HKSAR v. YIP WAI LAM

[English Translation – 英譯本]

HCMA 259/2019

[2021] HKCFI 905

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 259 OF 2019

(ON APPEAL FROM FLCC NO. 4810 OF 2018)

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J U D G M E N T

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Background

1.  The appellant was convicted after trial of one count of ‘Importing Unmanifested Cargo’[1] before Magistrate Debbie NG Chung-yee (“the trial magistrate”)  and was sentenced to 3 months’ imprisonment. He was also charged with one count of ‘Possession of Dutiable Goods’[2] and one count of ‘Failing to Declare to a Member of the Customs and Excise Service the Dutiable Goods’[3], to which he pleaded guilty and was fined $1,200 and $1,500 respectively.

2.  Now the appellant appeals against conviction on the charge of Importing Unmanifested Cargo. By the time of the appeal hearing he had already served his sentence in respect of the charge.

The prosecution case

3.  On 18^th December, 2017, the appellant drove a private car and arrived at Lok Ma Chau Control Point to cross the border alone. A member of Customs and Excise Service asked the appellant whether he had any items that needed to be declared. The defendant replied in the negative. Member(s)  of Customs and Excise Service searched the appellant’s car and found a carton on board.  It contained 10 gold bangles and one black plastic bag, in which a total of 177 gold ornaments wrapped in packing materials were found. The appellant admitted that those gold bangles and gold ornaments belonged to him, and he had not prepared any manifest.

The appellant’s case

4.  The appellant testified at the trial but did not call other witnesses.

5.  The appellant said he was a China-Hong Kong truck driver, and the gold ornaments in his car were bought by him and his wife from a gold shop in Shenzhen that day. His wife opened a ‘Gold Saving Club’ account with that gold shop. On that day, a total of Renminbi 384,988 was deducted from that account for buying a batch of gold ornaments. Except one of the bangles that needed to be repaired and the remaining 9 gold ornaments were kept by his wife, all gold ornaments were brought to Hong Kong by him by car.

6.  According to the appellant’s testimony, 2 out of the 5 pairs of gold bangles were meant as gifts from him and his mother for his younger brother’s wedding, whilst the remaining 3 pairs were from him and his two elder sisters for his niece’s wedding.  As to those gold ornaments, they were intended to be given to his younger sister-in-law at his younger brother’s ‘betrothal ceremony’ to be held in March 2018. His younger brother’ wedding day was 15^th September 2018 and that of his niece 10^th September 2018.

7.  The ground of defence put forward by the appellant was that those gold ornaments were his ‘items of personal property’ and therefore not ‘cargo’ within the definition under the Import and Export Ordinance, and hence they did not need to be recorded in a manifest.

Ruling by the trial magistrate

8.  The trial magistrate rejected the appellant’s testimony. She did not accept the appellant’s version that the gold ornaments found in the car were for wedding gifts. The trial magistrate further ruled that even if what the appellant said was true, that as the appellant said the gold ornaments would be given away, in that case the gold ornaments were not ‘items of personal property reasonably required for personal use’ but belong to ‘cargo’, and therefore they had to be recorded in a manifest.

Grounds of appeal against conviction

9.  There are two main grounds of appeal put forward by the appellant:

(1)  The trial magistrate erred in imposing evidential burden (提證)  on the appellant and/or erred in rejecting and/or unreasonably rejecting the appellant’s testimony, and even requested the appellant to take on the burden of proof (舉證)  and/or even requested the appellant to call witness(es)  to testify in corroboration, rather than taking into account the existence of reasonable doubt in the prosecution case when she considered the evidence;

(2)  The trial magistrate erred in ruling that the gold bangles and gold ornaments in question were not items of personal property reasonably required for personal use.

Ground of appeal (1)

10.  At the trial the appellant did not rely on the statutory defence under section 18(2)  of the Ordinance. As stated above, the appellant’s ground of defence was that those gold ornaments were his ‘items of personal property’ and did not fall within the definition of ‘cargo’ under the Ordinance.

11.  In respect of the above issue, the trial magistrate expressed the following in her Statement of Findings:

’32.  The defendant did not raise the statutory defence under section 18(2). The main issue in the defence case is – the gold bangles and gold ornaments are not within the meaning of cargo (「貨品」)  under the legislation. They are only items of personal property reasonably required for the personal use of the crew of the vehicle. The defence was of the view that they only had an evidential burden (只提證)  whilst the contrary had to be proved by the prosecution beyond all reasonable doubt that the batch of ‘gold’ was not items of personal property reasonably required for personal use, but was cargo instead.

33.  Section 18(1)(a)  of the Import and Export Ordinance, Cap 60, Laws of Hong Kong provides that – any person who imports any unmanifested cargo shall be guilty of an offence.

