HKSAR v. MA KWOK MING

HCMA 511/2019

[2020] HKCFI 993

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO 511 OF 2019

(ON APPEAL FROM FANLING MAGISTRACY

CASE NO FLMP 462 OF 2018)

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JUDGMENT

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1.  The Appellant (D2) appeals against a Forfeiture Order made by the Magistrate under s.28 of Import and Export Ordinance Cap. 60 (‘IEO’). The articles forfeited were 4 gold slabs and one Toyota seven-seater private car with ignition key, Security Lock Remote and one Vehicle Licence of MJ6133 (The Appellant was the registered owner).

Background

2.  As briefly summarized by the Respondent, there were altogether three charges in the case, Charges 1 and 2 were against D1 with importing goods to which Dutiable Commodities Ordinance applies, namely, 35 dutiable cigarettes, contrary to ss.17(1) and 46(3) of Dutiable Commodities Ordinance Cap. 109 (Charge 1); and failing to declare the 35 cigarettes under Charge 1 to a member of the Customs, contrary to s.34(3) as read with 34A(1) and 46(3) of Dutiable Commodities Ordinance Cap. 109 (Charge 2).

3.  Charge 3 was a joint charge against D1 and the Appellant D2.  The two defendants were jointly charged with 1 count of importing unmanifested cargo, the 4 gold slabs.

4.  D1 pleaded guilty to all 3 charges.  The Appellant D2 pleaded not guilty to Charge 3.

5.  The Admitted Facts provide as follows:

     At about 1315 hours on 15.12.2017, an incoming private car bearing Hong Kong registration number MJ6133, driven by CHOI CHI HUNG (First defendant) arrived at Customs Arrival Kiosk No.4 of Lok Ma Chau Control Point (LMCCP) for Customs clearance.  Customs officer asked CHOI CHI HUNG on whether he had dutiable articles or cargoes to declare.  CHOI CHI HUNG declared that he had gold.  Then, customs officer asked whether CHOI CHI HUNG had a manifest and CHOI CHI HUNG replied in the negative.  CHOI Chi Hung was directed to Private Car Clearance Depot of LMCCP for Customs inspection.  Custom officer found 35 not-duty-paid cigarettes in MJ6133 also, upon the personal search 4 pieces of gold (both prosecutor and defendant agreed to submit to the Court as Prosecution exhibits P1-P4) were found in his shoes under the insoles.  Customs officer arrested CHOI CHI HUNG as he had committed an offence under the Import and Export Ordinance.

     Customs officer 6269 take over the investigation.  At about 1850 hours on 15.12.2017, MA KWOK MING (Appellant) arrived Lok Ma Chau Control Point (LMCCP) and indicated that he is the cargo owner of P1-P4.  Customs officer 6269 immediately arrested and cautioned Second Defendant as he had committed an offence under the IEO.

6.  The Appellant was acquitted after trial.  The Magistrate accepted that the gold slabs were cargo.  It was the Appellant’s own cautioned admission that he told D1 to import the gold slabs for him.  Those gold slabs were thus imported by D1 as cargo, not as D1’s personal property.  Nevertheless, the Magistrate acquitted the Appellant because there was not sufficient evidence to prove that D1 was the Appellant’s employee.

Forfeiture hearing

7.  At the Forfeiture hearing, both sides did not call any witness.

8.  Defence accepted that there was a prima facie case for forfeiture, but objected to forfeiture.  First, it was submitted that the gold slabs were not ‘cargo’ because the gold slabs were ‘a personal gold of the Appellant’, ‘D1 admitted he was bringing it in for his friend’, and the gold slabs were imported by a private car, not a truck.

9.  It was further submitted ‘this is not a smuggling case’ because D1 immediately admitted to Customs that he imported the gold slabs upon Customs’ questioning and that the Appellant ‘was not facilitating or participating in any way, on the balance of probabilities, to contravene any laws in relation to any article becoming liable to forfeiture’.  The Appellant’s cautioned statement also stated that the Appellant had told D1 to declare the goods.

Magistrate’s Ruling

10.  The Magistrate held that the gold slabs were ‘cargo’ under s.2 of IEO and found that the Appellant failed to produce sufficient evidence to prove his ownership of the gold slabs.  The Appellant had not proven on the balance of probabilities that he did not in any way participate in or facilitate, either by design or negligence, D1’s offence of importing the gold slabs as unmanifested cargo.

