HKSAR v. KINDVIEW INDUSTRIAL LTD

[English Translation - 英譯本]
HCMA 6/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 6 OF 2010

(ON APPEAL FROM FLCC 512 OF 2009)

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JUDGMENT

Background

1.  On 19 February 2008, officers of the Customs and Excise Service seized 3,145 kilograms of suspected American ginseng and 10,800 cans of fruit cocktail from the goods compartment of a container truck that was about to leave the territory from Sha Tau Kok Control Point. The two batches of goods were not declared in the export manifest. The Customs and Excise officers arrested the driver surnamed Tsui (transliteration) and laid two charges against him. The first charge was “Attempting to export unmanifested cargoes”, contrary to section 18(1)(b) of the Import and Export Ordinance, Cap. 60 and section 159G of the Crimes Ordinance, Cap. 200. The second charge was “Attempting to export a specimen of an Appendix II species without a licence issued in respect of that specimen under section 23(1)(c) of the Protection of Endangered Species of Animals and Plants Ordinance”, contrary to section 13(1) of the Protection of Endangered Species of Animals and Plants Ordinance, Cap. 586 and section 159G of the Crimes Ordinance, Cap. 200.

2.  On 26 February 2008, which was a few days after the incident, the Appellant, a legal person named Kindview Industrial Limited, applied through its solicitors to the Hong Kong Customs and Excise Service pursuant to section 27(5) of the Import and Export Ordinance for the return of the cans of fruit cocktail and American ginseng which had been seized.

3.  The charges laid against the driver surnamed Tsui were fixed to be heard on 10 June 2008 at the Fanling Magistracy, and the case number was FLCC972/2008. The defendant pleaded not guilty to the charges and was convicted of the first charge after trial. He was sentenced to 3 months imprisonment, suspended for 2 years. As for the second charge, the magistrate took the facts of the case into consideration and amended the original charge to one which was contrary to section 13(2) of the Protection of Endangered Species of Animals and Plants Ordinance. The defendant then pleaded guilty to the amended charge and was fined $2,000.

4.  The transcripts of the proceedings show that at the last stage of the trial, Mr. Wong for the Customs and Excise Service made an application to the magistrate to dispose the exhibits of the case at an adjourned hearing. The original text is as follows:

“Mr. Wong: For P29 (i.e. 3,145 kg of American ginseng) and P3 (i.e. 10,800 cans of fruit cocktail), they will be dealt with separate proceedings. For other exhibit kept in court (original in English).

Court: right.”

5.  Subsequently on 11 August 2009, the Customs and Excise Service issued a summons pursuant to section 28 of the Import and Export Ordinance to apply to the court for the forfeiture of the two exhibits. The application was fixed to be heard before Mr. Cheung Kwan Ming, a magistrate sitting at the Fanling Magistracy, on 25 September 2009.

6.  As the Appellant had earlier requested the Customs and Excise Service to return the seized items, the Appellant appeared by its representative, Mr. Man Wang Leung (transliteration), at the hearing of the application by the Customs and Excise Service. The Appellant was not legally represented.

7.  The transcripts of the audio recordings of the hearing on 25 September show that the magistrate repeatedly indicated to Mr. Tse who appeared for the Hong Kong Special Administrative Region that he queried whether the magistrates’ court had the discretion to deal with the American ginseng in question. Having been asked repeatedly, Mr. Tse wrongly confirmed that the magistrates’ court had the discretion. Finally, the Court ordered the Appellant to pay HK$104,245 to the Commissioner of Customs and Excise within 14 days as the condition for the return of those two batches of goods.

8.  On 27 November of the same year, the Government of the Hong Kong Special Administrative Region applied through the Department of Justice for a review of the magistrate’s order in respect of the American ginseng in question. The Appellant was represented by Counsel Mr. Steven Liu at that hearing.

9.  The magistrate held the following at the review hearing:

“26. I agree that section 40(2) is applicable to the present case and I have wrongly relied upon section 28 of the Import and Export Ordinance and section 40(1) of the Protection of Endangered Species of Animals and Plants Ordinance.

