HKSAR v. YUEN MAN TUNG

CACC 442/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 442 OF 2003

(ON APPEAL FROM DCCC NO. 303 OF 2003)

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J U D G M E N T

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Hon Stock JA (giving the reasons of the Court):

Introduction

1. The applicant was convicted by Deputy Judge Candy in the District Court on 3 October 2003 of three offences against the Copyright Ordinance, Cap. 528 and was sentenced to a term of two years and six months' imprisonment. He sought leave to appeal against each conviction and on 16 April 2004 we granted leave and, treating the hearing of the application as the appeal, we allowed the appeal in relation to the first and third charges but dismissed it in relation to the second, and said that we would provide our reasons later. This we now do.

2. The applicant was D1 at trial and there were two other defendants, each of whom was also convicted.

The facts

3. The facts arise from a surveillance conducted by Customs and Excise officers outside premises at Lok Kwan Street in Kowloon. At about 1 pm they saw this applicant emerge. The applicant was carrying three sealed carton boxes and he was intercepted. The officers then entered the premises and they saw D2 leave a room, which has been described as Place A, and she was carrying two sealed boxes. It transpired that in the boxes carried by the applicant there was a large quantity of compact discs and of these it was proved, indeed admitted, that 130 were infringing copies of copyright works; and that in the boxes carried by D2 there were twenty infringing discs.

4. In one corner of Place A there was a room formed by a partition, and this room was referred to as Place B. There was a plastic folding door at one end of Place B which connected that room with Place A, and when the officers entered the premises that door was open. On the floor of Place B were more cartons, which were empty, but there were discs in plastic containers in the room and it was proved that of these discs, ninety four were infringing discs. In addition to these discs there were some 4,700 blank discs in cartons, fit for making infringing discs. Against one of the walls of Place B were found computers with compact disc writers, which serve to make disc replications.

5. It was common ground that the applicant had in his possession three keys to the premises, one which could open the lock of the main iron gate to the premises, another to open a padlock on that gate, and one to open the lock to the wooden door of Place A. The applicant also had keys to a vehicle parked nearby, which was his own vehicle, in the glove compartment of which were found more infringing discs, eleven in number, although no charges were preferred in relation to those discs.

6. The case against D3, which matters not for present purposes, rested on the fact that he was the sub-tenant of the premises.

The charges

7. These facts, all of which were admitted, resulted in the preferment of three charges against the applicant and the other defendants:

(1) The first alleged that the applicant and the other defendants at the premises in Lok Kwan Street made for sale or hire 244 CD Rom discs which were infringing copies of copyright works, contrary to section 118(1)(a) of the Copyright Ordinance. These were the discs that the applicant and D2 had been carrying as well as the infringing discs in Place B.

(2) The second charge alleged that the applicant and the other defendants had these discs in their possession for the purpose of or in the course of trade or business with a view to committing an act infringing the copyright in the works represented by the products, contrary to section 118(1)(d) of the same Ordinance; and

(3) The third charge was that the applicant and the two others had in their possession three computers each equipped with ten CD writers, as well as 4700 blank recordable CD Rom discs, knowing or having reason to believe that they were used or intended to be used for making infringing copies of copyright works for sale or hire or for use in the course of business for trade, contrary to section 118(8) of the Ordinance.

The applicant's statement on arrest

8. After the goods carried by the applicant and the goods in the premises were exposed, the applicant was arrested and cautioned and he said:

"Ah Sir, I just come here to collect the things for somebody," and when asked for whom, he answered: "It was Peter who asked me to come here to collect the things" and that Peter had asked him to take the things to the CTMA Centre in Mong Kok, at which point "Peter will then contact me again". Peter was to pay him $200 "each time". "I myself drive a vehicle to come here" he said, "and deliver the goods to Mong Kok", and he revealed the registration number of his vehicle.

As for the three keys that opened the various doors and locks of the premises, he said that they had been given to him by Peter and that the discs in his vehicle were for his own listening. He said that he had not opened the boxes which he had been carrying and that he had thought that they contained computer motherboards.

9. The applicant did not give evidence at trial nor call any on his behalf.

The Reasons for Verdict

10. In his Reasons for Verdict the judge referred to the fact that the defendants had not given evidence as to which he said:

"This proves nothing one way or the other but it does mean that there is nothing from the defence to contradict compare with or explain the evidence for the prosecution." (para 4). (Emphasis added).

