HKSAR v. HUNG CHAN WA AND ANOTHER

FACC No. 1 of 2006

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 1 OF 2006 (CRIMINAL)

(ON APPEAL FROM CACC NOS. 411 OF 2003 AND 61 OF 2004)

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J U D G M E N T

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Chief Justice Li:

1.  I agree with the judgment of Sir Anthony Mason NPJ and I note that the other members of the Court also agree with his judgment.  For reasons given in his judgment, the Court holds that ss 47(1) and 47(2) (“the relevant provisions”) properly interpreted by a process of remedial interpretation impose only evidential burdens on the defendant.  That being so, the relevant provisions are constitutionally valid.

2.  In its judgment delivered on 23 June 2005, the Court of Appeal had reached the same conclusion.  After that date, all trials and appeals have to be conducted on the basis that the relevant provisions impose only evidential burdens.

Previous view

3.  Before the Court of Appeal’s judgment on 23 June 2005, the widely held view was that the relevant provisions validly imposed legal or persuasive burdens on the defendant who had to discharge the burden engaged in the particular case on the balance of probabilities.  It will be convenient to refer to it as “the previous view”.  The previous view was shared by prosecutors, defence lawyers and the courts.  See for example, Chan Chun Ho v. HKSAR (1999) 2 HKCFAR 198 at 201A-B where the Court assumed the previous view to be correct.  Although the previous view could have been questioned earlier, it was only challenged for the first time in the present case.  That view was held to be incorrect by the Court of Appeal and now by the Court.

The proposed order

4.  Mr McCoy SC for the appellant, the HKSAR, submits that the Court should make an order limiting the retrospective effect of its judgment so that only the following persons may benefit from it :

(1) The two defendants in the present appeals.

(2) In addition the following persons :

(i) defendants who had already appealed within time by 23 June 2005 when the Court of Appeal delivered its judgment and those who appeal within time after that date; and

(ii) defendants who are able to obtain extension of time for appeal after 23 June 2005 on grounds apart from the ground that the relevant provisions only impose evidential burdens.

Mr McCoy SC suggests that the persons in (1) and (2) should be treated as, to use his expression, “within the judicial system”.  It will be convenient to refer to the above as “the proposed order”.

5.  The Court is invited to engage in what is generally known as “prospective overruling”.  As was pointed out by Stock JA delivering the judgment of the Court of Appeal on prospective overruling on 26 January 2006 (at para.10), this term is an imprecise one.  A court may be invited to engage in prospective overruling where a judgment holds a previous view on a legal question to be incorrect, whether or not the previous view had been the subject of judicial determination.  See In re Spectrum Plus Ltd (“Spectrum”) [2005] 2 AC 680 at para.6.  If it had been, the previous authority would have been overruled by the subsequent judgment.  In essence, the court is asked to impose a temporal limitation on its judgment so that its retrospective effect would be limited to the extent specified.  The proposed order represents a modified form of prospective overruling since it accepts that the judgment would have retrospective effect to the extent of covering the persons referred to therein.

6.  In seeking the proposed order, Mr McCoy SC for the appellant submits that :

(1) Article 160(1) applies to a court judgment holding a law previously in force to be in contravention of the Basic Law and establishes the norm that such a judgment only has prospective effect.  The norm is a variable one and the courts may vary it and specify the extent of the retrospective effect of a judgment.

(2) In any event, judicial power includes the power to engage in prospective overruling and the circumstances justify its exercise in the present case.

Article 160

7.  Article 160 of the Basic Law provides:

“Upon the establishment of the Hong Kong Special Administrative Region, the laws previously in force in Hong Kong shall be adopted as laws of the Region except for those which the Standing Committee of the National People’s Congress declares to be in contravention of this Law.  If any laws are later discovered to be in contravention of this Law, they shall be amended or cease to have force in accordance with the procedure as prescribed by this Law.

Documents, certificates, contracts, and rights and obligations valid under the laws previously in force in Hong Kong shall continue to be valid and be recognized and protected by the Hong Kong Special Administrative Region, provided that they do not contravene this Law.”

8.  On 23 February 1997, the Standing Committee adopted its Decision on treatment of the laws previously in force in Hong Kong in accordance with art.160 (“the Decision”).  This declared that the statutes and statutory provisions set out therein are in contravention of the Basic Law and are not adopted as the laws of the HKSAR.

9.  Article 160 is the last article of the Basic Law.  It is the only article in Chapter IX, the last Chapter, which is headed “Supplementary Provisions”.  It has two parts.  Article 160(1) deals with the continuation of laws whilst art.160(2) relates to the continuation of documents, certificates, contracts, and rights and obligations.  The latter provides that the specified matters valid under the laws previously in force in Hong Kong shall continue to be valid and be recognised and protected by the HKSAR provided that they do not contravene the Basic Law.  Article 160(1) supplements articles such as arts 8 and 18 in making it clear that laws previously in force shall be adopted except for those which the Standing Committee declares to be in contravention of the Basic Law.  Apart from the laws so declared to be in contravention, the article recognises that there may be laws which are discovered after 1 July 1997 to be in contravention.  In relation to them, art.160(1) provides that “they shall be amended or cease to have force in accordance with the procedure as prescribed by this Law”.

10.  The context of art.160 of course includes the continuation of a common law system in Hong Kong as provided by the Basic Law.  Under the common law, the well-established position is that a judgment determining a legal question operates retrospectively as well as prospectively.  See Spectrum at paras 4 to 7. 

11.  The crucial question is whether on its proper interpretation, the phrase “the procedure as prescribed by this Law” at the end of art.160(1) covers judicial procedure.  If it does, judgments of the courts determining pre-1 July 1997 laws to be in contravention of the Basic Law would only have prospective effect, since the article provides that the law in question “shall cease to have effect” in accordance with the procedure prescribed.  Such a result would be extraordinary.  Article 160 would be according to such judgments a treatment which represents a radical departure from the established common law position.  Further, a sharp distinction would have to be drawn between pre-1 July 1997 laws and post-1 July 1997 laws.  Whereas a court judgment determining a post-1 July 1997 law to be in contravention of the Basic Law would operate retrospectively as well as prospectively in accordance with the common law position, a wholly different rule would prevail in relation to a judicial declaration of contravention in relation to a pre-1 July 1997 law.  Article 160 should not be interpreted to lead to such an extraordinary result in the absence of clear words.

