THE QUEEN v. WONG KEI HUNG AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

(APPELLATE JURISDICTION)

MAGISTRACY APPEAL NO. 576 OF 1993)

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

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

HEADNOTE

Magistrate's appeal - whether charges should be amended after closing submissions - whether variance between complaint and evidence is material application of section 27 of Magistrate's Ordinance - whether an injustice as to costs can be cured by an order as to costs limited under section 27 - proper construction to be placed on section 27.

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

J U D G M E N T

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

1. On 8th June 1993, Mr. W.K. Kwok, sitting at Tuen Mun Magistrate's Court, convicted the appellants of the following offences;

2. The 1st appellant was convicted of two charges of possession for the purposes of trade or manufacture goods to which a false trade description was applied, contrary to s.7 of the Trade Descriptions Ordinance, Cap. 362.

3. The 2nd appellant was convicted of one charge of offering to supply goods to which false trade descriptions were applied.

4. The 1st appellant was fined $17,000 and the 2nd appellant was fined $5,000. Orders for forfeiture of the goods were also made.

5. Both appellants appealed and the main ground of appeal relates to amendments to the charges which the Magistrate made, effectively after all the evidence was completed and submissions had been made.

6. In order to see what happened and then analyse it in the context of s.27 of the Magistrate's Ordinance, it is necessary to start with the original charges that these appellants faced and then consider the course that these proceedings then took.

7. The 1 st appellant was originally charged with two offences contrary to s.9(2) of the Trade Descriptions Ordinance of possession for the purpose of trade or manufacture goods to which forged trademarks were applied. The two charges related to different premises. The goods were watches and ancillary items which were said to contain the forged trademark “Rolex”.

8. The 2nd appellant was originally charged with one offence contrary to s.7(l)(a)(ii) of the Trade Descriptions Ordinance of offering to supply goods to which a false trade description was applied. These items were the same as referred to in the second charge against the 1st appellant.

9. The proceedings took the following course;

10. The trial commenced on 27th April 1993 when various customs officers gave evidence. The hearing was then adjourned to 4th May 1993 when one customs officer gave evidence and evidence was then taken from Mr. Tse, an employee of Rolex.

11. Later on 4th May 1993, Mr. McNamara for the appellants, having decided not to call any evidence, made a closing submission in which he submitted that both his clients should be acquitted because the charges, as laid, had not been made out. Mr. Tse of Rolex had agreed in cross-examination that the Rolex trademarks were in fact genuine. What was not genuine was some of the components of the watches, such as the movement. Mr. McNamara made a detailed submission on the relevant law and the facts of the case. At the end of this submission, the Magistrate adjourned to 13th May 1993 in order to consider his verdict.

12. On 13th May 1993, instead of announcing his verdict, the learned Magistrate came into court and said;

“In the course of considering my verdict, I find I need further assistance from counsel. The D1 faces 2 charges which at first allege that he was in possession for the purpose of trade or manufacture certain goods to which a forged trademark applied. Defence’s submission to me if I understood correctly, is that the evidence of Mr. Tse Kang Wai showed the trademark itself was genuine, hence defendant could not be convicted of the offence. The evidence of Tse shows that false movements had been put within genuine Rolex watch cases, bracelets, etc; or the bracelet which was originally white in colour became a mixture of gold and white, although the trademark is genuine; for the clasp it’s with genuine trademark but the number is modified and there are colour changes regarding the winding crowns. I would like counsel to address me on whether or not because of these changes or factors, the genuine trademark had been falsified within the meaning of section 9(3) of Trade Description Ordinance?”

