HKSAR v. MUI SHUN KING, RICKY

HCMA1006/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.1006 OF 1999

(ON APPEAL FROM TMCC 3195 OF 1999)

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J U D G M E N T

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1. The appellant was convicted on 21 September 1999 of two charges of possession of light diesel oil from which marker or colouring substance had been removed. He was sentenced to four months' imprisonment in respect of each of the charges, the sentences are to be served concurrently. He now appeals both those sentences.

2. In respect of the first charge, on 26 July 1999, he was found in possession of 7,000 litres of light diesel oil from which the marker or colouring substance had been removed and, in respect of the second charge, on the same day, he was found in possession of 11,000 litres of light diesel oil from which the marker or colouring substance had been removed.

3. The facts were that a team of Customs Officers on that day laid ambush in the vicinity of a fenced area in Nai Wai, Lam Tei, Tuen Mun, New Territories. The party raided within the fenced area and found the appellant squatting in front of a metal tank inside a 40 foot container. He was using a metal rod with a plastic container to collect liquid from the tank. The appellant admitted that detreated oil was contained inside the plastic container and he was inspecting to see if the oil had been cleared by the detreating process. The tank was found to contain detreated oil.

4. Inside the container was found a sophisticated system of denatured charcoal filters and electric pumps with connecting hoses to filter oil which has dye in it, and which is not subject to a heavy duty, and turned it into diesel fuel which to the eye is indistinguishable from the clear product upon which full duty is payable and which it is permitted to be used in vehicles on our roads.

5. Outside the fence, 50 metres away, was found another tank which contained the oil involved in the second charge. There also a light goods vehicle was found and various pumps, filters, meters and other equipment necessary for the sale and dissemination of the oil were found. This was clearly a large scale and sophisticated operation for both the production of detreated oil and its distribution.

6. The magistrate said this in his Reasons for Sentence :

" I have been acting in the plea court at Tuen Mun as a principal magistrate since October 1998. During the 11 odd months period I have dealt with illicit fuel cases on a weekly basis and I consider them prevalent. The Customs & Excise Department who prosecute these cases have provided me with information about the various types of illicit fuel on offer which I have utilized in sentencing defendants and I also had prior to my sentencing the defendant been provided by them with statistics for illicit fuel prosecutions in 1998 ... and statistics for the period January - May 1999 ...

Whilst it would appear from the statistics ... that there have been relatively few prosecutions in relation to detreated marked oil, marked oil is light diesel oil (the next and major category of illicit fuel in the statistics) dyed red to distinguish it from light diesel oil. Unlike light diesel oil however marked oil is exempt from duty and is to be solely used for industrial purposes. It is an offence to use it as fuel on a road vehicle but it is detreated (decolourized) so that it can be used as such."

The magistrate went on to consider the heavy environmental impact of the use of oils such as detreated oil, which has a higher sulphur content and contributes to the pollution when used on a road vehicle, the fire risk posed by the activities of treatment plants such as that used by the appellant and the substantial loss of revenue suffered by the evasion of duty - in this case, HK$36,000. The magistrate went on to say this :

"Whilst prison terms have been rarely imposed I considered in the defendant's case given the prevalence of the offence it was necessary to pass a deterrent sentence as financial penalties do not appear to be deterring people such as him from getting involved in the trade. Indeed he had been fined substantially by me for a similar offence just over 1 month before the commission of these offences but had not been deterred by that from returning to the trade. The only effective deterrent in my view was the imposition of an immediate custodial sentence as opposed to a suspended prison term as suggested by his solicitor when I sentenced the defendant to an immediate prison term."

7. The magistrate made reference to the comments of Mr Justice Leonard in R. v. Ng Wai Ching, MA1309 of 1996 which dealt with the necessary increase in penalties for the breach of copyrights involved in the selling of compact discs and video compact discs. It was his view and it is mine that the circumstances relating to the sale of illegal diesel oil and diesel oil from which the marker has been removed should be dealt with on the same basis as has been the approach by the courts in respect of breach of copyright. There has been a substantial increase in these offences. The offences affect not only the trade but the public at large, both by the deterioration of the air quality it causes and the danger it poses, together with the considerable loss of revenues.

8. In all the circumstances, the magistrate's approach, being one in which he has warned those persons previously appearing in his court, was perfectly proper and the appeal against sentence is dismissed in respect of each of the charges.