HKSAR v. THE K2 LTD

HCMA1002/2005

IN THE HIGH COURT OF THE

 HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. HCMA1002/2005

(ON APPEAL FROM TWS 11396 OF 2005)

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J U D G M E N T

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1. This is an appeal against sentence.  The Appellant is a private limited company, and through its representative in the Magistrates Court pleaded guilty to a summons alleging that the company had failed to complete within 42 days and forward to the Registrar of Companies a copy of the annual return and that they were 52 days in default of their obligation in this regard.

2. The Magistrate imposed a fine of $3,000 and a daily fine of $30, creating a total fine of $4,560.

3. The mitigation advanced was that the company had a clear record; it was inactive, though not dormant, just paying a few service bills and the like, and that the failure to meet the obligations under the legislation had arisen due to an oversight.

4. The Appellant makes the point that because he was late, the administrative charge rose dramatically from $105, which it would have been on the day if he had been on time, to a sum of $1740.

5. The Magistrate was aware of that, as indeed I am aware of that, and it is something that falls to be considered as part of the general background of the case.  It is not, in fact, a double penalty, as the Appellant claims.  His analogy to it being akin to a fixed penalty is not really a correct one but, nonetheless, I bear in mind that the administrative fees increased and were borne by the company.

6. In the course of the hearing of the appeal, it became apparent that there were some 90 summonses of a like nature issued every week in Hong Kong for companies that were in default and, obviously, such a volume of prosecution has resulted in a consensus amongst the Magistrates for a range of fines.  I have been handed a helpful summary of penalties which identifies different Magistrates and Magistracies and the range of fines from the initial fine to the daily fine for cases such as this.  This fine imposed by the Magistrate here falls squarely within the range set out on that document.

7. A factor that is not to be ignored is this, that the cost of prosecuting companies like this who fail, for whatever reason to meet their obligations, is $5,598.  There is a provision in section 352 of the Companies Ordinance that allows the fines levied for offences like this to go to defraying the actual costs of the prosecution.  Of course, here, it would be immediately appreciated that the fine of $4,560 is less than the cost to the taxpayer of actually bringing the prosecution.

8. The Appellant is quite entitled to come here and say that even though other people are being treated in just the way that his company was treated in the Magistracy on a continuing basis, (of those 90 summonses a week, very many of them must relate to small companies like this one who forget their obligations or overlook them); he is entitled to come here and say, please reconsider my mitigation afresh and reconsider my fine.

9. I have done that, having heard the submissions clearly made by the company’s representative, and I regret to say that, in my view, the fine is a reasonable one.  I can see no reason to depart from the fine levied by the Magistrate.

10. In those circumstances, I am bound to dismiss the appeal against sentence.