Attorney General v. Fong Chin Yue and Others

Magistracy Appeals
Nos 989/1993 and 604/1994

H E A D N O T E

In a prosecution under subsections (1), (6) or (8) of section 17 of the Dutiable Commodities Ordinance, Cap.109 ("the DCO"), the prosecution must prove beyond reasonable doubt that the accused knew that the goods concerned were of the kind to which the DCO applies.

(2) Of course, if the goods happened to be alcoholic liquors, but the accused thought that they took the form of tobacco, that mistake would be no defence. Both alcoholic liquors and tobacco are goods of the kind to which the DCO applies. That is enough. The law takes no notice of mere quibbles.

(3) None of those subsections requires the prosecution to prove that duty on the goods in question was outstanding.

(4) But it is a defence for the accused to show on a balance of probabilities that he believed for good and sufficient reason, although erroneously, that the provisions of the DCO had been complied with, which compliance of course includes duty having been paid.

(5) Magistrates will of course approach such defences with fairness and common sense: being neither cynical on the one hand nor gullible on the other hand. Generally, the less sophisticated an accused and the more humble his position, the less is to be expected from him for the purpose of making out his defence. And of course the relevant considerations include: the quantity and value of the goods involved; whether the accused gained or stood to gain by offending; the extent of any such gain; and how it compares with what he could earn by honest means.

(6) All the subsections were consistent with the Bill of Rights.

(7) As to strict liability and the Bill of Rights, the Court said (at p.11 L-Q) that:-

"... where the conclusion that a statutory offence is an offence of strict liability is a conclusion arrived at by a process of construction, then there would be no room left for an argument that the statutory provision creating that offence is inconsistent with the Bill of Rights.

That is because of the high human rights content of the rules of construction which the courts apply to determine what a penal provision really means."

and

"Where rules of construction sufficiently strongly disposed in favour of individual freedom are employed, and an offence is nevertheless construed, in the public interest, to be one of strict liability, then that result can sit comfortably with the most powerful guarantees of individual freedom, even where the offence is punishable by a substantial term of imprisonment."

(8) As to (3) and (4) above, the Court held (at pp 24K-25E) that:-

" Knowledge that duty payable under a statute was outstanding would be a state of mind. So would a reasonable (although erroneous) belief that the provisions of that statute had been complied with. If the necessary implication is that such knowledge is excluded as an element which the prosecution has to prove, there is no reason in principle why proof by an accused on a balance of probabilities of such belief cannot be inferred to be a defence.

And where that exclusion is dictated by the need to convict the guilty, that inference would be a compelling one if it would protect the innocent. For the exclusion and the inference would complement each other towards attaining the fundamental objective of any criminal justice system worthy of the name. That objective is of course to convict the guilty while protecting the innocent.

Both limbs of that objective are entrenched in article 22 of the Bill of Rights which guarantees everyone the equal protection of the law. Everyone is entitled to protection from criminals and to protection from being wrongly treated as if they were criminals: not just the first; not just the second; but both - so as to be safe and free at the same time."

 

IN THE COURT OF APPEAL

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J U D G M E N T

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Bokhary JA :

TWO APPEALS

1. These two appeals were called on together. We will refer to Magistracy Appeal No. 989 of 1993 as "the first appeal", and to Magistracy Appeal No. 604 of 1994 as "the second appeal".

THE FIRST APPEAL

2. The first appeal is brought by Mr Wang Shih-hung. He was tried before Miss L.K. Loh in the Kwun Tong Magistrate's Court on two charges. On November 4 last year, he was convicted on one charge but acquitted on the other one. The charge on which he was convicted was possession of dutiable goods otherwise than in accordance with the provisions of the Dutiable Commodities Ordinance, Cap. 109 (to which we will refer as "the DCO").

3. Possession, therefore, was a basis of the charge against Mr Wang. And the particulars of the charge were that on May 31, 1993, in certain premises in an industrial building in Kowloon Bay, which premises he rented and used as a warehouse, he had in his possession dutiable goods, being 1,027,000 cigarettes, otherwise than in accordance with the DCO.

4. Upon his conviction on that charge, Mr Wang was, on the same day, sentenced to three months' imprisonment and fined $50,000.00.

5. He appealed to the High Court against that conviction.

6. The appeal involved, among other things, questioning the correctness of a previous decision of that Court, namely, the decision of Hooper J, on appeal from a magistrate, in Reg. v. Cheung Siu-yu [1991] 2 HKLR 142. Faced with a challenge to the correctness of one of its own decisions, that Court referred the appeal to this Court.

