THE QUEEN v. MARK PATRICK CUNNINGHAM

IN THE SUPREME COURT OF HONG KONG

(APPELLATE JURISDICTION)

MAGISTRACY CRIMINAL APPEAL NO. 341 OF 1992

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BETWEEN

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J U D G M E N T

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Fuad, V.-P.:

1. The appellant, Mr. Mark Cunningham, was convicted on 18th March this year by Mr. H.M. Sinclair in the magistrate's court, after a trial, of two charges. The first charge was possessing dangerous drugs contrary to section 8(1)(a) of the Dangerous Drugs Ordinance (10.96 grammes of cannabis). The second charge was possessing apparatus fit and intended for smoking cannabis contrary to section 36 of that Ordinance. He was fined $1,000 on each charge and now appeals to this court against his convictions.

dials to which a mark 'most be Cantior' so nearly resembling a trade mark, 'les must de Cartier' as to be calculated to deceive was falsely applied."

2. When the trial began, counsel on behalf of the appellant admitted that on 7th November 1990 Customs officers visited the premises of Swisscross Limited in a building in Pak Tin Par Street, Tsuen Wan and found the appellant there. They explained the purpose of their visit and found in the premises the items listed in the Particulars of Offence as well as the following:

3950 watch cases

9333 watch case bottoms

4000 watch hands

4000 watch crowns

1000 plastic frames

8000 spring bars

3. It was also admitted, that when interviewed, the appellant told the officers that the goods which had been seized belonged to a customer - HTC Import SRL - a trading company in Paraguay and that his partner Liao Ko Pan had been dealing with that company. In response to an order placed by HTC to assemble watches with the "most be Cantior" trademark, the appellant had ordered the dials with the trade mark on them from Taiwan. When they had been received they had been shipped to China for assembly. The assembled products were then returned to Swisscross where they would be shipped together with the remaining stock to HTC.

4. Counsel for the appellant also admitted that Cartier International B.V. was incorporated under the laws of The Netherlands and was registered in Hong Kong as the holder of the trade mark "les must de Cartier" in respect of clocks, watches and jewellery. It was further accepted that the assent of the proprietor of the trade mark had not been obtained by the appellant.

5. The appellant gave evidence before the magistrate and said that he was a shareholder of Swisscross with a 50% share. The other shareholder was a Taiwanese with a Paraguay passport. He said that he had made the watches because they had received an order from HTC company of Paraguay to manufacture them. HTC company was owned by another Paraguay citizen who had been a Taiwanese at birth. They had been informed that the HTC company had registered the mark "Cantior" in Paraguay. After the raid by the Customs Officers he had asked for, and received, a copy of the Paraguay Government Gazette showing the registration. He had also received a copy of an authorization from HTC permitting production of "Cantior" watches.

6. He went on to say that his company had designed the watches and that in designing them he has ensured that they did not infringe any registered design. The cases were bought from the case factory. Other companies could buy the same type of watch case, and the dials and the hands of the watches were normal designs. He pointed out that on the back of each watch, according to their clients' instructions, there was a swimming figure. The logo on the watches "most be Cantior" had been designed by the HTC company. The Customs Officers had found some of the items listed in the Statement of Facts on the desk in his office, and other items in the store next door. The export price of a typical watch was approximately US$4 and the profit was HK$1. The design of the watches bore no similarity to any Cartier watch and watches made by Cartier sold for prices between "10,000 to several 10,000 of dollars". He did not produce the watches for the purpose of misleading Paraguay people to believe that they were Cartier watches. He did not intend Paraguaian buyers to pay genuine Cartier prices for them; he knew what they would sell for.

7. On 5th March 1992, at the request of the appellant, the magistrate held a review hearing and his counsel, Mr. Cheng (who also appeared before me), submitted that the charge ought to be amended because the proper defendant was the company and not the director who had been charged. He drew some support for this contention from section 20 of the Ordinance. The magistrate heard other submissions on the review and declined to alter his decision.

8. I will take the first two grounds of appeal together. They are in the following terms:

"1.    The Agreed Facts showed that the company, Swisscross Ltd., was in possession of the goods for the purpose of trade or manufacture and that the Defendant was only carrying out his duty as a Director of the company for the acts complained of. In view of the Agreed Facts and corporate liability for its senior officer's acts, the Learned Magistrate erred in refusing to amend the charge by substituting the company as the Defendant and in convicting the Defendant of the offence.

2.    By S.20 of Cap.362, the legislature has shown an intention that where a body corporate is concerned a director is at jeopardy only where the body corporate is convicted of an offence under the Ordinance. S.20 appears to affirm the principle of corporate liability in offences under the Ordinance and the Learned Magistrate erred in refusing to amend the charge to show that the company was the Defendant and in convicting the Defendant of the offence. S.20 is drafted in clear and simple terms and the legislature of Hong Kong must be presumed to intend to give the words their ordinary meanings."

