HKSAR v. QUAN & CO ACTING ON BEHALF OF CHENG LOI TAI

HCMA 521/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 521 OF 2004

(ON APPEAL FROM KTMP 144/2004)

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J U D G M E N T

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1.  This is an appeal against a forfeiture order under Section 28 of the Import and Export Ordinance, Cap. 60 Laws of Hong Kong.  The Applicant, the Customs & Excise Department, claimed that the articles which they sought to be forfeited was connected to and seized in contravention of an offence under the Import and Export Ordinance, Cap. 60.

Facts

2.  On 7 November 2003, police saw two motorized vessels at 6 am in a bay of the Ninepins Group of Islands.  When the police launch approached them, they suddenly moved off and one stopped while the other sped away and turned to a narrow channel between two islands.  The police launch rounded the islands to try and cut off the vessel.  At some stage, while the boat was in the narrow channel, the coxswain of the vessel had jumped overboard, and, when the vessels re-emerged, there was no-body on board.

3.  In the hold of the vessel was found 42 boxes of computer equipment and no export manifest was found.  Each box was individually wrapped with transparent plastic sheeting.  There was no criminal prosecution resulting from the seizure of the boat and the computer equipment.

4.  The claimant claimed that the goods were his and objected to any forfeiture.  And the learned Magistrate after hearing evidence concluded that the claimant could not prove on the balance of probabilities that he was an innocent party and therefore she exercised her discretion in favour of the Applicant and forfeited the items set out in the summons.

Appeal

5.  The Appellant relied on two grounds of appeal against the said order by the learned Magistrate;

1.    The inference drawn by the learned Magistrate that the goods concerned was being “smuggled” to Mainland China was not the only inference that could be drawn in all the circumstances.

2.    The leaned Magistrate erred in finding that HKSAR v Lee Chiang was the case with “almost identical facts” and thus should be followed.

6.  Mr McGowan submitted that the evidence which the learned Magistrate had relied on to draw the irresistible inference that the goods were destined for China were equally consistent with the inference that these goods were stolen goods and that the people on board were the thieves or handlers of these goods and also that these goods were found within Hong Kong waters and the learned Magistrate had therefore erred in drawing the irresistible inference that these items were connected to and seized in contravention of an offence under the Import and Export Ordinance. 

7.  Mr McGowan also submitted that the prosecution had to prove a contravention of the Ordinance beyond a reasonable doubt I do not agree.  As Mr Tam submitted the onus of proof is on the prosecution but only on a balance of probabilities.  The Court of Appeal in the case of Reg. v CEC Finance Limited [1993] 2 HKCLR 134 at p. 138 said:

“Our opinion on the point is this.  The discretion to order forfeiture being unfettered, the question whether or not to so order is to be approached from a neutral starting point, with both parties on a level playing field, so to speak, and each with the onus of proving on a balance of probabilities any fact which he or it asserts if that fact is not admitted by the opposite party.  That is how the question is to be approached.  And it is to be answered by reference to what is just in all the circumstances as the magistrate finds such circumstances proved or admitted.”

8.  It is clear therefore that the learned Magistrate was correct in paragraph 10 of her Statement of Findings to identify the evidence which led her to draw the irresistible inference that the goods were destined for China and therefore that the Appellant had proved beyond reasonable doubt that the goods are liable to forfeiture as there was an intention to export these goods without manifest into China.

9.  Mr McGowan sought to distinguish the case of CEC Finance Limited from the present one on the basis that in CEC Finance that vehicle had been used for the purposes of smuggling by a Mr Pang, who had subsequently been convicted of an offence under the Import and Export Ordinance, whereas in the present case, there had been no conviction.  With the greatest respect, I do not think that the Court of Appeal intended the judgment to be limited to cases where there had been a previous conviction under the Import and Export Ordinance, as at page 136, His Lordship, Bokhary J.A. noted that the discretion of the learned Magistrate is “unfettered in that the factors to be taken into account in exercising it are not specified in the Ordinance”.

10.  Mr McGowan further relied on the fact that the claimant had claimed in his Exhibit P8 statement that the boat and the computer equipment had been stolen from him.   The learned Magistrate did consider this, despite the fact that the claimant did not give evidence during the hearing nor call witnesses, but the learned Magistrate after a thorough examination of Exhibit P8 came to the conclusion that she doubted the veracity of the claimant’s explanation and ruled that the claimant had not proved on a balance of probabilities his assertion that he was an innocent party.

11.  This was a finding of fact upon which the learned Magistrate was entitled to do and the learned Magistrate had given cogent reasons as to why she found as she did (see paragraph 13 of the Statement of Findings).

12.  I therefore see no merit in the appeal as the learned Magistrate had properly exercised her discretion in making the forfeiture order.  The appeal is therefore dismissed.