HKSAR v. CHAN WING

HCMA1126/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 1126 OF 2007

(ON APPEAL FROM TWCC 1465/2007)

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J U D G M E N T

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1.  This is an appeal against conviction.  Four charges are involved.  Charge 1 was attempting to export from Hong Kong infringing copies of copyright works.  Charge 2 was attempting to export goods to which a forged trademark was applied.  Those offences were committed on 16 June of 2006.  Customs officers at the airport had inspected a consignment of goods which were being shipped through UPS and the items mentioned in those two charges were found.

2.  Charges 3 and 4 are ones of possession of infringing copies contrary to the Copyright Ordinance and possession of goods to which a forged trademark was applied.  This relates to goods which were found at the Appellant’s business premises on the day after the seizure at the airport.  The infringing goods in question were there, about to be shipped through UPS again.

3.  It was common ground in the case that the Appellant was running a business on his own account, whereby he received goods from a Mr Yip in the Mainland and then sent them all over the world, using UPS to do so.  The business had been going on for some nine months to a year.  The Appellant told the Customs officers that he was paid $10,000 a month in order to do this.  He agreed that the volume of business was such that UPS were being paid $400,000 to $500,000 per month to take and deliver the packages in question.

4.  There was no issue that the goods in question, which were alleged to be infringing works of copyrights or to carry forged trademarks, did so and that there was no licence granted for anyone to deal in them.

5.  The interview that took place between the Appellant and the Customs officers was admitted without dispute and one of the answers there demonstrated that the Appellant well knew that the sort of goods he was dealing with on behalf of Mr Yip and exporting and possessing were DVDs, optical disks, films, handbags and sports shoes.  It was clear that he knew the nature of the goods particularised in the four charges . 

6.  It was thus - and the Appellant’s counsel agrees with this today - that the sole issue in the case is whether or not he can avail himself of the statutory defences which exist under the two Ordinances in question.  It is accepted that the burden is upon him, on the balance of probabilities, to establish such statutory defences.  Accordingly, pursuant to section 118(3) of the Copyright Ordinance, the burden was upon the Appellant to prove that he did not know and had no reason to believe that the copies in question were infringing copies and, in relation to the Trade Descriptions Ordinance, pursuant to section 12(2)(a), he had to prove that he did not know, had no reason to suspect and could not, with reasonable diligence, have found out that the goods were goods to which a false description or forged trademark had been applied.

7.  Mr Davies has not sought to rely on section 26 of that Ordinance which deals with mistake or relying on information supplied by other people but, even if he had done, it would have had the same due diligence requirement. 

8.  The Appellant gave evidence.  The magistrate did not believe him.  The grounds of appeal make criticism of the magistrate’s reasons and the fact that he took judicial notice of the fact that DVDs, sports shoes and handbags were the subject of a flourishing trade in infringing goods.  However, Mr Davies agrees that, today, the test is not whether the magistrate made an error but what my judgment should be on the material before me. 

9.  My judgment is that there are three things that are fatal to the Appellant’s case and prevent him discharging the burden upon him.  The first is that everyone in Hong Kong knows that there is a trade in infringing goods and everyone knows that the sort of goods that the infringers copy without licence are DVDs, especially of films, sports shoes and handbags.  We all know that and I know that.  The Appellant, had been in the trade by the time of these alleged offences for over nine months, and he must have known that as well.  That is the only point the magistrate truly made and he was entitled to, in my view.  Like him, I take the view that this Appellant, realistically, must have been aware that he was dealing with the sort of goods which are commonly the subject of infringers’ interest.

10.  Against that background, there are two significant pieces of evidence.  One is that the payments that had to be made for the shipping of the goods was made from the bank account of the Appellant, but the funds got there from this Mr Yip, according to the Appellant, by deliveries of cash carried by the driver who delivered the goods.  It was also the fact that the Appellant revealed that he could not really contact this Mr Yip, it was Mr Yip who, every time, had to contact him. 

11.  It was thus that a moment’s thought would reveal to someone in the Appellant’s position, even if he was not a particularly educated man as is claimed on his behalf, that he was dealing in the sort of goods that are commonly the subject of the infringers’ interest and he was providing a complete cut-out for Mr Yip who could not be traced because there was no address for him, no means to contact him properly, and no way to trace the flow of funds that financed the transportation.

12.  In those circumstances, I judge that this Appellant did not below, and cannot before me, demonstrate that he has discharged the burden of proof upon him to prove that he had no reason to believe that they were infringing copies under the Copyright Ordinance or bore forged trademarks under the Trade Descriptions Ordinance.

13.  I can make that judgment on the material that the Magistrates Ordinance puts before me without having to take help from the Statement of Findings.  However, when I look at the Statement of Findings, I do find help there as the magistrate gave what I regard as good reasons for coming to the same conclusion that I come to.  We express it in different ways but our conclusion is the same. 

14.  Accordingly, the appeal against these convictions is dismissed.