able, by trial, to establish the marital link between the two, we do not see that there was any conflict of interest between their respective cases. Both D1 and the appellant had the same defence, a bare denial of guilt. Both had the same trial strategy, namely to put the prosecution to strict proof and neither had a positive defence case. We agree with the respondent that the mere fact that neither D1 nor the appellant implicated a third party does not mean that they were necessarily implicating each other. The two were, in terms of their trial defences, perfectly aligned. In the present case there was no conflict of interest between the two sets of instructions.”

(emphasis added)

45.  Regarding (ii), I will for the time being leave aside the issue of whether the appellant possessed the goods in question and deal with it later.  To start with, in relation to the instruction that Mr Ng (as the representative of the Company) and/or Mrs Ng gave to the trial legal team, it was that the appellant was only responsible for collecting money and tidying up goods and was not responsible for the procurement of the goods.  The prosecution did not dispute that, nor did the Magistrate take as the basis of the convictions that she had a part in ordering the goods.  As mentioned above, the Magistrate took the view that even if it was based on the contention put forward by the appellant herself, in fact after she had been employed for more than one month, indeed because there was an increasing number of brand names offered for sale, she was of the view that she needed to know whether the goods she was selling were genuine, therefore she made enquiries with the boss.  The Magistrate took the view that this exactly showed that the appellant was suspicious of the authenticity of the goods, therefore the defence in section 26AAB just could not be relied on.  Whether Mr and Mrs Ng testified bore no relation to this basis for conviction on the part of the Magistrate.

46.  Secondly, although the Defendant Company/Mr Ng/Mrs Ng maintained that the appellant was “innocent”, as the Magistrate had pointed out, the crux of the present case was whether there was “sufficient evidence” to raise an issue that the appellant “had no knowledge”, “had no reason to suspect”, and “even though due diligence had been performed it could still not be ascertained”[59]. According to Lee To Nei v HKSAR[60], whether the appellant “had no knowledge” is an entirely subjective issue, and it only related to her state of mind.  On whether the appellant “had no reason to suspect”, this entails the objective and subjective elements at the same time: objectively, whether there existed certain facts which would lead a person to suspect the goods in question were counterfeits; subjectively, whether the appellant was aware of the existence of those facts.  As to whether the appellant was “unable to ascertain even due diligence had been performed”, it was an objective test as mentioned above, and it would depend on the court’s finding of what the appellant would be able to discover if she had performed due diligence.  Regarding the three points above, Mr Yim did not state clearly how Mr Ng’s and Mrs Ng’s testimonies would be able to help the appellant’s case if they had been called; and I am unable to see what possible relevance their testimonies could have.  Therefore, I take the view that it was not unreasonable when the trial counsel said that the testimonies of Mr and Mrs Ng would not be helpful to the appellant.  She cannot be said to be “incompetent”, not to mention “flagrantly incompetent”.

47.  If the defence did not call Mr Ng to testify, but instead only produced the Whatsapp [messages], the purpose would naturally be for proving the content of the Whatsapp conversations. However, this would obviously fall into hearsay evidence, which the court could not accept.  No matter what, as mentioned above, the Whatsapp content is of no help to the key disputes in the present case.

48.  Based on the above, I already have sufficient reasons to find complaint (a) not established, because (i) the possible “conflict of interest” the appellant alleged does not exist at all; and (ii) no unfairness was caused to the appellant by the trial team not calling Mr Ng or Mrs Ng to testify on her behalf, nor was it sufficient to influence the convictions.

49.  On top of that, I agree with the submissions by the respondent.  In the circumstances of the present case, no matter whether the appellant had a legal team separate from that of the Defendant Company’s at trial, not calling Mr or Mrs Ng to testify was still not an unreasonable decision:

(1)  As mentioned above, the testimonies of the couple would on the contrary be detrimental to the appellant in the key disputes in the case instead of being helpful, because Mr Ng said in Whatsapp that the goods for which the Customs put them up on charges were mainly the 300 plus garments of the brand name “Champion”, and it was the negligence on the part of their Company by procuring that batch of goods to the shop for sale without verifying their authenticity; and

(2)  As the couple had already made it clear their wish of refusing to testify, if they were forced to testify in court by way of summonses, what they were going to say would be an unknown. Moreover, if they testified in accordance with the Whatsapp content, they would obviously run the risk of self-incrimination.  Therefore, the court would be obliged to issue a warning to them before they gave the testimony in question. In these circumstances, they would be entitled not to testify on matters that would incriminate themselves.

