THE QUEEN v. WONG POON WAI AND OTHERS

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

MAGISTRACY APPEAL NO. 1566 OF 1990

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BETWEEN

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JUDMENT

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1. On the 12th October 1990 the appellants were all convicted on a charge of selling liquor without a licence, contrary to section 17(3B) and 46(1) of the Dutiable Commodities Ordinance, Cap. 109 of the Laws of Hong Kong. The particulars of the charge alleged that Dl Chan Yiu-cho (who was subsequently acquitted) and the appellants on the 10th day of May 1990, at ground Floor, 204 Prince Edward Road, Prince Karaoke, Mongkok, Kowloon, in Hong Kong, did sell liquor without a licence.

2. They were also jointly charged with the1st defendant in respect of an offence.of exposing liquor for sale under the same section of the said ordinance. However, all of them were acquitted on this charge as the Magistrate was not satisfied that the liquor in question was being "exposed" for sale.

3. PW1 was Woman Inspector Chau Ying-yu who affirmed that she was attached to special duties squad No.4, Mongkok and on the 20th April 1990 she was attached to Miscellaneous Subunit, Mongkok.   on that day she led a police party which included WPC15647 to Prince Karaoke at the ground Floor of 204 Prince Edward Road Mongkok. As a result of her observation inside the premises she instructed WPC15647 to give a warning to a person named Li Jing-han (D7). On the 10th May 1990 (the day of the charge) she instructed PC14, PC23993 and WPCI8653 to proceed to the Prince Karaoke and pose as customers. And at about 10.35 am on that day she led a police party to execute a search warrant inside Prince Karaoke. On arrival she saw PC14, PC23993 and C18653 there. As a result of a report from them she instructed the police officers to arrest D1 and the 8 ppellants and to seize a number of exhibits. She confirmed that photographs were taken at the premises.

4. Under cross-examination she testified that on the 20th April 1990 when she went to these premises she asked everybody who was in charge.and that the 7th defendant, , admitted she was.

5. PW2 was Wu Wai-wing Who testified that she went to the Prine Karaoke on the 20th April 1990 and on instruction gave a verbal warning to D7 Li Jing-han.   And that she reduced that verbal warning into writing in her notebook andasked D7 to sign. She produced her notebook as exhibit Pl.

6. That note which was signed by Li d.ing-han confirmed that this officer informed Li Jing-han "Since she has not had a licence she cannot sell any drinks (liquor) and snacks at this address. If she is in contravention of the offence, she will be summonsed. Subsequently she expressed that she understood the above-stated warning and then signed her name for confirmation."

7. PW3 was Station Sergeant Chan Sing-tak, some of his evidence related to the Ist defendant who is not an appellant and I will not refer to this part of his evidence. He did, however, confirm that on the 10th May 1990 (the date in the charge) at about 8.45 pm, he instructed PC14, PC23993 and PC18653 to pose as customers at the Prince Karaoke at the ground floor, 204 Prince Edward Road. Before they left the police station he gave them two $500 notes. He gave the notes to PC23993. He recorded the number of the two notes in his notebook and they were B758141 and C895121. He identified the two notes exhibit P3 as the notes in question. He also confirmed.that at 10.35 pm on 10th May he was led by Woman Inspector Chau (PW1) to go to the premises in question.

8. At this stage of the trial the cautioned statements of these appellants were all admitted as having been made voluntarily and were admitted in evidence by consent.

9. The 4th prosecution witness was PC23993 Lai Wing-lok who confirmed that he was instructed to go to the Prince Karaoke on the 10th may 1990 (the day of the charge) and that before he left Station Sergeant Chan (PW3) gave him two $500 notes. At 9.00 pm he arrived at the Prince Karaoketogether with PC14 and WPC18653. They were shown to a table by D8 whom he identified in Court. After they were seated, he ordered something from Lee Fun-ching (D9) namely a beer. His two colleagues also ordered beer and these beers were brought by D9.   He also noticed people sitting at the table next to theirs were served with beer. He confirmed that D9 brought the drinks from the bar. He also confirmed that D8 brought the bill, exhibit P13.

