HKSAR v. CHAU YUET SEUNG, CANDY AND ANOTHER

HCMA632/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

 (Appellate Jurisdiction)

MAGISTRACY APPEAL NO.632 OF 2006

(ON APPEAL FROM KTCC 7567 OF 2005 & KTS 15631 OF 2005)

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J U D G M E N T

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1. The appellants were each convicted after trial of one chargeof ‘possession for sale or for any purpose of trade or manufactured goods to which a forged trademark was applied’, contrary to section 9(2) as read with section 18(1) of the Trade Descriptions Ordinance, Cap.362.  The 1^st appellant was sentenced to a fine of $1,500 and the 2^nd appellant $3,500.  They appeal against the convictions.

THE CHARGE

2. Though taking the different forms of a charge and a summons respectively, the allegations against the appellants were identical :

“… on the 24^th day of November 2004, at G/F, 80 Shan Tung Street, Mongkok, Kowloon, in Hong Kong … had in your possession for sale or for any purpose of trade or manufactured goods, namely 34 numbers of stickers, 42 numbers pf metal plate, 10 numbers of safety belt cover, four numbers of neck pillow, 28 numbers of mud flap and 2 numbers of key holder, to each of which a forged trademark, namely ‘MUGEN’, was applied.”

THE FACTS

3. The 2^nd appellant was the company operating the car accessories shop at the locus in quo.  The 1^st appellant was an employee of the shop.  Under caution, the 1^st appellant admitted to be the person responsible for purchasing the infringing products for sale to other customers.  She said she did not know if they were genuine or counterfeit items because she did not know how to tell the difference.  Nor did she make any attempt to confirm that with the trademark owner of MUGEN.  These admissions to the Customs and Excise Department were not challenged.

THE TRIAL

4. The prosecution called three witnesses — one Mr Man (PW1) and two Customs Officers (PW2 and 3).  PW1 testified as an expert on MUGEN products.  The appellants did not give evidence or call any witnesses.

THE VERDICT

5. The bulk of this appeal concerns PW1’s expert status, an issue that took centre stage at trial, which explains the proportion it occupied in the magistrate’s Statement of Findings the relevant parts of which are reproduced below (with added numbering for easy reference) :

“2.   There is one main witness, PW1, and his expertise is challenged.  Initially, when the matter first came before the court, Mr Bruce Tse was not representing the defendant; but a solicitor from the solicitors’ firm was representing.  He was also challenging the competency of PW1 …

…

5.    … Very briefly, whether a witness is competent to give evidence as an expert is for the judge to determine.  There are two questions that I have to decide.  One is whether the subject matter of the opinion falls within the class of subjects upon which expert testimony is permissible.  It clearly is.  The second matter that I have to consider is whether the witness has acquired, by study or experience, sufficient knowledge of the subject to render his opinion of value in resolving the issues before me.  And again that is a question of the evidence that is before me.

6.    Very briefly, there were raids on shops made on 24 November 2004 by Customs and Excise.  During those raids, suspected forged trademark goods relating to the brand MUGEN were found in various shops.

7.    As a result of these raids, three separate sets of charges or summonses were brought before the courts: the first one was dealt in Kowloon City; the second one was started in Kwun Tong before another colleague of mine and was also completed before this case was completed; and then the third one was this particular case with which we are dealing today.

8.    The first two cases to which I have referred have been completed, and on each occasion PW1 was rejected as an expert witness.  That is a matter that obviously I have to consider, and it affects the credibility of the witness, but it in no way indicates or is any indication as to the way I should deal with the matter.  I have to consider the evidence before me.  Now, my understanding is that in order for PW1 to give evidence as an expert on behalf of MUGEN, it is not necessary for the company to actually have given him a letter of authorisation.

9.    I have asked to be addressed on this point, and there have been no legal submissions to the contrary.  That is, it is not necessary as a matter of law for PW1 to have been given a letter of authorisation in order for him to give evidence as an expert before me.

10.  PW1 gave evidence before me that his company is the sole agent for these goods in Hong Kong.  He has been their agent for four years.  He has handled the products for over seven years.  He has cooperated with the company for many years and he is familiar with their previous and present models.  The products cover auto accessories, as well as bags and clothing.  He is trained in distinguishing the trademarked goods.  He goes to Japan once or twice a year. He goes to the company and sees the new products. 

11.   In-chief he said he had not been told the result of the previous hearings and never informed of his expertise being challenged.  At the time he initially gave that evidence the case at Kowloon City had been completed, but the one before my colleague in Kwun Tong was still proceeding.

12.  Twenty percent of his business, he says, relates to ‘Mugen’ products.  That was the bare bones of his evidence.  Other evidence was given, and he was subjected to long and detailed cross-examination. 

