HKSAR v. CHIU TERESITA D. AND OTHERS

HCMA635/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.635 OF 2000

(ON APPEAL FROM ESCC 1958 OF 2000)

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J U D G M E N T

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1. The 4th appellant, (the 4th defendant in the trial) was charged with breaching a licence condition, contrary to section 46(1) of the Dutiable Commodities Ordinance, Cap.109. The particulars of the amended charge alleged that :

"Breach of a licensing condition, contrary to section 46(1) of the Dutiable Commodities Ordinance, Cap.109.

YIP Bun-keung, on the 29th December 1999, at Venus, Shop 1 & 2, Floor G, 89 Lockhart Road, Hong Kong, being the holder of a liquor licence in respect of the premises, contravened a condition lawfully imposed under the Dutiable Commodities Ordinance, namely clause 7 of the licensing conditions, by permitting the premises or part thereof to be used for an immoral purpose, namely sexual activities between a member of staff and a customer, Paul Andrew Turner."

2. The 4th appellant pleaded not guilty and was convicted after trial. He was fined $40,000. He originally sought to appeal against the conviction and sentence. However, the appeal on sentence was later abandoned. There were three other appellants in this case, however, they had chosen not to appear at the appealing hearing and their cases were dismissed. For the purpose of the present appeal, I shall refer the 4th appellant as the appellant.

3. The case involved an undercover operation by two police officers who went to the premises of the club to pose as customers on the material day. The learned magistrate had succinctly summarized both the prosecution and defence cases in the Statement of Findings. I shall repeat them here :

"Prosecution case

2. The prosecution case was founded on a late night visit by two undercover police officers (PW's 1 and 2) to Club Venus in Lockhart Road. Those officers were, it was alleged, separately solicited for an immoral purpose (prostitution) by D1 and D2. It was alleged that money had been paid for the prostitution and that D1 and D2 went separately with the two police officers to different hotels near to Club Venus where sexual activity took place prior to police raids. D3 was alleged to have been involved in the transaction between D1 and PW1 though she was separately charged. As to D4's case, it was alleged that sexual activity took place between D1 and PW1 in the Club Venus premises. This amounted to using the premises for an immoral purpose which was contrary to one of the terms of the liquor licence issued to D4, the licencee, under the Dutiable Commodities Ordnance. It was alleged that he had permitted this immoral usage to take place and was therefore guilty of an offence.

Defence case

3. The appellants denied that any sexual activities had taken place on the premises or that any of them had solicited the PW's for immoral purposes. It was not disputed that D1 had left the premises and had gone to a hotel with PW1 where sexual activity had taken place but it was not as a result of any solicitation or the payment of any money. D2 agreed that she had gone to a different hotel with PW2 but denied that any sexual acts took place. D3 denied any involvement in any solicitation of PW1. D4 relied on the denials of D1 and D3 as to any sexual activities in the premises and maintained that his own observations showed an absence of such behaviour; and in any event he did not know of or suspect any such activity and did not permit it to take place."

4. At the trial hearing, the prosecution had called two witnesses, Senior Inspector Turner, PW1 and Police Constable Kelly Lau, PW2. The liquor licence in respect of the premises (Exh.1) and the employees' records of the Club were produced by consent (Exhs. 3, 4, 5 and 6). The appellant had elected to give evidence. In addition, a plan and photographs of parts of the premises were produced by the defence (Exhs. 13, 8, 15, 16 and 19, respectively).

5. In the Statement of Findings, the learned magistrate had dealt with the relevant evidence pertaining to each offence. Regarding the evidence of the appellant, he had pointed out the following :

"(Charge 4)

16. Finally, there was evidence of D4, facing the licensing charge. He agreed that he was the licencee of the premises which had 20 or so employees on duty at the material time. His job was to supervise everything in the bar, including the girls, to see, as he put it, that they were not doing anything different from what they were supposed to do. The drinks for the girls were expensive for the reasons given by D3 and because, when sitting in the alcoves, customers had the advantage of sitting in more comfort and relative quiet. There was a charge of $4,000 (subject to negotiation) if a customer wanted to take a girl out but this reflected the loss of the bar's element of the hostess drinks. The girls got 35% of the drinks price and the bar the rest.

