HKSAR v. WONG YIU WAH AND OTHERS

HCMA 508/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 508 OF 2001

(ON APPEAL FROM ESCC 2210/2000)

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J U D G M E N T

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Introduction:

1. The 1st Appellant was charged with being the licensee of Club Romance contravening Condition 7 of the licensing condition by permitting persons to occupy or use the licensed premises for an immoral or illegal purpose, contrary to section 46 of the Dutiable Commodities Ordinance, Cap 109, Laws of Hong Kong. He was convicted after trial of an offence, contrary to section 46A instead in respect of breach by his employees. The 2nd to 4th Appellants were charged with and convicted of soliciting for an immoral purpose in a public place, i.e. Club Romance, contrary to section 147 of the Crimes Ordinance, Cap 200. They now appeal against the said convictions.

2. Mr Chain who represents all the Appellants does not seek to challenge the trial magistrate's finding of fact, but seeks to argue on points of law. The facts as found by the trial magistrate are that on 18 May 2000 two undercover police officers entered the Club and were offered immoral services by the 2nd to 4th Appellants. The 1st Appellant was the licensee but was not present in the Club at the time of the offence.

3. The point of law raised by Mr Chain in respect of the 2nd to 4th Appellants is that the place where the offence allegedly took place was not a public place. If the Club was not a public place, the convictions could not stand. In respect of the 1st Appellant, Mr Chain argues that the trial magistrate committed procedural irregularities when convicting him in respect of an offence contrary to section 46A instead of an offence contrary to section 46 as originally charged. Further, he argues that the employees, not being the licensee themselves, could not commit any breach of licensing condition and hence the Appellant could not be convicted in respect of the offence allegedly committed by the employees.

Whether Club Romance is a public place:

4. The offence of soliciting for an immoral purpose in a public place is an offence under Part XII of the Crimes Ordinance. In finding that the offence had been committed in a public place, the trial magistrate adopted the definition of "public place" under section 3 of the Interpretation and General Clauses Ordinance, Cap 1, instead of the definition under section 117 of Part XII of the Crimes Ordinance. In his written statement of findings, however, the trial magistrate considered that the evidence supported a finding that the Club was a public place within the definition of section 117 of the Crimes Ordinance.

5. Mr Chain argues that the definition of "public place" under the Interpretation and General Clauses Ordinance is much wider than that under the Crimes Ordinance. Mr Chain is unable to find any authority in respect of the definition under the Crimes Ordinance, but argues that it has the same meaning as that under section 2(a) of the Public Order Ordinance, Cap 245, as the two definitions are identically worded. That definition was considered by Deputy Judge Cruden in R v Lam Shing Chow [1985] HKC 162, which Mr Chain says is the one most singularly important decision in the area. In that case, the question for the Court was whether the common corridor of a private building was a public place. At page 165, Deputy Judge Cruden held:

"Access to the building is not, of course, limited to the occupiers but lawful access would also be available to their licensees and invitees. However, persons other than the occupiers who may lawfully enter the premises are neither members of the public [n]or any section of the public. Their legal right to access does not arise from being members of the public but solely by virtue of their status as licensees or invitees of the occupiers.

In these circumstances I am satisfied that the common corridor on the 12th floor of these private premises was not a public place within the meaning of s 2 of the Public Order Ordinance."

6. Mr Chain therefore argues that the undercover police officers as well as customers were permitted access to the Club, not as members of public but as licensees or invitees of the Club, and hence the Club was not a public place within the definition of section 117 of the Crimes Ordinance. I have no doubt that Deputy Judge Cruden's dicta referred to above is a correct statement of the law. However, Lam Shing Chow was concerned with the common corridor of a private building, while the present case is concerned with the Club premises. The factual basis of Lam Shing Chow is obviously different from the case now before me. Whether the Club premises is a public place depends, in my view, on the factual finding whether entry was by licence or invitation or whether entry was open to members of the public.