…

14.  I will deal with the rest of his evidence, which is criticised.  Very briefly, at the time after the raid and at the time that the goods from all the raids were being examined, also present — as well as PW1 — was a representative of the Japanese company.  The representative was clearly also involved in examining the goods.

15.  PW1 clearly agreed that this representative from the Japanese company knew more than he did about the particular MUGEN products.  He also agreed, amongst other things, that he was assisting this gentleman there, but he also said that he was also responsible for examining them.  In my judgment, I would have been very surprised if he had disagreed with those suggestions put to him. 

16.  Clearly, the head of the Japanese company is going to know more than PW1.  If the representative of the Japanese company — who was quite high up in the company — was here with PW1, PW1 is obviously going to agree that he was there assisting.  But, as I said, he maintained that he was always examining the goods as well.  And merely because one person knows more does not mean to say that the other person knowing less is not an expert.  Both of these persons can still be experts.

17.  It seems clear that he did not know details of all the trademarks that had been registered by the company, nor when they had been registered.  He did not have the details at his fingertips.  He stated he looked at the goods and then he made his investigations and judgments.  No criticism, in my judgment, can be made of that.  He knew where to check and he had sufficient experience from his other involvement with MUGEN to know what to look for.

18.  A letter of authorisation had been given to PW1 in relation to schedule 12 goods, which was all that he was covered for at the time of this particular raid, apparently.  Some schedule 12 goods are involved in this trial, but there are also other schedule goods involved in this trial.

19.  During the trial, a second up-to-date letter of authorisation covering all the goods was provided to the court by the prosecution.  After this letter had been provided PW1 gave further evidence.  But on the basis, as I have said, there is no need to have a letter of authorisation.  In my judgment, the fact that it came late did not actually affect his expertise and, to that extent, did not affect the credibility of the witness save as I indicated to defence counsel, it does indicate that the company is satisfied with him and his expertise.

20.  Having considered all the evidence in relation to PW1 and the criticisms made of his evidence — and perhaps he was not the most fluent expert that one has ever had before one’s court — I am still satisfied that he is an expert, and I deal with the case on the basis that he is an expert.  And I accept his evidence that the items before the court were forged trademarks.  I therefore find the charge and summons proved beyond reasonable doubt and so that I am sure.”

THIS APPEAL

6. Counsel for the appellants advances four grounds.

Ground 1

7. This ground argues that :

“The magistrate erred in finding PW1 to be an expert of the registered trademarks of MUGEN in Hong Kong”.

8. Under it, there are four sub-grounds the first of which criticizes the magistrate for making a premature ruling on the expertise of PW1 : Ground 1(i).

9. I am satisfied that nothing turns on this criticism.

10. It focuses on two occasions when the magistrate expressed the view that PW1 was an expert.  They took place (a) in PW1’s examination-in-chief and (b) before his cross-examination was completed, hence the allegation of premature ruling and material irregularity.

11. A closer look at the transcripts, however, shows that the magistrate’s first offending observation was nothing more than what a judge would say before any witness, having given his credentials, is allowed to carry on as an expert.  Before that, there was no indication from the defence that PW1’s status was an issue — only “we are going to challenge the so called expert” (p.118 O-P of the bundle), which may well be taken to mean a challenge to PW1’s findings.

12. The second observation took place some time afterwards, when the defence had clarified their intention, but only to put a check on a line of cross-examination which, with some justification, because of the ambivalent way it was going, the magistrate was not finding helpful to resolve the status issue (p.124 O-P).  There was no resistance from the appellants’ solicitor who then moved on to another topic before the magistrate gave her ruling (pp.124T-125S).

13. Obviously the magistrate was keen to get on with the trial, a phenomenon not uncommon in those busy tribunals, but there is no evidence of bias on the part of the court who, when counsel eventually stepped in with fresh arguments, acceded to the latter’s request to recall PW1 for cross-examination and revisit the question of his status.  Whatever irregularity there may or may not have been, the appellants were not prejudiced.

14. Ground 1(ii) argues that the magistrate’s ruling was against the weight of PW1’s evidence.

15. The criticism here is that on his own admission, PW1 was unaware of the number of MUGEN trademarks that are Hong Kong registered.  It follows that “PW1 did not have any idea of what all the registered trademarks look like” and was “no expert”. (See the appellants’ skeleton submissions, adopted orally.)

16. Again, I find this argument to have no merit.

17. The unshaken evidence of PW1 re his familiarity with MUGEN products is as summarized in paragraphs 10 and 12 of the Statement of Findings (above), the main points being (a) he was their sole agent locally, and (b) he travelled frequently to Japan to learn about their products.  The prosecution case was that he knew what products were available and their characteristics, and that anything inconsistent must be a counterfeit bearing a forged MUGEN trademark.

