HKSAR v. SHEIKH MUHAMMAD SHAHID

HCMA 1138/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 1138 OF 2001

(ON APPEAL FROM ESCC 1455/2001)

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J U D G M E N T

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1. On 27 September 2001, after trial, the appellant was convicted of an offence of attempting to import unmanifested cargo; of an offence of attempting to import goods to which a forged mark was applied and of an offence of attempting to import infringing copies of copyright works otherwise than for private and domestic use without the licence of the copyright owner.

2. On 28 September the appellant was sentenced to concurrent terms of 11 months; 11 months, and 1 month's imprisonment.

3. He appealed against both conviction and sentence and on 27 March I allowed his appeal; I set aside his convictions and quashed the sentences imposed upon him and I made an order that his costs both in this court and in the court below were to be paid by the respondent, such costs to be taxed if not agreed.

4. These are my reasons for those decisions put as concisely as I can, given that the factual and legal issues which arose during the trial of the appellant necessitated the learned Magistrate unburdening himself of some 26 pages of 'findings'.

5. The defence case at trial as recited by the Magistrate was as follows:

"The appellant gave evidence that he was a man of good character. I took this fully into account when considering his credibility and his propensity to commit the offences with which he is charged.

He gave evidence that he is employed by S.M. Enterprises as a Purchasing Manager in Pakistan. He purchases goods from different countries. Usually he purchases baby garments, baby shoes and watch parts. This was the first time he purchased games. He arrived in Hong Kong on the 11 April and went to Mainland China on the 12 April. This was his first business trip to China. He went to Guangzhou and made purchases from different shops. He then instructed the shopkeepers to send the goods to UDI. He left Guangzhou on 17 April for Hong Kong and flew from Hong Kong to Pakistan on 18 April.

He said he did not purchase any counterfeit goods. Concerning the controllers the shopkeepers showed him Chinese brands. Concerning the Playstations he paid 835 RMB per machine, which he believed to be new machines. He had been tricked by the shopkeepers. Concerning the memory cards he did not purchase Sony brand memory cards. He purchased over 7,000 cartridges. None of the ones he purchased had Gameboy, Nintendo, Dr Mario or Tetris logo. He gave the shopkeeper a list and told the shopkeeper to pack the items and then deliver them to the UDI godown. Concerning P27 and P28 the models he bought did not contain the Sony logo. He told the shopkeeper to deliver them to the godown. In respect of P29 he did not purchase these models but cheaper ones. He did not know that the shopkeeper had included them in the shipment.

He said he paid cash for all of the goods.

He said he knew China was a supplier of counterfeit goods but he did not purchase any counterfeit goods.

He said his friend introduced UDI to him. His friend was Mr Adil a Hong Kong businessman. He did not enter into any written contract with UDI but gave them on accurate packing list. He produced a name card of a UDI employee who he dealt with. He said he trusted UDI. The fee was US1,900. He left cash with Mr Adil to pay UDI after Adil received the Bill of lading. In fact a Bill of lading was never received so he did not pay the money to UDI.

He said on the 21 April someone from UDI called him in Pakistan to say the container had been seized by Hong Kong Customs. Three to four days later this person rang again and said there was a problem with the goods and you need to explain to Customs. He called Mr Adil and Adil arranged for him to see Customs. He flew into Hong Kong on the 2 May and explained the situation to PW4 on the 3 May.

In cross-examination he again said he did not purchase the models P27 and P28 - analog controllers, he did not purchase the model P29 - analog controllers, nor he did not purchase P32 - the memory cards, he could not be sure if he purchased P35 and P36 as he did not check each piece in the shop. He had purchased different models.

The following questions and answers are of significance:

Q. You were not present when the goods were loaded into the container as you were no longer in China?

A. Yes.

Q. Did you ask UDI to draw up a shipping agreement with you?

A. I never asked any company to draw up a shipping agreement with me.

He then went on to say that he did not know the name of the vessel on which the goods were to be transported or the route the goods would take. He said he would find that out on receiving the bill of lading.

He had never heard of the company Jiangxi Cereals Oils and Foodstuffs Import and Export Corporation. He was only aware of UDI.

Mohammad Adil was called as a defence witness. He has been a Hong Kong resident since 1984 and said that he has known the appellant for four to five years. The appellant would buy watch parts from him. The appellant asked him to recommend a goods forwarding company in China and he recommended UDI. A friend of his, Mr Faisel, regularly used UDI to transfer goods from China to Karachi.

He had never used UDI himself as he had no business in China.

The fee for UDI was US1,900 which was to be paid by him on behalf of the appellant on receipt of the bill of lading. The appellant gave him US1,900 before departing for Pakistan.

Previously he had been to the office of UDI twice and found it to be reliable.

Miss Liao of UDI called him to say there was a problem with the container and he then telephoned a Madam Ho of the Customs and arranged an appointment for the appellant."