13. Submissions were then made and at the end of these, the learned Magistrate invited Mr. McNamara and the prosecuting inspector to consider whether he should amend the present charge or substitute new charges against the appellant. The case was then stood down for consideration,

14. After consideration by both sides, detailed further submissions were addressed to the learned Magistrate. Mr. McNamara submitted that the power to amend should not be used so as to substitute wholly new charges with totally different considerations. He pointed out that the offence under s.7 was different to that under s.9. He pointed out that the prosecution, who was supposed to know about cases like this, had got the case completely wrong. They called Mr. Tse to support a charge relating to forged trademarks, but he could not support that allegation. The trademarks were in fact genuine Rolex trademarks. Mr. McNamara concluded by saying that the prosecution had made a mistake and should, at this stage of the trial, take the          consequences. He concluded further by remarking that his client would suffer untold prejudice if a completely new charge had to be faced.

15. The learned Magistrate then asked what prejudice would be suffered if an adjournment was granted, leave to recall and further examine witnesses was allowed and the defence were entitled to adduce further evidence. Mr. McNamara, in response, specifically referred to the prejudice of costs, in that if amendments were permitted, substantial costs would have been thrown away and further costs incurred.

16. The learned Magistrate decided to take time to consider the position and he adjourned until 19th May 1993.

17. On 19th May 1993, he accepted Mr. McNamara’s main submissions with regard to the wrong charge relating to the two charges against the 1st appellant. However, he went on to say that there was evidence to support a charge under s.7(1)(b) and he had therefore to consider whether or not the charges against the 1st appellant and, indeed, against the 2nd appellant should be amended. He then added this;

“I have considered defence counsel’s submission on the point very carefully. I am satisfied that even if the two charges were amended at his stage, the defence will not suffer any injustice which cannot be cured by an order as to costs, an adjournment or leave to recall and examine witnesses or call other witnesses.”

18. The learned Magistrate therefore amended the two charges (A and B) against the 1st appellant by taking out references to “forgery” and inserting “false trade description” contrary to s.7(1)(b) of the Trade Descriptions Ordinance. The particulars to the charges were similarly amended.

19. The charge against the 2nd appellant (C) was amended by including the following omitted words “in the course of trade or business” after “you” and before “offence”.

20. The case was then stood down for a short time while Mr. McNamara took instructions. On return to the court, the three amended charges were read and explained to the appellants and they pleaded not guilty to all three. The learned Magistrate then asked whether Mr. McNamara required an adjournment and he answered affirmatively. The learned Magistrate then said that the case would resume on 8th June 1993.

21. At this point, Mr. McNamara applied for costs. He referred to s.27 of the Magistrate’s Ordinance and submitted that this section states quite clearly that no amendment can be granted unless the defendant was granted costs. I will return shortly to consider whether this submission is accurate. He submitted that the amount of costs is not limited to $5,000, as s.69 of the Magistrate’s Ordinance deals only with orders for costs on acquittal or conviction. He handed in his brief which showed his fees as being $20,000 on the brief and a refresher of $ 10,000 per day.

22. The learned Magistrate refused to grant the appellants any costs and he stated that “the amendment does not change the substance and the merits of the case at all against the defendant”. This observation does not deal with the question of a costs injustice caused to the appellants.

23. On 8th June 1993, Mr. McNamara indicated that he did not require any witnesses to be recalled and that neither appellant wished to give evidence or call any evidence. The prosecuting inspector stated that he had no more submissions to make and that Mr. McNamara launched into his second closing speech, this time on the amended charges. The gravamen of his submissions on this occasion were that no false trade description had been applied to the goods which were non genuine Rolex parts arid thus the amended charges should fail.

24. The learned Magistrate then stood the matter down for a short time and then returned and convicted both appellants on each of the amended charges.

25. In addition to the fines of $17,000 and $5,000 respectively, the learned Magistrate ordered the forfeiture of all but two of the exhibits.

26. Notices of Appeals having been filed by both the appellants, the learned Magistrate then prepared his Statement of Findings which he signed on 22nd July 1993. They run to some 33 pages of typescript. Paragraphs 29 - 45 deal with the question of amendment.

