HKSAR v. FUNG KIN CHUNG

IN THE COURT OF APPEAL OF THE HIGH COURT

1997, No. 213
(Criminal)

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J U D G M E N T

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Gall, J.: (delivering the judgment of the Court)

1. The applicant was convicted on 14^th April 1997 of three charges of possession of unauthorized copies of various material in which copyright subsisted, contrary to s.5(1) of the Copyright Ordinance, Cap.39 and one charge of possession for sale of goods to which a forged trademark was applied, contrary to s.9(2) of the Trade Descriptions Ordinance, Cap.362.

2. In respect of each of the three charges contrary to the Copyright Ordinance, the applicant was sentenced to 8 months' imprisonment and in respect of the offence contrary to the Trade Descriptions Ordinance, the applicant was sentenced to 10 months' imprisonment, all sentences were ordered to be served concurrently.

3. The applicant was arrested on 10th February 1996 when officers from the Customs and Excise Department observed him repeatedly carrying objects from a building adjacent to the Golden Shopping Arcade in Shamshuipo to that shopping arcade. He was followed and observed to enter a flat on the 3rd Floor of Golden Building. When he next left the premises carrying a plastic bag, officers intercepted him and after revealing their identities, searched the bag. The bag contained 13 compact discs suspected of infringing copyright and two receipts relating to those discs. He was escorted back to the flat and it was searched. In it were found a bundle of laminated display cards depicting CD-Rom covers of disc titles, a price labeller and a roll of price labels, 7,575 CD-Rom discs and 5,021 video compact discs. The applicant was arrested and cautioned.

4. The applicant admitted after caution that he was the owner of the 13 compact discs carried by him at the time of the arrest. They were intended for sale by him at the Golden Shopping Arcade. He went on in a later written statement to say that the 13 compact discs found in his possession belonged to him and had been copied without the authorisation of the copyright holder. The two receipts in the plastic bag related to the sale of those 13 compact discs to others and that he was in the process of delivering them. He gave details of the profits that he made on the sale of each video compact disc and in respect of each CD-Rom. He admitted that all the other discs seized from his home belonged to him and were bought for the same price and were intended for sale in the Golden Shopping Arcade. He said that he was in business on his own account and that he rented the premises for some $7,000 per month.

5. At the trial of the applicant, a summary of facts was agreed including the facts that I have outlined above and in addition the following was agreed by the applicant by way of Background :

"As a result of frequent raids by officers of the Customs & Excise Department on retailers at the Golden Shopping Arcade, Shamshuipo, most shops have, of recent times, displayed only empty cases or inlaid cards of the infringing computer software they have available for sale. When a customer has selected the software he wishes to purchase, a telephone call is made to a nearby storage facility, and shortly thereafter, the custodian of the stock will bring only those discs that have been ordered and paid for. The 'custodian' is often a distributor operating quite independently of the owners of the shops he supplies. Customs & Excise Officers have accordingly modified their enforcement strategy from raids on the retailers, to covert surveillance to identify the persons effecting delivery of the ordered discs and thus to identify the premises where they are stored."

6. It is quite clear from the admissions by the applicant he was the sole proprietor of a storage facility in the area of Golden Shopping Arcade, Shamshuipo and that his function in the illegal sale of video compact discs and CD-Roms was to keep a stock of infringing material which would be ordered from him by shops in the Golden Shopping Arcade and that he would then deliver from his stock the ordered discs against payment by the shops. In business terms he might be categorised as a warehouser and wholesaler of goods.

7. The sole ground of appeal is "in all the circumstances of the case the total sentence of 10 months' imprisonment imposed upon the applicant was manifestly excessive and thereby wrong in principle."

8. Mr Grounds for the applicant concedes in the first instance that an immediate custodial sentence is appropriate for offences such as these. Mr Grounds has taken us through a number of authorities in respect of sentences for similar offences culminating in the case ofR.v. Ng Wai Ching MA 1309 of 1996 which was heard together with MA 1310 of 1996. The first of those appeals related to four charges, three contrary to s.5(1) of the Copyright Ordinance and one, as in this case, contrary to s.9(2) of the Trade Descriptions Ordinance. The facts in the first of those two appeals were that the offences took place on 26^th January 1996 at a shop at No.188 Wanchai Road, Hong Kong. That was some 2 1/2 weeks earlier than the date of the offence in the matter before us and the matter came up for hearing on 3^rd October 1996 where that appellant pleaded guilty. He was 19 years of age and had been an employee at the time in a retail shop selling the infringing discs and the forged discs over the counter. He had been sentenced to detention in a Detention Centre.

9. The second appellant was also 19 years of age and was also a shop assistant in a small retail shop. He was charged and pleaded guilty to one charge contrary to s.5(1) of the Copyright Ordinance and one charge contrary to s.9(2) Trade Descriptions Ordinance. The date of his offences was 21^st October 1995, some three months prior to the offences, committed by the applicant and he also was sentenced to detention in a Detention Centre. Leonard J. said in respect of each of those of appeals:

"It is very unfortunate that, despite their efforts the Customs and Excise appear to have been unable so far to catch the big fish of the trade and can only bring the minnows before the courts. Without their salesmen, however, the big fish cannot operate and so the salesmen must be deterred. Experience has shown that they are not deterred by fines, so that resort needs to be had to custodial sentences, even where the offender is a young person with a clear record.

Sad though it is that young men are being deprived of their liberty, I am satisfied that the magistrates are taking the correct line. The offences called for deterrent custodial sentences."

The appeal in respect of each sentence of detention in a Detention Centre was dismissed.

10. The case presently before us is of a considerably different nature. The applicant herein is in a substantial way of business and is a far cry from the young shop assistant retailing infringing works over the retail counter. He occupies a far larger niche in the sale of pirated intellectual property and none of the sentences in the circumstances of this particular case can be said to be wrong in principle or manifestly excessive. The application for leave to appeal against sentence is dismissed.