7. Mr Chain next refers to R v Chan Yuk-chun [1965] HKLR 693 in which a department store, the Bargain Centre, was held not to be a public place. He argues that if a department store is not a public place, a fortiori, the Club is not a public place. I think that is a misunderstanding of the decision in that case. The words "public place" have different meanings under different Ordinances. In Chan Yuk-chun, the appellants, who were reputed thieves, were convicted of loitering inside a public place, namely the Bargain Centre department store, contrary to section 25 (c) of the Summary Offences Ordinance, Cap 228. Section 2 of that Ordinance defines "public place" as follows:

"'public place' includes all piers, thoroughfares, streets, roads, lanes, alleys, courts, squares, archways, waterways, passages, paths, ways and places to which the public have access either continuously or periodically whether the same are the property of the Crown or of private persons."

8. After referring to the above definition, Huggins J held at 698:

"Counsel does not challenge the latter finding but argues that the word 'places' in the definition must be construed ejusdem generis with the words that preceded it and that the genus is what might be described as 'a way'. If that be the correct construction it is clear that a department store cannot be a 'place'. Although where the words 'or' and 'other' appears they are required by s.3 of the Interpretation Ordinance to be construed disjunctively and not as implying similarity, the ejusdem generis rule is not entirely excluded from the interpretation of Ordinances of Hong Kong and I think that Mr. Zimmern is right when he says that there is here a genus to which the Bargain Centre does not belong."

9. In construing the phrase "places to which the public have access" Huggins J construed the word "places" ejusdem generis with the words that preceded it and that the genus is what might be described as "a way". Thus, in my view, what Huggins J decided in Chan Yuk-chun is that a department store is not "a way" and hence not a public place within the meaning of the Summary Offence Ordinance. In view of the difference in the definition under that Ordinance and that under section 117 of the Crimes Ordinance, I do not think the decision in Chan Yuk-chun assists the appellants in the present case. In my view, if the defendants in Chan Yuk-chun were brandishing knives or offering immoral services inside Bargain Centre or the Wing On Department Store, it would be an affront to common sense to say that such conducts are not prohibited respectively under section 33 of the Public Order Ordinance or section 147 of the Crimes Ordinance.

10. Mr Chain also refers to the following dicta in Chan Yuk-chun at 698 in support of his argument that the Club, like a department store, is not a place to which the public has a right of access and hence not a public place:

"As in Brannan v. Peek one then has to ask oneself whether, although the Bargain Centre is not within the definition, it is nevertheless 'a public place' apart from the definition. It seems to me that the reasoning of the Lord Chief Justice in the English case is equally applicable here: apart from statutory definition it seems to me that the words 'a public place' necessarily imply at least a restricted right of access. There is no suggestion that the public had such right of access to the Bargain Centre and, with respect to the learned magistrate, I do not think it is 'a public place'."

11. It is obvious from the above dicta that Huggins J was considering the ordinary meaning of "public place" apart from the statutory definition in order to fix criminal liability on the defendant. In the present case, the Appellants are charged with a criminal offence. The issue is whether the immoral activities took place in a public place for which the statute creating the offence has provided a definition. In my view, that statutory definition is relevant. If the Appellants are caught within that definition, it matters not whether they are also caught within the ordinary meaning of "public place".

12. Mr Chain also refers me to R v Ng Chung Sang [1985] 1 HKC 311 and R v Chan Chu Shi [1990] 1 HKC 341 as authority for the proposition that a construction site in the former case and a multi-storey car park in the latter are not public places. I do not think those decisions decided anything as a matter of binding precedent. In Ng Chung Sang, the prosecution conceded, and in my view properly so, that a construction site was not a public place. In Chan Chu Shi, Ryan J adopted the principle of law in Lam Shing Chow and concluded that there was no evidence adduced by the Crown sufficient to establish the status of the car park in which the fight took place. This is a finding of fact based on the Crown's failure to adduce evidence to discharge its burden of proof and not that as a matter of law a multi-storey car park is not a public place within the meaning of Public Order Ordinance. Whether a place is a public place is a mixed question of law and fact.

13. The learned magistrate was certainly wrong in adopting the definition of "public place" in the Interpretation and General Clauses Ordinance when convicting the 2nd to 4th Appellants in his ex tempore reason for his verdict. However, in his written statement of findings, he directed himself to the proper definition under section 117 of the Crimes Ordinance and confirmed the convictions. The issue is whether, on the basis of the facts as he found them, he was justified to find that the Club was nonetheless a public place within the meaning of section 117 of the Crimes Ordinance. Mr Man on behalf of the Respondent argues that he was.