27. It is now convenient to refer to s.27 of the Magistrate’s Ordinance which provides as follows;

“27.   Defects in and amendment of complaint, information or summons

(1) Where it appears to the adjudicating magistrate that there is -

(a) a defect in the substance or form of any complaint, information or summons; or

(b) a variance between the complaint, information or summons and the evidence adduced in support of it,

he shall, subject to subsection (2) -

(i) amend the complaint, information or summons if he is satisfied that no injustice would be caused by that amendment; or

(ii) dismiss the complaint, information or summons.

(2) The adjudicating magistrate shall amend the complaint, information or summons where –

(a) the defect or variance mentioned in subsection (1) is not material; or

(b) any injustice which might otherwise be caused by an amendment would be cured by an order as to costs, an adjournment or leave to recall and further examine witnesses or call other witnesses.

(3) Following an amendment to a complaint, information or summons, the adjudicating magistrate shall -

(a) read and explain the amended complaint, information or summons to the defendant;

(b) give leave to the parties to call or recall and further examine such witnesses as may be reasonably required by a party having regard to the nature of the amendment;

(c) grant such adjournment as may be reasonably necessary to enable the parties to call or recall witnesses and to prepare their cases;

(d) if he thinks fit, make an order that the complainant or informant shall pay to the defendant such costs, not exceeding $5,000, as may be occasioned by the amendment; and

(e) give judgment upon the substantial merits and facts of the case as proved before him, having regard to the offence charged in the complaint, Information or summons as amended:

Provided that, if the amendment is made after the case for the complainant or informant is closed, no further evidence may be called by the complainant or informant other than evidence that would, apart from this section, be admissible in rebuttal.

(4) In this section, “amend” includes the substitution of another offence in place of that alleged in the complaint, information or summons.”

28. S.69 of the Magistrate's Ordinance provides that on acquittal or conviction, the court can make an order for costs not exceeding $5,000. Paradoxically, under the Trade Descriptions Ordinance, the court can make an unlimited order for costs. So, if these appellants had been acquitted, they would have been entitled to apply for a full order for costs. No order for costs was sought nor made on their conviction.

29. I think I can dispose quickly with one of Mr. McNamara's points. A Magistrate is, of course, a creature of statute, and his powers to award costs are those that are given to him under various Ordinances. The Magistrate's Ordinance only provides that he can award costs on an acquittal or conviction. I do not believe that he has any other powers unless specifically given to him. In an ordinary case, he cannot award costs in either direction if an adjournment is caused. However, he can order costs where an amendment takes place because he is specifically empowered to do so by s.27. I think Mr. McNamara is wrong to submit that he has a general power to award unlimited costs thrown away. Indeed, although Mr. McNamara submitted that to the Magistrate, I believe by the time the case reach me, he was not really putting that view forward.

30. Mr. McNamara's primary submissions centred around the interpretation to be given to s.27 of the Magistrate's Ordinance. His argument runs as follows;

(1)     In relation to the 1st appellant this was a case where there was a variance between the complaint and the evidence adduced in support of it. It was not a case of a defect in the substance or form.

(2)     The Magistrate must either amend (if he is satisfied that no injustice will be caused by the amendment) or dismiss the complaint.

(3)     The Magistrate must amend the complaint where the defect or variance is not material.

(4)     The variance is material in this case.

(5)     The Magistrate must amend the complaint where “any injustice which might otherwise be caused by an amendment would be cured by an order as to costs, an adjournment” etc.

(6)     The Magistrate only had power under this section to award costs of up to $5,000.

(7)     The costs thrown away were clearly in excess of $5,000.

(8)         Therefore the injustice (the costs thrown away) could not be cured by an order of costs under this section.

(9)         Therefore the amendment had to be refused.

31. In relation to the 1st appellant, I am quite satisfied that Mr. McNamara is correct in submitting that there was a variance between the complaint and the evidence adduced in support of it and that this was not a case of a defect in the substance or form. I return, in due course, to consider whether that submission can be said to relate to the case against the 2nd appellant.

