RICE GARMENT (INTERNATIONAL) LTD. t/a GARMENT SUPREME HONG KONG v. R.

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.880 OF 1996

--------------------

--------------------

-------------------------

J U D G M E N T

-------------------------

1. The appellant was convicted on 1st July 1996 of an offence of making a statement in the manufacturer's declaration on an application for the issue of an export licence which was false or misleading in a material particular, namely that the goods were of Hong Kong origin in accordance with a condition set out in the application, whereas in fact the goods, all or part of them, were not of Hong Kong origin.

2. In respect of this count, the appellant was convicted and fined the sum of $488,000 together with the costs in the sum of $5,000. Both the fine and the order as to costs have been appealed.

3. The trial took place over a period of a total of five days and involved a considerable amount of evidence which was fortunately lessened by the degree of agreement between the parties. However given the nature of the trial, the length that it took, and the matters involved the sum of $5,000 by way of costs awarded against the appellant is in no way flawed and nothing hangs on this ground.

4. The principal ground of appeal in respect of sentence is that in applying the law in determining the penalty, the learned magistrate relying on the case of Attorney General v. Marvels Clothing Co. Ltd. [1987] HKLR 839, and, although arriving at the correct level of sentence, did not apportion the blame for the transaction correctly between the appellant company and a Miss Li who was a party to the transaction. In Marvel, Cons, J.A. said at page 843 :

"At the same time it must be noted that the damage flows on the transaction as a whole, not from the number of its component parts. Due allowance should therefore be made in cases like the present were more than one licence is involved, and where the ultimate result could not have been achieved by one defendant without the other. It may not necessarily follow that in all cases the participants are equally to blame but in the present instance we see nothing to choose between them."

5. I respectfully agree with that passage and with the learned magistrate who held that there should be no duplication of penalty and that having arrived at the appropriate penalty for the offence which had been committed held that he should split that penalty and apportion part to the Miss Li who has been referred to in the proceedings and part of the appellant. It was necessary therefore that he looked at the part performed in the overall transaction by each of those parties to determine their culpability. He addresses this issue in his Reasons for Sentence and says at page 26 of the transcript :

"The only consideration that enabled me to reduce the sentence was the question of duplication in relation to the fine. However, I did not regard the carrier's culpability as in any way comparable to that of the Appellant. I have no doubt that it was the Appellant which had organised the fraudulent scheme and the Appellant which would have reaped the profits from it. It was the Appellant which had devised the elaborate deception and the system for covering up if detected."

6. The learned magistrate took as his starting point a figure of $500,000 by way of total fine. This is within the guidelines suggested at 40% of the free on board value of the goods adopted in the Attorney General v. Marvel Clothing Co. Ltd. and another. I cannot in any way criticize the starting point adopted by the learned magistrate.

7. The only issue for me to decide is whether his apportionment was a correct one and whether the passage which I have quoted from his reasons properly sets out the approach that he ought to have taken. The overall scheme was this : The appellant entered into a contract to supply to a company overseas a quantity of clothing. Consequent upon that contract, the appellant made a declaration stating that the appellant was the manufacturer of goods to be exported pursuant to that contract that the goods were of Hong Kong origin and covering various other matters. Consequent upon the contract and the export licence application, the appellant caused to be manufactured false labels as well as original labels in respect of the garments. The false labels were at some point placed over the original labels to effect the entry of the garments into Hong Kong and their passage past the customs authorities so as to appear to fulfil the terms of the export licence application.

8. Miss Li, whom I have mentioned before, was the person who was in charge of the bringing of the goods from China to Hong Kong. There is no evidence nor any inference to be drawn that she participated in the original contract, nor the application for export licence, nor the manufacture of the goods, there is no evidence that she participated in any way in the covering of the genuine label with a false label. She, from what is before me from the learned magistrate, was no more than the conduit or the means by which the garments were to gain entry from China to Hong Kong at the Man Kam To border crossing. Taking the transaction as a whole, from its inception at the arrangement of the contract for the sale of goods to the final delivery of those goods to San Francisco, which was their ultimate destination, the part played by Miss Li in effecting by whatever means was necessary the entry of the goods over the border at Man Kam To was a small part. I cannot in any way critictze the learned magistrate's view of her culpability when compared to that of the appellant. He had not approached this matter in any way which has been flawed. His reasoning has, in all of circumstances, been a proper reasoning.

9. I accept the concession by Mr Wong that the fine may have been higher than other magistrates may have passed, but in my view it is not so high to warrant my interference. The appeal against sentence is dismissed.