34.  The definition of cargo (貨物)  is any article which is imported or exported other than:

(a)  …;

(b)  …;

(c)  items of personal property reasonably required for the personal use of the crew or passengers of such vessel, aircraft or vehicle;

(d)  …;

(e)  …;

(f)  …;’

12.  Having set out the above provision, the trial magistrate went to quite some lengths (paragraphs 38-95)  to analyze the evidence of the defence. She raised a number of doubts about the appellant’s testimony and finally rejected the appellant’s version that the gold bangles and gold ornaments were for gifts from him and his relatives.

13.  The trial magistrate reached the following conclusion:

’90.  The impression the defendant gave me when he testified was that he was making up stories as he was testifying. For example, initially he said he did not know what the amount of return gift should be, but afterwards he withdrew that version by saying that there was an implied rule of a 80% return. Though I know that the defendant did not have to call witnesses, he testified alone whilst his mother, eldest sister, second elder sister, half younger brother, younger sister-in-law, maternal niece, mother-in-law, the proprietor of the gold shop and even his ‘wife’ did not testify. In my view, the defence evidence is very flimsy.

Ruling on 5 pairs of bangles/177 gold ornaments

91.  Let me state it again, that the defendant claimed that all the gold bangles/gold ornaments were deducted from the account of ‘Chan Yee Li (transliteration)’, i.e. it was not in the defendant’s name. The defendant claimed that the lady in the public gallery was his ‘wife’.  However, that lady did not testify under oath, did not confirm the account was hers, did not confirm she was (his)  ‘wife’, did not confirm she used the account jointly with the defendant, did not confirm all the gold bangles/gold ornaments were the defendant’s items of personal property.

92.  I am of the view that the defendant was unable to put in evidence to prove that the 5 pairs of gold bangles were his items of personal property successfully.  Even if they were, he claimed that he carried 3 pairs of those to cross the border on behalf of his family and 2 pairs of those would be given away, i.e. not for personal use.  Nobody from his family testified before me.  I do not rule out the existence of the two wedding ceremonies, but I am not satisfied that the defendant would need to, 9 months before the two couple would get married, draw and bring across the border 5 pairs of gold bangles at the same time – 3 pairs of the same style for his maternal niece and another 2 pairs of the same style for his sister-in-law when they would only get married 9 months later.

93.  Based on my analysis above, I am not satisfied that the 5 pairs of gold bangles were gifts intended for his sister-in-law and maternal niece from him and his family 9 months later. I am not satisfied that the 5 pairs of bangles were his items of personal property. I do not believe that the 5 pairs of gold bangles were reasonably required for his personal use. I find beyond all reasonable doubt that the 5 pairs of gold bangles are also cargo.

94.  Regarding the 177 gold ornaments, which the defendant claimed to be items of personal property, the situation is like that in paragraph 91 above. Moreover, no staff members of the gold shop came to testify in court to claim that the defendant’s wife drew gold ornaments from the account that day. As the so-claimed ‘wife’ was in court and she had taken away 9 gold ornaments, the ‘wife’ should have known her husband was arrested that day. She should have kept those 9 items for testifying in court, and pointed out to the court that the 9 items were indeed for personal use. Before me, there is only the defendant’s testimony.

95.  Based on my analysis above, I am not satisfied that a ‘betrothal ceremony’ ever took place in March. I am not satisfied that the 177 gold ornaments are items of personal property. I am not satisfied that the 177 gold ornaments of the same style are items of personal property reasonably required for personal use. I find beyond all reasonable doubt that the 177 gold ornaments are also cargo.

Conclusion

96.  In my view, the defendant knew full well he had to declare he was exporting gold when he was leaving the mainland; however, he did not declare at customs and did not pay any tax. In my view, he did not fill in a manifest to avoid the procedures of making a customs declaration and paying tax in the mainland. Here in Hong Kong, a customs declaration and tax payment are not required if the gold is an item of personal property. However, having taken all the above evidence and analysis into account, I am not satisfied that the 5 pairs of dragon and phoenix bangles and 177 gold ornaments were items of personal property reasonably required for the personal use of the defendant.

97.  I rule that at the material time the defendant drove the vehicle in question and the 393.51 grams of gold bangles as well as the 1,048.35 grams of gold ornaments he imported when he crossed the border were also cargo. At that time that batch of cargo was still unmanifested. In my view, the prosecution has already proved all the elements of the offence beyond all reasonable doubt. I find the defendant guilty of Charge 1.’

14.  Mr. Tze, counsel for the appellant, submitted that the trial magistrate considered the appellant’s testimony on an erroneous basis. The principle of considering the testimony of the defence should be whether the defence testimony was true or might be true, thereby constituting a reasonable doubt in the prosecution case.  In Mr. Tze’s view, the trial magistrate has not mentioned this basic principle anywhere in her Statement of Findings and on the contrary, she has mentioned here and there that the appellant did not call witnesses whom she thought he should have, and obviously the trial magistrate adopted an erroneous standard of proof to consider whether she should accept the appellant’s testimony.