18. Indeed, PW1 had explained to the court why all the six products named in the charge were questionable — ‘never made’ in the case of the safety belt covers, the neck pillows and the mud flaps, and ‘wrong design and packaging’ in the case of the stickers, the metal plates and the key holders, with much detail given in support of his opinion (pp.128-135).  This is evidence that the magistrate could rely on notwithstanding PW1’s ignorance in some numbers.  Anyone interested in that kind of information can look it up in the Intellectual Property Department.  The magistrate expressed the same view in paragraph 17 of her Statement of Findings.

19. Ground 1(iii) criticizes the magistrate for failing to deal adequately with the discrepancies in PW1’s evidence.

20. The discrepancies cover (a) the number of times PW1 said he had given evidence as an expert, (b) whether he knew his evidence had been rejected by another court and (c) whether someone from the Japanese company was present when the products in question were examined and whether PW1 was a mere assistant to this person.  (See the appellants’ skeleton submissions.)

21. Regarding (a), the difference is between “at least six to seven times” to a direct question from the prosecutor and a possible three to some indirect cross-examination by counsel.  It is, moreover, not at all clear whether PW1 was being asked the same question — the number of times he had gone to court to testify on the MUGEN brand generally or the number of times he had gone to court as a result of the raids on 24 November 2004.  Having read the transcripts, I have a feeling that PW1 and counsel might well be speaking at cross-purposes.

22. As for (b) and (c), they are the matters that constitute paragraph 11 and paragraphs 14 to 16 of the Statement of Findings respectively (above).  It shows the magistrate was alive to the issues and, on the presence and role of the Japanese gentleman, had dealt with the point head on.  I should add that as PW1 volunteered (p.77D), he had taken part in numerous such examinations so it was not surprising that he had mixed up the time.  Not only does this explain his getting confused but go some way to suggest that he was in fact involved in more cases than the raids we know gave rise.

23. In my judgment, none of these discrepancies is sufficiently serious and/or inexplicable to harm PW1’s reliability, not to mention the admissibility of his testimony as expert evidence.

24. Ground 1(iv) criticizes the magistrate for failing to make a finding on PW1’s credibility.  But this is absurd as PW1’s evidence was the trial’s key issue and was accepted by the magistrate.

Ground 2

25. This ground reads :

“The magistrate erred in finding or ‘understanding’ that it is not necessary for PW1 to have a valid letter of authorization and that there are no legal submissions to the contrary.”

26. The attack here is on what the magistrate observed in paragraphs 8 and 9 of the Statement of Findings (above), the simple point being there were in fact legal submissions to the contrary.

27. But this is really a non-point because regardless of what the magistrate might have said in those paragraphs, there is even before me no effective argument, not to mention authority, that, in law, PW1 had to have a letter of authorization before giving evidence as an expert.  Quite the opposite, I see great sense in the magistrate’s reasoning in the following exchange with defence counsel (p. 203 G-H):

“… it would have open to you [the defence] to get another expert along to say he [PW1] has got it all wrong.  Your expert would not have been authorized by the company [MUGEN] but nevertheless could still have been an expert if he had had sufficient experience.”

28. I should add that if there is any question about the class or classes of goods that the letters of authorization referred to (Class 12 in the one dated 27 August 2002 and Classes 12, 16 and 25 in the one dated 17 February 2006), the references were to the fact that those who wrote the letters were the registered owners of the MUGEN trademark as applied to products in those categories.  They said nothing about the expertise of PW1 being so limited.  The question of the letters of authorization does not, therefore, go to either admissibility or weight, except perhaps in the way that the magistrate had expressed in paragraphs 18 and 19 of the Statement of Findings (above).

Ground 3

29. This ground alleges that :

“The magistrate erred in failing to warn herself that the appellants were both of clear records and to give herself the relevant directions.”

30. It is true that the magistrate had neglected to say that she had given herself the customary warning.  But, as pointed out by the respondent, the fact that the appellants were of clear record had thrice been drawn to her attention, by the prosecution as well as the defence.  That being so, I am satisfied that this is a case in which the principle in Fok Tin Yau [1995] 1 HKCLR 351 must apply (as per Power VP as he then was) :

“Where a judge sitting alone, and evidence of good character has been given, this court will, even if he makes no mention of it, unless there be some expressed or implied indication otherwise, act upon the basis that he was aware of the character evidence and that he gave it the weight which he thought it deserve.”

Ground 4

31. This ground alleges that :

“The convictions are unsafe and unsatisfactory.”

32. I disagree.

JUDGMENT

33. The appeals of both the appellants are dismissed.