7. As it turned out, the prosecution conceded that, for a variety of reasons, Mr Wang's conviction could not be supported. The most fundamental of those reasons was that the evidence was such that the Magistrate should have found that Mr Wang was not in possession of the cigarettes.

8. We considered that concession to be well-founded. And we allowed Mr Wang's appeal straightaway: quashing his conviction and setting aside his sentence - saying then that we would give our reasons when we came to give our judgment in the second appeal. Those reasons we have now given.

9. And that brings us to the second appeal.

THE SECOND APPEAL

10. The second appeal is brought by the Attorney General. It is an appeal by way of case stated to the High Court, which referred the appeal to this Court.

11. In the case out of which it arises, the six respondents appeared before James C.Y. Lee Esq. in the South Kowloon Magistrate's Court on various charges under the DCO.

Four offences

12. Four offences were charged. All concerned dutiable goods, namely, brandy.

The first offence

13. The first offence was dealing with goods to which the DCO applies otherwise than in accordance with the provisions of that Ordinance.

14. That offence was created by section 17(1) of the DCO as read with section 46 thereof.

15. Section 17(1) reads:-

"No person shall import or export or have in his possession, custody or control, or in any way deal with or dispose of, any goods to which this Ordinance applies-

(a) except in accordance with the provisions of this Ordinance; or

(b) unless he has discharged all the obligations with respect to the goods imposed upon him by or under this Ordinance."

16. And section 46 reads:-

"(1) Except as otherwise expressly provided, any person who contravenes the provisions of sections 16, 17, 19, 20, 22 23, 24, 36, 37, 38, 55, 56, 58, 61, 68, 71 and 73 shall commit an offence and shall, in addition to any forfeiture which may be ordered, be liable on summary conviction to a fine of $100,000 and to imprisonment for 2 years.

(2) Any person who contravenes any condition, restriction, requirement or direction lawfully imposed, made or given under this Ordinance shall be guilty of an offence and, in addition to any forfeiture which may be ordered, shall be liable on summary conviction to a fine of $10,000 and to imprisonment for 1 year.

(3) In any case where a magistrate is of the opinion that an offence was committed with intent to avoid payment of duty, he may in addition to any fine imposed under subsection (1) or (2) inflict a fine not exceeding 10 times the amount of duty payable on the goods in respect of which the offence was committed."

17. In order to follow those and other provisions with which we are concerned, it is necessary to look also at the definition of "dutiable goods" given in section 2(1) of the DCO and at section 3 thereof which deals with the Ordinance's application.

18. The definition given in section 2(1) reads:-

"'dutiable goods' means goods to which this Ordinance applies, which are not exempt from duty and on which the full duty prescribed by law has not been paid, and includes goods on which duty has been paid if subsequently reimported;"

19. And section 3 reads:-

"(1) This Ordinance shall apply to alcoholic liquors, tobacco (other than any smokeless tobacco product within the meaning of section 2(1) of the Public Health and Municipal Services Ordinance (Cap. 132), and hydrocarbon oil.

(2) The Legislative Council may from time to time by resolution published in the Gazette apply to any substance any of the provisions of this Ordinance specified in the resolution with such modifications, if any, as may to them seem desirable, having regard to the nature of the substance to which the resolution relates.

(3) While any resolution relating to any substance is in force under this section the provisions of this Ordinance thereby applied shall have effect as if the substance were goods to which this Ordinance applies, but subject to such modifications, if any, as may be provided by the resolution.

(4) Except as provided in section 18, this Ordinance shall not apply to goods which are the property of or imported or purchased for the Governor or for the Government of the United Kingdom or of Hong Kong.

(5) Except as may be prescribed by regulations, the provisions of this Ordinance relating to the importation, exportation and movement of goods shall not apply to postal packets as defined in the Post Office Ordinance (Cap. 98)."

20. In the present case, the reason why the goods the subject-matter of the section 17(1) charge are said by the prosecution to be goods to which the DCO applies is that they are dutiable goods.

The second offence

21. The second offence was possession of dutiable goods otherwise than in accordance with the provisions of the DCO.

22. As it happens, that is the offence with which the appellant in the first appeal had been charged. It was created by section 17(6) of the DCO as read with section 46 thereof.