On allegation (b)

50.  The evidence the appellant relied on was that she had asked Mrs Ng whether the goods in the shop were genuine, and the latter replied that they were of course genuine.  The appellant also said that during Mrs Ng’s trip in Japan, the latter took photos of “Champion” garments and uploaded them to the shop’s webpage.  The garments in those photos were exactly the same as those for sale in the shop.  The appellant also said that she had passed by a Northface specialty shop, and saw the goods in that shop were exactly the same as the down garment Mrs Ng gave her as a gift[61].

51.  According to the trial counsel, she said she had explained the defences in sections 26 and 26AAB of the Ordinance to the appellant.  Although the appellant did have some explanations for the “Champion” goods, she stated in clear terms that she had not verified the authenticity of the goods, but only relied on the official webpages of the brands Mrs Ng showed her.  Those official webpages, however, did not include “Burberry”, “Chanel”, “Armani” and “UGG”.  As the appellant did not show that she had taken any measure to verify the authenticity of the goods of the above four brand names, the instruction she gave the trial counsel in the end was that she would not rely on section 26[62]. In this regard, the appellant agreed that at the conference the trial counsel did repeat to her the basic requirements of section 26(1), she only denied that the trial counsel had explained to her the requirements of section 26(2)[63].  Just as the respondent has pointed out, even until now, the appellant has never suggested that she had performed any reasonable precautionary measures or due diligence in relation to “Burberry”, “Chanel”, “Armani” and “UGG”.

52.  From the above, even if the trial counsel did rely on section 26 as the defence in the first place, that would not entirely exculpate the appellant because that defence was not applicable to goods other than “Champion”, and “Northface” was not included in Charge 1 and Charge 2.  I take the view that it was within the area of the trial counsel’s professional judgment for the trial counsel not to advise the appellant to rely on section 26 but only on section 26AAB as the defence for all the charges.  Even if not all counsel would unanimously agree with her view, her view was still understandable and reasonable, and was also in line with the factual basis of the defence case.  Therefore, she could not be said to be “incompetent”.  As stated above, section 26(2) is a procedural requirement, and if the trial counsel was not minded to make use of section 26(1), then even assuming that she really did not make a special mention to the appellant in relation to the procedural requirement in sections 26(2), I am of the view that it was insignificant.

53.  Regarding the issue that the appellant suspected the reason the trial legal team did not rely on the section 26 defence was because of the influence of “conflict of interest”, I agree with the submissions by the respondent that this contention in fact lacks objective support.  The Defendant Company pleaded guilty well before trial, and even if the trial counsel relied on section 26 as the appellant’s defence, it was not detrimental to the Defendant Company’s interests from an objective point of view.  The Defendant Company’s guilty plea exactly showed that it had not properly verified the goods to which forged trade marks were applied.  In these circumstances, a reasonable bystander will not take the view there exists a potential or real conflict of interest for the trial legal team to represent the appellant and the Defendant Company at the same time.

On allegation (c)

54.  The appellant pressed the point that in relation to Charge 2, there is no direct evidence on the appellant’s possession of the goods in question, a point which the trial legal team overlooked. There was ground to impugn the matter.  The presupposition of this submission from the appellant is that “possession” in section 9 has a special connotation, which does not include the concept of “possession” in common law.

55.  I cannot accept the submissions above from the appellant. First of all, section 9 of the Ordinance does not provide any special meaning of the term “possession”.  In these circumstances, the court will in general adopt common law concepts to construe what it means by “possession”. For instance, in the “possession offence” under the Dangerous Drugs Ordinance, the court also applies the concept of “possession” in the common law.  When giving directions to the jury, the court will point out to the jury that even where a certain object is not in the hands of the accused or his pocket, in certain circumstances the defendant will also be deemed to be in possession of that object[64]:

‘Please note that you should not equate ownership with possession. In other words, one may possess an object even though one does not own it.

