THE QUEEN v. CHEUNG YIN HANG

IN THE SUPREME COURT OF HONG KONG

(APPELLATE JURISDICTION)

MAGISTRACY CRIMINAL APPEAL NO. 272 OF 1992

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BETWEEN

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Reasons handed down: 17 June 1992

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J U D G M E N T

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Fuad, V.-P.:

1. These are my reasons for having dismissed this appeal at the conclusion of the hearing on 10th June 1992.

2. On 7th November 1991 Mr. Mak Hing Kuen pleaded guilty in the magistrate's court at Tsuen Wan to two offences contrary to sections 17(6) and 46 of the Dutiable Commodities Ordinance, Cap. 109 and to two offences contrary to section 8(1) of the Smoking (Public Health) Ordinance, Cap. 371. He was fined $10,000 on each of the charges under the former ordinance and $1,000 on each of the charges under the latter Ordinance making a total of $22,000. 16,400 cigarettes had been found on a 5.5 ton goods vehicle with the registration number DK2904. No duty had been paid on them and none of the packets of cigarettes bore the Government health warning or the tar group designation of the cigarettes. The cigarettes were valued at $15,780; the duty payable on them was $8,448.

3. The notices for which provision is made by subsections (3) and (4) of section 48 of the Dutiable Commodities Ordnance were duly given by the Commissioner of Customs and Excise and were served on Mr. Mak and Madam Cheung Yin Hang in respect of the seizure of the cigarettes and the vehicle. The cigarettes were liable to forfeiture by virtue of subsection (1) of section 48 and the vehicle by virtue of subsection (2) of that section, read together with section 15(1)(b).

4. The vehicle was registered in the name of Madam Cheung and was the subject of a hire-purchase agreement. On being served, the finance company concerned indicated that they would not seek to oppose forfeiture. However, Mr. Mak and Madam Cheung gave notice of their claims under subsection (6) of section 48 of the Ordinance that the cigarettes and the vehicle were not liable to forfeiture. The Commissioner applied to the magistrate's court for the condemnation of the goods pursuant to subsection (8) of section 48 of the Ordinance and the forfeiture proceedings took place on 28th February 1992 before Mr. M.A. Buckley. Mr. Mak and Madam Cheung were represented by counsel.

5. The magistrate had before him the record of the proceedings in which Mr. Mak had been convicted, rendered admissible by virtue of section 48(9)(b) of the Ordinance. The record showed that Mr. Mak had admitted that he was seen taking a cardboard box from the vehicle and that he was arrested later in a restaurant where he had been selling some of the cigarettes. Six cartons were found with him and eighty-two cartons were found in the back of the vehicle.

6. Madam Cheung, who is in her middle fifties, is Mr. Mak's mother-in-law. The hire-purchase agreement which was before the court showed that the total price of the vehicle, including insurance, had been $73,755. $33,755 was paid initially and the balance of the hire was payable by 12 months instalments of $3,734. As it happens, the final instalment was due three days after the forfeiture hearing, and so the vehicle never became hers because the magistrate ordered its forfeiture.

7. The learned magistrate declined to alter his decision after a review hearing on 13th March 1992 and Madam Cheung appealed to this court against the order for forfeiture.

8. I may mention here that counsel for the claimant before the magistrate did not suggest that a forfeiture order in respect of the cigarettes should not be made. His submissions then, and now on this appeal, concerned only the vehicle.

9. Madam Cheung, who lived with her daughter, son-in-law and grandchild, gave evidence before the magistrate and told him that she allowed Mr. Mak to drive the vehicle and that at night it was parked outside their apartment. She would keep the keys in her handbag overnight and hand them back to Mr. Mak in the morning. She thus controlled the possession and use of the vehicle. She swore that she had no idea that her son-in-law was committing an offence; she thought that he was delivering groceries quite lawfully. She explained that Mr. Mak had in the past been a hawker and after he had married her daughter she had bought the vehicle and asked him to work delivering goods. She was thus encouraging him to do something lawful. Madam Cheung never drove the vehicle and had no driving licence.

10. The evidence about Madam Cheung's financial resources was not very clear. I will not review it for it is fully set out in the magistrate's Statement of Findings. The magistrate noted that at the review hearing further evidence was given about her finances to show that she had a larger income than had appeared at the earlier hearing, and that he was also told that the vehicle was sometimes used for family expeditions.

11. In his Statement of Findings the learned magistrate referred to section 48 of the ordinance and stated that the statutory provisions showed that forfeiture was mandatory unless undue hardship would be suffered by the making of a forfeiture order; it was in such cases that the court had a discretion not to order forfeiture.

12. The magistrate referred to Attorney General v. Chin Chak Wing [1961] HKLR 479 which was a decision of the Full Court and to de Basto, J.'s judgment in Attorney General v. So Lo Kam [1986] HKLR 564 in which he set out the general principles to be applied when considering forfeiture provisions. The magistrate mentioned that he noted from these authorities that there was no additional requirement of guilt or negligence on the part of the owner before forfeiture could be ordered and that the courts must not make orders the result of which would frustrate the object of the legislation or impair its effectiveness.

13. The magistrate said that he had concluded from the evidence that Madam Cheung and her family pooled their income and defrayed living and other expenses from the aggregate sum. He did not think that she earned as much as $10,700 a month as had been stated but rather that this was the total income of the family. He observed that since Madam Cheung did not hold a driving licence and did not drive, the result of not making a forfeiture order would be that the vehicle in question would, in effect, be restored to Mr. Mak. He inferred from the evidence that Mr. Mak used the vehicle almost exclusively. It did not appear to him that undue hardship would be suffered by Madam Cheung since her use of the vehicle was quite limited. Having considered the matter and the authorities he had come to the conclusion that he was obliged to order the forfeiture of the vehicle (and the cigarettes).

14. Apart from the two authorities mentioned by the magistrate in his Statement of Findings, my attention has been drawn to two other useful cases: Director of immigration v. Chu Shiu Fat [1980] HKLR 780, a decision of Macdougall, J. (as he then was) and the decision of Bewley, J. in Attorney General v. Chung Chi Wing [1988] 1 HKLR 539.

15. Mr. Percy, who did not appear in the court below, submitted that the magistrate had applied the wrong test by the emphasis he had placed on the question whether or not undue hardship had been shown; the authorities made it clear that this consideration was insufficient although clearly it would be a factor that a court was entitled to take into account.

16. In my respectful opinion, the judgment of Macdougall, J. in Chu Shiu Fat is particularly helpful because it discussed and explained the earlier authority of Chin Chak Wing and pointed out that the court in the earlier case had drawn a distinction between the position of a hire-purchase company and an owner whose car had been stolen where the question of forfeiture arose - I am referring to page 783 of his judgment. As I understand the authorities, after considering all the points raised by Mr. Percy, the evidence led before the magistrate and the submissions made to him fell far short of being sufficient to justify a refusal to make an order of forfeiture. Each case will depend on its own facts, of course, but it must not be forgotten that in Chin Chak Wing's case the claimant was a hire-purchase company and could not possibly have known what the vehicle under hire was being used for and yet the Full Court held that a forfeiture order should have been made.

17. In my judgment, the discretion that the magistrate had to exercise in this matter could, on the facts, only have been exercised in the way that he did exercise it. Therefore, I dismissed the appeal.