14. The definition under the two Ordinances are as follows:

Under the General Clauses and Interpretation Ordinance:

"'public place' means

(a) any public street or pier, or any public garden; and

(b) any theatre, place of public entertainment of any kind, or other place of general resort, admission to which is obtained by payment or to which the public have or are permitted to have access;"

Under the Crimes Ordinance and section 2(a) of the Public Order Ordinance:

"'public place' means any place to which for the time being the public or any section of the public are entitled or permitted to have access, whether on payment or otherwise, and, in relation to any meeting, includes any place which is or will be, on the occasion and for the purposes of such meeting, a public place."

15. On the facts as found by the learned magistrate, when the undercover officers entered the Club, nobody inquired about their identity or have their identity registered or inquired about their membership. There was nothing referable in the price list to any membership of any club and the officer paid by cash and not by credit to any account of any member. There was no reference to any club in the personnel records of the 2nd to 4th Appellants nor any chop of the Club. On the above basis, the magistrate found that the Club was a place of entertainment to which the public have or were permitted to have access.

16. When applying the definition under the Crimes Ordinance to the above facts, no mention was made by the magistrate about "place of entertainment". The magistrate must have satisfied himself that a place of entertainment is a place within the meaning of the words "any place" in the definition under the Crimes Ordinance. I do not think the magistrate could have faulted on that as "any place" must be wider than just a place of entertainment.

17. The learned magistrate have found that the officers were permitted to have access into the Club. It could be argued as in Lam Shing Chow that the officers were admitted as licensee or invitees of the occupier for the purpose of the Club and not as members of the public. However, factually, the present case is distinguishable from those in Lam Shing Chow in that the place concerned is not the common area of a private building, but a Club open to the public. In my view, so long as the Club is open for business, inviting the public to enter, it is a place to which the public are permitted to have access and therefore a public place within the meaning of section 117 of the Crimes Ordinance. It matters not whether they were admitted by the occupier as licensees or invitees. It also matters not whether the occupier have power to refuse entry because the premises was full or because of any reason. Thus on the facts as found by the learned magistrate, the Club was a public place whether he applied the definition under the Interpretation and General Clauses Ordinance or under the definition in the Crimes Ordinance. With this conclusion, the appeal against conviction by the 2nd to 4th Appellants must be dismissed.

Whether there was any procedural irregularities in convicting the 1st Appellant of an offence not originally charged:

18. The 1st Appellant was originally charged with committing the offence himself as licensee, contrary to section 46 of the Dutiable Commodities Ordinance, but was convicted of another offence, contrary to section 46A, in respect of the offence committed by his employees. Mr Chain's complaint is that the 1st Appellant was convicted without the magistrate formally amending the charge in accordance with section 27 of the Magistrates Ordinance, and hence depriving the 1st Appellant of the opportunity to raise the statutory defence under subsection (2). Mr Man on behalf of the Respondent submitted that section 46A provides an indirect basis of liability and as the 1st Appellant was legally represented at trial, there was no need for the amended charge to be put to him.

19. What transpired from the transcript is as follows. At the final submission stage, the court prosecutor referred the magistrate to the decision in HKSAR v Chiu Teresita D and Others HCMA 635 of 2000 and submitted that the licensee's liability could also arise under section 46A. Mr Chain, who also represented the 1st Appellant in the court below, argued that employees not being licensees themselves could not have committed any breach of Condition 7 which imposed a personal obligation on the 1st Appellant as licensee. Then the magistrate adjourned for consideration. He gave no indication whatever whether he accepted or rejected Mr Chain's submission. But at the resumed hearing, the magistrate after referring to section 46A said that the 1st Appellant did not give evidence or call any witness and that from all the available evidence he could not show he had taken all practicable steps to prevent the breach of the condition. The learned magistrate then concluded that the 1st Appellant failed to avail himself of the defence under section 46A(2)(b) and convicted him of an offence contrary to section 46A.