12.  An examination of the language of art.160(1) lends no support to the appellant’s argument that judicial procedure is included within its purview.  On the contrary, its language indicates that the judicial process is not included and that it is only the legislative procedure which is contemplated by the article.  The article refers to the situation where a pre-1 July 1997 law is discovered after that date to be in contravention of the Basic Law.  Discovery marks the commencement of the process.  It is by the operation of the procedure as prescribed by the Basic Law that the relevant law “shall be amended or cease to have force” in accordance with that procedure.

13.  As to the first limb, “shall be amended”, this phrase connotes a legislative procedure.  A law is amended by the enactment by the legislature of a subsequent statute to amend it.  The courts do not amend laws.  That “amend” should be interpreted in this way is supported by the use of the word in other articles of the Basic Law where it is plain that the reference is to a legislative act.  For example, art.8 refers to laws being subject to amendment by the legislature of the HKSAR.  And art.73(1) provides that the legislature’s powers and functions include the amendment of laws.  As to the second limb, “shall cease to have force”, the phrase also suggests a legislative procedure.  It is when the legislature repeals a law that it ceases to have effect so that the phrase “shall cease to have effect” connotes the legislative context.

14.  Thus, both limbs in “shall be amended or cease to have force” indicate that the procedure giving rise to these consequences is the enactment of legislation through the legislative procedure.  Legislation enacted is prospective, at any rate in the absence of express provision to the contrary.  The enactment of legislation with retrospective effect is of course most exceptional, assuming such a course is constitutionally valid, having regard to its subject matter. 

15.  Accordingly, it should be concluded that art.160 does not apply to judicial procedure.  It therefore does not prescribe or support the making of the proposed order.  In view of this conclusion, it is unnecessary to deal with other points relating to art.160 which have been addressed in argument, including the point that it is not engaged since the relevant provisions, interpreted to impose only evidential burdens, are consistent with the Basic Law.

Whether the power exists

16.  The questions (a) whether judicial power includes the power to engage in prospective overruling and (b) if it does, whether it should be exercised in this case will now be discussed.  As has been noted, the proposed order represents a modified form of prospective overruling.

17.  Whether the courts in a common law jurisdiction have the power to engage in prospective overruling has been much debated in recent years.  The Court’s attention was drawn to numerous authorities around the globe, including the jurisprudence of the European supra-national courts, namely the Court of Justice of the European Communities and the European Court of Human Rights.  As far as domestic courts are concerned, recent decisions include on one side the English decision of Spectrum holding in favour of its existence in all situations.  And on the other side stands the decision of the High Court of Australia in Ha v. State of New South Wales (1997) 189 CLR 465 at 503-4 and 515 rejecting the notion that judicial power in Australia includes such a power.

18.  On any view, the power to engage in prospective overruling, if it exists, is an extraordinary power.  In view of the conclusion below that the present circumstances do not justify the exercise of the power even if it exists, it is not necessary to decide the fundamental question whether and to what extent the courts in Hong Kong have the power.  Nor is it necessary to consider the appropriateness of the terms of the proposed order.  However, some observations will be made on prospective overruling later on in this judgment.

Exercise of the power

19.  Assuming that judicial power in Hong Kong includes the power to engage in prospective overruling and to make an order such as the proposed order, is the present case a proper one for its exercise?

The Government’s submission

20.  In contending that the proposed order should be made, Mr McCoy SC for the appellant relies on its apprehension of a flood of applications to the courts for extension of time to appeal against conviction resulting in gravely disruptive consequences for the criminal justice system.  He submits that the principle of certainty is an important one and that making the proposed order would prevent these applications from being made and achieve certainty.  Whether the situation apprehended is as serious as that suggested by Mr McCoy SC depends upon the principle governing the Court’s discretion to extend time to appeal against conviction in this situation.  It is therefore necessary first, to identify the applicable principle in order to ascertain the magnitude of the problem which might arise before deciding whether the proposed order should be made.  If, for example, applications for extension of time, dealt with in accordance with the applicable principle, are likely to succeed only in exceptional circumstances, it would not be necessary to consider the appropriateness of resorting to the power of prospective overruling.

Extension of time

21.  The avenue of appeal is provided for by statute for persons convicted of criminal offences.  Various statutory provisions provide for appeals through the hierarchy of the court system.  (See ss 113, 114 and 114A of the Magistrates Ordinance, Cap. 227, ss 82 and 83Q of the Criminal Procedure Ordinance, Cap. 221, s.83 of the District Court Ordinance, Cap. 336 and ss 31, 32 and 33 of the Hong Kong Court of Final Appeal Ordinance, Cap. 484.)  These provisions lay down time limits for appeals and confer on the courts the discretion to extend time.  (In this judgment, the term “appeal” is used to include leave to appeal.)  This arrangement is an important feature of any criminal justice system.  It is in the interests of society for there to be finality in the criminal process.  But the time limits for the purpose of achieving finality are not absolute.  The courts have the discretion to relax the time limit where this is considered to be justified in the circumstances of an individual case.

22.  While the question, whether time should be extended for an appeal against conviction is essentially a matter of discretion for the courts, it is of course not an unfettered discretion.  The burden is on the defendant to justify exercise of that discretion in his favour. 

Applicable principle

23.  Whatever be the level of court, in dealing with applications for extension of time to appeal against conviction on the ground that the previous view that the relevant provisions imposed legal or persuasive burdens has now been authoritatively held to be incorrect and that the relevant provisions only impose evidential burdens, the principle to apply is that this ground by itself would not justify an extension of time.

