HKSAR v. WONG KIN WING (黃建穎)

FAMC No. 17 of 2020

[2020] HKCFA 30

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 17 OF 2020 (CRIMINAL)

(ON APPLICATION FOR LEAVE TO APPEAL

FROM HCMA NO. 316 OF 2019)

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D E T E R M I N A T I O N

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Chief Justice Ma (for the Appeal Committee):

1.  The applicant was convicted[1] jointly with Tsang Chung Man (Ms Tsang) of two charges under s9(2)[2] of the Trade Descriptions Ordinance, Cap 362 (the Ordinance).  The charges related to (1) the sale of goods bearing a forged trade mark and (2) possession for sale or for any purpose of trade or manufacture goods bearing a forged trade mark.  Both charges related to mini brush kits bearing a “Hello Kitty” trade mark.  On charge 1, the accused were each fined $5,000, on charge 2 each was fined $8,000.  Both accused appealed.  By a judgment dated 14 May 2020, their appeals on conviction were dismissed.[3]  The applicant now seeks leave to appeal to the Court of Final Appeal on the substantial and grave injustice ground.[4]

2.  The two accused jointly rented shop premises at Argyle Centre on Nathan Road in Mong Kok.  The shop was a consignment shop[5] in which spaces, known as consignment cubes, were in turn leased to persons who would utilise their rented space to display and sell goods.  The relevant space in the present case was known as Cube R4.  It was there that customs officers bought a mini brush kit bearing the “Hello Kitty” trade mark (charge 1) and also found boxes of mini brush kits bearing the same mark (charge 2).  At the trial, there was evidence that the “Hello Kitty” trade marks found on these kits were false.

3.  In the lower courts, the issue was whether the provisions of s26AAB of the Ordinance[6] provided a defence to the applicant.  This provision states:-

“26AAB. Additional defence (sale of goods to which forged trade mark is applied etc.)

Without limiting section 26, in any proceedings for an offence under section 9(2), the person charged is entitled to be acquitted if—

(a) sufficient evidence is adduced to raise an issue that the person charged—

(i) did not know;

(ii) had no reason to suspect; and

(iii) could not with reasonable diligence have ascertained,

that a forged trade mark had been applied to the goods, or that a trade mark or mark so nearly resembling a trade mark as to be calculated to deceive had falsely been applied to the goods; and

 (b) the contrary is not proved by the prosecution beyond reasonable doubt.”

The critical issue was in relation to s26AAB(a)(iii), namely whether the applicant could not with reasonable diligence have ascertained that a forged trade mark had been used for the said mini brush kits.

4.  Under this provision, the inquiry is an objective one asking what could reasonably be required to be done under ordinary circumstances, bearing in mind also the actual circumstances; what would constitute reasonable diligence will vary with the facts of any given case.[7]

5.  In the courts below and also before us, the applicant[8] submitted it was important to bear in mind the fact that at no stage had he seen the offending trade marks, even though he may have seen the mini brush kits.  There was a division of labour between him and Ms Tsang, each being responsible for seeking their own clients in renting out consignment cubes.  Cube R4 was rented out by Ms Tsang.  In these circumstances, the reasonable diligence aspect of the defence under s26AAB was met as far as he was concerned.  If he had seen the “Hello Kitty” trade marks, he then could have made inquiries as to their genuineness, but if he did not see the marks, there was nothing he could do.  As far as he was concerned, all he saw were some unbranded brushes.

6.  Both the Magistrate and the Deputy Judge were of the view that the reasonable diligence aspect was not satisfied.[9] The following facts were seen to be important in this respect:-

(1) Although there was a division of labour between the applicant and Ms Tsang, they jointly leased the premises, and shared equally in the profits and expenses.  Accordingly, both were responsible for the whole premises.

(2) The applicant was acutely aware of the risk of selling counterfeit goods.  There had been a number of past incidents in which this had occurred or there were suspicions to this effect.  One incident involved the sale of “Hello Kitty” water bottles, another incident involved some well‑known brand sunglasses.  There were other incidents.  The applicant would certainly speak out if he thought there was a risk of counterfeit goods being sold even if this involved clients of Ms Tsang rather than his own.  There was even a provision in the tenancy agreements with clients that fake goods should not be sold.  It followed from this that the applicant ought to have been doing his utmost to ensure the shop would not be selling counterfeit goods.

(3) In his evidence, the applicant accepted he had a duty to ensure that goods sold in the premises were genuine.

(4) Most of the goods sold in the premises in the consignment cubes were handicraft goods, with only a few being non‑handicraft goods such as the said mini brush kits.  The point of this piece of evidence was that non‑handicraft goods would be more likely to have trade mark logos than handicraft ones, and the applicant could be assumed to know this and accordingly be more careful regarding such goods.

7.  Bearing in mind the facts of the case, the Magistrate was of the view that the applicant had not exercised reasonable diligence in the circumstances.  It was not enough for the applicant merely to say he had not seen the “Hello Kitty” logos.  He should have done more.  The Deputy Judge agreed with the Magistrate, after having gone through the same evidence in the case.

8.  In the application for leave, as stated earlier, the applicant emphasised the factual finding that he had not seen the “Hello Kitty” trade mark on the mini brush sets.  However, this was only one of the relevant circumstances in relation to a consideration of s26AAB(a)(iii) of the Ordinance.  As we have just seen, there were other relevant facts to consider in determining whether reasonable diligence had been exercised.  Presumably, if he had examined the goods more than just cursorily, he would have seen the logos.  Both the Magistrate and the Deputy Judge were of the view that the applicant ought to have done more.  It cannot be said that this view was wrong to the extent that there is a reasonable argument that there may have been a substantial and grave injustice in the present case.  The applicant has not satisfied the high threshold requirement.[10]

9.  The application for leave to appeal is accordingly dismissed.