Mr Andrew Bruce SC for the Appellant raises the following grounds of appeal against the Forfeiture Order

Ground 1

11.  The Magistrate erroneously found that the Appellant was not the owner or otherwise entitled to the gold slabs because:

(1)  the Magistrate erred in taking into account what another person said or failed to say in relation to the ownership of the gold bars, specifically that D1 failed to say anything which pointed to the Appellant as the owner or was otherwise entitled to the gold slabs.  This was a particularly egregious error because the Magistrate also held at another place in his Statement of Findings that the assertions of the Appellant were not credible because, amongst other things, he had not subjected himself to cross examination.  In this regard, even if (contrary to submission) the assertion about the Appellant not subjecting himself to cross examination had any merit the same position must apply in evaluating such contribution as the statement under caution of D1 to the assessment of the evidence.

(2)  The statement under caution of D1 was inadmissible.

(3)  (Alternative to Ground 1(2)) even if the statement under caution of D1 was admissible in determining the entitlement of the Appellant to make a claim, the Magistrate erred in assuming that a failure to mention the Applicant was positive evidence that he was not so entitled.

(4)  The admissions made to the Principal Magistrate were by D1 and not the Appellant and cannot be binding on the Appellant.  The fact that the Appellant was present does not of itself constitute an admission of those facts and there is no suggestion that he was asked whether he agreed with them.

(5)  The Magistrate erred in his conclusion that the claim by the Appellant was false because it was contradicted by D1 was not a basis to disbelieve the Appellant.

(6)  The Magistrate, while correctly saying that a “mere claim” repeated many times does not become a true claim, erred in his evaluation of the claim made by the Appellant.  One of the sources of the assertions of the Appellant was the statement under caution made by the Appellant which is regarded in criminal proceedings as some evidence of the assertions contained in the statement: R v Sharp [1988] 1 WLR 7.  The evidential status of the parts of a statement under caution which are favourable to an accused are now regarded as such as to attract a Liberato direction: HKSAR v Chan Tam Fu [2016] 3 HKC 250, [2016] 1 HKLRD 608, §75.  Accordingly, the learned Magistrate erred in asserting that the statement under caution of the Appellant was a “mere claim”.

(7)  The learned Magistrate erred in holding against the Appellant that he refused to answer certain questions.  Such an approach is forbidden reasoning in criminal proceedings including, it will be submitted, forfeiture proceedings: Lee Fuk Hing v HKSAR (2004) 7 HKCFAR 600.  The inferences that the learned Magistrate drew against the Appellant that he must have something to hide by reason of his exercise of his right of silence was precisely the reasoning forbidden by the Court of Final Appeal in Lee Fuk Hing v HKSAR.

Ground 2

12.  On the premise that the Appellant was entitled to make a claim, the discretion of the learned Magistrate to refuse such a claim miscarried because:

(1)  The learned Magistrate erred in assuming that a person of the background and experience of the Appellant knew what was required to comply with the requirements for the importation of gold into Hong Kong, and, in particular, the requirement that a manifest be provided.  In this regard, the Magistrate failed to take into account that the Appellant was importing into Hong Kong something which was in all respects perfectly legal.

(2)  The finding of the learned Magistrate relies on the conduct of D1 in failing to provide such a manifest in circumstances where there is no evidence that the Appellant had any control over the manner in which D1 conducted himself at the Customs inspection.

(3)  The finding of the learned Magistrate fails to take into account the wholly technical breach of the Ordinance by D1 in the sense that accepting there was no manifest, he declared to the officers that he was bringing in gold.  That declaration albeit not in the form of a manifest was part of the prosecution case.  The secreting of the gold is neither here nor there and is readily understandable travelling on the roads in the Mainland.

(4)  The learned Magistrate misapplied the decision of the Court of Final Appeal in Wong Hon Sun v HKSAR (2009) 12 HKCFAR 877 because the assumption in Ground 2(1) (above) wrongly founds the basis for the connivance of the Appellant in relation to the assumed instructions to D1 implicit in the findings of the learned Magistrate.  It is equally consistent, to the extent that there may have been instructions to D1 that telling the officers of the Customs & Excise Service that he had gold complied materially.

(5)  The order was wholly out of proportion to the true nature of any breach of the law on the part of D1 because of the nature of the conduct of D1.

Ground 3

13.  The decision of the learned Magistrate to forfeit the Appellant’s motor vehicle was wrong because:

(1)  There was in view of the manner in which D1 presented to the Customs positive evidence of an attempt at compliance in telling the officers of the gold even if it is right that this violated the requirements of the law.

(2)  The order was wholly out of proportion to the true nature of any breach of the law that there may have been on the part of D1 because of the nature of the conduct of D1.

Discussion

14.  As stated by the Magistrate, forfeiture proceedings are civil in character.  They affect the property rights of the owners of the articles sought to be forfeited.  The court has a discretion to order the articles to be returned to the innocent owners.