17. The employment records of D1, D2 and D3 (Exhs 3-5) were seized by the police on the night in question from under the bar counter. D4, in his evidence, produced what he said were their service conditions - Exh 20. They had not been seized by the police, he said, because they were kept in a different place behind the bar from Exhs 3-5. They were not shown to the police on the night of the raid because the police did not ask anything. These conditions prohibited indecent behaviour and were, D4 said, reinforced by daily verbal reminders to staff. The girls were not encouraged to go out with customers because of the risks of going out with males and because by going out, customers would no longer be buying profitable drinks in the bar.

18. D4 testified that on the night in question he was on duty in the bar area and constantly walked around checking the staff. He did not observe any indecency and had no suspicions about it. He had observed PW1 and D1 in the alcove: the entrance was not covered by the cupboard door and he could see PW1 and D1 sitting next to each others. He saw nothing improper."

6. Having analysed the evidence and considered the submissions, the learned magistrate found that, the charge, as amended at his own initiative, was proved by the prosecution beyond a reasonable doubt.

7. In the grounds of appeal against conviction, counsel for the appellant, Mr Duncan, put forward a number of points for the consideration of this court :

1. Material Irregularity : It was argued that the learned magistrate should have, at the stage of the no case submission, made a ruling on the nature of the offence, i.e. whether it was a strict liability offence or one that would require mens rea or an offence that vicarious liability would apply. The failure to do so amounted to a material irregularity in that the appellant was unable to make an informed decision as to whether to give evidence or call evidence.

2. Section 27 of the Magistrates Ordinance : After hearing the final submissions and the case was adjourned for verdict, on the return day, the learned magistrate proposed an amendment to the charge, pursuant to section 27, Cap.227. Despite the objection by the defence, the learned magistrate proceeded to make the amendment. He erred in finding that there was "no injustice caused by the amendment". In the context of section 27, injustice arose simply as a result of additional expense incurred by the appellant as a result of defects caused by the prosecution in preparing of the charge, irrespective of "fairness" or "prejudice". It was not open to the learned magistrate to amend the charge because of the limit on costs in the provision. The charge should have been dismissed.

3. Section 46A(1), Cap.109 : It could only arise in respect of the same offence and not in the circumstances where the offence allegedly committed by the appellant could not have been committed by the servant. The offence could only be committed by a "licensee".

4. On the factual finding : The learned magistrate should not have come to the conclusion that the appellant knew of the sexual activity on the premises. This conclusion was against the weight of the evidence.

5. The conviction was unsafe and unsatisfactory : The learned magistrate failed to understand the defence of the appellant. The appellant did not rely on the denials of the other defendants as to any sexual activities in the premises. The appellant's case was quite independent and separate from the other defendants. Furthermore, the magistrate made no finding that such defence under section 46A(2) had to be made out only on the balance of probabilities.

8. In his re-amended grounds of appeal, Mr Duncan had put in an additional ground stating that the learned magistrate had made an error of law in deciding that there was a case to answer for the appellant.

9. In relation to the first ground, Mr Duncan said that at the trial he had made a submission that there was no case for the appellant to answer as the charge required proof of "mens rea", i.e. actual knowledge of the alleged sexual activity and a failure to prevent the same. The prosecution suggested that the charge did not require proof of "mens rea" in that the offence charged was either one of strict liability or one of vicarious liability, pursuant to section 46A(1), Cap.109.

10. However, Mr Duncan complained that when the magistrate found that there was a case to answer, he had not given his reasons. This, counsel argued, constituted a material irregularity, as the appellant was therefore unable to make an informed decision as to whether to give or call evidence.

11. I was unable to agree with this submission. There is no duty upon the magistrate to give reasons in finding a case to answer. It may well be necessary or a good practice to give reasons in some cases, but I would not say that failing to do so in this particular case had constituted a material irregularity. I was unable to see how the appellant was prejudiced in the instant case.

12. Mr Duncan argued that mens rea was an element of the offence. The prosecution submitted that it was a strict liability offence and alternatively section 46A(1) would apply. Even if the defence's submissions were correct, a finding of no case to answer would not necessarily follow. The question could well be one of what inference could be drawn on the issues of presence and mens reas. In any case, if the magistrate's view on section 46A(1) was correct, then his ruling could not be criticized. Faced with the decision by the magistrate that there was a case to answer, the appellant had proceeded to exercise his right and chosen to give evidence, no doubt, after competent legal advice on the full implication of the ruling. In my view, the appellant could not now be heard to say that his decision to testify was not an informed decision.