20. Section 46(1) and 46A(1) and (2) provide as follows:

46. (1) A person who contravenes a condition, restriction, requirement or direction lawfully imposed, made or given under this Ordinance commits an offence.

46A.(1) Where an offence against this Ordinance is committed by a servant of a licensee, the licensee shall, without prejudice to the liability of any other person, also be guilty of that offence but shall not be liable to any term of imprisonment.

(2) Where a prosecution is brought against a licensee by virtue of this section in respect of an offence committed by a servant, it shall be a defence -

(a) in the case of an offence against section 61, 71, 72 or 73, if ......

(b) in the case of any other offence, if the licensee shows that he took all practicable steps to prevent the commission of the offence.

21. Section 46 imposes criminal liability on a licensee (in the present context) in respect of breaches of licensing condition while section 46A imposes vicarious liability on the licensee in respect of any offences against the Dutiable Commodities Ordinance committed by his employees. An offence under section 46, obviously, requires proof of mens rea on the part of the licensee, while that under section 46A would not. The ambits covered by the two sections are different. Section 46 covers conditions, restrictions, requirements or directions imposed or made or given under the Ordinance, while section 46A covers any offences against the Ordinance. In my view, the two sections create different offences and are independent of one another.

22. There is nothing in the Dutiable Commodities Ordinance or any other Ordinance making an offence contrary to section 46A a statutory alternative for a charge contrary to section 46. Thus before a defendant charged with an offence contrary to section 46 could be convicted of an offence contrary to section 46A, the magistrate shall adopt the procedure under section 27 of the Magistrates Ordinance. He should, in particular, amend the charge, have it read and explained to the defendant, allow him to plead to the amended charge, and give leave to the parties (not just the defendant) to call or recall and further examine such witnesses as may be reasonably required by a party having regard to the nature of the amendment. These procedures are mandatory. They are important safeguards to the individual's liberty. In the present case none of these have been complied with.

23. Mr Man submits that as the 1st Appellant was legally represented, these procedures need not be followed. I am astonished by such an argument. The 1st Appellant was charged with committing the offence himself. He was entitled to rely on such defences as may be available to him and put the prosecution to strict proof of any particular element in respect of that offence, for example, mens rea. He elected not to give evidence. All of a sudden, without any warning, the magistrate convicted him of a strict liability offence, contrary to section 46A, on the basis that a like offence has been committed by his employees. While some defence common to both offences might have been canvassed, certainly he has not had an opportunity to raise the statutory defence under section 46A(2)(b) and to consider whether to give evidence or call witnesses to further that defence. On this ground alone, the appeal must be allowed.

Whether breach of Condition 7 could be committed by an employee:

24. If I am to allow the appeal, it is open to me to exercise any of the power under section 119 of the Magistrates Ordinance. These powers include ordering retrial de novo, remitting the matter with my opinion to a magistrate or making such other order as I think just. It is in this context that Mr Chain submits that as the breach of Condition 7 could not be committed by an employee as a matter of law, I should allow the appeal simpliciter without amending the summons or without making any order for retrial.

25. Mr Chain's argument has been rejected by the learned magistrate in the court below on the basis of the authority of Chiu Teresita D and Others. Mr Man sought to support the learned magistrate's decision on the following dicta from Tong J at page 21 of his judgment:

"As to the issue of whether section 46A(1), Cap 109 had any application in the present circumstances, the argument by Mr Duncan was that in law, the servant could not be guilty of the offence with which the appellant was charged, it being an essential ingredient of such offence that the appellant be the 'licensee'. On the face of it, it was an attractive argument. I noted that the prosecution was mainly relying on a breach of clause 7 in the licence. And the wording of this clause was that: The licensee shall not permit any person to occupy or use any portion of the premises for any immoral or illegal purpose. On this important issue, the learned magistrate stated in his oral judgment that ....

'.... Although she was not the licensee, she was the person contravening a condition of the licence. And she committed an offence under section 46(1) as well and the use of the expression 'the licensee shall not permit' does not limit the condition to the licensee only. It is a condition applicable to the use of the premises. Consequently, liability arises under section 46A(1) giving rise to the statutory defence under section 46A(2)....'