15.  The Appellant bears the onus, according to the civil standard of proof, of establishing that the articles seized are liable to forfeiture.  The Appellant bears the legal burden of making out his case on the balance of probabilities for an order for delivery to him of the seized articles, either unconditionally or conditionally. (Wong Hon Sun v HKSAR (2009) 12 HKCFAR 877)

16.  On ground 1, it was essentially submitted that the Magistrate had erroneously found that the Appellant was not the owner or otherwise entitled to the gold slabs.

17.  However, particularly from paragraphs 33 to 39 of the Statement of Findings, the Magistrate had indeed gone through a very detail exercise to analyse and explain why he did not find for the Appellant’s ownership on balance, including but not limited to the fact that the gold slabs were found from D1’s possession; there was no evidence to suggest the gold slabs belong to others; D2 simply turned up at the check point to assert the ownership without proof and D2’s mere claim though repeated under caution was not tested under cross-examination.  Further, D2 did not give evidence but the Magistrate also mentioned that a suspect has the right to remain silent.  The Magistrate finally found that D2 was hiding the whole truth when interviewed under caution and the Magistrate also found him not trustworthy and there was no believable evidence to support D2’s claim of ownership.

18.  The Magistrate knew full well all the undisputed evidence and ruled that D2 had not proved on balance of probability that D2 was the owner of the gold slabs.

19.  The above findings clearly fall within the ambit of the Magistrate, and it was not unreasonable, illogical nor contained inherent improbabilities, the Appellant simply had no basis to interfere with these findings.

20.  As to various detail complaint under ground 1, it must be noted that the Magistrate is clearly entitled to evaluate the Appellant’s claim against all the background, and he had correctly stated that D2’s assertion under caution was not tested and therefore the Magistrate also entitled not to believe D2’s claim.  Therefore, ground 1 has no substance and without merit, this ground must fail.

21.  On ground 2, again, the Magistrate clearly had in his mind the whole content of Appellant’s cautioned statement and knew that he had admitted having been a boss of many different companies engaging in the trading and leasing of cross-boundary vehicle for 15 years and he had owned the private car in question for 10 years.  The Magistrate then proceeded to state that he simply did not believe a person of his background and experience would have no knowledge about the requirement of furnishing a manifest to C & E when one is importing such an amount of gold to Hong Kong.

22.  The Magistrate’s finding is reasonable and I did not find any error in it.  The Magistrate had in fact further mentioned that even if the Appellant were the owner, he also did not prove on balance that he did not in any way participate in nor facilitate the contravention.  If the Appellant’s assertion was to be believed, no doubt he did cause the importation and it could not be said that he did not in any way participate nor facilitate the contravention. 

23.  Further, the gold slabs weighed 4 kg and valued over 1.2 million in total, the importation was without manifest and it was a substantial breach and could not possibly be said as a technical one.  Therefore, the forfeiture made was also correctly made and nor was it out of proportion.  Ground 2 also fails.  

24.  As to ground 3, it was also submitted that D1 had admitted to C & E officer right away at the check point and thus the forfeiture was wholly out of proportion.

25.  With respect, D1 was stopped at the check point and personal search was conducted when 4 gold slabs were found in his shoes under the insoles, though D1 had admitted even before the search, it was still a clear breach without manifest and I did not find the forfeiture out of proportion in the circumstances.

26.  To conclude, under s27(1) of the Import and Export Ordinance, articles in connection with the contravention of any provision of the Ordinance and any vehicle so seized and which has been used in connexion with, or is the subject of, the contravention of any provision of this Ordinance are liable to forfeiture.

27.  As in Wong Hon Sun v HKSAR FACC 1/2009, once there is a prima facie case for forfeiture, it is ‘for the claimant, in order to avoid this outcome, to make out a case for an exercise of the discretion to order delivery of the article to him.  He may do this by proving facts to the satisfaction of the court, according to the balance of probabilities, that show that he did not in any way participate in or facilitate, either by design or negligence, the contravention which has resulted in the article becoming liable to forfeiture.  To say this is to say no more than that a party who seeks to have a judicial discretion exercised in his favour bears the burden of establishing his case.  It is not for his opponent to negative the existence of such a case.’

28.  As stated above, the Magistrate had applied the law correctly, and found that Appellant failed to prove on balance, thus the judicial discretion had not been exercised wrongly nor unreasonably.

29.  After re-hearing and examining all the evidence, I also hold that the Forfeiture Order is rightly made, as all the appeal grounds also fail, therefore, the appeal against Forfeiture Order is hereby dismissed accordingly.