24.  Such a principle is well-established by overseas jurisprudence.  In overseas jurisdictions, the courts in dealing with applications for extension of time for appeal against conviction have consistently applied the principle that time should not be extended for appeal only on the ground that an authoritative judgment subsequent to the conviction has held the previous understanding of the law to be incorrect.  See R v. Ramsden [1972] Crim LR 547, R v. Mitchell [1977] 1 WLR 753, R v. Hawkins [1997] 1 Cr. App. R. 234, R v. Ballinger [2005] 2 Cr. App. R. 433, R v. Unger [1977] 2 NSWLR 990, R v. Knight [1998] 1 NZLR 583 and R v. Thomas [1990] 1 SCR 713.  In adopting this principle, the courts recognize the practical necessity for finality in the criminal process.

25.  However, overseas jurisprudence does not exclude the possibility that there could be exceptional circumstances in a particular case which would justify the court in extending time for appeal against conviction on the ground that a subsequent judgment has held the previous understanding of the law to be incorrect.  Especially as the Court does not have before it an appeal raising a question relating to extension of time, it is not feasible for the Court on this occasion to attempt to define what constitute exceptional circumstances except to say that the circumstances must be so exceptional that the occasions when they would be held to exist would be very rare.  Cases where the defendant had pleaded guilty would not fall within this exception.  No opinion is expressed about the correctness of the decision in R v. Kwok Hing-man [1994] 2 HKCLR 160 in relation to the extension of time for an appeal against conviction for a non-existent offence.

26.  In deciding whether to apply for extension of time for appeal against conviction, defendants must take account of the principle referred to above that will be applied by the courts.  Having regard to this principle, the magnitude of the problem would appear to be much less than that apprehended by Mr McCoy SC.  Assuming that the courts have the power to engage in prospective overruling, its exercise is plainly not justified in this case.

27.  It should be noted that in dealing with applications for extension of time for appeals against conviction which may be made, the courts may have to adopt such summary procedure as may be appropriate for the court concerned.  See for example s.83S of the Criminal Procedure Ordinance, Cap. 221 and rule 7 of the Hong Kong Court of Final Appeal Rules, Cap. 484. 

Prospective overruling

28.  First, whether judicial power includes a power to engage in prospective overruling in a particular jurisdiction is a most intricate question concerning the proper role of the courts in the jurisdiction concerned.  It would necessarily involve a consideration of the courts’ function in the light of the separation of powers and the relationship between the executive, the legislature and the judiciary.  Ultimately, it is a question which has to be decided in the light of the constitutional framework of the jurisdiction concerned.  It is a problem which by its nature may not be susceptible to a common approach across the common law world.  It may be inevitable that different jurisdictions would come to divergent answers to this difficult problem.

29.  Secondly, the question whether the power to engage in prospective overruling exists may arise in a wide variety of situations.  It may arise in the context of private law, criminal law or public law.  It may have to be considered where the judgment relates to the common law, statutory interpretation or constitutional interpretation or a combination of these areas.  It might be that the same considerations do not apply to all these situations in relation to both whether the power exists and if so, its width and the circumstances that may justify its exercise.  In relation to statutory interpretation, it should be noted that in Spectrum, Lord Scott and Lord Steyn were of the view that the power does not extend to a decision on statutory interpretation and dissented on that matter.

30.  Thirdly, in relation to a judgment determining a constitutional issue, the question whether the power exists will have to be considered in the context of the range of remedies that may be available in this situation.  In Koo Sze Yiu v. Chief Executive FACV Nos 12 and 13 of 2006 (12 July 2006), the Court left open the question whether the courts have the power to grant a declaration of temporary validity of a law or executive action which has been declared unconstitutional.  See paras 32, 60 and 61.  It should be noted that such a remedy is even more far reaching than prospective overruling.  With prospective overruling, the court’s judgment would take effect from the date of the judgment.  But where a declaration of temporary validity is made, the judgment would not even take effect at that time.  It would only take effect after the expiry of the period as specified in the declaration sometime after the judgment.

31.  Fourthly, it is of the essence of the common law that it evolves to meet the changing needs of the society in which it functions.  Judges have the responsibility and indeed the duty to develop the common law to respond to changing needs.  Thus, when the House of Lords developed the tort of negligence on the neighbour principle in the seminal case of Donoghue v. Stevenson [1932] AC 562, it did not mean that this has been the position under the common law since time immemorial.  Similarly when the House of Lords decided in Arthur J S Hall & Co v. Simons [2002] 1 AC 615 not to follow its previous decision in Rondel v. Worsley [1969] 1 AC 191 on the question of the advocate’s immunity, it did not mean that Rondel v. Worsley was wrongly decided.  Rather, the question was reconsidered over three decades later in the light of changes in the law of negligence, the functioning of the legal profession, the administration of justice and public perceptions.  Where the common law has developed in this way, it is usually unnecessary to decide on the precise point of time when the change occurred.  Conceivably, such an issue may arise in a particular case.  Lest there be any misunderstanding, it should be added that no view is expressed on the question whether the common law in Hong Kong on the question of advocate’s immunity should be developed along the same lines as in England.

32.  Its capability of being developed by judges to meet changing needs is at the heart of the common law.  Developing the common law in this way cannot properly be regarded as an application of the power to prospectively overrule.  In relation to a common law question, that power would only be engaged, where contrary to a previous view, a judgment is given that the previous view was incorrect at the time it was held, overruling a previous authority on the point, if there was one.  And the court considers whether and if so the extent to which it should confine the retrospective effect of its judgment.

33.  Fifthly, it must be emphasised again that even if the power to engage in prospective overruling is held to exist in any situation, it is an extraordinary power.  And the courts must approach its exercise with the greatest circumspection. 

Mr Justice Bokhary PJ :

34.  I agree with the Chief Justice and Sir Anthony Mason NPJ in this appeal and the one heard together with it.  Striking down a law is a course of last resort.  The courts will strive to give laws a constitutional reading to save them, if possible, from being declared unconstitutional.  Each of these reverse burden provisions can and should be read to impose only an evidential burden.  So read each leaves defendants with what the presumption of innocence exists to provide.  By that I mean a measure of protection consistent with the idea that convicting the innocent is far more abhorrent than letting the guilty go free.  As for the question of limiting judicial decisions to prospective effect, I would leave it open.  On any view, these are not cases for imposing such a limitation. 

