HKSAR v. CHENG CHUNG POR

HCMA406/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.406 OF 2004

(ON APPEAL FROM TMS 10481 OF 2003)

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J U D G M E N T

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1. The appellant was convicted on 4 February 2004 with the commencement of the production of specified textiles without lodging with the Director of Trade and Industry a notification in respect of those textiles within the permitted period. On the same day the appellant was fined the sum of $5,000. The appellant now appeals that conviction.

2. This prosecution was brought pursuant to section 6AB(1) of the Import and Export Ordinance, Cap.60 which provides :

"(1) A person shall not commence the production of any specified textiles (whether by himself or through any other person) unless he lodges with the Director a notification in respect of those textiles within the permitted period, or within such other period as the Director may, at his discretion, allow in a particular case."

3. The appellant is the manager of a company trading under the name of Loyal Garment Factory in Tuen Mun. He is responsible for the day-to-day running of that company and it is his duty to lodge production notification and export licence applications in respect of the garments manufactured by the company.

4. Under the Import and Export Ordinance, textile products including cut-and-sewn garments to United States of America are prohibited articles, the import and export of which must be under and in accordance with valid licences issued by the Trade and Industry Department ("the Department"). Further, under the Import and Export Ordinance, manufacturers who produce cut-and-sewn garments for export to United States are required to lodge with the Department a production notification for validation within three working days prior to the commencement of the assembly works of the consignment. That notification enables officers of the Customs and Excise Department to verify the origin of the goods during the course of production. A validated production notification is a document necessary for an application for export licence.

5. It is accepted by the parties that a production notification had to be lodged and that it was a pre-requisite to production. An investigation by the Customs and Excise Department revealed that Loyal Garment Factory had commenced the assembly work of 174 dozen of ladies' woven jacket for export to United States on 9 July 2003. At that point, no production notification had been lodged with the Director-General of Trade and Industry within the permitted period. An inspection was made of the records and it was ascertained that Loyal Garment Factory lodged a retrospective production notification on 12 July 2003 to cover the consignment of goods.

6. A production notification is lodged electronically through a computer system and is made by way of a notification to an organization called Tradelink. Tradelink is the organisation which collects such applications and then hands them on to the Department. The system is that the production notification is sent by the producer by computer to Tradelink which within half an hour will respond to the transmission confirming its reception. In the event that no confirmation is received by the person lodging the production notification, then that person will by that lack of notification be made aware that the notice has not been received. The consequence of that lack of notification of receipt will be that a fresh notice must be lodged through Tradelink.

7. In respect of this matter the appellant said that he had on 9 July 2003 made application to the Department through Tradelink. He acknowledged that he was aware that when Tradelink received the production notification they would verify receipt within about half an hour. He said that on 9 July 2003 he was busy at his work and that he forgot to check that Tradelink had verified acceptance of the production notification. In fact on that day due to a problem either with the computer of the appellant or somewhere along the line, no application was received by Tradelink and therefore no verification of acceptance was given by that organization. The appellant said that on 12 July 2003 he had discovered that the production notification had not been sent and he then submitted a production notification through Tradelink retrospectively.

8. The magistrate was satisfied that the only manner in which an electronic application could be made was through Tradelink. He was further satisfied that such a production notification made to Tradelink would elicit a response if received, that response being within half an hour, and further that no notification of receipt from the Department would be made other than an approval for production.

9. The first matter to be considered in respect of the offence under this section is that the offence is one of strict liability. There is no issue of mens rea and to prove the offence it is necessary that the prosecution prove that production of specified textiles had commenced and that there had been no lodgment with the Director of a notification in respect of those textiles within the permitted period.

10. The second matter to be considered is the meaning of the word "lodges". If it is implicit in the meaning of that word that the production notification must be received by the Director-General of Trade and Industry or by Tradelink, its agent, then that element of the offence would be satisfied by proof that no production notice had been received. It will be immaterial whether the appellant had attempted to send the information. So long as it has not been received, the offence would be complete in that element.

11. The magistrate referred to certain dictionaries in coming to his conclusion that the word "lodges" required the production notification reach the Director-General or his agent. He found that it was necessary. The Shorter Oxford Dictionary defines "lodge" as "to get a thing into an intended place" or to "deposit in a specified place of custody or security" or "vest or represent as residing in a specific person or thing" or "deposit in court or with an official". It is clear from these definitions that to satisfy the definition of "lodges" it is necessary for a person dealing with a production notice to transmit the production notice and for it to be received by Tradelink or by the Director-General of Trade and Industry.

12. Mr Burkett for the appellant argues that this places an intolerable burden upon an applicant but this is not so. Electronic transmission has to take place with Tradelink and Tradelink within half an hour acknowledges receipt of the application for production notification. If no such notification is received by the person applying, then no production notification has been lodged and the person lodging the production notification is made aware of that by a failure of a response.

13. The first ground of appeal relating to the definition of the word "lodges" therefore fails.

14. The second ground of appeal was that it was incumbent upon the prosecution to prove the appellant did not submit the production notification. With respect it is not for the prosecution to prove that the appellant failed to submit the production notification. It is for the prosecution to prove that he failed to lodge it. They did so by showing that no such notification had been received by the Director-General of Trade and Industry. This ground of appeal must fail.

15. The third ground of appeal again refers to the submission of a production notification and, again, the issue is not whether it was submitted but whether it was lodged. This ground must also fail.

16. The appeal against conviction is dismissed.