An object may be possessed by more than one person at the same time.  If two or more people agree to keep a pool of articles or a particular product in one place and that any of them may go there to take or move some of the articles as and when they see fit, then all are in control of the product in the sense that I have described “control”, and all are in possession of it.

But a person’s mere presence in the vicinity of an object is not of itself possession of it.  If a person is invited for dinner to a friend’s home, he is not in possession of the objects in that home simply because he is there and knows that the objects are there. The objects are not in his physical custody and he has neither the intention nor the authority to exercise control over them.’

See also R v Chan Ping & Anor[65].  I cannot see why the concepts above are not applicable to section 9 of the Ordinance.  On this point, HKSAR v Telephone Est (HK) Co Ltd, a case mentioned above, is not contrary to my understanding.  The court allowed the appeal only because the lower court did not give sufficient reasons on its ruling on the defendant’s “possession” of the items in question.

56.  Secondly, in HKSAR v Koon Chiu Jewellery (Hong Kong) Limited[66], M Poon J(sic)(as she then was) gave the following definition on the “possession” of infringing goods:

‘14. …the manner of “possession” can be actual keeping or in actual control of the item in question in other ways. …to have actual control of the item in other ways, the possessor does not necessarily have to be in the vicinity of, or even actual contact with, the item in question. Regarding this way of “possession”, the prosecution has to prove:

(a)  the appellant had control over the item in question;

(b)  he was aware he was in control of that item;

(c)  he was aware of the nature of that item; and

(d)  he intended to control that item when necessity arose.’

The common law concept of “possession” was also applied above, but the nature of the item referred to in (d) does not include the accused knowing that forged trade marks have been applied to them. I have discussed this above and shall not repeat myself here.  Based on the principle of stare decisis, authorities from the lower courts which are in contradiction to Lee To Nei v HKSAR of the Court of Final Appeal on this point should no longer be followed.

57.  It is well established in law that the court is entitled to infer whether the accused is in “possession” of the goods to which forge trade marks were applied under the charge in accordance with the accused’s conduct and the circumstances at the time: HKSAR v Lai Cheuk Ming (transliteration)[67].  It is well-known that circumstantial evidence can be as cogent as direct evidence, and even more.  Whether there is sufficient evidence in a certain case so as to reach the inference that the accused is in possession of a certain item is a fact sensitive issue.  As evidence and facts vary, past authorities may not be a lot of help to this issue in the present case.

58.  In the present case, there is the following circumstantial evidence to show whether the appellant was in “possession” of the goods in Charge 1 and Charge 2:

(1)  At the time of the offence, there was only the appellant in the shop attending to it.  When the appellant testified, she said that she alone was responsible for attending to the shop day in day out.  The four “bosses” of the shop (including the Ng couple) had full-time jobs of their own.  She confirmed that her daily duties included counting the goods after they had arrived, unpacking and sorting the goods, putting them on the racks, handling online orders, cleaning, etc.  As for the ordering and pricing of the goods it was Mrs Ng’s responsibilities[68];

(2)  During PW1’s test purchase, the appellant was able to answer the former’s enquiries without hesitation, be they about price, sizes and refund and exchange policies[69];

(3)  PW2 seized exhibits in the shop.  Of the 374 pieces of goods which were confirmed to be counterfeits, 365 of them were printed with the forged “Champion” trade mark, as in the case of P1.  91 pieces of counterfeit goods (P5 to P8) were found at the display racks inside the shop; and 307 pieces of counterfeit goods (P9-P17) were found in the storeroom.  The counterfeit goods which were on display and for sale were obviously subject to the control of the appellant as the salesperson.  The drawer at the cashier also contained shipping documents of exhibit P19[70];

(4)  According to PW2, the floor area and the storeroom of the shop were about 600 square feet, and at the time of the offence the only door leading to the storeroom was open[71]; and

(5)  The 374 pieces of counterfeit goods involved in Charge 2 were all clothing.  The quantity was massive and was consistent with the shop’s business of retail of children’s wear[72].