13. In this connection, the further ground of appeal related to the fact that the magistrate had ultimately decided that effectively mens rea was required for the charge as it was necessary for the prosecution to prove that the appellant knew what was taking place. Counsel said that in such circumstances, the magistrate should have ruled, in the first place, that there was no case to answer, emphasizing again that there was no evidence from the prosecution that the appellant was on the premises at the relevant time. Therefore there was no evidence that that the appellant had the requisite knowledge.

14. I found I was unable to agree with this submission. Knowledge could be inferred from the circumstances. Although there was no direct reference by the prosecution witness regarding the presence of the licensee, it would not necessarily result in a no case to answer. The charge involved the allegation that the licensee permitted a state of affairs to happen. If indeed the licensee, who was under a duty to ensure the compliance of the conditions in the licence, was not even present on the premises where sexual service was, according to the prosecution evidence, so readily available from the staff of the club, that might well be a valid basis for an inference that he had had prima facie permitted such activity to take place. This was particularly so when the licencee was also the manager of the club. It should be noted that condition 4 in the licence stipulated that the licensee shall personally supervise the premises. In the circumstances, I was not entirely persuaded that in the circumstances, the learned magistrate should have ruled as defence counsel had proposed.

15. In any case, if the learned magistrate took the view that a liability under section 46(1) could arise in an indirect manner as provided for by section 46A(1), there would necessarily be a case to answer on that basis. In my view, there was no material irregularity involved and that the finding of a case to answer was not an error.

16. As to the point arising from section 27, Magistrate Ordinance, Cap.227, I would also disagree with Mr Duncan, despite his forceful submission. Section 27 reads :

"27. Defects in and amendment of complaint, information or summons

(1) Where it appears to the adjudicating magistrate that there is -

(a) a defect in the substance or form of any complaint, information or summons; or

(b) a variance between the complaint, information or summons and the evidence adduced in support of it,

he shall, subject to subsection (2) -

(i) amend the complaint, information or summons if he is satisfied that no injustice would be caused by that amendment; or

(ii) dismiss the complaint, information or summons.

(2) The adjudicating magistrate shall amend the complaint, information or summons where -

(a) the defect or variance mentioned in subsection (1) is not material; or

(b) any injustice which might otherwise be caused by an amendment would be cured by an order as to costs, an adjournment or leave to recall and further examine witnesses or call other witnesses.

(3) Following an amendment to a complaint, information or summons, the adjudicating magistrate shall -

(a) read and explain the amended complaint, information or summons to the defendant;

(b) give leave to the parties to call or recall and further examine such witnesses as may be reasonably required by a party having regard to the nature of the amendment;

(c) grant such adjournment as may be reasonably necessary to enable the parties to call or recall witnesses and to prepare their cases;

(d) if he thinks fit, make an order that the complainant or informant shall pay to the defendant such costs, not exceeding $5,000, as may be occasioned by the amendment; and

(e) give judgment upon the substantial merits and facts of the case as proved before him, having regard to the offence charged in the complaint, information or summons as amended:

Provided that, if the amendment is made after the case for the complainant or informant is closed, no further evidence may be called by the complaint or informant other than evidence that would, apart from this section, be admissible in rebuttal.

(4) In this section, 'amend' (修訂) includes the substitution of another offence in place of that alleged in the complaint, information or summons."

17. Counsel argued that as the cost was fixed at the ceiling of $5,000, and the injustice could not be cured by an order of costs as the adjournment would clearly involve more than $5,000.

18. There was a long exchange between counsel and the magistrate on this subject matter of the meaning of injustice. This can be seen from the transcript. The most crucial parts, in my view, took place at page 76 onwards :

"COURT: ... so tell me how the changing of the words 'allowing vice or immoral activities to take place on the said premises' to 'clause 7 of the licensing conditions by permitting the premises or part thereof to be used for an immoral purpose, namely sexual activities between a member of staff and a customer, Paul Andrew Turner,' can you tell me how that further particularisation in any way, shape or form prejudices your client's position and makes it unfair? Can you explain that to me because I simply don't understand?