Mr Justice Chan PJ :

35.  I agree with the judgment of the Chief Justice and the judgment of Sir Anthony Mason NPJ.

Mr Justice Ribeiro PJ :

36.  I agree with the judgment of the Chief Justice and the judgment of Sir Anthony Mason NPJ.

Sir Anthony Mason NPJ :

Introduction

37.  These appeals raise a series of questions similar to those raised and dealt with in this Court’s judgment in HKSAR v. Lam Kwong Wai and Lam Ka Man (FACC No. 4 of 2005) which is delivered concurrently with the Court’s judgment in this case.  These appeals, however, concern s.47 of the Dangerous Drugs Ordinance, Cap. 134 (“the Ordinance”).  They also raise the question of prospective overruling which is an issue having more practical consequence in this case than in HKSAR v. Lam Kwong Wai and Lam Ka Man.  Related to this question is the interpretation of art.160 of the Basic Law and the     proper approach to be adopted by the courts in dealing with applications for extension of time to appeal against conviction.  These questions have great importance for the appellant because it apprehends that there are many persons who were convicted of an offence under ss 4 and 8 of the Ordinance and will seek an extension of time to appeal against their convictions on the ground that, in light of the Court of Appeal’s judgment, they were wrongly convicted.  Chief Justice Li deals with these questions in his judgment with which I agree.

38.  The appeals come to this Court pursuant to leave to appeal granted by the Appeal Committee for the appellant to pursue the following points which the Court of Appeal certified as points of law of great and general importance involved in its decision :

“(1) Once an accused is proven or presumed to have in his possession a dangerous drug, is the statutory presumption, until the contrary is proven, that the accused knew that what was in his possession was indeed a dangerous drug, provided for by Section 47(1) of the Dangerous Drugs Ordinance, Cap. 134 or by Section 47(2) of the Dangerous Drugs Ordinance, Cap. 134?

(2) Are Sections 47(1) and 47(2) of the Dangerous Drugs Ordinance, Cap. 134 consistent with the presumption of innocence prescribed by Article 11(1) of the Hong Kong Bill of Rights Ordinance, Article 14.2 of the International Covenant of Civil and Political Rights (ICCPR) as applied by Article 39 of the Basic Law; and with the right to a fair trial, protected by Article 10 of the Hong Kong Bill of Rights Ordinance, Article 14.1 of the ICCPR as applied by Article 39 of the Basic Law and Article 87 of the Basic Law?

(3) Whether the statutory presumptions under sections 47(1) and (2) of the Dangerous Drugs Ordinance, Cap. 134 are capable of an interpretation and construction permitting the court to “read down” the sections as imposing an evidential burden upon the accused?

(4) If the statutory presumptions under sections 47(1) and (2) of the Dangerous Drugs Ordinance, Cap. 134 do permit a court to “read down” the provisions as imposing an evidential burden upon the accused, whether this is still unconstitutional as the presumptions under section 47 do not provide a specific defence to the accused but cast a burden of proof on a necessary ingredient of the offence.”

39.  The issues which arise in relation to s.47 are :

(1) is the reverse onus of proof in relation to knowledge of the nature of the contents of a container imposed by s.47(1) or s.47(2);

(2) is the onus of proof imposed by each sub-section a persuasive onus of proof;

(3) if so, does it derogate from the presumption of innocence and the right to a fair trial as protected by the Basic Law and the Hong Kong Bill of Rights (“the BOR”);

(4) if so, can it be justified as having –

(a) a rational connection with a legitimate societal aim (the rationality test); and

(b) is it no more than is necessary to achieve that legitimate aim (the proportionality test);

(5) if not, can a remedial interpretation be applied to s.47(1) and (2), as was applied by the Court of Appeal, in order to preserve their constitutionality; and

(6) if so, what interpretation do they bear?

The legislative provisions

40.  Section 4 of the Ordinance makes it an offence to traffic in dangerous drugs.  A person convicted of that offence upon indictment is liable to imprisonment for life.

41.  By virtue of s.2, trafficking includes “possessing a dangerous drug for the purpose of trafficking”.  That was the form of trafficking alleged in these two cases.  So, as Stock JA said in the Court of Appeal, the concept of possession was central to the appeals.

42.  Section 8 of the Ordinance provides :

“(1) Save under and in accordance with this Ordinance or a licence granted by the Director thereunder, no person shall –

(a) have in his possession …

…

a dangerous drug.”

43.  Section 47 provides :

“(1) Any person who is proved to have had in his physical possession –

(a) anything containing or supporting a dangerous drug;

(b)  the keys of any baggage, briefcase, box, case, cupboard, drawer, safe-deposit box, safe or other similar container containing a dangerous drug,

shall, until the contrary is proved, be presumed to have had such drug in his possession.

(2)  Any person who is proved or presumed to have had a dangerous drug in his possession shall, until the contrary is proved, be presumed to have known the nature of such drug.

(3)  The presumptions provided for in this section shall not be rebutted by proof that the defendant never had physical possession of the dangerous drug.”

In this judgment, the word “container”, wherever appearing, is used so as to mean anything which contains or supports a dangerous drug, including the various things mentioned in s.47(1)(b).

44.  Sections 8 and 47 need to be read in the light of s.2(2) which provides :

“(2) For the purposes of this Ordinance, a person shall be deemed to be in possession of a dangerous drug or a pipe, equipment or apparatus, as the case may be, if it is in his actual custody or is held by some other person subject to his control or for him and on his behalf.”

It is not suggested, however, that s.2(2) qualifies or affects the presumptions or the reverse onus provisions in s.47.

The facts

45.  In both appeals it was accepted before the Court of Appeal that the defendant had possession of a container and knew that the container housed the substance which turned out to be a dangerous drug.  The first presumption imposed by s.47(1) that the defendant was in possession of the drug was not an issue.  A different presumption that the person in possession of a dangerous drug knew that it was a dangerous drug was in issue because each respondent said that he thought that the material in the container was not a dangerous drug.

Hung

46.  Hung was charged on an indictment containing one count which alleged that, on 26 October 2002, in Tak Hing Street, Kowloon, he unlawfully trafficked in a dangerous drug, namely 500g of a mixture containing 410g of heroin hydrochloride.  He was tried before Deputy High Court Judge Barnes and a jury and was convicted by a 5-2 majority.  He was sentenced to 15 years’ imprisonment.