10. PW5 PC878 Yeung Ying-chuen was the exhibit officer on the day of the police raid. He identified D2 as the person in charge of the premises as having revealed his identity at that time. At the cashier counter he seized two $500 notes and he identified them as exhibit P3. He also seized a number of bills and order chits, a menu and various items of liquor. He seized two glasses of beer from the table of his colleagues, who were undercover, which glasses he. identified as exhibits P22a and b. He handed over one glass of beer and one bottle of whisky to the Government Chemist for analysis and later retrieved them from the government Chemist together with the government Chemist's Certificate which he produced as exhibit P23. That certificate showed that the glass contained approximately 130ml of a liquid with 5.0% (v/v) alcohol.

11. At the close of the prosecution case the defence counsel made a submission of no case to answer but his application was unsuccessful on the A charge so far as these appellants are concerned. The Magistrate acquitted the 1st defendant at this stage on the basis that there was no evidence that he was the proprietor, manager or employee of any kind.

12. The appellants elected not to give evidence and no witnesses were called on their behalf.

13. In giving his judgment at the conclusion of the hearing convicting all the appellants the Magistrate said :

14. On the 16th October, 1990 the appellants served notices of appeal in which the sole ground of appeal was stated to be that the Magistrate erred in law in ruling that the offence is one of strict liability.

15. Later by drawing assistance from section 42(1) & (3) of the Road Traffic Ordinance by way of analogy, the Magistrate decided that he had been wrong to rule that section 17(3B) creates an offence of strict liability. Later he said

16. Mr Jackson Poon, who appears for the appellants, submits that the section does not create an offence of strict liability as there is no clear indication of this in the terms of the Ordinance.

17. He refers in particular to Section 17, the relevant section, which places restrictions on dealing with and possession of certain dutiable goods. It is in the following terms :

18. Mr Poon submits that there is no proviso to subsection (3B) as there is to subsection (2). However, as they both appear in the same section it is indicative of the fact that the offence created bu subsection (3B) is not one of strict liability. Mr Poon also relies on subsection. (10); he argues that if the offence was one of strict liability, there would be no need for subsection (10).

19. He also agrees with the Magistrate that a person involved in a managerial capacity or as a waiter, barman,. supervisor, i.e. working in a supervisory or service area, is aiding and abetting the establishment in the sale.

20. Mr Poon submits that even if the offence is one of strict liability, because D3, D4, D5, D6, D8 and D9 were merely acting as employees and were not shown to have been aware of the fact that there. was no licence to sell liquor, the Magistrate was correct to take the view that there should have been no case to answer against them.

21. So far as D2 and D7 are concerned, he submits that.. in view of the comments of the Magistrate the convictions of D2 and D7 are unsafe.  furthermore, as it is not a serious case, the court should. not order the matter to go back for a new trial.

22. Mr Chiu for the Crown argues that this case involves important points of law.  He submits that section 17(3B) does create an offence of strict liability.  Applying the principles in Gammon he says, the offence is one which is not truly criminal in nature But nevertheless is a matter of social concern.  It involves legislation which regulates the taxation or control of liquor.  The whole purpose of this kind of legislation is to prevent the selling of liquor to underaged persons and the control of the sale of liquor except under certain strict conditions.   He submits that all the Crown must do is prove that the item sold was liquor and the Crown need prove nothing further.    He submits that there was ample evidence that all theappellants.    were on duty on the relevant day and at most they admitted under caution that they sold liquor.   For those who did not admit selling liquor themselves, they admitted knowing that liquor had Been sold at the material, time that day.   He submits that it was clearly proved that they were part of a joint enterprise, and they had knowledge.