27. Having carefully considered the submissions of both parties, it is hereby decided that pursuant to section 40(2) of the Protection of Endangered Species of Animals and Plants Ordinance, the court has no discretion to make a conditional order for the restitution of Item (1) on the summons, namely 3,145 kilograms of American ginseng. I rule that the order in respect of Item (1) is ultra vires and invalid. For the sake of clarity, the prosecution’s application for review is granted, and the previous decision in respect of Item (1) on the summons is altered on the ground that the court does not have the jurisdiction and cannot make any order in respect of Item (1).” [Emphasis added by this Court]

10.  To put it briefly, the consequence of the magistrate’s order is that the American ginseng in question shall be forfeited under section 40(2) of the Protection of Endangered Species of Animals and Plants Ordinance.

Grounds of Appeal

11.  Mr. Liu, Counsel for the Appellant, put forward a total of five grounds of appeal which can be summarised as the following three propositions:

(1) The Customs and Excise Service applied to the court for the forfeiture of the seized items pursuant to section 28 of the Import and Export Ordinance. Therefore the court should deal with them in accordance with the provisions therein.

(2) The court should not have held that section 40(2) of the Protection of Endangered Species of Animals and Plants Ordinance was the only provision applicable in the present case and should not have accordingly held that it did not have any discretion to deal with the American ginseng seized in the case.

(3) Where in accordance with the provisions in two legislations of equal status (namely Cap. 586 and Cap. 60), the seized items were to be dealt with in different ways, the court should adopt one that was most favourable to the Appellant. In other words, the court should exercise the discretion conferred upon it by the Import and Export Ordinance to deal with the American ginseng in question.

12.  Mr. Tsui, the container truck driver responsible for the transportation of the goods in question, was charged with two counts which were contrary to the Import and Export Ordinance and the Endangered Species of Animals and Plants Ordinance respectively. During the trial, Counsel for the two parties agreed to the following facts pursuant to section 67C of the Criminal Proceedings Ordinance and tendered the Facts as Exhibit P4. The original text is as follows:

“2. In the presence of the Defendant and 7954, Customs Officer 07324 conducted a thorough cargo examination. Apart from the manifested ketchup, a total of 3,145 kg of suspected American ginseng (P2) and 10,800 cans of fruit cocktail (P3), which were not declared in P1, were found. As P2 and P3 were unmanifested cargoes and P2 was suspected to be endangered species, 07324 immediately cautioned and arrested the Defendant at 1230 hours.

3. On 25.2.2008, CHAN Yu-nam, Endangered Species Protection Officer from the Agriculture, Fisheries and Conservation Department conducted an examination on P2 and confirmed that the specimen are roots of Panax quinquefolius, listed in appendix II species of Schedule 1, Protection of Endangered Species of Animals and Plants Ordinance, Cap. 586.”

At the last stage of the trial, the defendant pleaded guilty to the amended charge, contrary to section 13(2) of the Protection of Endangered Species of Animals and Plants Ordinance. The items involved in the charge were 3,145 kilograms of American ginseng. In accordance with the above Admitted Facts, the batch of American ginseng (Exhibit P.2) was seized because it was suspected to be endangered species. Subsequent analysis confirmed it to be a species listed in Appendix II.

13.  When the defendant pleaded guilty to and was convicted of the second charge, section 40(2) of the Ordinance automatically came into operation. This provision is as follows:

“40(2) If a person is convicted of an offence under Part 2 or 3, any specimen of a scheduled species seized under section 34(1) in connection with the offence, or any proceeds of sale of the specimen if already sold under section 35, shall, without order, be forfeited to the Government”. [Emphasis added by this Court]

It is provided in the Ordinance that the American ginseng in the case shall be forfeited to the Government without any court order. The Ordinance does not confer any discretion on the court to deal with the seized items.

14.  According to the transcripts of the trial, Mr. Wong for the Government applied to the magistrate to adjourn the disposal of the American ginseng and cans of cocktail fruit in question. At that time, the magistrate responded by saying “right”, which showed that even he had overlooked the content of section 40(2) of the Ordinance. I am of the view that Mr. Wong had no right to ask the court to adjourn the disposal of the American ginseng seized. But even when he erroneously made an application for adjournment, the court still had no power to adjourn the disposal of that batch of goods.