59.  Based on the accumulative weight of the above evidence, I am of the view that one can arrive at the following obvious conclusions that can be reasonably considered to be irrefutable:

(1)  As the only salesperson in the shop and that her employment started from May 2018, the appellant must have known the stocks for sale and the sales situation of the shop like the back of her hand;

(2)  Although the appellant was not the owner of the goods inside the shop, they were obviously subject to her control, and she could take away or move the goods from the racks or the storeroom at a time or situation she deemed fit; and

(3)  As her duty as the shop assistant would require, she necessarily also had the intention and authority to control those goods.

Therefore, I agree with the respondent’s submissions.  Taking into account that the appellant played the role of the only staff member that dealt with the daily operation of the shop, and the evidence related to the goods and the situation of the shop at the time of the offence, for the trial counsel to choose not to dispute the appellant “possessing” the goods in question, she can absolutely not be said to be “incompetent”.  I take the view that it was perfectly reasonable and sensible for her to do that.  The appellant’s submissions to the contrary now put forward are not only in vain, but are impractical and should not have been put forward.

On allegation (d)

60.  On 7 September 2020, after the Magistrate found the appellant guilty of the charges and before the trial counsel started mitigation, the Magistrate asked the appellant if she “had provided” the Customs with certain assistance.  The Magistrate made it clear that “Of course, I am not talking about providing any assistance at this moment, but I want to know that if [you] had, [you] did, I hope that these would perhaps be under consideration”[73]. Obviously, the Magistrate’s enquiry had nothing to do with the convictions, only that she did not wish that any matter which could constitute mitigating factors on the appellant’s part was omitted.

61.  Whether it would constitute or might have constituted a “conflict of interest” for the trial legal team to represent the appellant and the Defendant Company at the same time, I have already discussed that above and I shall not repeat myself here. I do not take the view that the matter that the Magistrate chose to make the enquiry at that juncture shows that she was of the view that there was the possibility of a potential “conflict of interest” between the appellant and the Defendant Company during trial. Otherwise, she should have raised her concern during trial.  On this point, I agree with the view of the respondent that she asked the appellant at that juncture whether the latter needed independent legal advice only because there was a potential question of independence.  At that time, the trial counsel said in court that her circumstances were relatively embarrassing, that she would explain to the appellant the court’s consideration, and the possible sentence, and let the appellant decide herself what to do[74]. Therefore, the Magistrate adjourned sentencing[75]. In the interim, the appellant signed an “Acknowledgement of Waiver of Independent Legal Advice”[76]:

“I, Leung Yee Wun, being D1 in WKCC 88/2020, understand that I can seek independent legal advice, which I have decided that I will not require after careful consideration.”

After court commenced, the appellant also confirmed in her own words with the Magistrate that she did not require independent legal advice[77].

62.  In her affirmation, the appellant confirmed that she had actually signed an “Acknowledgement of Waiver of Independent Legal Advice”, but she said that because the decision of the hearing on that day was entirely different from the result estimated by the trial legal team, she was unnerved and worried.  She said that if the issue of assisting the Customs had been raised before trial, if she had been given sufficient explanations; and if she had not been under the pressure of time, she would have made a different decision[78].

