THE SECRETARY FOR JUSTICE v. LI LAP CHUN

HCMA 1158/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 1158 OF 1998

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J U D G M E N T

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1. This is an appeal by the Secretary for Justice by way of case stated.

2. The Respondent Li Lap Chun appeared before the Fanling Magistracy on a charge of possession for the purpose of trade goods to which a forged trade mark was applied, contrary to s.9(2) of the Trade Descriptions Ordinance, Cap.362. The subject matter of the charge was 100 cartons containing 250,000 phials of what was purported to be Po Chai Pills. The trade mark "Po Chai Pills" appearing thereon was forged.

3. The Respondent who was the driver of the goods vehicle carrying the goods was intercepted by officers of the Customs and Excise Department at the Sha Tau Kok Control Point. The goods in question were seized from the goods compartment of the Respondent's lorry. The Respondent was arrested and cautioned whereupon he admitted that he was instructed by one Mr Chen over the phone to deliver the goods from Sha Tau Kok to Kowloon. He duly picked up the goods in Sha Tau Kok. He knew that the goods were Chinese medicine and he would be paid $600 as the transportation fee. The circumstances of the Respondent's arrest and the contents of the Cautioned Statement were not in dispute.

4. The Mr Chen who had purportedly placed the order with the Respondent was subsequently located and arrested. Under caution, Mr Chen denied having any knowledge about the goods in question or that he knew the Respondent.

5. At the trial the Prosecution evidence was agreed by the Defence and no further evidence was called. The Respondent elected not to give evidence and there was no Defence witness. The learned Magistrate ruled that there was a prima facie case for the Respondent to answer. She went on to acquit the Respondent of the charge on the basis that on the evidence before her, she was not satisfied beyond reasonable doubt that the Respondent was in possession of the goods for the purpose of trading in them.

6. The Prosecution applied for a review. The application for review was dismissed and the learned Magistrate affirmed her previous decision to acquit the Respondent. In paragraph 8 of her Reasons for Ruling on review, she made the following observations in respect of s.9(2) of the Ordinance :

"In S9(2), all references to what elements constitute offences, relate to and are in connection with the goods to which the forged trade mark has been applied. A person is guilty if he sells these goods, if he exposes these goods (presumably for sale), if he possesses these goods for sale, if he possesses these goods for any purpose of trade in these goods and if he possesses these goods for any purpose of manufacture. All adjectives relate to the goods. I am of the view that the Defendant must be proved to possess these pills and have them to trade in them. Possess them to trade in them, not possess them in the course of his trade. I do not agree the prosecution need only prove he is in possession in the course of his own trade, of transporting them from A to B for profit to be guilty of an offence under this section."

There were also observations made regarding the concept of ownership and possession for cases of this nature. For reasons not entirely clear to me, the learned Magistrate took the view that the Prosecution had failed to prove that the Respondent was the owner of the goods and she did not make any specific finding on whether the Respondent was in possession of the infringing goods. However, from the manner which she was pre-occupied with the issue of whether the goods were for the Respondent's own trade or for the trade of another person, it must have been the case that she did find the Respondent was in possession of the pills.

7. The question certified for consideration by this Court in the case stated by the Magistrate is this :

"Whether I erred in law in holding that a person who is paid to deliver goods to which a forged trade mark was applied does not possess those goods for the purpose of trade?"

Section 9(2) reads :

"... any person who sells or exposes or has in his possession for sale or for any purpose of trade or manufacture, any goods to which any forged trade mark is applied, ... commits an offence." (emphasis added)

The charge laid against the Respondent was :

"Li Lap-chun, you are charged that on the 9th day of December 1997 at Shek Chung Au Check Point, Sha Tau Kok Control Point, in Hong Kong, you had in your possession for a purpose of trade goods, namely, 250,000 tubes of Po Chai Pills, to each of which a forged trade mark ... was applied."

8. In the charge before the learned Magistrate, it was incumbent upon the Prosecution to prove the following three elements :

(1) that the trade mark appearing on the goods is a forged trade mark;

(2) that the Defendant was in possession of the said goods; and

(3) the possession is for any purpose of trade.

9. The first element did not pose any problem in the Court below as it was agreed between the Prosecution and the Defence that the trade mark was in fact forged.

10. On the issue of possession, it appeared that the learned Magistrate was at one stage slightly troubled by the identity of the owner of the goods. As I have indicated earlier, it is unclear from her reasons if she had made a factual finding on the issue if the Defendant was in possession of the goods. The third element of the charge perhaps posed the greatest difficulty for the learned Magistrate. She was obviously concerned with the way in which the section is worded and construed the section as if requiring the prosecution to prove that a defendant must be in possession of the infringing goods for the purpose of trading in them. Since the Respondent was transporting the goods under the direction of Mr Chen or some unidentified owner, the Magistrate concluded that it was Mr Chen or the owner who was trading in the goods. It having been agreed that the Defendant's occupation was one of a transportation lorry driver, the goods could not have been for the Defendant's own trade. The conclusion she thus reached was that the Respondent, being paid to deliver the goods, could not have been trading in those goods.

11. I am not persuaded that the learned Magistrate had adopted the correct approach in her interpretation of the wording of that section. The words appearing are "any purpose of trade". Had it been the intention of the legislature that it is for the purpose of the Defendant's own trade, it would have resorted to specific words. The section is drafted in such a way that it covers a wide range of activities and not merely confined to the trade of the person who was in possession of the goods for the time being. The fact that the Respondent is a lorry driver and his business activities include transporting goods from one place to another, is clearly covered by the section. It is also sufficiently wide to include situations where a defendant was assisting in the trade of the goods by another person - in this case, the trade of Mr Chen or the unknown owner who had given instruction to the Respondent. In order to give proper effect to the legislation, a wider interpretation of the section is necessary so that no one can take advantage and say that he was only involved in a relatively minor role in the chain of activities whereby infringing goods are distributed onto the market for consumption by the public.

12. In the present case there is clear evidence that the Respondent was in possession of the goods. One hundred cartons of infringing goods consisting of 250,000 phials of pills bearing a forged trade mark were seized. It is without doubt a commercial quantity. The inescapable conclusion must be that the Respondent did possess the pills for either his trade or for the trade of another person. The section is drafted sufficiently wide to cover both situations.

13. Any defendant charged under this section is of course entitled to rely on the statutory defence under s.26 of the Ordinance. The Respondent however did not avail himself of the statutory defence. He elected not to give evidence at the trial.

14. For the reasons given, my answer to the question certified for this Court in the case stated is in the affirmative.