HKSAR v. CHUI KWOK KEUNG AND ANOTHER

CACC 13/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 13 OF 1999

(ON APPEAL FROM DCCC 1123 OF 1998)

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J U D G M E N T

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Wong, J.A. (giving the judgment of the Court):

1. The applicants faced two joint charges under s.5(1) of what has been referred to as the old Copyright Ordinance, Cap.39. The old ordinance has now been replaced by the Copyright Ordinance, Cap.528 which came into operation on 27 June 1997. The offences to which the present appeal relate were committed on 20 June 1997 and the charges were therefore brought under the old ordinance. Be that as it may, the only relevance between the old and the new ordinances, in so far as this case is concerned, goes to sentence, with which we are no longer concerned following the withdrawal of his application for leave to appeal against sentence by Tam Ka Kui, the 2nd applicant. The trial took place before Her Honour Judge Toh in the District Court. The 2nd applicant pleaded guilty to both charges at the outset and was sentenced to a total of 15 months' imprisonment. Chui Kwok Keung, the 1st applicant, pleaded not guilty to both charges and was convicted after trial and sentenced to two years' imprisonment in total.

2. The 1st applicant applies for leave to appeal against conviction. We will deal with his application.

3. The charge sheet which contains two charges reads as follows :-

" 1st Charge
Statement of Offence

Possession for the purpose of trade or business of infringing copies of cinematograph films in which copyright subsisted, contrary to section 5(1) of the Copyright Ordinance, Chapter 39.

Particulars of Offence

CHUI Kwok-keung and TAM Ka-kui, on the 20th day of June, 1997 at Front Portion, 3/F, 21 Dundas Street, Mongkok, Kowloon, in Hong Kong, had in their possession for the purpose of trade or business 60,339 video compact discs being infringing copies of cinematograph films in which copyright subsisted.

2nd Charge
Statement of Offence

Possession for the purpose of trade or business of infringing copies of sound recordings in which copyright subsisted, contrary to section 5(1) of the Copyright Ordinance, Chapter 39.

Particulars of Offence

CHUI Kwok-keung and TAM Ka-kui, on the 20th day of June, 1997 at Front Portion, 3/F, 21 Dundas Street, Mongkok, Kowloon, in Hong Kong, had in their possession for the purpose of trade or business 4,948 compact discs being infringing copies of sound recordings in which copyright subsisted."

4. The facts are simple. Customs officers gave evidence that on 20 June 1997 they were keeping observation in the staircase outside the 3rd floor of 21 Dundas Street, Mongkok. Shortly after they took up their positions, they saw the 1st applicant leaving the flat with a rucksack on his back. He was stopped and taken back to the flat by the officers. There was no furniture inside the flat except a cardboard box and stacks of video compact discs (VCDs) in a room shown on the left of a photograph. The same photograph depicts another room on the right, again with stacks of VCDs and cassette discs (CDs). The rooms were not locked. At the time of entry, the room on the left was closed and as for the room on the right it was not completely closed off. The officers said that when they entered the flat the stacked VCDs on the floor in the room on the right were visible to them. From this, the judge drew the inference that the 1st applicant must have clearly seen the VCDs when he was inside the flat prior to leaving.

5. A search was conducted. Inside the rucksack were 1,024 VCDs and in one of the trousers pockets of the 1st applicant the officers found two keys which fitted the iron grille and the wooden door of the entrance to the flat. The 1st applicant was arrested. The flat was searched and a total of over 80,000 copies of VCDs, and this includes the number found in the rucksack, were seized. On subsequent examination, 60,339 VCDs were found to have infringed copyright and 4,948 CDs were found to have infringed the copyright of the sound recording.