63.  Regarding the appellant’s contention above, I noticed that the date of the offence in the present case is 10 January 2019, and the crime was also found out by the Customs on the same day; therefore, the time limit for prosecution would expire after 1 year: see section 19 of the Ordinance[79]. It was not the case that the Customs did not know about the relationship between the Ng couple and the Defendant Company, because under caution the appellant already told the Customs what she knew, and the Customs also made enquiries with Mrs Ng.  However, in the end the Customs only prosecuted the appellant and the Defendant Company[80], and from this one could see that the Customs did not intend to invite the appellant to become a prosecution witness at all.  Secondly, the appellant and the Defendant Company formally retained the trial solicitor only on 27 April 2020 (i.e., after the time limit for prosecution)[81], and the appellant’s instruction at that time was not guilty.  Actually, even if she intended to assist the Customs on her own initiative, she had already missed the opportunity. Thirdly, the appellant pleaded not guilty initially, so even if she intended to provide the Customs with assistance after she had been convicted, since she was already found by the Magistrate to be “a witness who is not honest and reliable”[82], whether the prosecution would accept assistance from her would be highly doubtful.  Moreover, the time limit for prosecution has expired, I have reason to believe her assistance would not be of practical use to the investigation or prosecution, nor would it bring her any further discount.

64.  Finally, I also agree with the following submissions from the respondent:

(1)  It is commonplace and for various reasons that the same legal team will represent different defendants in the same criminal trial.  Unless conflict of interest is involved, this is the freedom of the accused to choose his own legal representative and it is also generally respected by the court.  In fact, at the early stage of the case the appellant did make use of the Duty Lawyer Service, but then she decided to use the same trial legal team together with the Defendant Company, and that was the appellant’s free choice.  The appellant admitted that because of that she did not have to pay any legal fees, and the advantage for her from the financial point of view was obvious;

(2)  Whether the appellant had provided the Customs with any assistance, this would only be a consideration toward sentence, and would not affect the propriety and safety of the convictions;

(3)  The Defendant Company had already pleaded guilty before the trial started.  The mitigation the trial counsel put forward on its behalf was not in contradiction to the appellant’s case.  The trial solicitor’s firm also confirmed from start to finish the instructions received from the Defendant Company and those from the appellant were consistent, and they included having negotiations with the Department of Justice before trial, and suggestions that the Defendant Company would plead guilty in exchange for dropping the charges against the appellant, or to deal with the appellant’s case by way of a binding over, but the prosecution did not accept these suggestions; and 

(4)  The appellant herself also confirmed in the affirmation that during the adjournment, the trial counsel did state to her as it was that if she put forward new evidence to assist the Customs, the trial legal team would no longer be able to represent her; therefore, there did not exist any concealment.

65.  Based on the above, I do not take the view that there was any professional misconduct on the part of the trial legal team.  There is nothing arguable in ground (2).

Ground of appeal (1): Possession (Charge 2)

66.  In her Statement of Findings, the Magistrate recited the admitted facts and the testimonies of the witnesses from both sides.  In relation to “possession”, her findings of facts are as follows:

“5. The defence does not dispute that the defendant had sold and possessed goods to which forged trade marks were applied, and the only issue in the present case is whether the defendant can rely on the statutory defence under the Ordinance.

…

17. The defence does not dispute that exhibit P1, which the defendant sold to the Customs Officer, was a counterfeit, nor does it dispute that the 374 pieces of goods involved in Charge 2, which were found from the shop (including the storeroom) upon search, had forged trade marks applied to them.

…

20. The crux of the present case lies in whether there is sufficient evidence produced to raise an issue that the defendant did not know, had no reason to suspect and could not with reasonable diligence have ascertained that the goods in question were counterfeits.

…

21. The prosecution case is not in dispute. I accept the prosecution evidence and find that the defendant did sell and possess goods to which forged trade marks were applied for business purpose, i.e., for sale.

…

27. I find that the defendant sold to the Customs Officer an upper garment to which the forged trade mark Champion was applied.  As the shop assistant, she possessed the 374 pieces of goods to which forge trade marks were applied, and they were on display or being kept in the shop.  The shop being a retailer, the defendant possessed the 374 pieces of counterfeit goods for the purpose of sale.”

67.  Regarding the meaning of “possession” in section 9 of the Ordinance and the evidence in relation to the appellant’s “possession” of the goods involved in Charge 2, I have already discussed them above and I shall not repeat myself here.  I agree with the respondent, in that there was abundant evidence on the appellant “possessing” the counterfeits in Charge 2, and with no dispute from the defence in relation to “possession”, the Magistrate did not discuss this issue at length, but instead focused on whether the defence in section 26AAB would be applicable, which was understandable and could not be criticised.  As for HKSAR v Yeung Ming Chu[83], which the appellant relied on, the important considerations for which Beeson J allowed the appeal seemed to be the ambiguous basis of the prosecution’s evidence and the defendant in that case was stopped outside of the unit, and these are distinctly different from the circumstances in the present case.