Having given the matter careful consideration, I found I would agree with the magistrate's interpretation of section 46A(1). In my view, Mr Duncan's argument would be more appropriate in relation to, for example, conditions 5 and 6 of the licence. These conditions imposed a strictly personal duty on the licensee. However, for those conditions which require the licensee not to permit a state of affairs to take place inside the premises, such as conditions 7, 8 and 9, section 46A(1) would apply."

26. Mr Chain submits that this part of Tong J's judgment is obiter. Indeed it is, as in that case the appellant's conviction was confirmed under section 46 and not section 46A. As a general proposition, I agree that in the context of licensing conditions of a licensed premises, conditions regulating activities on the premises, or what Tong J calls "state of affairs", run with the premises and binds not only the licensee but also users of the premises. Conditions 3, 11 and 12 which respectively prohibit playing games of chance, regulate the operating hours and prohibit dancing are clear examples of conditions which regulate activities on the premises and are binding on the licensee as well as users. On the other hand, there are conditions, which by their own terms impose only a personal obligation on the licensee. Conditions 4, 5 and 6 which respectively provide that the "licensee shall personally supervise the premises", "the licensee shall display a warning notice" and "the licensee shall exhibit and keep exhibited a notice ...." are examples where positive and personal obligations are imposed on the licensee.

27. Whether Condition 7 is a condition which imposes a personal obligation on the licensee only or is a condition which regulates the activities on the licensed premises depends on what is the proper construction of the condition. Here I feel constrained by the terms of the condition to depart from Tong J's observation in Chiu Teresita D and Others. Condition 7 provides as follows:

"The licensee shall not permit any person to occupy or use any portion of the premises for any immoral or illegal purpose."

28. The crucial word is "permit". This word has generated much litigation. It is not defined in the Dutiable Commodities Ordinance. According to the Oxford Dictionary, it means "to allow the doing or occurrence of" or "to give permission or opportunity for" or "to allow or give consent" to certain events. In my view, "permit" in the context of licensing condition in a licensed premises means giving leave or authorisation by someone who has the management or at least de facto control of the premises. A person can only permit that which is within his power to prohibit. Thus only the licensee or, in his absence, his delegated manager (usually called the "person in charge") could exercise control in the premises and hence permit or prohibit the activities referred to in the condition.

29. It could be argued that if the licensee is obliged to prevent the premises from being used for a particular purpose, the condition is one which regulates the activities or state of affairs on the premises and is binding on the licensee's employees, in particular the person in charge, not to permit the prohibited activities. However, that interpretation would be contrary to the opening words of the condition which expressly provides that the "licensee shall not permit ..." It must be assumed that the licensing authority would not waste words and every word in the condition has its place. Hence, by the use of these words referable only to the licensee, the licensing authority must have intended to impose the obligation only on the licensee.

30. The licensing conditions are written in three distinct styles. Firstly as in Conditions 4, 5, 6, 7, 8 and 9, the direct voice is used imposing certain obligations on the licensee. Secondly, the passive voice is used with the verbs "permit", "allow", "operate" and "maintain", but without reference to the licensee as in Conditions 1, 2, 11, 12 and 14, impliedly imposing an obligation on the licensee and such employees of the licensee who are in the position to permit, allow, operate or maintain. Thirdly, the passive voice is used with a neutral verb, as in Condition 3, which imposes a prohibition on any person on the premises. This is a condition which regulates the activities or state of affairs on the premises. The inescapable conclusion to be drawn from the specific reference to the licensee and the use of the word "permit" in Condition 7 is that the licensing condition imposes a personal obligation on the licensee who only is in the position to permit or prohibit certain activities on the premises and is not one which regulates the activities on the premises. If it were the latter, it could have been worded in the passive voice without reference to the "licensee" as in Condition 1 or could simply provide that "the premises shall not be used for an immoral purpose" by adopting the style in Condition 3.

31. I am therefore driven to agree with Mr Chain that the obligation under Condition 7 is a personal obligation imposed on the licensee and that the offence could not be committed by an employee of the licensee. I do not think the hostesses or the customers who participated in the immoral activities could be in a position to permit such activities. The hostesses could either participate in the immoral activities with the permission of the licensee or, as the defence alleges, on their own without permission. In my view, it is not within their power to permit their own unauthorised act prohibited by their employer.