6. The 1st applicant elected to give evidence. He said that he had been working for the 2nd applicant as a courier or mover and had been to the flat about six times before 20 June. The last time he was there was on 19 June. He was never told to move things from the flat, only to move boxes up there from the ground floor after they had been delivered. He had no idea what was inside those boxes. On 20 June, because the 2nd applicant was short-handed, he was told to go up to the flat to carry the rucksack down to the ground floor and he thought he was to give it to the 2nd applicant. He did not know what was inside the rucksack and he had never looked into the two rooms shown in photograph 11, P1. He said both rooms were locked and sealed shut. He also said that when he was pushed into the flat, his head hit the wall and he lost consciousness so he could not see the room being opened and his rucksack being searched and the contents taken out.

7. The judge rejected his evidence and found the charges proved against him.

8. The 1st applicant makes three complaints in his Amended Perfected Grounds of Appeal Against Conviction. Mr Cheng Huan, SC, who appears for the 1st applicant before this Court, invites us to deal with Grounds 1 and 3 together as they are closely inter-related. We will proceed on this basis. These are the Grounds.

"Ground 1

The learned judge erred in law in equating possession with 'only control or custody' (Letters L to M at page 22 of the 'Reasons for Verdict').

Particulars

a) The learned judge failed to direct herself that it was incumbent on the prosecution to prove that the Applicant also had knowledge that the items found in his physical possession and those found inside the premises were 'VCDs' and 'CDs'.

b) The learned judge made no findings at all that the Applicant knew that the items were in fact 'VCDs' and 'CDs'.

c) Having failed to make any such findings aforesaid the learned judge erred in applying the presumption under section 5 of the Copyright Ordinance Cap.39.

Ground 3

In relation to the VCDs found inside the premises the learned trial judge erred in her 'Reasons for Verdict' in inferring guilt of the Applicant on the basis that

a) The Applicant once inside the premises would have been able to see the VCDs and CDs;

b) The Applicant could gain easy access to the premises (page 23 letters D to F).

These reasons given by the learned judge are not sufficient in law to infer guilt."

9. The point raised by Mr Cheng Huan in argument is a short one. He submits that the judge failed to direct or misdirected herself on the meaning of possession. It is wrong to define possession in the way she did and that is "possession does not mean ownership, only custody or control". In the context of this case, Counsel says that possession means custody or control with knowledge, i.e. that the 1st applicant knew what were in the rucksack and the flat were VCDs or CDs. Mens rea is, therefore, an important ingredient of the offence created under s.5(1). Counsel refers to the statutory defence in s.5 which provides that once "a person is found to be in possession for trade or business any infringing copy of a work in which copyright subsists shall unless he proves to the satisfaction of the court that he did not know and that he had no reason to believe that it was an infringing copy of any such work shall be guilty of an offence". Counsel also submits that the judge had probably confused knowledge of the contents in the rucksack and the flat with knowledge that they were infringing copies. The judge was thinking, he argues, that s.5 creates a double presumption and once the 1st applicant was found to be in custody or control of what were in the rucksack and the flat, he would be presumed to know that they were VCDs and CDs. Furthermore, he is presumed to know that they were infringing copies. Clearly, this cannot be the case. He says that the judge had not addressed or properly addressed her mind to this vital element of the case. He further submits that the evidence in this case is not sufficient to draw inferences of guilty knowledge.

10. Section 5(1) of the Copyright Ordinance (Cap. 39) provides, so far as is material :

"... any person who for the purposes of trade or business has in his possession any infringing copy of a work ... in which copyright subsists ... shall, unless he proves to the satisfaction of the court that he did not know and that he had no reason to believe that it was an infringing copy of any such work ..., be guilty of an offence ..."

11. In order to bring home a charge under the section, it is incumbent on the prosecution to prove that

(i) The article to which the charge relates must be an infringing copy of a work in which copyright subsists.

(ii) The defendant must have been in possession of such an article.

(iii) He must have been in possession of it for the purposes of trade or business.

This last element can be proved by circumstantial evidence, e.g. the quantity and value of the VCDs and CDs and in this case it would not be too difficult to draw such an inference. Once the prosecution has proved all the three elements beyond reasonable doubt, then and only then the burden shifts to the 1st applicant to avail himself the statutory defence under s.5 that he did not know and he had no reason to believe that the VCDs and CDs found in the rucksack and the flat were infringing copies. He only needs to discharge the onus of proof on a balance of probabilities.