23. Section 17(6) reads:-

"No person shall have any dutiable goods in his possession, custody or control unless-

(a) he is-

(i) the holder, or the servant of the holder, of a removal or export permit, personally conveying the goods direct from one place, ship, vehicle, train or aircraft to another place, ship, vehicle, train or aircraft in accordance with the permit; or

(ii) the licensee, or the servant of the licensee, of a general bonded warehouse, personally conveying the goods, if imported in a ship, vehicle, train or aircraft and duly entered in the manifest, direct from the ship, vehicle, train or aircraft in which they were imported to the warehouse; or

(b) the goods are-

(i) in a general bonded or a licensed warehouse; or

(ii) in a place licensed for the manufacture of such goods; or

(iii) on railway premises and under the control of the railway authorities, if the nature of the goods has been disclosed to those authorities; or

(iv) in a ship, vehicle, train or aircraft, if the goods were imported, or are to be exported, in that ship, vehicle, train or aircraft and are duly entered in the manifest; or

(v) in a place approved by the Commissioner under section 28A."

The third and fourth offences

24. The third offence is buying dutiable goods otherwise than in accordance with the provisions of the DCO.

25. And the fourth offence is selling such goods otherwise than in accordance with those provisions.

26. Both the third and fourth offences were created by section 17(8) of the DCO as read with section 46 thereof.

27. Section 17(8) reads:-

"No person shall, on his own account or on behalf of another, sell, offer for sale or buy any dutiable goods which are in Hong Kong, unless the goods are-

(a) in a general bonded or licensed warehouse; or

(b) in the place where they were manufactured; or

(c) in the ship, vehicle, train or aircraft in which they were imported; or

(d) on the railway premises."

The six respondents

28. The 1st, 2nd and 3rd respondents, for whom Mr Wong and Mr Ma appear, were charged under subsections (6) and (8) of section 17.

29. As for the other three respondents, for whom Mr Wu appears: the 4th respondent was charged under subsections (1) and (8) of that section, while the 5th and 6th respondents were charged under subsection (1) thereof.

All the charges dismissed

30. On January 5 this year, without hearing any evidence, the Magistrate dismissed all the charges. It is against such dismissal that the Attorney General, for whom Mr Bailey appears, appeals.

Three things held

31. In dismissing all the charges, the Magistrate held three things.

First

32. First, he held that all four offences charged were offences of strict liability in that "knowledge of the status of the relevant goods as dutiable goods" is not an ingredient of any of them. By that expression "knowledge of the status of the relevant goods as dutiable goods" is meant knowledge that duty on the goods in question was outstanding in that such duty was payable but had not been paid. The Magistrate held that the prosecution did not have to prove such knowledge in relation to any of the offences charged.

33. Whether that holding is correct is the first question posed in the stated case.

34. The Attorney General accepts and asserts that it is correct, and invites an answer in the affirmative to the first question.

35. The respondents contend to the contrary, and invite a negative answer to that question.

Second and third

36. Secondly, on the view which he took of the consequences of strict liability in the sense mentioned, the Magistrate held that subsections (1), (6) and (8) of section 17 of the DCO did not admit of a construction consistent with article 11(1) of the Bill of Rights, which provides that everyone charged with a criminal offence shall have the right to be presumed innocent until proved guilty according to law.

37. Thirdly and finally, the Magistrate held that those subsections had, by reason of such inconsistency, been repealed by section 3(2) of the Hong Kong Bill of Rights Ordinance, Cap. 383.

38. Whether the second holding is correct is the second question posed in the stated case, while whether the third holding is correct is the third question posed therein.

39. Since the Bill repeal of pre-existing legislation would be the inevitable consequence of any Bill inconsistency to the extent of such inconsistency, the second and third questions merge.

40. The Attorney General contends that the second and third holdings are incorrect, and he invites answers in the negative to the second and third questions.

41. The respondents contend to the contrary, and invite affirmative answers to both those questions.

Strict liability and the Bill of Rights

42. It will be remembered that in delivering the advice of the Privy Council in Attorney General v. Lee Kwong-kut [1993] AC 951, Lord Woolf made the point (at p. 975D) that:-

"It would not assist the individuals who are charged with offences if, because of the approach to be adopted to 'statutory defences' by the courts, the legislature, in order to avoid the risk of the legislation being successfully challenged, did not include in the legislation a statutory defence to a charge."

43. That would suggest that an offence is not automatically open to challenge under the Bill of Rights merely because it is an offence of strict liability.

