THE ATTORNEY GENERAL v. LEE KUNG LEUNG

IN THE SUPREME COURT OF HONG KONG

MAGISTRACY APPEAL NO. 364/90

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

BETWEEN

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

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

JUDGMENT

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

Hon. Yang, C.J.:

1. This is the Attorney General's appeal by way of case stated, reserved for this court by O'Connor, J.

2. On 10th October 1989, a summons was issued whereby Mr. P.L. Wong of the Customs and Excise Department on behalf of the Attorney General was the applicant and Lee Kung-leung (Lee) was the claimant to an Application for Forfeiture of 102 video-cassette recorders and 101 video-cassette tapes (hereinafter referred to as the seized goods) made under s.28 of the Import and Export Ordinance, Cap. 60.

3. The summons came before Ar. Paterson-Todd sitting at the Fanling magistracy on the 8th November 1989. He ordered that the seized goods De returned to Lee.

4. On the 21st December 1989, the Attorney General made an application before the learned magistrate for Review of his order, which he refused.

5. The Attorney General then applied to the magistrate to state a case. The question of law arising for determination was whether the magistrate had exercised the unfettered discretion given to his Court judicially.

6. Lee was at all material times a lorry driver driving vehicles owned by others. His income was six to seven thousand dollars a month. He was married with four children. He was at the time of his arrest on the 27th May 1989 in debt to friends, relatives and loan sharks in the sum of $120,000. He was under pressure to repay those debts.

7. In order to do so, he decided to transport the seized goods into China. On the 27th May 1989 he drove a lorry to the Customs and Excise checkpoint at the Man Kam To border crossing into Mainland China. The lorry contained a cargo of waste plastic materials duly recorded in the manifest. On examination by Customs Officers, however, the seized goods were discovered in a concealed compartment of the lorry.

8. Lee was charged with (a) attempting to export unmanifested cargo contrary to s.18 (1)(b) of the Import and Export Ordinance, Cap. 60, and (b) attempting to export prohibited articles without a licence (viz., the video-cassette recorders), contrary to Reg. 4(1) of the Import and Export (General) Regulations, Cap. 60. He pleaded guilty to both charges and was fined $25,000 on each charge.

9. The facts also show that Lee had purchased the seized goods for $214,020 and personally concealed them in the lorry. He did not declare the goods on the lorry's manifest nor did he obtain the required licence for the export of the video-cassette recorders. As a result of the seizure of the seized goods his debt increased to $300,000 and he was receiving threats from loan sharks for repayment.

10. The learned magistrate in refusing to forfeit the seized goods took into consideration the following issues:

11. It seems clear that in considering the first three of those four issues, the magistrate purported to follow the decision of this Court, differently constituted, in The Attorney General v. Leung Wing-cheung, Magistracy Appeal No. 1051 of 1987 (unreported), where Kempster, J.A. observed that in that case (a) that no duty or other fiscal liability had been evaded, (b) that there was no evidence that the relationship between Hong Kong and Mainland China was liable to be affected, and (c) that the respondent had merely failed to type or write out a manifest.

12. Unlike the position in that case it was accepted by counsel before us that duty would have been payable by Lee to the government of the People's Republic of China in respect of the goods he was attempting to smuggle across the border. It was proved by the prosecution and found as a fact by the Magistrate that the respondent did not obtain the required licence for the export of the video cassette recorders because it was his intention not to declare them to the Chinese authorities and, should they have been_.discovered, there would have been (in the respondent's own words) "a lot of trouble". It therefore follows as a matter of sheer common sense that the activity in which Lee was engaged is of the type that has a damaging effect on Hong Kong's relations with the People's Republic. It is an irritant which tends to disturb a smoothly working relationship. Indeed, in any smuggling case this must be so whether the goods sought to be smuggled are dutiable in the People's Republic, as in the present case, or are prohibited there.

13. In the cogent arguments of Mr. Pallaras acting on behalf of the Attorney General, the point was made that no duties were ever levied in Hong Kong on the export of goods, and that the legislation is not aimed at protecting or increasing revenue. The purpose of the legislation is principally to regulate trade and to prevent smuggling. The gravamen of the offence here does not relate to the loss of revenue to the Hong Kong Government for there is none. In Attorney General v So Ma-por (1981) HKLR 696, Roberts, C.J., set out the aim of the legislation (at p.698 F-G) :

"Mr. Lucas pointed out, entirely properly, that the real gravamen of the offence is not the act of taxing unmanifested cargo out of Hong Kong, but the damage which the subsequent disposal of the goods will have on the relationships of Hong Kong with overseas countries and, in particular, with our neighbours on the mainland."

 

14. In dealing with the magistrate's second issue Mr. Pallaras again referred to the case of So Ma-por (supra) and Chan Kam-bor v The Queen, Criminal Appeal No. 239 of 1981 (unreported), approved in So Ma-por. There O'Connor, J. said (at p.3) :

"In the case of the Queen v Hau Sang 1963 HKLR page 881 the Court said 'it is appropriate when deciding on the sentence to have regard to the damaging effect the breach of the law may have on our external relations, which in their turn can have domestic repercussions'. It is clear that a continuing smuggling of articles of any type in either direction between Hong Kong and China is an irritant, tending to disturb the smooth relationship existing between Hong Kong and China."

15. On the magistrate's third issue, it was submitted on behalf of the Attorney General that this was not a mere technical offence, but that Lee had made a conscious and deliberate decision to smuggle goods into Mainland China. Clearly the legislature regards deliberate snuggling as a serious offence by providing a sentence of two years' imprisonment for failing to have a manifest.

16. In The Attorney General v King Fat Trading Company, Magistracy Criminal Appeal No. 1000 of 1989 (unreported), Bewley, J. said this (at p.3):

"Magistrates should be aware that these offences are not technical. The maximum sentence is two years imprisonment plus a fine. The purpose of forfeiture is to enforce the ordinance and to act as a deterrent. Although licences are readily issued, they are necessary to the compilation of trade statistics, which play an important part in fine-tuning Hong Kong's economy."

 

17. The fourth issue considered by the learned magistrate, that of hardship, is amply answered by Mr. Pallaras' submission. If there was any hardship, it arose directly out of Lee's own criminal conduct. It is, he submits, unconscionable to allow Lee's deliberate criminal conduct to form the basis of a finding of undue hardship. If there was hardship, it was not "undue hardship": vide The Attorney General v So Lo-kam (1986) HKLR 564, 569A. In The Queen v Ngai Wai, Magistracy Appeal No. 750 of 1985 (unreported), Nazareth, J. said (at p.2):

"the mere fact that forfeiture would cause undue hardship to the owner does not of itself resolve the matter in his favour; and that the purpose of the forfeiture provisions should be borne in mind and an order should not be made the result of which would frustrate the object of the legislation or impair its effectiveness." "

 

We respectfully adopt those views.

18. The question posed by the Magistrate for the consideration of this Court is "Did I exercise the unfettered discretion given to the Court judicially?" For the reasons given above the answer to that question is "No."

19. In our view there should have been an order for forfeiture of the goods,.