15.  On the other hand Mr. Ma, prosecutor for the respondent pointed out that the trial magistrate has made it clear at the very beginning of her Statement of Findings, ‘The prosecution bears the burden of proof. The standard of assessing the proof has to be up to beyond all reasonable doubt. The defendant does not need to prove his innocence, nor does he have to call witnesses.’ It is already the correct principle of the burden of proof.  It does not necessarily have to be expressed in the way as stated by Mr. Tze.

16.  Admittedly, magistrates do not have to set out all the basic legal principles in their Statements of Findings.  An appellate court assumes that in general magistrates will not fail to recognize basic principles such as the burden of proof is on the prosecution and they have to prove the elements of a charge beyond all reasonable doubt, etc. even if they do not state these clearly in their Statements of Findings.

17.  However, if certain factors that emerged in a Reasons for Verdict delivered by a magistrate would make people believe that the magistrate erred in some basic principles, the appellate court can no longer assume that the magistrate will not err in basic principles.

18.  In respect of the present case, the main ground of defence put forward by the appellant at the trial was that the gold bangles and gold ornaments did not fall within the definition of ‘cargo’ in the Ordinance. To prove that the appellant has contravened section 18 of the Ordinance, the prosecution has to prove that the appellant imported unmanifested ‘cargo’, and that is one of the elements of the offence. The burden of proof was entirely on the prosecution, and the appellant was not obliged to prove that his unmanifested items did not belong to ‘cargo’.

19.  Hence, it was incorrect when the trial magistrate said in paragraph 11 above, which was quoted from her Statement of Findings, that the appellant had an ‘evidential’ burden.  From the trial magistrate’s analysis, one can see that she is of the view that the appellant’s not calling other witnesses to testify in corroboration has undermined the credibility of the appellant’s testimony. In fact, the trial magistrate put the burden of calling witnesses on the appellant though she said that she knew the appellant was not obliged to do so.

20.  In my view, the trial judge has indeed considered the appellant’s testimony on an erroneous basis, as submitted by Mr. Tze. Therefore, ground (1)  of the appeal is allowed.

21.  Though I ruled that the trial magistrate erred in principle when she ruled that she rejected the appellant’s testimony, she also ruled that she did not think those gold bangles and gold ornaments did not belong to ‘cargo’ even if she accepted the appellant’s version.

Ground of appeal (2)

22.  Mr. Tze submitted that gifts bought for next of kin and to be given to the dearest ones should be regarded as reasonably required for personal use, and one of the main functions of gold is value preservation; therefore, the trial magistrate erred in ruling the gold items in question as not reasonably required for the personal use of the appellant as there was no proof that there was no need for the appellant’s family (to acquire those)  for personal use and value preservation.

23.  Under section 2 of the Ordinance, the definition of ‘cargo’ is very broad.  Apart from the situations in which (a)  to (f)  of section 2 apply, ‘any import or export articles’ all belong to ‘cargo’.  In respect of the present case, the gold bangles and gold ornaments were no doubt articles imported into Hong Kong, unless any subsection from 2(a)  to (f)  applies.  At the trial, the appellant only relied on (c), i.e. ‘items of personal property reasonably required for the use of the crew or passengers of such vessel, aircraft or vehicle’.  The trial magistrate also ruled that the appellant could be regarded as the ‘crew’ of the vehicle he drove. Hence, the only issue to be considered is whether the gold ornaments are items of personal property reasonably required for personal use.

24.  Mr. Tze relied on the case of HKSAR v Chan Ming Kuen[4] to submit that a narrow definition should not be adopted on the words ‘personal use’ under the Ordinance; instead they should be comprehended from a wider perspective. In that case, Deputy High Court Judge Wesley Wong said that the court should not limit the items for personal use only to be used by the defendant when considering whether the cargo was items of personal property reasonably required for his personal use; otherwise absurd situations would arise. For instance, the cargo was a wall clock for the defendant’s use in the office. If there were other people in the office who could use it at the same time, it would create an absurd outcome that the item could not be reasonably required for the personal use of the defendant.

25.  In my view, the facts of the present case are not the same as the circumstances in Chan Ming Kuen.  In the present case the version put forward by the appellant is that the gold ornaments were gifts for him and his family to give away, and the situation is not the same as that in Chan Ming Kuen, in which the telephone parts in question were for installation in the company for the common use of the staff members.

26.  ‘Personal use’ under the Ordinance obviously refers to the use of that item by the crew member himself/herself, to the exclusion of others. If ‘personal use’ also includes use available to or to be given away to other people, then for the same reason, sale for other people’s use should also be included.  That obviously goes against the purpose of the Ordinance.

27.  In my view, items that can be given away to other people for their use do not fall within ‘items of personal property reasonably required for personal use’ in the Ordinance. Hence, the defence put forward by the appellant has failed. The ruling made by the trial magistrate in this regard is correct.

28.  For the above reasons, the appellant’s appeal against conviction is dismissed.