15.  Subsequently on 25 September at the hearing of the forfeiture application by the Customs and Excise Service, Mr. Tse for the Special Administrative Region also overlooked the content of section 40(2) of the Ordinance. He told the magistrate that the court could exercise its discretion to deal with the seized items.

16.  The Prosecution repeatedly made mistakes at the various stages of the proceedings, including the application to adjourn the disposal of exhibits, the application by the Customs and Excise Service for a forfeiture order and the hearing of the forfeiture application.

17.  The main thrust of Mr. Liu’s grounds of appeal was that since the magistrate agreed to adjourn the disposal of the exhibits and given that the forfeiture summons was issued pursuant to the Import and Export Ordinance, the magistrate should follow the procedures set out in the Ordinance to conduct the forfeiture hearing, and should not have relied on the Protection of Endangered Species of Animals and Plants Ordinance to deal with the seized items. Moreover, Mr. Tse for the Government also agreed that the magistrate had the discretion to dispose of the seized American ginseng, and the magistrate should therefore deal with the application pursuant to the provisions of the Import and Export Ordinance.

18.  I cannot agree with the viewpoint of Mr. Liu because when the container truck driver was convicted of the two charges, the American ginseng involved in the case should be dealt with in accordance with section 40(2) of the Protection of Endangered Species of Animals and Plants Ordinance and became forfeited to the Government without any further court order. Mr. Wong, appearing for the prosecution in that hearing, obviously overlooked the provisions in the section and erroneously applied to the court to adjourn the disposal of the exhibits of the case. Subsequently when the Customs and Excise Service issued a summons pursuant to the Import and Export Ordinance for the forfeiture application, they too had obviously overlooked the provisions in the section.

19.  At the forfeiture hearing on 25 September, Mr. Tse for the Special Administrative Region also overlooked the effect of the Ordinance and erroneously submitted to the court that it had the discretion to deal with the American ginseng in question. Further, the magistrate also made the same mistake. From a legal point of view, the batch of American ginseng had been forfeited upon the container truck driver’s conviction, and accordingly it could not be the subject matter of any subsequent application. Given that the Prosecution had repeatedly made mistakes and that the magistrate had also overlooked the legal effect of section 40(2), I do not understand why Mr. Liu still considers that the Court has the power to deal with that batch of American ginseng.

20.  The argument of Mr. Liu seems to be that when the court is dealing with a case, and when the prosecution has made one mistake after another, and when the magistrate has also made the same mistakes, the Court’s position will change from one that has no discretion to one that has discretion to deal with the matter. I am of the view that such an argument is extremely illogical.

21.  The magistrate rightly pointed out in paragraph 23 of his Reasons for Decision of the Review Hearing that the discretion was conferred upon the court by the legislation. Even when the prosecution and the defence erroneously agreed at the hearing that the court had the discretion, the court would not have it on account of the mistakes of both parties. The magistrate adduced the case of HKSAR v Tang Siu Kwong and others, CACC106/1999. The Court of Appeal held in the case that the ultra vires transfer of a case to the District Court by the magistrate rendered the entire hearing before the District Court invalid.

22.  In the present case, upon the conviction of the container truck driver on 24 June, the American ginseng was forfeited to the Government. So the ensuing legal proceedings were conducted in respect of non-existent items. Any subsequent orders made by the court had no legal basis and therefore carried no legal force.

23.  It is hereby held that the first, second and third grounds of appeal cannot stand.

24.  In his fourth ground of appeal, Mr. Liu submitted that when two legal provisions, namely Cap. 586 and Cap. 60, set out different ways to deal with the matter, the court should adopt one that was most favourable to the Appellant, and that the magistrate failed to abide by that legal principle at the trial of the present case.

25.  I had requested Mr. Liu to provide this Court with local legislation and authorities to support his argument but he could not adduce any Ordinance or local cases to support what he said. Further, as I have said earlier, when the American ginseng in question was forfeited to the Government, there was no endangered species to be dealt with by the court. Accordingly the issue of whether the court should deal with the application in a way that was most favourable to the Appellant did not exist. I rule that this ground of appeal cannot stand either.

26.  For the aforesaid reasons, the Appellant’s appeal is hereby dismissed and the magistrate’s decision at the review hearing is upheld.