12. The definition on possession given by the judge, if it stands alone or if the judge had stopped there, is clearly inadequate and defective. The question is does it stand alone or did the judge stop there. The answer must be "No". Both before and after the judge said "possession does not mean ownership, only custody or control", she had referred to evidence which could only be relevant to the issue of knowledge. In the Reasons for Verdict at page 20 F-H, she said :-

"The upshot of their evidence was that when they entered the premises the stacked VCDs on the floor in the room on the right was visible to them and therefore by inference the defendant when he was inside the flat prior to leaving must have also clearly seen them."

At the same page S-T :-

"He said he had been working for the 2nd defendant as a courier or mover and had been to the subject premises about six times before 20 June. The last time he was there was on 19 June."

At page 23 B-J :-

"I have no doubt about the customs officers' evidence about seeing the defendant and taking him into the subject premises and the layout of the premises when they first entered. I also have no doubt that the defendant when he was inside the flat would have been able to see the VCDs and CDs in the room on the right as it was open to view and that the room on the left, though closed, was not locked and the defendant could gain easy access if he wanted to since he had the keys to the premises."

13. Although the judge did not expressly state that she found that the 1st applicant saw the VCDs and CDs and therefore knew what they were, these passages could serve one purpose and one purpose only and that is that the 1st applicant had knowledge that what were inside the rucksack and the flat were VCDs and CDs and that he had custody or control of them. We are in no doubt that that was what she in fact found. If she had not been sure, she would have said so.

14. Reading the Reasons for Verdict as a whole, it is not possible that she could have confused knowledge of what were in the rucksack and the flat with the statutory defence of knowledge of infringing copies. At the end of her Reasons for Verdict, she said at page 23 R-S and page 24 A-B :-

"I am aware that the defendant need only prove on a balance of probabilities or more likely than not that he had no knowledge of the infringing copies of these VCDs and CDs in both the flat and the rucksack but he has failed to do so."

15. Here what the judge was saying is that once the prosecution had proved that the 1st applicant was in possession of the VCDs and CDs in the rucksack and the flat in the sense that he had custody or control of them and he knew that they were VCDs and CDs, the 1st applicant can fall back on the statutory defence that he did not know and had no reason to believe that the VCDs and CDs were infringing copies. He needs only to discharge the burden cast upon him on a balance of probabilities. It is very clear to us and we do not think that the judge could have in the slightest degree misunderstood or confused.

16. All the ingredients of the offence having been present and proved, the judge was perfectly entitled to come to the conclusion that the 1st applicant had knowledge of what were in the rucksack and the flat were VCDs and CDs and that he had custody or control of them and they were infringing copies which the 1st applicant had possession for the purposes of trade or business.

17. Grounds 1 and 3 therefore fail.

18. Ground 2 relates to the first charge only. It reads :-

"This conviction is unsafe and/or unsatisfactory because the evidence adduced did not support the particulars as alleged.

Particulars

a) There were two alleged separate offences : namely possession of 1,024 VCDs found in the physical possession of the Applicant (outside the premises) and the remaining 59,315 VCDs (found inside the premises).

b) In these circumstances there should have been two separate and distinct charges."

19. Apart from what is stated in the written amended ground, no arguments have been advanced before us nor is there anything in Counsel's skeleton submission. No authorities were cited. All Counsel says about this Ground is that it is unsafe and unsatisfactory.

20. There was no objection taken at the trial that charge one was bad for duplicity. No complaint is made before us that the 1st applicant has been prejudiced or injustice has occurred as a result.

21. As the finding of the VCDs in the rucksack and the flat was so close both in time and place, it is entirely proper to prefer one charge instead of two separate charges. In this way, it serves to better reflect the overall criminality.

22. There is no merit in this Ground and must be dismissed.

23. In the result, we refuse the application.