MR DUNCAN: Well, sir, with respect, that is not the test, with respect. We have already been through this...

COURT: So is there any unfairness caused by the change?

MR DUNCAN: There's injustice.

COURT: All right, injustice.

MR DUNCAN: It's not unfairness, it's injustice.

COURT: Because of costs.

MR DUNCAN: Because of costs, injustice, yes. That's the point.

COURT: Right. Yes?

MR DUNCAN: Sir, unless I can help you any further, that's the submission.

COURT: Well, I am bound to say that I am against you, Mr Duncan, on this point. I do not need to call upon the prosecution. In my judgment there is no injustice caused by the amendment that is proposed. The issue of costs, adjournment, leave to recall further witnesses or examine witnesses or call other witnesses under subsection (2)(b) of section 27 therefore does not arise.

I might add that one of the matters that I find difficult to understand - it may be just my fault that I am not following it properly - about the point made about costs is that the adjudication under section 2(b) with an order as to costs is not limited, in fact, because the limit of five thousand is following amendment after the magistrate has made a finding under subsection 2.

Thereafter there is a limit, but subsection 2(b) is entirely silent as to it. But, in any event, the matter is dealt with, in my judgment, by the fact that there is no injustice caused and therefore I am bound to amend the charge 4 in accordance with section 27 and in accordance with -obviously, I will heard anybody who wants to suggest that it might be amended in a slightly different way from that which has been drafted.

But apart from that, I propose to amend it and I do amend it and now section 3 applies. Following an amendment to a complaint or information, the duly ... (indistinct) magistrate shall follow the procedure under section 27(3), which I am bound to follow.

Now, the first thing I'm going to do is have this charge put to D4 the amended charge. And if that charge could be read to him?

Do you want a moment to explain to him what's going to happen now?

MR DUNCAN: I'm happy for the court to follow the procedure.

COURT: Yes.

AMENDED CHARGE 4 READ

DEFENDANT PNG TO THE AMENDED CHARGE"

19. The case was then adjourned and when the court resumed on 8 June 2000, Mr Duncan informed the learned magistrate that the appellant, having received further advice and having considered the matters further, had decided not to apply to recall any of the witnesses. I was given to understand that in fact the defence had never applied for costs for the adjournment.

20. Counsel had relied heavily on the decision of Kaplan J (as he then was) in R v. Wong Kei Lung and Low Shieu Wai, HCMA576/1993. In this judgment, the learned judge considered that the only injustice involved was that the 1st appellant had to face extra costs as a result of the prosecution getting the charge wrong in the first place resulting in the need for an amendment. The judge said it was clear to him that costs in excess of $5,000 had been thrown away and, in ordinary circumstances, any tribunal would wish to award these to the 1st appellant. The judge further found that:

" So I am satisfied that there was an injustice here which could have been cured by an order as to costs. However, it could not be cured by any order which the Magistrate had power to make because, under s.27(3)(d), he cannot award more than $5,000 in costs. ...

I am, therefore, satisfied that Mr. McNamara's propositions are sound in relation to the case against the 1st appellant. I find it extraordinary that the Magistrate did not even consider it appropriate to award $5,000 costs. Whatever he thought about the nature of the amendment, there can be no doubt whatsoever that the 1st appellant was put to extra costs as a result of the prosecution putting forward an allegation of forgery which their own witness could not support and which then led to further submissions, adjournments, and amendments."

21. It should be noted that the learned judge's decision was made in the context of the prosecution having laid the wrong charge in the first place. But the present case was totally different. The learned magistrate had stated quite clearly that he was simply clarifying the particulars in the charge. I could not see any thrown away costs here. In his Statement of Findings, the magistrate had explained the position as follows :