47.  According to the admitted facts, the defendant was stopped by police on 26 October 2002 and searched when a block of dangerous drugs was found in a plastic bag.  The plastic bag was in a shoulder bag carried by the defendant.  The plastic bag contained another plastic bag in which was some paper which wrapped the block of dangerous drugs.  There was oral testimony that the defendant was seen outside the Regal Riverside Hotel at about 8 pm on that day and that he was then approached by another man who was not carrying anything.  They both entered the hotel where they sat down and talked.  After about 10 minutes conversation, the other man left.  Shortly thereafter he returned carrying something which he passed to Hung.  The two then parted.  Hung took a taxi.  When he was about to alight at the end of his journey, the police intercepted and arrested him.

48.  When interviewed, Hung said that a person called Ah Shui had asked him to go to the hotel to pick up a videotape and that is what he thought the bag contained.  At the trial Hung said in evidence that he had known Ah Shui for many years since the age of 16 but that they had lost contact until the summer of 2002, when Ah Shui proposed that they might engage in off-course betting.  Although Hung was offered a 10% commission for each customer introduced, none was introduced.  All that happened was that Hung placed football bets with Ah Shui and they sometimes met to eat and drink, when Ah Shui paid the bill.  On the day in question, Ah Shui asked Hung to collect a videotape for him and told him the tape was about English football matches.  Hung agreed and went to the Riverside Hotel.  Hung said that he did not look into the bag and did not know that it contained dangerous drugs.

49.  In her summing-up the judge informed the jury of the two s.47 presumptions and said of the first :

“Of course, there was never any dispute that he also had the block in his possession.  So he is presumed to have the drug in his possession as well.”

The judge left as the live issue the second presumption and said :

“If, after considering all the evidence, you are satisfied on a balance of probabilities that it is more likely than not that the accused did not know that dangerous drugs was inside the bag handed to him, then you must find him not guilty ...  If, however, you are satisfied that the accused failed to rebut the presumption that he was in possession of the dangerous drug and he knew that it was dangerous drug, then you have to decide whether the prosecution has satisfied you beyond a reasonable doubt that the accused possessed the drugs for the purpose of trafficking.”

50.  Five and one half hours after they retired, the jury sent a note to the judge stating three questions.  The second question was :

 “(2) Part of the jury, 3 out of 7, did not accept that the testimony given by the accused is the believable truth.  But they cannot find solid evidence to draw the conclusion that the accused knew that the item that was being carried inside his bag was really a dangerous drugs (sic) – they somehow got stuck there.  Please advise how to proceed.”

51.  Lengthy discussion followed between the judge and counsel.  The judge reminded the jury of the presumption, its nature and effect and that the defendant had to rebut the presumption on the balance of probabilities :

“… he had to show, on all the evidence before you, that it is more likely than not that he did not know.  So this is not a question of finding conclusive or concrete evidence that the accused knew of the nature of the dangerous drug.  The law already presumes that he knew.  So it is a question of whether you are satisfied he has rebutted the presumption on the balance of probabilities.”

52.  After the jury retired again, they sent a further note to the judge in these terms :

“Now, the job of the jury is to see if the evidence provided can let the accused to argue that he did not know that the item that was being carried in his bag is, in fact, dangerous drugs (sic).”

“In the process of evaluating whether the accused knew he was actually carrying DD, are those doubts that arise during the jury discussion be (sic) considered beneficial to the accused? i.e. Does the "benefit of doubt" still apply to judge whether he knew he was carrying DD, on the balance of probability?”

After a further direction from the judge, the jury retired and returned with their majority verdict.

Asano

53.  Asano was born in Japan in January 1981.  He was aged 22 at the time of his alleged offence.  He had never previously been outside Japan.  He was arraigned before Jackson J and a jury on an indictment that alleged that on 25 March 2003 at the departure hall of the Hong Kong International Airport, he unlawfully trafficked in a dangerous drug, namely 6.85kg of a crystalline solid containing 6.83kg of methamphetamine hydrochloride.  He pleaded not guilty but was convicted by the unanimous verdict and sentenced to 20 years’ imprisonment.

54.  Although the prosecution adduced oral evidence, the case for the prosecution largely rested on admitted facts.  According to the admitted facts, Asano presented himself at the Dragonair check-in counter on the morning of 25 March, checked in a suitcase and a rucksack.  The police then intercepted him and took from him some keys.  They opened the suitcase in which nothing incriminating was found.  Drugs, however, were found in the rucksack.  It contained a grey plastic bag and a plastic box in which was a document holder.  In the holder was a blue paper box.  Within the box, were three transparent zipper bags each of which contained a white substance which was found to be methamphetamine hydrochloride.  In the transparent plastic box was another box-like object wrapped in blue paper.  In the blue paper were four more transparent zipper bags each containing drugs.  The retail price of the dangerous drugs seized was in the region of HK$2.55 million.

55.  When interviewed, Asano denied that he knew that he was carrying dangerous drugs.  At the interview and at the trial, he maintained that, on leaving school, he came to know a man named Takashi who offered him a free trip to Hong Kong to bring back a quantity of legal drugs because Takashi’s passport had expired and he could not bring them back.  After arriving in Hong Kong he was given an air ticket to Japan by a man who also gave him a rucksack.  Asano went to the airport and checked in the rucksack.  He thought that the rucksack contained drugs that were not illicit.  The defence was that Asano was young and very naïve, it being suggested that no-one having knowledge that the drugs were illicit would have checked in a relatively flimsy rucksack containing such drugs.

56.  The judge identified as the sole issue in the case the question whether the defendant knew that the package in the rucksack contained dangerous drugs and further, that the presumption which was engaged was that created by s.47(2) of the Ordinance.

The Court of Appeal’s judgment

57.  The judgment of the Court of Appeal, delivered by Stock JA, proceeded first to deal with the interpretation of s.47(1) and (2).  It has been the subject of conflicting authorities in Hong Kong.  The Court’s conclusion on this point is stated succinctly in these terms :

“[s.47(1)] presupposes that it has been established that the accused was in physical possession of an item that transpired to be a dangerous drug and raises a presumption that he intended to possess that item and that [s.47(2)] raises the subsequent presumption that the accused was aware that the item was a dangerous drug.”