44. Of course, that is not to say that the express wholesale abolition of each and every mental element in our criminal law would be consistent with the Bill of Rights. If effective, such a measure would leave no one with liberty or security of person. And of course the right to liberty and security of person is a right secured for everyone under article 5(1) of the Bill of Rights.

45. But where the conclusion that a statutory offence is an offence of strict liability is a conclusion arrived at by a process of construction, then there would be no room left for an argument that the statutory provision creating that offence is inconsistent with the Bill of Rights.

The test

46. That is because of the high human rights content of the rules of construction which the courts apply to determine what a penal provision really means. Those rules were summarised by Lord Scarman in delivering the advice of the Privy Council in Gammon (Hong Kong) Ltd v. Attorney General [1983] AC 1 when he said (at p.14B-D) that:-

"(1) there is a presumption of law that mens rea is required before a person can be held guilty of a criminal offence;

(2) the presumption is particularly strong where the offence is 'truly criminal' in character;

(3) the presumption applies to statutory offences, and can be displaced only if this is clearly or by necessary implication the effect of the statute;

(4) the only situation in which the presumption can be displaced is where the statute is concerned with an issue of social concern, and public safety is such an issue;

(5) even where a statute is concerned with such an issue, the presumption of mens rea stands unless it can also be shown that the creation of strict liability will be effective to promote the objects of the statute by encouraging greater vigilance to prevent the commission of the prohibited act."

The corresponding position in the United States

47. In cases of the present nature, provided that it is made with a sensible measure of selectivity, our courts can often profit from a study of the corresponding position in the United States. The present instance is such a one.

48. We have looked at the decision of the United States Supreme Court in United States v. Balint 258 US 250. That case concerns strict liability and the due process clause. Under that clause of the Fourteenth Amendment of the United States Constitution, it is provided that no one may be deprived of life, liberty or property without due process of law. So the clause is as powerful a guarantee of individual freedom as one can hope to find.

49. The report of Balint's case (supra) does not indicate what maximum penalty was involved there. But we know from the report of another decision of the United States Supreme Court, United States v. Dotterweich 320 US 277 at p.285, that Balint's case (supra) was one "involving a maximum sentence of five years."

50. What we gather from the American cases is - admittedly putting it in our own words - therefore this. Where rules of construction sufficiently strongly disposed in favour of individual freedom are employed, and an offence is nevertheless construed, in the public interest, to be one of strict liability, then that result can sit comfortably with the most powerful guarantees of individual freedom, even where the offence is punishable by a substantial term of imprisonment.

In the present case

51. In the present case, the issue is not as to knowledge that the goods involved were of the kind to which the DCO applies. Rightly, Mr Bailey accepts that such knowledge is an element of each of the offences charged here. Were it otherwise, liability under the relevant provisions would be absolute. Plainly, that is not so. Such knowledge is necessary. And Hooper J went too far in Reg. v. Cheung Siu-yu (supra) at p.142I when he took the contrary view. Rightly, Mr Bailey does not seek to support that contrary view.

52. So the goods must be of the kind to which the DCO applies. And the prosecution must therefore prove beyond reasonable doubt that the accused knew that the goods were of that kind. Of course, if the goods happened to be alcoholic liquors, but the accused thought that they took the form of tobacco, that mistake would be no defence. Both alcoholic liquors and tobacco are goods of the kind to which the DCO applies. That is enough. The law takes no notice of mere quibbles.

53. Reverting now to the issue in the present case, that issue, as we have earlier indicated, goes to knowledge that duty on the goods involved was outstanding.

Four theoretical possibilities

54. Four theoretical possibilities were canvassed in the course of the argument. We will state them in the simplest possible terms, without using expressions such as "strict liability" or "ingredient".

The first possibility

55. The first possibility is that the prosecution has to prove beyond reasonable doubt that the accused knew that duty on the goods was outstanding.

The second possibility

56. The second possibility is this. The prosecution does not have to prove such knowledge. But it would be a defence if the accused believed for good and sufficient reason, although erroneously, that the provisions of the DCO in respect of the goods had been complied with. Compliance includes of course the payment of duty. And once the accused raises that defence, it is for the prosecution to negative it beyond reasonable doubt.

The third possibility

57. The third possibility is that the prosecution does not have to prove such knowledge; but that it is a defence for the accused to prove such belief on a balance of probabilities.

The fourth possibility

58. The fourth possibility is that the prosecution does not have to prove such knowledge; and that such belief is no defence at all.