"19. I gave reasons in court for my verdicts which have been transcribed (Transcript, page 43) I incorporate those reasons into this statement of findings. It can be seen that I have there set out something of the history of the trial which involved, inter alia, an amendment to charge 4 after the close of the evidence and submissions but before verdict. Charge 4, as originally drafted, did not specify which condition of the licence the prosecution was alleging had been breached; and neither did it use words which conformed with the condition of the licence to which it seemed to refer, viz, clause 7. It alleged a contravention of the licence by 'allowing vice or immoral activities to take place on the said premises'. The words of clause 7 refer to 'permit[ting] any person to ... use any portion of the premises for any immoral ... purpose'. Thus 'allowing vice ... activities' did not appear in the licence. Furthermore, the original allegation did not specify what sort of immoral purposes were alleged. No objection was taken to the form of the charge during half-time submissions of no case. The wording was regarded as imprecise but comprehensible. However, upon reflection, after the close of all the evidence and after submissions, I decided it was appropriate to consider an amendment. The thrust of the prosecution case was directed at the sexual activities on the premises but as drafted, the charge could have included the soliciting being alleged against D1-D3. It was therefore essential for the charge to specify who was alleged to have used the premises for immoral activities (D1 with PW1 or D2 with PW2) and to specify the nature of the activities. The original charge was at variance with the evidence called in support of it and, subject to the terms of section 27 of the Magistrates Ordinance, Cap 227, an amendment was obligatory - as well as being fair to D4.

20. There was an objection to that amendment on the grounds that it would cause an injustice to D4 which could not be cured by the provision of costs or the recall of witnesses. I ruled (Transcript, page 28) that no injustice to D4 would be caused by the amendment and that the question of costs and recall of witnesses did not arise under section 27(2)(b) of Cap 227. The procedure under section 27(3) was followed and an adjournment was granted to allow for the recall of PW1. In the event, the defence did not require the recall of that or any other witness. I thus heard further submissions on the facts and the law and an application on behalf of D1-D3 for a trial de novo which I refused (Transcript, page 40S). Thereafter I considered my verdicts and delivered them as transcribed."

22. Having considered the submissions, I would disagree that the term "injustice" in the context of section 27 should be given such a narrow interpretation as proposed by the appellant. I was unable to accept the proposition that once the costs involved was more than $5,000, it would immediately be an injustice that could not be cured. There was no suggestion here that the appellant would be deprived of the legal representation if he was not indemnified of the costs for the adjournment. In fact, there was not even an application for costs for the adjournment.

23. A further point to note on this matter would be that when considering the wording in section 27(3)(d), the question of costs appeared to be a discretionary matter. According to the section, following an amendment, the magistrate shall follow the procedure as stated in (3) (a), (b) and (c). Then, if he thinks fit, make the costs order not exceeding 5,000. In my view, this amount was only compensatory in nature, and in any event, it was discretionary and not mandatory.

24. I agree with the learned magistrate that the term "injustice" has a wider implication and the point of the sufficiency of costs would only be one of the factors to be considered. There could be an example where the injustice could not be cured by any costs order, $5,000 or otherwise. Say a witness who has testified may have left Hong Kong and could not return or he or she may even be dead. In such a case, any material amendment to the charge, which necessitated the recalling of witnesses, would be an injustice that could not be cured by any cost order.

25. There had been the complaint that the amount of $5,000 was too small an amount for the purpose. However, if the same situation arose as in the case of Wong Kei Lung, the costs thrown away could now be suitably dealt with according to the Costs in Criminal Cases Ordinance, Cap.492. In any event, the decision of Wong Kei Lung should be understood in light of its special facts, ( See Lord Cooke of Thorndon NPJ in Poon Chau Cheong v Secretary of Justice FACC No. 7 1999 at page 11.)

26. The concept of "injustice" could not be so narrowly interpreted. There must be other relevant factors to be taken into account. Particularly in the present case, I was not satisfied that we had a similar situation where the only injustice involved was the extra costs as in Wong Kei Lung. The present amendment did not affect the basic fabric of the evidence in the case. The learned magistrate actually found that there was no injustice caused, although he did grant an adjournment at the request of the defence. Having considered the issues raised carefully, I found no substance in this particular ground of appeal.

27. Mr Duncan also raised the complaint that the learned magistrate had erred in concluding that the appellant knew that "sexual activity was taking place" on the premises. It was said that this conclusion was against the weight of the evidence. Counsel formulated a number of details concerning how the learned magistrate had been wrong in dealing with the evidence. They related to the issues, inter alia, that there was no direct evidence of the appellant being aware of the sexual activities; that there were inconsistencies in PW1's evidence about the screen; and the failure by the magistrate to consider that the appellant had a lot of other duties to attend to inside the club.