58.  The consequence of this interpretation was that the reverse onus of proof imposed by s.47(2) was engaged by the issue of fact which arose in both cases.

59.  The Court, having concluded that s.47(2) derogated from the presumption of innocence, went on to consider whether the derogation could be justified as having a rational connection with a legitimate societal objective and as amounting to no more than is necessary to achieve that objective.  As the objective was the need to address the serious problem of overcoming the major difficulty of proof of possession of dangerous drugs when a defendant maintains, as he frequently does, that he is unaware of the contents of a container which is in his possession, the Court had no difficulty in finding that s.47(2) had a rational connection with a legitimate objective.

60.  The critical question then was whether s.47(2) was disproportionate.  The Court found that it was and reached the same conclusion on s.47(1).

61.  The Court then, applied a remedial interpretation to s.47(1) and (2) in order to make them consistent with the Basic Law and the BOR, basing that remedial interpretation on s.3 of the BOR Ordinance and art.VII(3) of the Letters Patent which, although ceasing to operate in the HKSAR at midnight on 30 June 1997, had an impact on the Ordinance when it came into operation in 1992.  The remedial interpretation took the form of reading the persuasive onus imposed by s.47(1) and (2) down to an evidential onus.

The appellant’s case

62.  The main thrust of the appellant’s case on s.47 is that it does impose a persuasive onus of proof and that the persuasive onus satisfies both the rationality and the proportionality tests; in other words, the persuasive onus not only has a rational connection with the legitimate objective, as the Court of Appeal found, but also it derogates from the presumption of innocence no more than is necessary to achieve that legitimate objective.  The appellant also submits that the Court of Appeal erred in the interpretation which it placed on s.47(1) and (2).  The answer to this submission has no material bearing on the main thrust of the appellant’s case.  It is, however, convenient to deal with the submission at the outset.

The interpretation of s.47(1) and (2)

63.  According to Mr McCoy, SC for the appellant, s.47(1) incorporates a double presumption: first, a presumption that a person who has in his physical possession anything containing a dangerous drug or the keys to any container containing a dangerous drug, has legal possession of that dangerous drug; and, secondly, a presumption that the person has knowledge of the presence of the drug in the container.  On this argument, s.47(2) is not directed to creating a presumption of knowledge of the presence of the drug in the container for that is the subject of the second presumption created by s.47(1).  Instead, s.47(2) is directed to the case where a defendant is shown to have legal possession of a dangerous drug but contends that he thought that it was a drug other than that identified by the Government chemist and described in the particulars of the charge.

64.  This interpretation of s.47(1) and (2) has the support of three decisions of the Court of Appeal, R v. Tam Chun Fai [1994] 2 HKC 397 at 401F-G; R v. Ng Chiu Leung [1996] 1 HKC 181 at 187F-I; and HKSAR v. Chan Ming Fai [2001] 4 HKC 511 at 516D-517F; see also R v. Tsang Kwok-wing [1989] 1 HKLR 270 (which was concerned with s.24 of the Firearms and Ammunition Ordinance, Cap. 238).  Apart from the decision now under appeal, there is one Court of Appeal decision, HKSAR v. Chui Chi Wai [1999] 3 HKC 225 which takes the contrary view and supports the Court of Appeal’s view.  The authority of Chui Chi Wai is weak because in that case the Court of Appeal was not referred to its earlier decisions.

65.  Although the question of interpretation has been the subject of disagreement, the arguments which support the Court of Appeal’s interpretation of s.47(1) and (2) are, with respect, the stronger.  As a matter of language and analysis, sub-section (1) does appear to create two presumptions, even if the second presumption arises only by reason of the knowledge imputed to the defendant by presuming that he has legal possession of the contents of the container.  The operation of the sub-section is to be understood in the light of the principle of the common law, that :

“… the term ‘possession’ is satisfied by a knowledge only of the existence of the thing itself and not its qualities, and that ignorance or mistake as to its qualities is not an excuse.”

(Reg v. Warner [1969] 2 AC 256 at 305F, per Lord Pearce).  See also R v. Boyesen [1982] AC 768 where Lord Scarman (at 773H-774A) said :

“Possession is a deceptively simple concept.  It denotes a physical control or custody of a thing plus knowledge that you have it in your custody or control.  You may possess a thing without knowing or comprehending its nature: but you do not possess it unless you know you have it.”

66.  When sub-section (1) is so understood, its evident purpose is to enable the prosecution to establish a case by proving that the defendant had physical possession of a container or keys to a container which housed a dangerous drug.  Once physical possession is established, the double presumption arises, that of legal possession of the drug and that of knowledge.  But knowledge of what?  As a constituent element of the concept of legal possession, it is knowledge of the presence of the thing possessed that is required, not knowledge of its nature or its qualities, as the statements quoted from Warner and Boyesen so clearly demonstrate.

67.  There was, accordingly, no necessity for the implied presumption of knowledge in s.47(1) to extend to knowledge of the nature of the drug or knowledge that it was a dangerous drug, in order to constitute legal possession at common law.  And, in that context, in the absence of some indication of legislative intention (of which there is none), there is no reason at all why the presumption as to knowledge of the presence of the thing itself should be extended to knowledge of its nature or qualities.  On this view of s.47(1), the presumption of legal possession of a substance would not be displaced by the defendant showing that, although he was aware that there was a substance housed in the container, he did not know that it was a dangerous drug.  Under s.47(1), he would need to show, on the probabilities, that he was unaware of the presence of a substance in the container.

68.  Not only is there no indication of legislative intention that s.47(1) contains an unexpressed presumption extending to knowledge of the presence of a dangerous drug, s.47(2), by providing expressly for a presumption on that matter, negates the basis for such an implication in sub-section (1).  In so providing, s.47(2) also enables the defendant to prove that he was unaware of the presence of a dangerous drug, a course not available under s.47(1).