Counsel's stance

59. The stance taken by each counsel may be summarised thus.

For the Attorney General

60. For the Attorney General, Mr Bailey submits that the fourth alternatively the third possibility represents the true position. And he submits that none of the four possibilities are inconsistent with the Bill of Rights.

For the 1st. 2nd and 3rd respondents

61. For the 1st, 2nd and 3rd respondents, Mr Wong submits that the first alternatively the second possibility represents the true position. And he submits that, while those two possibilities are Bill consistent, the other two possibilities are Bill inconsistent in their entirety.

For the 4th. 5th and 6th respondents

62. For the 4th, 5th and 6th respondents, Mr Wu submits that the first alternatively the third alternatively the second possibility represents the true position. That is the order in which he puts it: one, three and then two. He submits that only the fourth possibility is Bill inconsistent. And even then, his submission is that it is Bill inconsistent only to the extent that it carries liability to imprisonment.

63. Such liability for an absolute offence would, he submits, be inconsistent with the right to liberty and security of person guaranteed by article 5(1) of the Bill of Rights. In support, he relies on the decision of the Supreme Court of Canada in Reference re section 94(2) of the Motor Vehicle Act 23 CCC (3d) 289, which dealt with absolute as opposed to strict liability, and in which Lamer J, with whose judgment all but one member of the Court agreed, said this (at pp 315-316):-

" I do not take issue with the fact that it is highly desirable that 'bad drivers' be kept off the road. I do not take issue either with the desirability of punishing severely bad drivers who are in contempt of prohibitions against driving. The bottom line of the question to be addressed here is: whether the Government of British Columbia has demonstrated as justifiable that the risk of imprisonment of a few innocent is, given the desirability of ridding the roads of British Columbia of bad drivers, a reasonable limit in a free and democratic society. That result is to be measured against the offence being one of strict liability open to a defence of due diligence, the success of which does nothing more than let those few who did nothing wrong remain free.

As did the Court of Appeal, I find that this demonstration has not been satisfied, indeed, not in the least.

In the result, I would dismiss the appeal and answer the question in the negative, as did the Court of Appeal, albeit for somewhat different reasons, and declare s. 94(2) of the Motor Vehicle Act, as amended by the Motor Vehicle Amendment Act, 1982, inconsistent with s. 7 of the Canadian Charter of Rights and Freedoms.

Having come to this conclusion, I choose, as did the Court of Appeal, not to address whether the section violates the rights guaranteed under ss. 11(d) and 12 of the Charter."

64. This qualification to his stance was added by Mr Wu: were we to accept any of Mr Wong's submission, then he, Mr Wu, would like to be treated as having adopted them.

Which?

65. In deciding which of those four possibilities represents the true position, we begin by going back to the five propositions stated by Lord Scarman in the Gammon case (supra) at p.14B-D.

Lord Scarman's five propositions applied

66. We will apply Lord Scarman's five propositions one by one.

The first proposition

67. The first proposition - which is that "there is a presumption that mens rea is required before a person can be held guilty of a criminal offence" - is of course what we put at the forefront of our approach.

The second proposition

68. As to the second proposition - which is that "the presumption is particularly strong where the offence is 'truly criminal' in character" - take the view that the present offences are not truly criminal in character. They spring not from any inherent evil in the conduct prohibited. Rather, they spring from the fact that such conduct is prohibited. To use the Latin expressions used in some of the cases, they are mala prohibita rather than mala in se.

69. We would add, however, that our ultimate decision would be the same even if we considered the present offences truly criminal.

The third proposition

70. As to the third proposition - which is that "the presumption applies to statutory offences, and can be displaced only if this is clearly or by necessary implication the effect of the statute" - we take the view that, looking at the whole of the legislative scheme in context, it is a necessary implication of this statute's effect that the prosecution does not have to prove knowledge that duty was outstanding.

The fourth proposition

71. Moving on to the fourth proposition - which is that "the only situation in which the presumption can be displaced is where the statute is concerned with an issue of social concern, and public safety is such an issue" - we take the view that this statute is concerned with an issue of social concern.

72. The concern is to raise revenue and to raise it in a way that treats taxpayers with equality. If the law were impotent, or even if it were merely inefficient, in visiting serious consequences on the evasion of duty, it would fail to accord equal protection to honest taxpayers. And of course article 22 of the Bill of Rights guarantees everyone equal protection of law. It is a mistake - and an injustice to the Bill of Rights - to think that it only protects the man in the dock and never protects the man in the street.