23. He has referred me to section 46A(2)(B) which is in the following terms :

This subsection would Be superfluous, he says, if section 17 did not create an offence of strict liability. He contends that all the appellants were charged as principals and not as aiders and abettors. Where persons place an order for purchase of the liquor in the confined premises, all people in the premises should Be treated as involved in the sale. That would include the cashier, supervisor etc. But not, for instance, a toilet cleaner.

24. I sympathise with the Magistrate who, I think, was led astray by some of the submissions made to him.

25. The terms of section 17(3B) are that "no person" may sell any liquor except on the authority of a licence or permit and in accordance with the terms of it. This section focuses on individual sales. Each time a sale takes place of such liquor, an offence is committed. To lump together all the transactions that occurred that night and attempt to bring home criminal liability to the defendants in respect of all those sales in only one charge, was in my opinion quite wrong. It was clearly the intention of the prosecution at the outset of the trial to charge these appellants in respect of the sale of the beer to the police .. officers concerned. That was the sale, the proper subject of the charge. That was the only sold item, which was examined by the Government Chemist. The only reason, I can suppose, for the amendment of the charge which took place at the end of the Crown case when the reference to "beer" was deleted, is that at that stage it was realised that the admissions contained in the cautioned statements of a number of the defendants did not relate specifically to this particular sale of beer. It was hoped to widen the scope of the charge. to include more than that specific sale of beerto the police officers. That, in my view, was quite wrong. The evidence of other sales would, however, be relevant to the issue of the knowledge of the appellants that the bar was open and sales of liquor were taking place, which knowledge would be relevant to their knowledge in respect of the transaction in question.

26. Is the offence one of strict liability?

27. With the exception of subsection (2) the terminology used in Section 17 suggests the creation of offences of strict liability to which statutory exceptions are provided. Once the Crown, to the proper standard of proof, has established the facts within the terms of the section, the burden is on the defendant to prove the exception on a balance of probabilities. If he is unable to do this, he will be convicted.

28. Under rule 1A of the Dutiable Commodities Regulations the sale of liquor is prohibited at any premises for consumption on the premises except on the authority of a Liquor Licence, a temporary Liquor Licence or a Canteen Licence.

29. The conditions under which a liquor licence is granted are set out on Form 2 of the Liquor Licence made under Regulations 17 and 21 of the Dutiable Commodities (Liquor) Regulations.

30. This requires a photograph of the licensee, the name of the licensee, the name or sign of the licenced premises, the address, description of the licenced premises and states the period of the licence and the fee. In addition, the conditions are made as follows :

31. It will be seen from these conditions that it was the intention of the legislature that considerable control should be exercised over premises where liquor is to be sold in accordance with a licence or permit.

32. In addition to subsection (2) in section 17 the Dutiable Commodities Ordinance contains other provisions where the word "knowingly" appears in the section creating the offence. An example is section 58(1) where the words used are .

33. Clearly knowledge that the utensil or apparatus is a still is an essential ingredient in that offence. By contrast paragraph (b) of the same subsection creates an offence of "having in his possession, custody or Control any fermenting or fermented material" without any reference to "knowingly" doing so.

34. On my reading of this Ordinance as a whole and in the light of section 46A(2)(b), the offence created by section 17(3B) read with section 46(1) is an offence of strict liability. In reaching this conclusion I have paid particular attention to the reasoning of the House of Lords in Pharmaceutical Society of great Britain v. Storkwain Ltd (1986)83 Cri. App R. 359 and to the propositions set out in the judgment of Lord Scarman in Gammon v. Attorney general of Hong Kong (1985] A.C.I.

35. Just as Regulation 29(1)(C) of the Dutiable Commodities (Liquor) Regulations has been held to create an offence of strict liability, so I hold that section 17(3B) of the Ordinance likewise does so. The selling of liquor in breach of the conditions of a licence is not an offence of a truly criminal character, but the terms of the section relate to an issue of serious social concern, and obviously the creation of a strict liability offence will promote greater diligence against selling liquor other than in accordance with the terms of a licence or permit. I therefore rule against the appellants on the first ground of appeal.