68.  I deal with this appeal by way of a rehearing, and take the view that there was sufficient evidence before the Magistrate concerning the appellant’s possession of the 374 counterfeits which were on the display racks on the shop floor or in the shop. The defence had no evidence to the contrary to explain and undermine the evidence of the prosecution.  Therefore, it was correct for the Magistrate to find possession of the goods set out in Charge 2. Moreover, I am of the view that the Magistrate was also totally correct to find that the appellant was unable to rely on the defence in section 26AAB.  On this point, the appellant did not have any submissions to the contrary, and their dispute was mainly on the trial legal team not making use of section 26 as the appellant’s defence, and I have already ruled that this complaint is not established.  Based on the evidence before the Magistrate, I take the view that the appellant’s conviction on Charge 2 is safe and satisfactory. If need be, I will make use of the power vested [in me] under section 119(d) of the Magistrates Ordinance to confirm the conviction on Charge 2: Ching Kwok-yin v HKSAR[84].

Conclusion: Appeal against convictions

69.  Based on the above, I find that none of the appellant’s various grounds of appeal against convictions is established, be they considered individually or collectively.

70.  Having reviewed all the evidence in the present case by way of a rehearing in accordance with Chou Shih Bin v HKSAR, I dismiss the appellant’s appeal against convictions on Charge 1 and Charge 2.

Appeal against sentences

71.  The appellant pressed the point that in the context of not counting the 374 counterfeits in Charge 2 toward the whole incident, according to HKSAR v Fong Tat Wing[85] and HKSAR v Man Hoi Kei (transliteration)[86], considering the circumstances of a small business and a first offender, coupled with the fact the appellant was only a staff member there, a relatively huge fine would be an appropriate sentence.  The submissions above by the appellant were based upon the fact that the appellant’s appeal against Charge 2 was allowed, and that Charge 1 only involved one piece of goods.  Therefore, the trial Magistrate’s sentence of 7 days’ imprisonment suspended for 2 years for Charge 1 was manifestly excessive.

72.  Based on my decision on the appellant’s appeal against convictions, her bases for appeal against sentences no longer exist.  Despite that, there is necessity for me to point out in Fong Tat Win and Man Hoi Kei, the defendants pleaded guilty.  When dealing with their appeals against sentence, the court took the view that fines were already sufficient in reflecting their culpability, taking their frank admissions as the basis.  That is certainly inapplicable to the appellant in the present case.

73.  For the sake of caution, I reviewed the reasons for sentence given by the Magistrate, who pointed out that the appellate courts have not laid down sentencing tariffs for this type of cases, and she referred to the discussion on sentence in Secretary for Justice v Lam Chi Wah [87] when sentencing. The Magistrate took into account that the appellant was in possession of 370 plus pieces of goods to which forged trade marks were applied, that there were as many as 5 trade marks involved, that some of the goods were sold at retail prices close to those of their genuine counterparts, and according to the Magistrate’s finding, the appellant was obviously suspicious about the authenticity of the goods, but chose to stay on to work as the salesperson and took part in activities of selling counterfeits, which was seriously detrimental to the interests of a number of trade mark holders.  On the other hand, the Magistrate also took into account that the appellant used to enjoy a clear record, and that it was not her responsibility to procure and price the goods.  In the end the Magistrate passed suspended sentences[88]on the appellant on the two charges.

74.  Based on the reasons stated by the Magistrate, I take the view that the appellant’s sentences are not wrong in principle, and they are not manifestly excessive either.  They can be said to be lenient, on the contrary.

Conclusion

75.  Based on the above, the appellant’s appeal against convictions and sentences are dismissed.

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. P. Y. Lo, Barrister-at-law.