69.  As a matter of first impression, there are difficulties with s.47(2).  The opening words of sub-section (2) suggest that it operates outside the ambit of sub-section (1), after the defendant’s legal possession of the dangerous drug has been established by proof or presumption.  In combination with the reference to “the nature of the drug”, the opening words excite the reader to speculation about an array of improbable explanations of the purpose of sub-section (2).  But one thing is very clear and that is that s.47(1), (2) and (3) are all related in various ways to proof of offences relating to the possession of a dangerous drug, whether by way of proof or presumption.  This circumstance suggests that the presumption under s.47(2) of knowledge of the presence of a dangerous drug in a container is relevantly linked to the possession-based offences created by ss 4 and 8 of the Ordinance.

70.  The explanation of the relationship between s.47(1) and (2) and the seemingly infelicitous language of sub-section (2) is to be found, as the Court of Appeal held, in attributing to it the purpose of responding to the expectation that the courts would, in accordance with established principle, read into the offence provisions, a requirement of knowledge of the presence of a dangerous drug (see R v. Warner at 307, per Lord Pearce; He Kaw Teh v. The Queen (1985) 157 CLR 523 at 589, per Brennan J).  The case for adopting this approach is a very strong one.  The offences created by ss 4 and 8 are serious offences, the former (trafficking) very serious, being punishable by a sentence of life imprisonment.

71.  So understood, s.47(2) sheds most of the difficulties which have been thought to surround it.  It is directed at an additional element of the offences which stands outside the common law concept of legal possession dealt with by s.47(1).  In the expectation that the two presumptions carrying the prosecution case based on physical possession forward to legal possession will not be enough to establish the mental element – knowledge of the nature of the drug – on which the courts would insist, a further presumption is provided by s.47(2).  Once this is acknowledged, the relationship between s.47(1) and (2) is comprehensible and the opening words of sub-section (2) serve the purpose of indicating that, after proof or presumption of legal possession, there is introduced another presumption, namely of knowledge of the nature of the drug.  The explanation provides an important role for s.47(2), whereas, on the appellant’s submission, the suggested purposes which the sub-section serves are unconvincing.

72.  So I agree with the Court of Appeal and reject Mr McCoy SC’s submission on this question.

A persuasive onus

73.  Clearly the reverse onus imposed by s.47(2) is a persuasive onus and so is the onus imposed by s.47(1). 

Derogation from the presumption of the innocence

74.  It is equally clear, applying the approach adopted by this Court in HKSAR v. Lam Kwong Wai and Lam Ka Man, FACC No. 4 of 2005, para.41, that the reverse onus under s.47(2), as well as that under s.47(1), derogates from the presumption of innocence and consequently from the right to a fair trial.  The prosecution is required to do no more than prove physical possession of a container, or of keys to a container, containing a dangerous drug.  Presumptions then arise which throw on to the defendant the onus of proving that he did not have possession of such a drug or that he was unaware of the presence of such a drug.  It is clear enough that the defendant may be convicted under s.4 and s.8 because he fails to prove on the balance of probabilities that he did not have legal possession of the drug or that he was unaware that he had such a drug in his possession, yet the evidence may be such as to generate a reasonable doubt that he had possession or that he had knowledge that what he possessed was a dangerous drug.  What is more the reverse onus under s.47(2) relates to a critical aspect of the offence, involving what is blameworthy conduct on the part of the defendant, namely his knowledge that he is in possession of a dangerous drug.

Justification

75.  In this situation, it is for the appellant to justify the derogation from the presumption of innocence by showing that the derogation :

(a) is rationally connected with the pursuit of a legitimate societal objective (“the rationality test”); and

(b) that the means employed – the imposition of the reverse onus – are no more than is necessary to achieve that legitimate objective (“the proportionality test”).

As this Court discusses the relevant principles governing these matters in HKSAR v. Lam Kwong Wai and Lam Ka Man, there is no occasion to repeat what is said there.  Likewise, I refrain from setting out the relevant provisions of the Basic Law and the BOR as they are set out in my judgment in that case.  As noted in that judgment it will be sufficient to examine the issues as they relate to the presumption of innocence in the context of the Basic Law and the BOR (as applied through art.39 of the Basic Law) as any impact on the right to a fair trial flows from the impact on the presumption of innocence.

The rationality test

76.  The rationality test can be dealt with shortly.  The Court of Appeal was correct in holding that it was satisfied.  Proof of the elements of possession offences relating to dangerous drugs is notoriously difficult, particularly in cases where the drugs are in a container and the defendant maintains that he did not know that what was in the container was a dangerous drug.  The imposition of presumptions as to legal possession and the defendant’s knowledge of the nature of the drug possessed is rationally connected with the legitimate objective of preventing and suppressing the trade and use of dangerous drugs and punishing those who participate in them.

The proportionality test

77.  The application of the proportionality test is the critical issue in this case.  At the outset, it is appropriate to say that the Court of Appeal was right in concluding that the persuasive burdens imposed by s.47(1) and (2) failed the proportionality test and then to explain briefly the reasons why that conclusion was correct.

78.  As noted in HKSAR v. Lam Kwong Wai and Lam Ka Man, it is accepted that, in some situations, a reverse onus provision may satisfy the proportionality test; see, for example, L v. D.P.P. [2003] QB 137; R v. Matthews (Mark) [2003] 2 Cr. App. R. 19.  But, the burden of justification rests with the State and the reasons supporting the justification must be compelling.  Granted that weight must be given to the legislative judgment, particularly where, as here, the State is grappling with the acute problem of dangerous drugs and the sophisticated techniques employed by criminals engaged in drug trafficking, it is the responsibility of the courts to ensure that the constitutional rights of the individual are adequately protected so that the interference with those rights is no more than is necessary to achieve the legitimate societal objective.  In this context, the courts are well-equipped to discharge that responsibility because the issue is one that relates to matters of proof, onus and evidence.  In discharging this responsibility, the courts, as the Court of Appeal noted, recognize that the more serious the crime, the more important is the protection of the constitutional rights of the individual.