Then he said:

"The explanation given by each defendant is self-serving and is admissible only to show the reaction of each of the defendants at the time the questions were put. They are not evidence of the truth of what was said." (Emphasis added).

11. He added that the photographs of the premises showed them to be very small; and that any person looking into Place B would at once notice computers and discs stored in the plastic containers there and conclude that the computers were used for replicating discs. That room was clearly a workshop he said. There was also a notebook there, which appeared to contain a record of titles of discs replicated. Furthermore, anyone going into Place A could not but see that there was another room, Place B. He then said this:

"15. Place A is a small and congested area. From the photographs it is clear that a person entering Place A could not fail to be aware of the existence of Place B.

16. It follows that anyone entering Place A could not fail to be aware of the contents of Place B. The blank compact discs were found in cardboard boxes similar in shape and size to the boxes carried by D1 and D2. In addition to that each of the defendants had keys to the Premises.

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18. In my view the irresistible inference, in the absence of any explanation to the contrary, is that D1 and D2 must have been aware of the contents of Place B and must have been aware that the boxes which they were carrying contained discs.

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20. For any reasonable person being aware of what was in Place B, it would not have required a leap of imagination for that person to conclude that compact discs were being replicated in Place B. The explanation given by each of the defendants is, as I have said, self-serving and, in any event, is not believable. None of the explanations comes close to attacking or weakening the irresistible inference to be drawn from the prosecution case.

21. Each defendant has chosen not to give any explanation in evidence. While they are not obliged to give evidence the fact that they have chosen not to do so makes the inference to be drawn from the prosecution case even stronger." (Emphasis added).

12. He then concluded that each defendant was aware that the premises were used to replicate compact discs and "that each played a part in running what was clearly a pirating operation".

The Grounds of Appeal

13. There are five grounds of appeal, apart from the concluding ground that the convictions are not safe or satisfactory, but in their effect there are two grounds.

(1) The nature of the statement

14. The first complaint is that the judge erred in his approach to the statement made by the applicant to the officers by concluding that none of it was evidence of the truth of what was there asserted by the applicant, a conclusion that led the judge to say that there was nothing to contradict or explain the evidence for the prosecution, and that there was no explanation contrary to the inference that the applicant and D2 must have been aware of the contents of Place B.

15. If the statement made by the applicant to the Customs Officers was a mixed statement, in other words, one that contained both inculpatory as well as exculpatory matter, then the judge erred when he said that the explanation given by the applicant was not evidence of the truth of what was said, for it is well-established that both parts of such a statement are admissible as evidence of their truth, although the question of weight is altogether another matter. There is no need for us here to rehearse the law, and its development or rationale, for the principles are by now known, and were set out by this Court in HKSAR v Poon Hoi Wing [2001] 1 HKC 363.

16. The statement is said by Mr McGowan to have been mixed in that, whilst there are undoubtedly exculpatory parts to the comments made, there was inculpatory material too, namely, the admissions that the applicant had indeed been to and inside the premises; that he was holding three keys to the premises; and that he had been in possession of boxes taken from the premises.

17. Mr Tam for the respondent argues that the statement made by the applicant to the officers is not a mixed statement because the matters said to constitute admissions against interest were in the event not live issues in the case.

18. We do not think that the test propounded by Mr Tam is the proper test. Whether a statement is or is not wholly exculpatory is not a question resolved by having regard to the issues which remain to be determined in the light of admissions made at the time of trial. Its nature is to be determined rather by its content at the time it is made. If it is adverse to the person making it in relation to an important element of the offence charged - and this is not intended to be an exhaustive delineation, but merely one that suffices for the purpose of the present case - then self-evidently it is not wholly exculpatory. Possession was a vital element of both charges 2 and 3 and the fact that the officers said that the keys and boxes had been found on the person of the individual arrested, does not mean, as experience shows, that that is an assertion that had necessarily to be accepted upon arrest or at trial. The statement made by the applicant contained an acceptance of the assertion by the arresting officer that he, the applicant, had been holding three cartons; a comment that he intended to carry the goods away in his own vehicle; and an admission that he had keys to the premises. These in our judgment were significant and incriminating admissions. The applicant could have alleged (but did not), for example, that he had only arrived at the premises for some unconnected purpose and that the officers were not telling the truth.

19. It follows therefore that the judge erred in concluding that the statements made by the applicant were inadmissible as to the truth of their contents.