32. I am also quite satisfied that the variance here was a material variance.

33. I am also quite satisfied that the only injustice in this case was that, quite clearly, the 1st appellant had to face extra costs in dealing with the charge made against him as a result of the prosecution getting it wrong and the need for amendment. It is quite clear to me that costs in excess of $5,000 were thrown away and, in ordinary circumstances, any tribunal would wish to award these to the 1st appellant.

34. So I am satisfied that there was an injustice here which could have been cured by an order as to costs. However, it could not be cured by any order which the Magistrate had power to make because, under s.27(3)(d), he cannot award more than $5,000 in costs. I have given consideration as to whether s.27(2)(b) should be construed as reading as follows “any injustice which might otherwise be caused by amendment would be cured by an order as to costs within the jurisdiction of the Magistrate under this section.” I do not believe that that is a proper interpretation to be given to the sub-section. The legislature was quite clearly concerned with an injustice which sounded in costs. If injustice has been caused which sounds in costs as a result of the way in which the prosecution has prepared and put forward their case, it does not cease to be an injustice merely because the Magistrate has power to award $5,000 costs. If it were intended that the only order as to costs which could deal wholly or partly with the injustice caused, was one limited to $5,000, then I would have expected this to have been made crystal clear in the section. Of course, in some cases, an order for costs of $5,000 might well cure any injustice that has been caused. However, I note that this section has been in force since 1987 and even then the sum of $5,000 was small. Today, it is extremely small. Whereas it might cover the costs of a wasted day where someone is represented by the duty lawyer, it is not appropriate, in a complex case, where senior Counsel is being briefed by solicitors on a fee paying basis.

35. I am, therefore, satisfied that Mr. McNamara’s propositions are sound in relation to the case against the 1st appellant. I find it extraordinary that the Magistrate did not even consider it appropriate to award $5,000 costs. Whatever he thought about the nature of the amendment, there can be no doubt whatsoever that the 1st appellant was put to extra costs as a result of the prosecution putting forward an allegation of forgery which their own witness could not support and which then led to further submissions, adjournments, and amendments.

36. Let it not be thought that I am supporting an approach such as this, in the normal run of case, where as frequently happens, there are minor defects in the complaint which require amendment. These cases, very often, are perfectly satisfactorily dealt with under s.27, because there are either defects in the substance or form which are not material such as an amount or an address, or they involve a variance between the complaint and the evidence which is not material. In this case, however, the variance was material. The defence came along to meet a charge relating to forged Rolex trademarks. The witness from Rolex agreed in cross-examination that these marks were genuine. The prosecution were then faced with losing the prosecution, because as the Magistrate stated Mr. McNamara’s submissions at that stage were formidable. It is not without significance to note that the prosecution did not seek an amendment to any of the charges. It was the learned Magistrate himself who suggested an amendment during the course of his consideration of Mr. McNamara's closing submission. I have no doubt that in relation to the 1st appellant, the variance was most material involving a change from forgery to the application of a false trademark by the use of a completely different section in the Ordinance. I must point out that in many cases even a material defect can be cured by amendment without causing injustice such as when it is sought and granted at the outset of the trial.

37. It seems to me that s.27 requires an urgent amendment. If it were the intention of the legislature that amendments should be allowed, provided injustices could be cured by an order for costs, then it must be important for the Magistrate to have power to make an order which reflects the amount of the costs thrown away in a situation such as this. In such a situation if the costs thrown away are considered to be too great it is always open to the prosecution to elect not to proceed on the unamended charge. It is also worth noting that the predecessor of s.27 which came in to force in 1949 and remained until replaced in 1987, was a section which made it very difficult for a Magistrate to take into account any defects or variance such as existed in this case. The section specifically provided that “no objection shall be taken or allowed to any complaint....for any alleged defect ...in substance or in form, or for any variance between such complaint…and the evidence adduced in support thereof, and the Adjudicating Magistrate shall, in all cases, give judgment upon the substantial merits and facts of the case as proved before him, and convict the defendant of the offence with which he was charged with such variation as has been warranted by the evidence of any offence which under the provisions of s.10(2)(c) could have been tried therewith”.