If there was strict liability, did it apply to the appellants?

36. The second ground of appeal is that, even if the section creates an offence of strict liability, strict liability did not apply in respect of the appellants.

37. If all the appellants were secondary parties to the offence in the charge, then the Magistrate would have clearly been wrong in holding in effect that the prosecution did not have to prove mens rea against them.  However, the position is not as simple as that.

38. A person may be a principal offender under this subsection without being a licencee or proprietor of the liquor in question. The sale of liquor in breach of the section cannot only be Committed by the establishment as the Magistrate held. The section is quite different from, for instance section 22(l) of the Licencing Act 1961 in England which provided :

"If - (a) The holder of a Justices' on-licence knowingly sells or supplies intoxicating liquor to person to whom he is not permitted by the conditions of the licence to sell or supply it; .. . he shall be guilty of an offence."

39. Only the licencee could be the principal offender under that section. The position is to be contrasted with, for instance, the Licencing Act 1964 S.169(1) where it was made an offence for the Licence Holder "or his servant" to knowingly sell intoxication liquor to a person under 18.

40. In my judgment any person who conducts a sale whether as a servant or agent or as a licencee may be guilty of the offence under section 17(3B) as a Principal Offender.

41. The doctrine of delegated responsibility founded on Allen v. Whitehead [1930]1 K.B. 211 does not apply in respect of offences of strict liability. The only appellants who could be principal offenders in respect of the sale to the police officers were the waitresses who conducted the sale. All the other appellants could be secondary parties whether as aiders and abettors or as counsellors or procurers and the normal rule regarding mens rea would apply to them. This means that in the case of a principal offender lack of knowledge that the goods sold was liquor would not be a defence. Subject to the exception, there is an absolute prohibition on the sale of liquor and knowledge that it is liquor is not an essential ingredient in the offence.

42. The identity of the licencee was not established because no licence had been granted. Liability could not therefore be brought home to any of the appellants under section 46A which section is indicative of strict liability and, of which section, subsection (2) was no doubt enacted to mitigate to some extent the harshness of the rule that the acts of the servants are the acts of the licencee as was held in such cases as Commissioner of Police v. Cartman [1696]1 Q.B. 665 and Anderton v.Rodgers [1981] Crim.L.R. 404 where the former was approved.

43. In the case of secondary parties to the offence the Crown would have to establish the requisite mens rea for aiders and abettors or counsellors or procurers as to knowledge that the sale was of, or to be of, liquor as the case may be..

44. In a case such as this where there was evidence that a bar had been opened and The sale in question took place while that bar was. in operation it. would be open. to the Magistrate to infer that the secondary parties intended the sale of the liquor in question or that such a sale would take place. In those circumstances they would be guilty unless they proved the sale was in accordance with the terms of a licence.

45. In my judgment there was prima facie evidence in this case against all the appellants, either as principal offenders, aiders and abettors or counsellors or procurers in respect of that offence.

46. As the Magistrate in his statement of findings did not make any express finding as to who was the person who conducted the sale in question, I allow the appeal, remit the case to the Magistrate and direct him to fine that there was a case to answer in respect of each appellant for the reasons given above and to proceed with the hearing, giving the appellants the opportunity to enter upon their defences again in the light of my judgment. At the conclusion of the trial, it will be a question of fact who made the sale. It will be a question of fact whether other persons present had the requisite intent that the liquor should be sold, or was being sold. Once the Crown have succeeded in proving that an appellant was a principal offender or secondary party to the sale of liquor to the police officers, the burden will be on that appellant to establish that the sale was in accordance with the terms of a valid licence.

47. Even though the offence is one of strict liability, the magistrate may, if convinced the defendant, whom he convicts, honestly intended to comply with the law, reflect this in an appropriate reduction in any fine he imposes.