6. The learned Magistrate, inter alia, came to these conclusions:

"I found all the prosecution witnesses were honest and truthful witnesses. Indeed there was no real challenge to their evidence.

The appellant testified. I observed him in the witness box. Having considered his evidence and given myself the appropriate good character warnings I rejected his evidence. I did not believe him nor did I believe the evidence of his witness. I also disbelieved the explanation put forward in the appellant's record of interview. That explanation was given two weeks after learning of the seizure.

I was satisfied beyond reasonable doubt that the appellant did attempt to import into Hong Kong the goods which are mentioned in the 1st charge and that the goods were not listed in the manifest. The manifest stated that the cargo was being shipped from Huangpu to Hong Kong. The goods would have been unloaded in Hong Kong and stored at the H.I.T. Terminal pending shipment to Karachi. I was satisfied beyond all reasonable doubt that the appellant had given instructions for the goods to be transported through Hong Kong.

I was satisfied beyond all reasonable doubt that as in the Keening case the carrier had been given instruction as to what was required and they were being left to carry them out. The appellant's role was complete. He had done all that he could do to commit the completed offence."

.....

"I rejected the appellant's evidence that he did not know that the cargo was unmanifested and even on his own case he did not show reasonable diligence. Indeed I was satisfied beyond reasonable doubt that he did know the cargo was unmanifested. The compelling and irresistible inference is that the cargo was unmanifested to conceal the counterfeit goods. The appellant certainly did not show on a balance of probabilities that he did not know and could not have known with reasonable diligence that the cargo was unmanifested.

I disbelieved the evidence of the appellant that he did not know the route that the container would be taken and that he did not know the container would go through Hong Kong.

The appellant was on his first business trip to China. This is was the first time he was shipping goods to Pakistan from China. It was a valuable cargo. He would have to collect the cargo in Karachi and then transport it overland to Lahore.

In these circumstance I do not believe that the appellant would not have signed a shipping agreement with the transportation company. Without a shipping agreement if the container were lost in route he would have difficulty in establishing any civil claim. Without an agreement if the transportation company were to cheat him he would have difficulties in establishing his claim.

I do not believe that the appellant did not even ask the shipping details. Surely he would want to know how his valuable cargo would be taken to Pakistan. He would want to know on which ship the container would arrive in Karachi so he would arrange for delivering and further transportation.

I do not believe that the appellant did not inspect the goods before they were loaded into the container. This was the first time he had purchased goods in China. He had every reason to inspect the goods.

There was no reason for him to have blind trust in either the shopkeepers or the transportation company.

I found that the appellant has invented a version of events in order to try and distance himself as far as possible from the false manifest and counterfeit goods.

I do not believe the appellant's evidence concerning UDI. The only evidence he and his witness could produce to show the involvement of UDI was a name card. UDI does not appear on the manifest. There are no payment records to UDI, although the appellant and his witness say payment was to be made after the Bill of Lading was presented. I rejected the evidence of the appellant and his witness in relation to UDI. I found that the story concerning UDI was another attempt to distance the appellant from the false manifest.

The compelling and irresistible inference is that the appellant was aware of the contents of the container and that he knew the route by which they were to be transported, that he knew the goods in the container would not be included in the manifest.

I rejected the evidence of Mr Adil. He had not traded in China. Other than a name card he came up with nothing else to support his dealings with UDI. He said he had been to the office of UDI before but there was no reason for him to go there was as he had no business with UDI. I rejected his evidence concerning UDI.

In any event Adil was not involved in bringing the container into Hong Kong nor purchasing the contents of the container in China. He had no knowledge of the contents of the container."

.....

"In his final submission the appellant's counsel said that if his client were guilty why would he go to customs. There are a number of reasons why he would surrender including the belief that he would not be charged, perhaps on legal advice."

7. On behalf of the appellant Mr Mc Gowan was proposing at the hearing of this appeal against conviction to rely upon 6 grounds. In the event it was not necessary for me to hear argument in relation to 5 of those grounds and I need make no further reference to them.

8. The sixth and successful ground was this:

"There was material non disclosure of important evidence."

9. That matter arose in this way, and I make reference here to an affirmation (which is before me by way of additional evidence ) of Mr Khosa who appeared as counsel for the appellant in the court below. The goods shipped on the appellant's behalf were in a container. The manifest which related to that container mentioned (on the very same line) another container which had nothing whatsoever to do with the appellant. Both containers contained, according to the manifest, 'soles'.

10. Prior to the trial of the appellant Mr Khosa and/or those instructing him made informal enquiries of the prosecution as to what had happened to the second container, and it would appear that they were told or were led to believe that the persons with an interest in that container could not be traced and no further details were provided.

