HKSAR v. OR KWOK WAI

CACC 456/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 456 OF 1998

(ON APPEAL FROM DCCC 1217/1997)

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J U D G M E N T

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Mayo J.A. (giving the judgment of the Court):

1. The applicant was convicted on two counts of conspiracy and nineteen counts of forgery after a trial in the District Court before H.H. Judge Chua. He was sentenced to a total of 4 years 3 months imprisonment and now seeks leave to appeal against his convictions and the sentences which were imposed.

2. In the course of an excellent 32 page closely typed Reasons for Verdict the Judge sets out in some detail the scheme which was adopted by the applicant to evade the payment of duties on cigarettes and the steps which were taken by him and his associates to avoid detection and prosecution by the Customs and Excise Department.

3. The main prosecution witness Mr. Hsu who was formerly a junior Customs and Excise Officer had already been convicted on his own plea to charges directly and indirectly connected with this case. He gave his evidence under an immunity from prosecution. Notwithstanding this the Judge accepted him as a reliable witness of the truth. It is apparent from the Perfected Grounds of Appeal which have been lodged by Mr. Ross for the applicant that he accepts that it is not open to him to challenge the Judge's findings of fact. What he attempts to do in this application is to challenge the legality of the convictions for the reasons given. A consequence of this is that it is not necessary to descend into great detail so far as the evidence is concerned. It is sufficient to have a general background of the circumstances of the case and particulars of the charges which were laid:

"1st Charge (against D1 & D2)
Statement of Offence

Conspiracy to pervert the course of public justice, contrary to section 159A(1)(a) of the Crimes Ordinance, Cap. 200.

Particulars of Offence

OR Kwok-wai and LO Chu-po alias Anna, between the 23rd day of July 1997 and 31st day of August 1997, in Hong Kong, conspired together with HSU Kam-wing, CHAN Sik-man, CHAN Chung-yan to pervert the course of public justice by agreeing that LO Chu-po, alias Anna, CHAN Sik-man and CHAN Chung-yan should falsely represent to officers of the Customs and Excise Department that a fictitious person named CHAN Kam-ming was the owner of counterfeit cigarettes in a container seized by the Customs and Excise Department.

2nd Charge (against D1 only)
Statement of Offence

Conspiracy to defraud, contrary to Common Law.

Particulars of Offence

OR Kwok-wai, on divers days between the 16th day of July 1997 and the 4th day of August 1997, in Hong Kong, conspired together with YEUNG Kam-fai, CHOW Kim-pan, CHAN Chung-yan, HSU Kam-wing, CHAN Sik-man and other persons unknown, to defraud officers of the Customs and Excise Department by dishonestly representing that Wellingtat Industrial Company Ltd. was the licensee/applicant for an export permit dated the 29th of July 1997 for the exportation from Hong Kong of 930 cases of cigarettes which destination was Singapore."

4. So far as the 1st charge is concerned the relevant evidence starts with the seizure by Customs and Excise Offices of the shipment of counterfeit cigarettes belonging to the applicant.

5. It was quickly appreciated by all parties concerned that almost inevitably an investigation would be undertaken by the Department with a view to prosecuting anyone who had acted illegally.

6. With this in mind a number of meetings took place to determine what action could be taken to frustrate or negate the Customs Officers endeavours. This included the destruction of documentary evidence and computer records.

7. It also included the invention of a fictitious character Chan Kam-ming who would become the owner of the container and providing this character with a telephone number where one of the conspirators would answer any telephone calls and claim to be Chan Kam-ming.

8. The second conspiracy was a separate conspiracy. The subject matter of the conspiracy was a different consignment of cigarettes. Although some of the conspirators were the same as those involved in the first conspiracy some were not. The object of this conspiracy was also of a different nature.

9. At a meeting at the end of July it was appreciated that it was necessary to export a large consignment of cigarettes from the Mainland to Singapore. For this purpose it was necessary for the consignment to go through Hong Kong. The cigarettes in question were counterfeit and it was feared that if the channels previously used were used for this there was a considerable risk that Customs and Excise may seize the cargo and inspect it.

10. Accordingly it was agreed that documentation would be prepared on the basis that the permit application would be made by Wellingtat who held an appropriate licence and that instead of the normal shipper Far East Shipping, Modern Shipping Company would be engaged. Also the cigarettes would incorrectly be described as being "Double Happiness" cigarettes. In addition to this it was apparent that the owner of the goods was the fictitious Chan Kam-ming referred to in the 1st charge.