79.  Various considerations are relied upon to support the imposition of a persuasive onus.  First, there is the gravity of the social problem generated by the trafficking and use of dangerous drugs and the difficulty of solving that social problem, a difficulty which has been experienced throughout the world.  Secondly, there is the particular problem, already referred to, of proving possession and knowledge on the part of a defendant of the identity of the contents of a container which is in his possession.  Thirdly, proof of the absence of such awareness is a matter peculiarly within the defendant’s own knowledge.

80.  On the other hand, there are very strong countervailing considerations.  First, there is the very real possibility, mentioned earlier, that a defendant may be convicted because he fails to discharge the burden of proof imposed upon him, even though the evidence raises a reasonable doubt as to his possession or knowledge of the presence of a dangerous drug in the container.  That this possibility is open is a very serious interference with the right to the presumption of innocence.  That the possibility is not simply a theoretical possibility is strikingly demonstrated by the exchanges between the jury and the trial judge at Hung’s trial.  Secondly, the persuasive onus is imposed on the defendant in relation to the critical element in the offence, the defendant’s knowledge which is both the mens rea or mental element and the core element of blameworthiness in the offence.  Thirdly, the s.47(2) presumption operates in addition to the presumption of legal possession created by s.47(1).  So the prosecution, by merely, proving the defendant’s physical possession of a container, brings into existence presumptions of legal possession of the contents of the container and knowledge of the nature of its contents.  The very purpose of s.47(1) and (2) is to throw on to the defendant the burden of disproving legal possession and knowledge of the nature of the contents, these elements being the substratum of a possession-based offence under s.4 or s.8.

81.  This derogation from the presumption of innocence is so severe that it is not sustainable unless it can be shown at least that the legitimate objective cannot be achieved otherwise than by the imposition of these reverse burdens of proof.  This has not been shown.  The appellant has not demonstrated that an evidential onus of proof would be inadequate to achieve that objective.  Indeed, it does not appear that the legislative endorsement of s.47(1) and (2) was based on a considered judgment that an evidential onus would not have achieved the legitimate objective.

82.  The House of Lords majority decision in R v. Lambert [2002] 2 AC 545 confirms this view.  In that case, the majority concluded that the imposition of a persuasive burden on the defendant to prove absence of knowledge by way of a defence to a charge of being in possession of cocaine with intent to supply, contrary to s.5(3) of the Misuse of Drugs Act 1971 (UK), was a derogation from the presumption of innocence under art.6(2) of the European Convention on Human Rights and Fundamental Freedoms, that it could not be justified as being no more than necessary for the achievement of the legitimate objective and that it should be treated as an evidential onus.  Mr McCoy SC seeks to distinguish and to curtail the significance that Lambert might otherwise have for Hong Kong by pointing out that Lord Steyn in Lambert (at 573A-B) relied on the statutory erosion in England of the traditional right of silence as a basis for saying that the persuasive onus was disproportionate and an evidential onus was sufficient.  His Lordship specifically referred to s.34 of the Criminal Justice Act 1994 which enables an English judge to comment on an accused’s failure to mention facts when questioned or charged.  This provision has no counterpart in Hong Kong.  In Hong Kong, the failure of a person charged with an offence to give evidence cannot be made the subject of any comment by the prosecution (Criminal Procedure Ordinance, Cap. 221, s.54(1)(b)).  And, in Hong Kong, the trial judge should make no comment on a defendant’s exercise of his right of silence (Lee Fuk Hing v. HKSAR (2004) 7 HKCFAR 600 at 622D-G, per Mortimer NPJ). 

83.  Granted the difference in this respect between England and Hong Kong, the difference affects only one of the matters on which Lord Steyn relied for his statement (at 572H) that a :

“… new realism in regard to the problems faced by the prosecution in drugs cases have significantly reduced their scope.”

Other points made by Lord Steyn are applicable in Hong Kong.  It is simple common sense that possession of a container housing drugs will generally demand a full and adequate explanation, while the introduction of a statement by the defendant containing a self-serving explanation that he did not know what was in the container can be dealt with by an appropriate direction (Lambert at 573B-E, per Lord Steyn).  It would be a serious mistake to think that a jury will not evaluate for itself the decision of a defendant to prefer silence, when offered an opportunity to make a statement or explanation on being questioned or charged.  The difference in permissible judicial comment between England and Hong Kong is not of such significance as to undermine the value that the decision in Lambert has for Hong Kong in considering the issues in this case.  It is open to a trial judge to invite the jury to consider the common sense point (made by Lord Steyn at 575C) that it must be comparatively rare for a drug dealer to entrust a valuable parcel of drugs to an innocent.

84.  Mr McCoy SC relies heavily on the dissenting speech of Lord Hutton in Lambert (at 622H-623A), where his Lordship said that “the threat of drugs to the well-being of the community and the peculiar difficulty of proving knowledge in such cases” justify the persuasive burden.  In my view, neither that threat nor the difficulty of proof nor the need to deter justifies such a burden.  With respect, I do not agree with Mr McCoy SC’s submission when it has not been demonstrated that less intrusive means have been considered and discarded.

85.  It follows that the persuasive burdens imposed by s.47(1) and (2) are disproportionate and that, in each sub-section, an evidential onus would be a sufficient means of achieving the legitimate objective.

Remedial interpretation

86.  The Court of Appeal was right to apply a remedial interpretation to s.47(1) and (2) by treating the burdens of proof as creating an evidential onus only.  But in accordance with the approach adopted by the Court in HKSAR v. Lam Kwong Wai and Lam Ka Man, that remedial approach is to be based on implied powers conferred upon the courts of the Region by the Basic Law itself.  There is no occasion to express an opinion on the case for remedial interpretation based on s.3 of the BOR Ordinance which ceased to have effect before 1 July 1997.

Conclusion

87.  In the result the following orders should be made :

(1) Declare that s.47(1) and (2) each should be read and given effect as imposing an evidential onus only.

(2) Appeals dismissed.

 

Chief Justice Li :

88.  The Court unanimously dismisses the appeals and makes the declaration set out in the concluding paragraph of Sir Anthony Mason’s judgment.

89.  In concluding, the Court wishes to pay tribute to the two helpful and comprehensive judgments of the Court of Appeal given by Stock JA on the appeal against conviction and prospective overruling respectively which have been of considerable assistance to the Court.