11. Upon that footing the appellant's trial proceeded and the Magistrate chose to disbelieve the appellant upon a number of crucial issues which I have set out above and to which I will return later.

12. Following upon the conviction of the appellant and in preparation for this appeal further enquiries were made by Mr Khosa and those instructing him which enquiries revealed, inter alia, that the appellant's account of matters given in his evidence at trial concerning the shipping arrangements (which evidence was rejected by the Magistrate) could well be true.

13. I do not propose to go into the detail of those enquiries but suffice it to say that when this appeal first came before Deputy High Court Judge Wong on 27 February and Mr Mc Gowan made mention of Mr Khosa's affirmation and its content the appeal was adjourned and the prosecution was ordered to comply with a request for disclosure concerning the second container.

14. What then happened was that the required information was disclosed and it was revealing. It showed, inter alia, that far from the owner of the goods in the second container being untraceable, he and the company of which he was a director has been prosecuted some months prior to the trial of the appellant and whilst the company had been convicted of an offence relating to unmanifested cargo the director (one Mr Jhala) had been aquitted.

15. Of much greater significance, however, to this present appeal is the fact that the information then disclosed about the second container and the earlier trial revealed that,

	(a)	Mr Jhala had entrusted his company's goods to be shipped by UDI from the Mainland to Dubai;
	(b)	that Mr Jhala's container had been seized by the Customs and Excise Department in Hong Kong on 21 April 2001 along with the container of the appellant's goods;
	(c)	that on 8 May UDI sent a letter to the Customs and Excise Department saying that the declaration of 'soles' in the manifest was a clerical error on their part and they accepted full responsibility for that error;
and	(d)	that Mr Jhala had explained (when he was interviewed by Customs and Excise officers) the mechanism of shipping goods through UDI and UDI's relationship with Jiangxi Cereals Oils and Foodstuffs Import and Export Corporation, China.

16. Plainly all of that information was highly relevant to the case against the appellant and to his defence which defence (in the absence of that information) was rejected by the Magistrate. It was information that should have been disclosed whether applied for or not. Justice to the appellant's case demanded no less.

17. In his written skeleton argument in support of this ground of appeal Mr Mc Gowan puts his case (and I summarise it) in this way:

"Enquiries had been made before trial in an attempt to ascertain what had happened to the "owners" of the other offending container - these were met with a response which suggested, a failure to identify the owners.

This line, was not therefore pursued further.

This effectively meant that Mr KHOSA's cross-examination concerning the other container was limited ...with answers that could be described as "being economical with the truth".

This is because, inter alia, as a perusal of the documents now made available makes clear, the two containers were actually entrusted to the same forwarding company, UDI, that company passed them on to the same "shipper" as declared in the manifest (Jiangxi Cereals Oil and Foodstuffs), and that both had the same "false" declaration. Additionally neither were intended for final discharge in Hong Kong.

Further, and most importantly, the prosecution was in possession of a letter from UDI which admitted that they (or their servants and/or agents), had made the misdeclaration, directly or indirectly.

. . . . .

this was vital information which clearly indicated that UDI did exist and at least may have been responsible for the 1st offence. It is also clear from this that they were aware that at least one of the containers onboard GUAN HANG 373 contained video games; no other on the manifest is so shown. That information must have been provided by the appellant.

Mr JHALA's record of interview indicates what the shipping arrangements were when utilizing UDI. He had used them in the past. The appellant had not.

Mr Jhala further stated/explained:

* He did not know the name of the vessels on which his container was to be shipped.

* No "confirmation" was received from UDI.

* Other details were forwarded later.

* He did not know the date the container was to leave China.

* He did not know the date of arrival in Dubai.

* At the time of its departure from China he did not know the Bill of Lading number of his container.

* Payment was only to be made on receipt of the Bill of Lading.

* He [even as an experienced exporter] was not aware of the procedure but entrusted it to an agent [UDI].

* The role of agents and Import/Export Companies.

It is submitted that the Magistrate's findings of fact against the appellant could not have been sustained if this information had been made available, before trial, to the Defence. All matters on which he disbelieved the appellant are essentially traversed.

It is further submitted that if his findings against the appellant on these points are not sustainable, then one cannot be sure that his other contrary findings are safe and/or satisfactory.

It is contended that the failure to alert, at the very least, the Defence to the existence of inter alia these documents constitutes a "material Non-Disclosure", with a profound effect on the fairness of the appellant's trial and the safety of his convictions."

18. I agree with that contention and, despite Mr Cheung's arguments to the contrary, I also agree with Mr Mc Gowan's penultimate paragraph. Plainly the Magistrate's view of the appellant was formed at least in part upon his (the Magistrate's) incredulity. Events have clearly shown that such incredulity may not have been justified had all the information been made available prior to, or at the time of, the appellant's trial.

19. It was for all of these reasons that this appeal was allowed.