The fifth proposition

73. Finally, as to the fifth proposition - which is that "even where a statute is concerned with such an issue, the presumption of mens rea stands unless it can also be shown that the creation of strict liability will be effective to promote the objects of the statute by encouraging greater vigilance to prevent the commission of the prohibited act" - we take the view that two main points arise.

The first main point

74. Of those, the first is this. We are satisfied that vigilance of the kind spoken of in the fifth proposition would be promoted by strict liability in the sense of it being unnecessary for the prosecution to prove knowledge that duty was outstanding. Indeed, we are satisfied that such necessity would seriously hamper if not cripple the legitimate objectives of section 17, which is that duty should be paid and that people should be careful to avoid having anything to do with goods on which duty is outstanding. And we hold that there is no such necessity.

The second main point

75. At the same time, the second main point is that we are equally satisfied that it would do that objective absolutely no harm at all for it to be a defence if the accused proves on a balance of probabilities that he believed for good and sufficient reason that the provisions of the DCO had been complied with. Mr Bailey accepts that. Indeed, we would go on to say that, quite plainly, the availability of such a defence would actually advance that objective. It would advance it by permitting it to be attained without convicting blameless persons.

76. We think that it would be reading too much into Lord Scarman's fifth proposition to think that it stands in the way of construing a penal provision to admit of such a defence. And once that is recognized, reservations over the Gammon case such as those expressed by the Court of Appeal in New Zealand in Millar v. Ministry of Transport (1986) 2 CRNZ 216 diminish if not disappear.

Can it be done?

77. While he accepts that the availability of such a defence to all of the offences created by section 17 would not be a bad thing, Mr Bailey invites us to pause to consider whether such a defence is something which can be achieved by way of construction.

The law in Australia. Canada and New Zealand

78. We have looked at the cases in: Australia (including the decisions of the High Court of Australia in Maher v. Musson (1934) 52 CLR 100 and Proudman v. Deyman (1941) 67 CLR 536); Canada (including the decision of the Supreme Court of Canada in Reg. v. City of Sault Ste Marie (1978) 85 DLR (3d) 161); and New Zealand (including the decision of the Court of Appeal in New Zealand in Millar v. Ministry of Transport (supra)).

79. They all support the proposition that a position under which the prosecution does not have to prove guilty knowledge, but it is a defence for the accused to prove on a balance of probabilities that he reasonably although incorrectly held an honest belief, is a position which can be arrived at by way of construction.

The law in England

80. Turning to the law in England, we begin by looking at the decision of the House of Lords in Sweet v. Parsley [1970] AC 132.

Lord Reid in Sweet v. Parsley

81. And we find ourselves enlightened and encouraged by what Lord Reid said. It is true that he begins (at p.149F) with what a legislator might do. And it is true that he is talking about a legislator when he says (at H on the same page): "So he would have to consider whether, in a case of this gravity, the public interest really requires that an innocent person should be prevented from proving his innocence in order that fewer guilty men may escape."

82. But by the time we reach p.150D, we find that Lord Reid has started to consider what the courts may be able to do by way of construction. For there he says this:-

"It would often be much easier to infer that Parliament must have meant that gross negligence should be the necessary mental element than to infer that Parliament intended to create an absolute offence."

And when he comes to consider the decision of the High Court of Australia in Proudman v. Deyman (supra), Lord Reid speaks of it (ibid.) as a "variant" of inferring that Parliament meant to make gross negligence the necessary mental element rather than to create an absolute offence.

Lord Pearce

83. From Lord Reid's speech we turn to that of Lord Pearce.

Referring to the sort of defence which we are discussing here as a "half-way house", Lord Pearce says this (at pp.157H- 158E):-

" If it were possible in some so-called absolute offences to take this sensible half-way house, I think that the courts should do so. This has been referred to in Warner's case [1969] 2 A.C. 256. I see no difficulty in it apart from the opinion of Viscount Sankey L.C. in Woolmington v. Director of Public Prosecutions [1935] A.C. 462. But so long as the full width of that opinion is maintained, I see difficulty. There are many cases where the width of that opinion has caused awkward problems. But before reducing that width your Lordships would obviously have to consider all the aspects of so far- reaching a problem. In the present case Miss Heilbron was wisely loth to involve herself in this when she had easier and surer paths to pursue.