38. It seems to me that the 1987 amendment was an amelioration of that somewhat strict approach. It made clear that amendments should not be made where any injustice could not be cured in the manner set out in sub­section 2(b). It seems a little strange that the legislature in 1987 was enacting what could be described as a pro-defence section, but then took away any benefit thereby provided by limiting the order as to costs to $5,000. I do not see how it can be argued that the injustice caused by costs thrown away can be cured by awarding an artificial sum which bears no relationship whatsoever with the costs actually caused by the prosecution’s change of case.

39. I am, therefore, quite satisfied that Mr. McNamara's submissions in relation to the 1st appellant are correct and that the Magistrate should not have granted the amendments and that he should, on the original charges, have acquitted the 1st appellant and I, therefore, propose to allow the appeal and set aside the convictions and fines in respect of the 1st appellant.

40. I now turn to consider the 2nd appellant’s appeal. In this case, there was a defect in the substance or form of the charge because the words “in the course of trade or business” were omitted. In my judgment, the defect was not material. If it were a case of variance between the complaint and the evidence, I would have held that such variance was not material. In those circumstances, I think the Magistrate was correct to amend the charge as he did and I am satisfied that no injustice was caused which sounded in costs or in any other way. The appellant still faced the charge under the same section and the ingredients had been proved by evidence which the Magistrate accepted. In fact, it is fair to point out that hardly any submissions were addressed to the Magistrate in relation to the amendment of the one charge against the 2nd appellant. Mr. McNamara concentrated his attack on the proposed amendments to the 2 charges against the 1st appellant who was, of course, the prime mover and employer of the 2nd appellant. This matter was dealt with correctly in my view on the basis that words were simply omitted from the charge. No one was taken by surprise and it is not clear from the record whether Mr. McNamara really took any strong objection to this particular amendment.

41. In relation to both appeals, Mr. McNamara raised an additional point which is now only relevant to the 2nd appellant’s appeal. Mr. McNamara submitted that no false trade description had been applied to the non Rolex parts. I am quite unable to accept this submission. What was offered for sale was a watch or watches purporting to be Rolex watches but in fact only having some genuine Rolex parts mixed with non genuine Rolex parts. Once a completed watch had been put together, it is not appropriate, in my judgment, to break the watch down into its individual component parts. These were not genuine Rolex watches because non genuine Rolex parts were included in the completed product. The description applied to the watch as a whole not merely to its individual components. This common sense approach appears to be supported by authority. In A.G. v. Ikeda [1989] 1 HKLR 9, Wong J. held that where component parts were assembled, they were no longer the small individual component parts they once were. Although the facts of this case, as Mr. McNamara was quick to point out, were not completely analogous to those before me, nevertheless, the approach of the learned judge does accord with what I would term a common sense approach. I am satisfied that there is nothing in this point and that the 2nd appellant's appeal must be dismissed.

42. I accept that it is somewhat unfortunate that the 1st appellant has been acquitted whereas his employee, the 2nd appellant, has had his conviction upheld. This result stems from the fact that both faced different charges which required different amendments in different circumstances. I therefore dismiss the 2nd appellant’s appeal.

43. It has been urged upon me that I should set aside the orders for forfeiture in relation to both appellants. I decline so to do. Section 30(1) of the Trade Descriptions Ordinance, Ch. 362 provides as follows;

“Any goods in respect of which an offence under this Ordinance has been committed, shall be liable to forfeiture, whether or not any person has been convicted of any such offence.”

44. In my judgment, it is perfectly plain that the 3 offences were committed and thus the goods are liable to forfeiture. It is not a relevant fact that I have set aside the conviction against the 1st appellant in relation to the 2 charges against him. I did so because of the circumstances of the amendment. Had no amendment been necessary, it follows beyond doubt that he would have been convicted on the evidence and on my conclusions as to the alternative point raised by Mr. McNamara. In those circumstances, I do not propose to set aside any of the orders for forfeiture made by the Magistrate in this case.