28. In his Statement of Findings, I could see that the learned magistrate had made a careful and comprehensive consideration of the evidence. Regarding the 1st appellant, the magistrate found that her account was clearly inconsistent as to whether there had been any touching between her and PW1 in the alcove. The magistrate was in no doubt that she was lying and was sure that she had solicited PW1 for the immoral purpose. As to the 2nd appellant, the magistrate also disbelieved her claim that she thought at first she and the undercover police were leaving to go drinking elsewhere because of the club's refusal to serve him with more drinks. The magistrate was also sure that PW2 had not allowed himself to get drunk.

29. In relation to the 3rd appellant, the magistrate stated that she was closely involved in the supervision of the activities of PW1 and the 1st appellant in the alcove. She accepted that she had been involved in the negotiation of the price of the 1st appellant's departure. The magistrate found that she must have seen the sexual activities between PW1 and the 1st appellant inside the alcove in the premises. The magistrate disbelieved her evidence on two matters : that she saw nothing of the touching and that she did not specify, in answer to a question from PW1 about the nature of the charge, that the $4,000 paid by him was for the purpose of "making love". The magistrate was sure that the 3rd appellant had solicited PW1 for the immoral purpose of prostitution with the 1st appellant.

30. As to the appellant, the magistrate had made the following findings :

"25. The essence of D4's case was to emphasise how closely he monitored the activities of the girls in Club Venus, particularly by his regular patrols in the small area which comprised the bar ('I was always walking around and checking'). He claimed that his constant vigilance enabled him to say that no sexual activity had taken place at the material time between PW1 and D1. I was sure however that even without such special vigilance, D4 must have seen PW1 and D1 at the bar before they went to the alcove; and that at the bar, D1 was behaving in the sexually active manner described by PW1. D4, particularly if as vigilant as he claimed, would have seen D1 standing between PW1 and the bar counter, rubbing her crotch on his thigh. D4's claim to have seen PW1 and D1 sitting side by side in the alcove as he walked past was false: I was sure she had been sitting astride PW1. D4 was not a truthful witness. And if, as I found to be the case, the alcove had been partially screened by the cupboard door, he would have seen it and would have known, with his acute sensitivity to the possibility of sexual misbehaviour on the premises, that what was going on amounted to using the premises for an immoral purpose.

26. I was sure that D4 knew of the immoral acts by D1 in relation to PW1 and that he permitted it to continue having failed to exercise his undoubted authority to stop it. It followed that he was committing an offence under section 46(1) of the Dutiable Commodities Ordinance."

31. In fact, the magistrate had also, when giving his oral reasoning, explained his analysis in relation to the appellant's evidence. The details could be seen in the transcript.

32. The matters raised by Mr Duncan were issues of fact. The magistrate, having seen the witnesses and heard their evidence, had made the necessary inferences and findings, as he was entitled to, based on his view and analysis of the credibility of witnesses and the circumstances of the case. I could find no valid reason to disturb the magistrate's factual findings. The findings were not against the weight of the evidence.

33. As to the issue of whether section 46A(1), Cap.109 had any application in the present circumstances, the argument by Mr Duncan was that in law, the servant could not be guilty of the offence with which the appellant was charged, it being an essential ingredient of such offence that the appellant be the "licensee". On the face of it, it was an attractive argument. I noted that the prosecution was mainly relying on a breach of clause 7 in the licence. And the wording of this clause was that : The licensee shall not permit any person to occupy or use any portion of the premises for any immoral or illegal purpose. On this important issue, the learned magistrate stated in his oral judgment that :

"But in my judgment a liability under section 46(1) can also arise in an indirect manner specifically provided for by section 46A(1). If the licensee's servant commits an offence under the Ordinance, the licensee will be guilty of that offence, unless he can establish on the balance of probabilities the defence under subsection (2). The fact that this is a vicarious liability imposed for a criminal offence is reflected in the limitations on penalty.

My finding, so far as D4 is concerned, can be put very briefly in this way. I am sure that the touching alleged by PW1 took place. I accept Inspector Turner's account of this girl sitting astride him in the alcove area and most importantly I accept his evidence of the alcove being screened off by the use of the cupboard doors. It follows that sexual activities were taking place inside the premises and in the context of this case where drinks with specially enhanced prices were being purchased from the bar whilst the PW and D1 were in the alcove, that amounted to use for an immoral purpose. Indeed the contrary is not suggested if those events took place.