The Australian High Court, founding on Cave J. (1889) 23 Q.B.D. 168, 181, and Wills J. (at p. 175) in Reg. v. Tolson have evolved a defence of reasonable mistake of fact, and the burden of proving this on a balance of probabilities rests upon the defendant. The whole matter is discussed in an interesting article, 'Strict Responsibility in the High Court of Australia,' by Professor Colin Howard in the Law Quarterly Review (1960) vol. 76 p.547. He concludes at p.566:

'Where a statutory prohibition is cast in terms which at first sight appear to impose strict responsibility, they should be understood merely as imposing responsibility for negligence but emphasising that the burden of rebutting negligence by affirmative proof of reasonable mistake rests upon the defendant.' He cites Maher v. Musson (1934) 52 C.L.R. 100 per Dixon J., at p.105, and per Evatt and McTiernan JJ. at p.108; cf. Sherras v. De Rutzen [1895] 1 Q.B. 918, 921 per Day J.

That decision was before Woolmington's case [1935] A.C. 462. In Thomas v. The King (1937) 59 C.L.R. 279 the matter was further discussed, but I see no reference to Woolmington's case [1935] A.C. 462. I should be happy to be persuaded either that it does not prevent us from adopting such a satisfactory concept as the Australian courts have evolved or that its wide effect should be limited. But it has not been necessary for the purposes of the present case to go fully into that aspect of the matter."

84. In the result, Miss Sweet's conviction was quashed on another basis. And if what Lord Pearce said is not definitely a green light, it certainly is not a red one either.

And Lord Diplock

85. Finally, we come to how Lord Diplock put it, which is like this (at pp 162F-163D):-

" But only too frequently the actual words used by Parliament to define the prohibited conduct are in themselves descriptive only of a physical act and bear no connotation as to any particular state of mind on the part of the person who does the act. Nevertheless, the mere fact that Parliament has made the conduct a criminal offence gives rise to some implication about the mental element of the conduct proscribed. It has, for instance, never been doubted since M'Naghten's Case (1843) 10 Cl. & F. 200, that one implication as to the mental element in any statutory offence is that the doer of the prohibited act should be sane within the M'Naghten rules; yet this part of the full definition of the offence is invariably left unexpressed by Parliament. Stephen J. in Reg. v. Tolson (1889) 23 Q.B.D. 168 suggested other circumstances never expressly dealt with in the statute where a mental element to be implied from the mere fact that the doing of an act was made a criminal offence would be absent, such as where it was done in a state of somnambulism or under duress, to which one might add inevitable accident. But the importance of the actual decision of the nine judges who constituted the majority in Reg. v. Tolson, which concerned a charge of bigamy under section 57 of the Offences Against the Person Act, 1861, was that it laid down as a general principle of construction of any enactment, which creates a criminal offence, that, even where the words used to describe the prohibited conduct would not in any other context connote the necessity for any particular mental element, they are nevertheless to be read as subject to the implication that a necessary element in the offence is the absence of a belief, held honestly and upon reasonable grounds, in the existence of facts which, if true, would make the act innocent. As was said by the Privy Council in Bank of New South Wales v. Piper [1897] A.C. 383, 389, 390, the absence of mens rea really consists in such a belief by the accused.

This implication stems from the principle that it is contrary to a rational and civilised criminal code, such as Parliament must be presumed to have intended, to penalise one who has performed his duty as a citizen to ascertain what acts are prohibited by law (ignorantia juris non excusat) and has taken all proper care to inform himself of any facts which would make his conduct lawful."

Fundamental principles

86. That enables us - indeed it requires us - to test the position by reference to fundamental principles.

87. Among the statements of those principles is this classic statement by Stephen J in the famous case in the Court for Crown Cases Reserved of Reg. v. Tolson (1889.) 23 QBD 168 at p.187:-

"The full definition of every crime contains expressly or by implication a proposition as to a state of mind."

88. Knowledge that duty payable under a statute was outstanding would be a state of mind. So would a reasonable (although erroneous) belief that the provisions of that statute had been complied with. If the necessary implication is that such knowledge is excluded as an element which the prosecution has to prove, there is no reason in principle why proof by an accused on a balance of probabilities of such belief cannot be inferred to be a defence.

89. And where that exclusion is dictated by the need to convict the guilty, that inference would be a compelling one if it would protect the innocent. For the exclusion and the inference would complement each other towards attaining the fundamental objective of any criminal justice system worthy of the name. That objective is of course to convict the guilty while protecting the innocent.

90. Both limbs of that objective are entrenched in article 22 of the Bill of Rights which guarantees everyone the equal protection of the law. Everyone is entitled to protection from criminals and to protection from being wrongly treated as if they were criminals: not just the first; not just the second; but both - so as to be safe and free at the same time.

