THE QUEEN v. SHIU CHO-KEE

HEADNOTE

Order for forfeiture in criminal proceedings - object of such order, whether crime prevention or punitive - principles to be applied in exercising discretion.

 

IN THE SUPREME COURT OF HONG KONG

(APPELLATE JURISDICTION)

MAGISTRACY APPEAL NO. 393 OF 1985

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BETWEEN

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JUDGMENT

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1. The Appellant was convicted on nine charges of possession of plates contrary to section 5(2) of the Copyright Ordinance, Cap. 39, and nine charges of possession of infringing copies of literary works, contrary to section 5(1) of the same Ordinance. There were nine pairs of charges, each pair being in respect of a different address where the Appellant carried on business. He pleaded guilty and was fined $1,000.00 in respect of each charge, that is a total of $18,000.00. In addition the magistrate made a forfeiture order under section 5(3) of the Ordinance in respect of all the articles which were liable to forfeiture. These articles included forty-one photocopying machines, 5 punching machines and 12 binding machines. The articles forfeited were valued at over half a million dollars. The appeal is only against the forfeiture order. The learned magistrate, in his findings, states that he took the view that the forfeiture provisions were for the purpose of enforcing the Ordinance, and were to be used, in the absence of good reason to the contrary. The question that arises on the appeal, is the correct approach to the forfeiture provisions in the Ordinance.

2. The power to order forfeiture is a discretionary power. The discretion must be exercised judicially. It must not be exercised in such a way as to frustrate the object of the legislation or to impair its effectiveness: Director of Immigration v. Chu Shiu-fat [1980] H.K.L.R. 780.

3. The object of the Copyright Ordinance is to deter illegal copying. It provides for forfeiture, as a discretionary order, of equipment used for making infringing copies.

4. Forfeiture appears to have its origin in the old law of deodand: Cheatley v. R. [1972-73] A.L.R. 907 at 916. An order for forfeiture could tend towards effecting the object of the Ordinance in either of two ways, firstly, as a form of preventive justice, depriving the offender of the tools of his trade, or secondly by acting as an additional punishment, and therefore a deterrent. Some forfeiture provisions have the additional object of enabling an offender to be relieved of the fruits of his crime. Other forfeiture provisions are aimed at taking out of circulation dangerous or objectionable goods. Whatever its object, forfeiture involves the loss of property rights and to that extent is as much a penalty as a fine. In Cheatley v. R. it was observed, at page 919, that "Historically forfeiture has been regarded as a 'mulct or fine - a punishment for an offence' (R. v. Mayor Dover (1835) 1 C.M. & R. 726 at 736 per Parke B)".

5. In 'The Profits of Crime and Their Recovery' the Report of a Committee chaired by Sir Derek Hodgson, it is said (page 99) that when forfeiture is used as an additional penalty "it is in effect a fine in specie, and ought to be considered as such. Consequently it ought not to be combined with other penalties if the total effect would be too severe'.

6. That courts take this attitude is indicated by the decisions in R. v. Thompson (1977) 66 Cr. App. R. 130, R. v. Lidster (1976) Cr. L.R. 80, and R. v. Buddo (1982) 4 Crim. App. R.(S) 268. See also Thomas 'Principle of Sentencing' 2nd Ed. page 335 - 336. If the property is intended to be used solely or primarily for an unlawful purpose, the court will not necessarily have regard to the extent to what the forfeiture adds to the totality of punishment. Such a case was R. v. Attarde (1975) Crim. L.R. 729.

7. In the Attorney-General v. Eagles's Eye (Hong Kong) Ltd., Application for Review No. 7 of 1984, the Court of Appeal held that the courts, when imposing a sentence, should not have regard to the fact that the Director of Trade would, as a result of the convictions, require the offender to surrender an amount of quota equivalent to that which had been used for improper exports. I consider that case distinguishable, as the Court of Appeal apparently accepted that the Director's action was compensatory or by way of restitution. When making an order for compensation, the court has regard to the offender's means, but does not consider the order as part of the sentence for purposes of the 'totality' principle.

8. I consider the power of forfeiture in the Copyright Ordinance is primarily intended to be used to prevent further offences, but it may, in appropriate circumstances also be used for penal purposes.

9. The Appellant does not contend that there should have been no order for forfeiture in this case, but says that to forfeit all the articles, to a total value of over half a million dollars, was excessive and unnecessary in all the circumstances.

10. Each case must be considered on its merits. An order ought not to be issued as a matter of course, at least not when goods of a substantial value are involved. An important matter for consideration was the likelihood of the property being used for the commission of further offences, if a forfeiture order was not made. The Appellant had a substantial business in legitimate photocopying, in each of the premises involved in the charges. The articles were not primarily possessed for an illegal purpose. The illegal photocopying was not the major part of his business, though it was on a substantial scale. There is some risk of the articles being used in future for illegal photo-copying. A balance should be effected between the requirement to make a forfeiture order so as to prevent further offences, and the penal effect on the offender of such an order when considered together with the other penalties imposed. The order for forfeiture, in the circumstances, brought the punishment to a level beyond that required by the object of the Ordinance or the public interest. The learned magistrate did not direct his mind to the appropriate principles and considerations. As a result his discretion miscarried and I will exercise it anew.

11. The articles liable to forfeiture are set out in a list marked 'A'. The articles are still in Appellant's custody pending the result of this appeal. No issue is taken as to the forfeiture of items which are infringing copies and textbooks. I order forfeiture of such items which are items 2, 3 and 4 on the list. I also order forfeiture of two of the photocopying machines item 1, one of the sorting machines item 6, and two of binding machines item 8. The machines I have ordered forfeit are to a total value of about $57,000.00. There will be no problem about which particular machines in each category are forfeit. The prosecution will have their pick, in order to ensure that the least valuable is not surrendered up.

12. The other items are released to Appellant.