9. As to the first ground, the magistrate in his Statement of Findings, pointed out that counsel for the appellant had submitted at the outset of the trial that the proper defendant was Swisscross and had invited him to amend the charge. He had refused the application since in his view the choice of the appropriate defendant was the prerogative of the Crown. Mr. Cheng had repeated his submission at the close of the prosecution case. Again, he had rejected the submission and ruled that there was a case to answer by the appellant. After convicting the appellant, Mr. Cheng had sought the review principally on the same ground.

10. The magistrate indicated that he felt that the only question for him to decide was whether or not there was sufficient evidence against the appellant who was the defendant named in the charge before him. I entirely agree with him. Mr. Cheng in support of his argument cited Tesco Supermarkets Ltd. v. Nattrass [1982] AC 153. The Tesco case is not anauthority for the proposition advanced by Mr. Cheng. It would be relevant for the purposes of applying section 26(1)(a) of the Ordinance if the question arose whether a particular person was "another person" for the purpose of those provisions where a body corporate was the defendant.

11. Section 20 of the Ordinance is in the following terms:

"20. Where a body corporate is convicted of an offence under this Ordinance, every person who, at the time of the commission of the offence, was a director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, shall be deemed to be guilty of that offence unless he proves that the offence was committed without his knowledge, or that he exercised all due diligence to prevent the commission of the offence."

12. I do not know whether I have understood Mr. Cheng's submissions on this point, but with great respect to him, the section seems clear enough and it does not say that where the person who has committed an offence is a director of a body corporate, that it is the body corporate which must be charged and not the director.

13. The third ground of appeal is put in this way - that when convicting the appellant the magistrate failed to consider all the circumstances of the case including:

"the difference in the prices, the pronunciation of the words, the difference in the styling with the back clearly stating Made in Japan, the fact the mark was a genuine trade mark registered in Paraguay for over a year and that the ultimate consumers were Spanish speaking Paraguaians."

14. In my judgment the, magistrate, in his Statement of Findings (pages 4-9) correctly directed himself in accordance with the leading authorities on the issues he had to decide. I can find no justification for the appellant's complaints. Once the magistrate had properly directed himself, the issue became one of fact and having looked at the watches myself I have to say that I entirely agree with what the magistrate said in his Statement of Findings on this point:

"Having so directed my mind to these tests, I find that the distinguishing or essential feature of the trade mark lies in those words, 'les must de Cartier' written in a particular stylised form. The same stylised form is used in the Appellant's mark. It goes without saying that both marks are applied on watches. The difference between the two marks is so minute and well disguised by the stylised writing that on first glance I readily believed that the two marks were the same. I have no doubt that the ordinary person as described by the learned authors of Kerly's who exercises ordinary care without a very careful and intelligent examination of the marks, and without looking at the two marks placed side by side, will come to the same belief as I had. I find that likelihood of confusion or deception is strong and is not disproved even by placing the two marks side by side. I therefore find as a fact that the mark used by the Appellant and 'les must de Cartier' are so resembling as to cause confusion."

15. As regards the complaint that the magistrate was wrong in rejecting the defences raised by the appellant based on subsections (1) and (4) of section 26 of the Ordinance, I can only say that the magistrate's reasoning on pages 10 and 11 of his Statement of Findings seems to me unassailable. I do not know how the appellant can successfully rely on the authorisation he said he had to use the mark "CANTIOR" (this is how the mark appears in the Paraguay Gazette - in upper case) to justify the logo used on the watches he was producing. As the learned magistrate pointed out the appellant was not applying the mark "Cantior" as such but "most be Cantior" and in the stylised form resembling the genuine "les must de Cartier".

16. The final ground of appeal is that the magistrate erred in concluding that the expression "calculated to deceive" in section 9(2) meant the same as "likely to deceive or cause confusion". Mr. Cheng suggested that by continuing to use the former expression and not adopting the latter the Hong Kong legislature must have used the words "calculated to deceive" in the plain and ordinary meaning of those words, so that an intention to deceive is required. The magistrate dealt with this point in considerable detail at pages 4-6 of his Statement of Findings and cited ample authority to support the conclusion he reached. He did not err in his approach.

17. In my judgment, on the facts proved before the magistrate and the law as interpreted by the authorities a conviction of the appellant for the offence with which he was charged was inevitable. I found no material misdirection or non-direction in the magistrate's careful Statement of Findings. This was a most blantant contravention of section 9(2) of the Ordinance. It was for these reasons that I dismissed the appeal.