11. The proprietor of Wellingtat had no knowledge of these arrangements and had not authorised anyone to use his company's name or license.

12. So far as charges 3 to 21 are concerned they were all framed in a similar manner save for the relevant details.

13. Charge 3 reads:

"3rd Charge (against D1 only)
Statement of Offence

Forgery, contrary to section 71 of the Crimes Ordinance, Cap. 200.

Particulars of Offence

OR Kwok-wai, on or about the 19th day of June 1997, in Hong Kong, made a false instrument, namely an application for Export Permit under the Dutiable Commodities Ordinance, Cap. 109 in the name of Palun Transportation Ltd., with the intention that he or another should use it to induce an officer of the Customs & Excise Department to accept it as genuine, and by reason of so accepting it to do or not to do some act to his own or any other person's prejudice."

14. Here the prosecution case was that the applicant caused Mr. Hsu to apply for nineteen export licences in the name of Palun Transportation Co. (the holder of a licence) to export nineteen truck loads of Marlboro cigarettes from Hong Kong to the Mainland. The proprietor of Palun had no knowledge of this.

15. Grounds 1 and 2 of the Perfected Grounds of Appeal have been abandoned.

16. Ground 3 reads:

"3. In relation to charges 1 and 2, the convictions are bad in law as the evidence in support of the charges, if accepted relate to one not two conspiracies."

17. From the very brief summary of the facts referred to in this judgment it is evident that while there were some connecting factors these two conspiracies were separate conspiracies. The main distinguishing feature was the stated objective. In the first conspiracy what the parties were doing was to cover up their tracks and forestall the likelihood of criminal proceedings being instituted against those conspirators who had been guilty of criminal offences. This was an attempt to pervert the course of justice.

18. The second conspiracy was of a different nature. Here the object of the exercise was to defraud the Customs and Excise Office. This was to be achieved by "camouflaging" the exportation of the cigarettes by furnishing false particulars in the hope that the cargo would escape the vigilance of Customs and Excise Officers.

19. There were sufficient distinguishing features to establish that these conspiracies were separate and distinct and this ground must fail.

20. Ground 4 reads:

"4. In relation to charge 1, the Learned trial Judge erred in ruling that the particulars of the charge constitute a conspiracy to pervert the course of public justice when the particulars constitute a conspiracy to commit an offence under section 36 of the Dutiable Commodities Ordinance (Cap 109)."

21. The basis of Mr. Ross's submission is that the activities referred to in the 1st conspiracy constituted a contravention of s.36 of the Dutiable Commodities Ordinance, Cap. 109.

22. S.36 reads:

"36. Misrepresentation, concealment, removal of goods, and defacement of licence or permit

(1) No person shall make any incomplete statement or declaration or furnish any incorrect information, whether or not such statement, declaration or information is made verbally or in writing, or apply any incorrect description or supply any incorrect particulars in any document made or furnished for the purposes of this Ordinance or for any licence or permit to be issued under this Ordinance.

(2) Any person who -

(a) attempts to evade payment of duty on any goods to which this Ordinance applies, embarks or causes to be embarked for exportation on any ship or aircraft, or produces or causes to be produced to any member of the Customs and Excise Service to be so embarked -

(i) any goods to which this Ordinance applies and which are not intended for export; or

(ii) any goods, matter or thing as goods to which this Ordinance applies, the same not being goods to which this Ordinance applies or which are different in type, nature, quantity or quality from the goods shown on any export permit or statement which is presented and which purports to cover such goods; or

(b) with any such intent fraudulently removes, deposits or conceals any goods, matter or thing; or

(c) after any goods to which this Ordinance applies have been embarked for exportation on any ship or aircraft, without the consent of the Commissioner opens the packages in which the goods are contained or cancels, or obliterates, or alters the marks, letter or devices thereon,

shall on summary conviction, in addition to all other penalties which he may thereby incur, pay or forfeit either treble the amount of duty payable on any goods involved or the sum of $50,000, at the election of the Commissioner (which election shall be certified by the Commissioner in writing under his hand), and all such goods, matters or things shall be forfeited and may be seized by any member of the Customs and Excise Service. (Amended L.N. 294 of 1982; L.N. 338 of 1995)

(3) No person shall without lawful authority alter, deface or make any erasure on a licence or permit, or have in his possession a licence or permit on which such an erasure has been made or which has been so defaced or altered.

(Amended 46 of 1996 s .18)

[cf. 1840 c. 18 s. 15 U.K.; 1918 c. 15 s. 15(5) U.K.]"