I further find that particularly in the context of the very small size of these premises and D4's own account of how closely he watched the situation in the bar that D4 must have known about these activities. It may be that had he looked around the screen covering the alcove D1 would have had her back to him, sitting as she was astride PW1, but he would have known what was going on and to think anything to the contrary is clearly unrealistic.

D4 himself describes his regular patrols in the club. He even says that he saw PW1 and D1 and that they were sitting next to each other, close but side by side. That, I find, is a false claim. D4's patrols would have revealed the screened-off alcove. There could only be one reason.

I take the point about Inspector Turner, PW1, not mentioning D4 but I find it has no bearing in the matter. Neither, in the context of the screen, does the question of whether the sexual activities themselves were intermittent or continuous. I am sure that D4 knew that sexual activity was taking place. He permitted it to continue. Such an activity was prohibited by clause 7 of the licence and that condition was lawfully imposed under the Dutiable Commodities Ordinance and the offence was thereby committed by D4.

I add this: the use for an immoral purpose was made by D1, D4's servant under the terms of section 46A. Although she was not the licensee, she was the person contravening a condition of the licence. And she committed an offence under section 46(1) as well and the use of the expression 'the licensee shall not permit' does not limit the condition to the licensee only. It is a condition applicable to the use of the premises. Consequently, liability arises under section 46A(1) giving rise to the statutory defence under section 46A(2).

I find that the defendant, D4, has failed to make out that defence. The arrangements in this bar of which he was licensee of customers paying enhanced prices for hostess drinks to go to the relative seclusion of the alcoves which were screened from casual view with his female staff show that he was not taking all practicable steps to prevent the commission of the offence, commission of the breach on the prohibition on immoral purpose.

The service contracts not produced to the police at the time of the raid on the club, even assuming they existed at the material time, are, I find, a sham. And the same goes for any pep talks given to the staff, bearing in mind that he was allowing staff to go into that seclusion with customers such as PW1. So I find that he would be guilty of this charge under the terms of section 46A(1), even if he were not directly guilty under section 46(1) itself. "

34. Having given the matter careful consideration, I found I would agree with the magistrate's interpretation of section 46A(1). In my view, Mr Duncan's argument would be more appropriate in relation to, for example, conditions 5 and 6 of the licence. These conditions imposed a strictly personal duty on the licensee. However, for those conditions which require the licencee not to permit a state of affairs to take place inside the premises, such as conditions 7, 8, and 9, section 46A(1) would apply.

35. Apart from what the learned magistrate had stated, The liability under section 46A(1) could perhaps arise also in another way. In so far as the 3rd appellant was concerned, she was found to have negotiated with PW1 regarding his taking the 1st appellant out for "making love". The magistrate also found that the 3rd appellant was aware of the immoral acts that had taken place between the 1st appellant and PW1 on the premises. I found that the appellant's guilt under clause 7 could be established through the knowledge and activity of the 3rd appellant as the servant by virtue of section 46A (1)

36. Regarding the complaint that the learned magistrate had misunderstood the appellant's case in that it was independent of the other appellants' defence, I could find no substance in such a contention. In the trial, the defendants had testified and their evidence was general evidence in the case. The denial of the alleged sexual activities by any other defendants, if accepted by the court, could affect whether the charge against the appellant was established beyond a reasonable doubt. If the magistrate accepted the evidence of the other defendants that there were no such sexual activities, he would obviously have difficulties in finding the charge proved against the appellant.

37. Hence, in law, the other defendants' evidence was a relevant consideration, even if the appellant had not expressly relied on their evidence. The learned magistrate had not misunderstood the appellant's case; he had gone beyond the appellant's evidence and considered all the relevant evidence. It was correct for him to have done so.

38. Similarly, I could find no merit in the suggestion that the magistrate could have applied the wrong standard of prove in relation to the defence provided under section 46A(2). I am sure that the magistrate, with his amount of experience, would not have made such a fundamental error in this regard.

39. For the above reasons, despite the able and persuasive submissions by Mr Duncan, I shall therefore dismiss this appeal.