ATTORNEY GENERAL v. NGAO KAI-SUEN

1986, No. 637

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H E A D N O T E

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Forfeiture order - exercise of discretion - proper test - owner blameless - goods returned.

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

MAGISTRACY CRIMINAL APPEAL NO. 637 OF 1986

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J U D G M E N T

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1. This is a case stated by G. Watson Esq. at Fanling Magistrates Court.

2. The case arises out of an application for forfeiture under s.28 of the Import and Export Ordinance, Cap. 60, in which the respondent claimed ownership and the return of 30 television sets lawfully seized by the Commissioner for Customs and Excise.

The magistrate made the following findings:-

"i) The goods are liable to forfeiture and were lawfully seized.

ii) Legal ownership of the goods is in the company CHINA HUMAN LTD. and in joint venture with the Republic of China.

iii) The Commissioner for Customs and Excise served notice on the Respondent as 'owner' in terms of section 27 Import and Export Ordinance, Cap. 60 and the Respondent had a special interest in and responsibility for such goods.

iv) The goods are freely importable in course of joint venture and indeed the Chinese authorities were pressing Respondent for delivery of the goods.

v) Application for export licence from Hong Kong was made but rejected on the technical ground that black and white or colour was not stated.

vi) A licence has since been issued (ex post facto) for export of these particular goods to Mainland China.

vii) Attempt (leading to seizure) was made to export the goods from Hong Kong into Mainland China by two employees of the company who had prepared false manifest and had no licence.

viii) Respondent did not know and had no reason to believe such attempt would be made as he well knew the goods were required and could freely enter Mainland China."

He concluded :-

" Having considered the evidence and facts as found therefore I am satisfied that the Respondent acted throughout in good faith and that the offence was committed without his knowledge and consent and that he had done all that was reasonably and practically possible to ensure the lawful export of the goods and that is in the interest of comity of nations and good relations between Hong Kong and Mainland China to have the goods restored to the Respondent in execution of the joint venture between the Respondent and his company and the Republic of China and so ordered the return of the goods to Respondent."

The question of law arising for the opinion of the court is:-

 

3. Counsel for the appellant, Mr. Bruce, does not attack the magistrate's first reason for not ordering forfeiture - lack of knowledge and consent - but submits that the evidence did not show any threat to good relations between Hong Kong and China and that the magistrate has therefore applied a wrong principle.

In Chan Kam Bor & Others v. R.⁽¹⁾ O'Connor J. said:-

"In passing sentence for an offence of facts of this nature, regard may be had to our relationships with other jurisdictions in the area and some regard should be paid to the comity of nations ...... It is clear that a continuing smuggling of articles of any type in either direction between Hong Kong and China is an irritant, tending to disturb the smooth relationship existing between Hong Kong and China."

4. This passage was cited with approval by the Court of Appeal in Attorney General v. SO Chan-po and others⁽²⁾. Sir Denys Roberts C.J. said at page 698:-

"We agree that substantial weight can be given to the damage that is likely to be done to Hong Kong's relationship with other territories by activities of this nature."

5. In the light of these authorities I agree with Mr. Bruce that the courts are concerned to prevent the illegal smuggling of goods to China and it is that which enhances the comity of nations. The encouragement of trade in general and joint ventures in particular are different matters and should not concern a magistrate engaged in forfeiture proceedings.

6. Nevertheless, although the magistrate in this case was wrong in this respect, he was undoubtedly right - given his findings of fact - in concluding that the respondent was lacking in fault or blame.

7. He seems to have attached at least equal weight to this conclusion as he did to the comity of nations principle. I am satisfied that, even without the latter, he would have been persuaded to make the order returning the goods to the owner.

8. On the authorities he was right. In R. v. Man Kim-ping and another⁽³⁾, Jones J. said:-

"The correct test is that an order should be made unless some good reason is shown to the contrary. See Attorney General v. Chin Chack-wing (1961) H.K.L.R. 479, and Director of Immi ration v. CHU Shiu-fat (1980) H.K.L.R. 780. The burden of proof which is the civil burden lies with the claimant on the balance of probabilities. Undue hardship suffered by a claimant is obviously a factor to be taken into consideration when a magistrate exercises his discretion. But, where as in the instant case on the agreed facts the appellants were completely blameless, the magistrate should exercise his discretion in their favour."

The answer to the question posed is therefore 'Yes'. The appeal is dismissed.

(1) Crim. App. No. 239/81

(2) (1981) H.K.L.R. 686

(3) H.C.A. 646/85