23. Mr. Ross went on to contend that the legislature by enacting s.36 must have intended to repeal the common law offences of attempting to pervert the course of justice so far as that offence applies to the furnishing of false information to Customs Officers. It will be appreciated that the section carries much lighter penalties than those relating to perverting the course of justice.

24. The fallacy of this argument can be demonstrated by the fact perverting the course of justice covers a much broader range of activities than those contemplated by s.36. The Judge who heard submissions on this matter had this to say at p.45 of the appeal bundle:

"A person may supply false information in breach of section 36 without intending to pervert the course of justice. Section 36 is narrower in ambit, allowing for summary process for a less grave offence. On the other hand, by the coincidental fact that, in attempting to pervert the course of justice, an offender supplied information, does not mean the prosecution is bound to charge the special provision, which carries a maximum of 2 years' imprisonment and a fine of HK$1 million. When appropriate, the prosecution may charge the more serious offence as it has done here.

In my view, section 36 and attempting to pervert the course of justice, are aimed at different mischiefs and are meant to run in tandem. Furthermore, I find that the particulars of the charge do not allege the supply of the incorrect information was in connection with 'the purposes of this ordinance' or 'for any licence or permit' but essentially to pervert the course of justice.

In the circumstances, I am satisfied the charge is appropriate. I further find there is no requirement that the prosecution should proceed summarily. Therefore, I rule I am properly seized of the 1st charge."

25. With respect we agree with this analysis of the situation. Perhaps the most conclusive observation which can be made on this is that had the legislature intended s.36 to have the effect contended for by Mr. Ross it would no doubt have provided for it.

26. This is hardly surprising. In most cases s.36 is contravened with the object of evading excise duties. Almost invariably this is a much less serious matter than an attempt to pervert the course of justice.

27. This ground cannot succeed.

28. Ground 5 reads:

"5. In relation to charges 3 to 21 inclusive, the Learned trial Judge erred in ruling that section 71 of the Crimes Ordinance (Cap 200) applies to the conduct particularized in the charges when the particulars constitute offences under section 37 of the Dutiable Commodities Ordinance (Cap 109)."

29. Again submissions were made to the Judge by Mr. Ross on this issue. The Judge's analysis of the position is contained at pages 47 to 49 of the appeal bundle.

30. The important point which was appreciated by the Judge is that s.71 of the Crimes Ordinance, Cap. 200 is not the same as s.37 of the Dutiable Commodities Ordinance, Cap. 109. The essential difference between the two sections is that there is a requirement in s.71 to prove an intent to cause prejudice. There is no such requirement in s.37.

31. Equally important there is nothing to suggest that the legislature intended to repeal the operation of s.71 when s.37 was enacted.

32. The conclusion reached by the Judge at p.49 of the appeal bundle was the correct one and this ground must also fail.

33. None of these grounds can succeed. The convictions were in no way unsafe or unsatisfactory and this application is dismissed.

Sentence

34. When imposing the sentences she did the Judge took a serious view of the matter. It was a carefully planned scheme involving the evasion of substantial excise duties. When passing the individual sentences the Judge said:

"In the circumstances, the sentences I imposed on D1 are:

(1) Charges 3 to 21 is 3 years and 9 months;

(2) Charge 1, 18 months;

(3) Charge 2, 21/2 years.

Looking at these sentences globally, the sentence on the 2nd charge will run partly concurrent and partly consecutive to the sentence on the 1st charge, so that it is consecutive by 4 months.

The sentence on charge 2 will also run partially concurrent but consecutive to those sentences by 2 months so that he will serve altogether 4 years and 3 months."

35. The main complaint made by Mr. Ross is that there is an undue disparity between the sentences imposed in the other trials against the applicant's associates and the sentences imposed on him.

36. Particular reference is made to Yeung Kam-fai who it was alleged was the main instigator of the scheme. There were valid reasons to impose an overall heavier sentence on the applicant. He was convicted of a conspiracy to pervert the course of justice, a conspiracy to defraud the Customs and Excise Office and nineteen offences of forgery. Mr. Yeung was not convicted of any forgery offences.

37. We do not consider that the overall sentence imposed was either wrong in principle or manifestly excessive. The application must accordingly be dismissed.

38. Mr. Ross was however correct to observe that it is incumbent upon a sentencing Judge to impose separate sentences on every charge where there has been a conviction. It would appear that what the Judge must have intended was to pass sentences of 3 years 9 months on each of the forgery charges and that they should all be served concurrently. We would amend the Judge's order to reflect this omission.