32. In the absence of the licensee, the person in charge who has defacto control over the premises may permit such immoral activities on the premises. If he does so with the knowledge and consent or authority of the licensee, the licensee commits an offence contrary to section 46. If he does so without the knowledge and consent or authority of the licensee, neither he nor the licensee is in breach of the licensing conditions as the obligation under Condition 7 is not applicable to the person in charge while the licensee has no knowledge of the immoral activities. This may be unsatisfactory, but it is up to the licensing authority to enlarge or redefine the ambit of Condition 7.

33. I am sympathetic with the learned magistrate. This case involved some very complicated question of law to be dealt with in a busy magistrate's court. The learned magistrate was facing strong counsel and, worst of all, he was misguided by the court prosecutor. He was probably concerned that there may not be sufficient evidence to prove that the 1st Appellant had knowledge of the immoral activities that took place in the premises and that counsel's argument that the hostesses were on a frolic of their own. He then took up the prosecutor's suggestion of convicting on section 46A.

34. In my view, there is ample evidence of the system in which the premises was operated. The premises was dark. When the undercover officers entered, they saw two expatriate males with girls sitting on their laps. They were immediately approached by the 3rd and 4th Appellants in a sexually active manner and they touched the officers' private parts. The 2nd Appellant then enquired if the officers would take the hostesses out. She told the officers that it was the company's regulation that the charge was $2,750, all inclusive, for three hours. The 3rd and 4th Appellants then explicitly suggested the officers to take them out to have sex. They did not demand extra charge for their sexual services. Thus the $2,750 was inclusive of their sexual services. The officers were charged $7,048 allegedly for "drink and dinner" when there was in fact no dinner served. According to the price list, the charge for taking a hostess out was $4,000 and not $2,750 nor what the officers were charged. This shows that the price list was a sham and the charge of $2,750 received by the Club included an element for the immoral services offered by the hostess. Both officers received identical treatment. These together with the dark condition of the premises, the concerted action of the 2nd Appellant with that of the 3rd and 4th Appellants and how the other hostesses were behaving towards two other customers suggest what happened to the officers was part of a system in which the Club operated, i.e. offering immoral services to its customers. The 1st Appellant was under a duty to supervise the premises personally. In the circumstances, could he have no knowledge of such a system? Could he not have permitted the immoral activities performed by the 3rd and 4th Appellants as part of that system? I think the evidence in the present case is so strong that not only is there a case to answer for the 1st Appellant for an offence contrary to section 46, but also as to compel him to give an explanation. If he does not put forward any credible explanation of his lack of knowledge of the system or as to cast doubt on the prosecution case, or if his explanation is rejected, it is open to the magistrate to draw as the only irresistible inference that the immoral services offered by the hostesses is part of the system in which the Club operates and the licensee has knowledge of the system and permitted the immoral activities. That would be sufficient to bring home a conviction under section 46 without praying in aid of section 46A.

35. But by convicting the 1st Appellant on section 46A, the learned magistrate must have taken the view that the evidence of knowledge of the immoral activities on the part of the 1st Appellant was lacking. That is a finding of fact, which I cannot interfere. In view of that and the course taken by the learned magistrate, I do not think it is now open to me under section 119 of the Magistrates Ordinance to set aside the conviction and remit the matter back to the learned magistrate for further disposal with my opinion above. Also, in view of my ruling that an employee could not in law commit a breach of Condition 7 and render the licensee vicariously liable under section 46A, I do not think I should amend the charge and remit the matter back to the learned magistrate to continue with the proceedings in accordance with section 27 of the Magistrates Ordinance. Accordingly, I am left with the unhappy choice of allowing the appeal by the 1st Appellant.

Conclusion:

36. The appeals of the 2nd to 4th Appellant are dismissed. With regret, the appeal of the 1st Appellant is allowed. His conviction is set aside. Any fine, if paid, shall be refunded. I make a cost order nisi that there shall be no order as to costs of this appeal.