20. The question then is the impact of this error on the convictions. In this regard there are two considerations: the first is that the judge commented that he did not in any event believe the explanations and that none came close, as he put it, to weakening the irresistible inference which he drew; the second the fact to which we referred in Poon Hoi Wing, that where there is no evidence to support the account given in a partly exculpatory statement, the weight to be given to that exculpatory part is likely to be slim and, if so, this may well mean that the proviso to section 83 of the Criminal Procedure Ordinance will be applied.

(2) Place B

21. The determination of these questions is tied up with the remaining ground of appeal, which is that the judge erred in his conclusion that 'anyone entering Place A could not fail to be aware of the contents of Place B'. We do not think that that inevitably followed. It is true that anyone entering Place A would certainly have seen that there was an opening to another room, but the rooms and the machinery within Place B were so configured - and we have seen a plan of the rooms as well as photographs - that it did not follow that a person in Place A had to know what was in Place B. The entrance to Place B was a small entrance at one corner of Place A, and a person entering Place A would only know what was in Place B if he or she went to the door or opening to Place B and looked inside.

The errors' consequence

22. It follows that the applicant has demonstrated two material errors, and we are left therefore to consider whether nonetheless the strength of the evidence was such that no miscarriage of justice has actually occurred. Mr Tam points to the fact that the judge has in any event not believed the explanation given by the applicant to the Customs officers, and he suggests that the accepted facts are such that there is but one sensible inference to draw, which is that the applicant knew full well what he was carrying and that he was party to such illicit operation as was obviously being conducted at Place B.

23. The uncontested evidence showed that the applicant had keys on him which were keys to the premises. There was no one else in the premises other than D2, a female who also had keys to the premises and who was carrying boxes when the raid occurred, but whose precise role is otherwise not clear. The applicant was clearly handling goods which were infringing copies of copyright works. On the other hand, whilst Place B was wholly dedicated to the production of infringing discs, the same cannot be said for Place A. It housed some of the paraphernalia of a residence. But we note that no evidence other than the keys and the applicant's presence at the time of arrest was produced connecting the applicant to the premises: no papers or clothing, for example, showing that he frequented the place, nor any admission to that effect.

24. That he had in his custody the infringing items he was carrying is self-evident. On the view of the facts most favourable to the applicant, it seems to us fanciful to suggest that he would be entrusted with the keys to these particular premises unless he knew full well that they housed copyright infringing goods, and the suggestion that he did not know the nature of the goods he was carrying is therefore similarly fanciful. And if, as is obvious, he knew that much, he must have also known that the infringing copies which he was carrying and which D2 was carrying were goods intended to be used in the course of trade or business. It is furthermore obvious that D2 was acting in concert with the applicant and her possession of the cartons that she was carrying is to be attributed in law to the applicant as well. It is not argued otherwise. Accordingly, the errors which we have identified have not resulted in an injustice in relation to the conviction on charge two.

25. But Mr Tam would have us go further. His contention was that by reason of possession of the keys there can be but one inference, which is that the applicant was party to the running of the enterprise as a whole, and must therefore be guilty of the first charge which asserted manufacturing of the discs, and the third which alleged possession of the disc manufacturing computers. On the particular facts of this case, that is one inference that might be drawn and perhaps the most probable of the possibilities; but it is not in our judgment the only reasonable inference to draw. There is another possibility, that he was collecting these goods on behalf of the operator of the premises, and had been entrusted, as one who knew what went on in those premises, with the keys for the limited purpose of collection, and delivery of discs to a designated place. That is in part the assertion he made upon arrest. On the evidence that was presented in this particular case, we fail to see how this second scenario which we postulate can be excluded as a reasonable possibility. It is a scenario that renders him guilty of the second charge. But there is not enough in our judgment upon which to conclude that he was necessarily a party to the manufacturing operation upon which charges 1 and 3 depended. We add in this context that even if the judge's conclusion that anyone entering Place A could not fail to be aware of the contents of Place B were correct, this would in any event be insufficient to sustain charges 1 and 3.

Conclusion

26. For these reasons, we allowed the appeals in relation to charges 1 and 3, and quashed those convictions and set aside the sentences imposed in respect of them. As to the second charge, we applied the proviso to section 83 of the Criminal Procedure Ordinance and affirmed the conviction in relation to that charge to the extent of possession of 150 CD-ROM discs which were those carried by the applicant and D2. The tentative suggestion that we should therefore reduce the sentence on charge two was not successfully pursued.