R. v. WALLEM SHIPPING (HK) LTD.

MAGISTRACY APPEAL NO.1552 OF 1994

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

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J U D G M E N T

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1. The appellant is a shipping company and was charged that as the agent for the owner of a vessel arranged, on behalf of Jardine Freight Services (HK) Limited (a shipping agent of a USA buyer), for the export of 475 cartons of jackets to Russia without the necessary export licence. Subsequently the licence was applied for and granted. Both the appellant and Jardine Freight Services (HK) Limited were summoned and at the request of the Crown the summonses were consolidated at the hearing. At that hearing, the appellant was not legally represented. An employee of the company, Mr So, attended and pleaded guilty on the appellant's behalf and offered no mitigation.

2. The magistrate applied theMarvel's tariff at 40% of the FOB value and apportioned this as to $200,000 against the appellant and the balance of $57,840 against Jardine Freight Services (HK) Limited. The appellant has appealed against the fine on the grounds that it was excessive.

3. Mr King, who appears for the appellant, submits that there was substantial mitigation which, if put before the magistrate, would have resulted in a much reduced fine.

4. Before the magistrate, counsel representing Jardine Freight Services (HK) Limited advised the magistrate that his client had given clear instructions to the appellant not to ship the goods because his client company was aware that no export licence had been issued. As no objection to this submission was taken by Mr So at the time, the magistrate, not surprisingly, proceeded on the basis that the claim was true.

5. Mr King's instructions are that the claim was not in fact true and that the goods had been packed and inaccurately labelled as general cargo by the owners. Such goods do not require an export licence. He submits that the appellant had dealt with the owner on previous occasions without problems arising and in this instance had acted in good faith when shipping the goods. He advises me that when the appellant became aware of the lack of the necessary licence, contact was made with Russia and instructions given that the goods be held until the appropriate licence was obtained.

6. It is not in dispute that the goods involved in the transaction were not strategic goods and that the FOB value was $639,600.

7. Mr King tells me that the appellant proceeded with the transaction on the basis of a 5% commission on the total freight charges and that the commission would be $780. He also refers to the clear record of the appellant, a company which has been in operation in Hong Kong for many years and that over the last 3 years has, on average, exported 4,719 20 ft containers a month. The appellant comes, therefore, before the court with an unblemished record.

8. No criticism can be levelled at the magistrate in imposing the fine that she did because, as I have said, nothing was said in mitigation on behalf of the appellant and no challenge was taken to the submissions that were made on behalf of Jardine Freight Services (HK) Limited. If these matters had been raised at the time, I do not doubt that she would have felt the need to hold an enquiry to decide what the culpability was vis-a-vis the various parties involved.

9. It is, of course, necessary to consider each case on its own facts and the fine that is imposed should reflect the culpability of the parties. Accepting as I do what Mr King has said to me, I am satisfied that if the magistrate had heard these matters and being satisfied that the appellant's position was as it has been put to me, then she would have imposed a lesser fine. I am satisfied that the appeal should be allowed and that the fine be reduced to $20,000.