The presumption in item (a) of section 40

91. In the course of his submission, Mr Wong posed examples into which he factored the presumption in section 40 of the DCO. It is unnecessary to deal with those examples. But we think it appropriate to mention that Mr Bailey informed us that the Attorney General's position, which he always makes known whenever prosecutions under the DCO are brought, is that the presumption in item (a) of section 40, being that "it shall be presumed until the contrary is proved ... that any goods to which [the DCO] applies are dutiable goods", has been repealed for Bill inconsistency.

Coming back to the third possibility

92. Coming back to the third possibility which we discussed, that possibility, it will be remembered, is that liability is strict, but proof on balance of a reasonably held honest belief is a defence.

Section 17(2)

93. As it happens, such a defence is expressly made available where the charge is under section 17(2), which creates an offence somewhat different from the ones with which we are concerned. For that subsection and the proviso thereto read:-

" No person shall have in his possession, custody or control any goods knowing that in respect thereof an offence against this Ordinance has been committed:

Provided that no person shall be convicted of an offence against this subsection if he proves that when such goods came into his possession, custody or control he had good and sufficient reason to believe that the provisions of this Ordinance relating to the goods had been complied with."

94. One theoretically possible view might be that the Legislature intended such a defence should be available in respect of subsection (2) of section 17 but not in respect of the other subsections thereof. But, under the relevant rules of construction, that view is unwarranted. At the very least, there are reasonable rivals, including the view that the Legislature thought that the defence would be available in respect of the other subsections anyway unless expressly removed.

Simpler reason

95. In the present case, it is unnecessary to come to any decision as to the limits of what can be done by way of legislation under our constitutional arrangements.

96. We say that for this simple reason. To interpret the relevant provisions as requiring proof by the prosecution of knowledge would leave a gap through which the guilty could escape in droves. At the same time, to interpret those provisions as precluding a defence of reasonable belief would leave a gap through which the innocent may fall to their harm. By no proper canon of construction can the intention to create either of those gaps be attributed to the Legislature.

Consequently ...

97. Consequently, the third possibility represents the true position. So the prosecution does not have to prove that the accused knew that duty on the goods was outstanding. But it is a defence for the accused to prove on a balance of probabilities that he believed for good and sufficient reason, although erroneously, that the provisions of the DCO relating to the goods had been complied with, which compliance of course includes duty having been paid.

The true and Bill consistent position

98. In our judgment, that represents the true and Bill consistent position: arrived at by a process of construction which has built into it conformity with the Bill of Rights and the meeting of the criteria laid down in Attorney General v. Lee Kwong-kut (supra) for justifying any onus being placed on the accused.

The approach to the defence

99. Magistrates will of course approach such defences with fairness and common sense: being neither cynical on the one hand nor gullible on the other hand. Generally, the less sophisticated an accused and the more humble his position, the less is to be expected from him for the purpose of making out his defence. And of course the relevant considerations include: the quantity and value of the goods involved; whether the accused gained or stood to gain by offending; the extent of any such gain; and how it compares with what he could earn by honest means.

The answers

(1) The first question which the Magistrate asks us comes to this: was I correct in holding, in relation to each charge, that the prosecution did not have to prove that duty on the goods in question was outstanding in that such duty was payable but had not been paid? Our answer is "Yes, you were correct to so hold. But remember the "reasonable belief" defence which we have said is available if the accused can prove it on balance."

(2) The second question which the Magistrate asks us comes to this: was I correct in holding that subsections (1), (6) and (8) of section 17 of the DCO did not admit of a construction consistent with article 11(1) of the Bill of Rights? Our answer is "No, those subsections are Bill consistent."

(3) The third question which the Magistrate asks us comes to this: was I correct in holding that those subsections had, by reason of Bill inconsistency, been repealed by section 3(2) of the Hong Kong Bill of Rights Ordinance, Cap. 383? Our answer is "No, those subsections being Bill consistent, they remain operative."

RESULT : BOTH APPEALS

100. The first appeal is allowed. Mr Wang's conviction is quashed; and his sentence is set aside.

101. The second one, the Attorney General's appeal, is also allowed. The dismissal of the charges is set aside; and the matter is remitted to the same Magistrate for him to proceed thereon, trying the case in accordance with the opinion of this Court as expressed in this judgment.

102. Before parting with these appeals, we wish to express our indebtedness to all counsel involved for the assistance which we have derived from their industry.