RE FLYING CRANE LTD

HEADNOTE

            Does the word "article" in s.21 of the Customs & Excise Ordinance Cap. 60 include documents relating to "the article"?

 

            Are the powers referred to in s.20 of the Ordinance exercisable separately and independently of the powers in s.21?

 

            Held: "Article" does include documents relating to the "Article" and sections 20 and 21 of the Ordinance should be read together. Accordingly no declarations would be made that the officers of the Customs & Excise Department had exceeded their powers when they seized documents during the course of an investigation undertaken under s.20.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS N0. 426 0F 1985

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JUDGMENT

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1. On the 13th February 1985 officers of the Customs and Excise Department attended at the Applicants' factory premises for the purpose of conducting an investigation of the Applicants' records pursuant to section 20 of the Import and Export Ordinance Cap. 60. Initially, they requested copy documents. They remained on the premises some hours and later conducted a search of the premises and seized a large volume of documents. On the 14th February Deputy Judge Barnett granted leave to the Applicants to apply for a Judicial Review of the action taken by the Customs and Excise officers. The Applicants are seeking three declarations. The first declaration they seek is that the search and seizure were not undertaken in a bona fides manner and was therefore unlawful. The second was that there was no power to seize the documents and the third is that only relevant documents should be seized and that as too many documents were taken, the seizure was unlawful. By agreement between the parties I was invited only to consider the second declaration sought as this raised an issue of law namely the proper construction of the relevant sections of the Import and Export Ordinance Cap. 60. The other two declarations involved questions of fact. There is considerable doubt whether questions involving issues of fact can satisfactorily be the subject of a Judicial Review.

2. Mr. Neoh who is representing the Applicants submitted that it was necessary to look carefully at the provisions contained in section 20 and 21 of the Ordinance. He argued that section 20 was primarily concerned with the powers of the Customs and Excise Department in relation to documents and section 21 was intended to confer upon the Department rights of seizure in relation to ''articles" and that "articles" did not include any documents which may exist in relation to the "articles".

3. Unfortunately, the word "article" is not defined in the definition section of the Ordinance. It is, however, defined in section 20A. Here "article" is defined as meaning an article of cargo. "Cargo" is defined in the definition section. Here it is defined as follows:

Interestingly, the documents exempted from the definition of "cargo" do not extend to the classes of documents which were seized by the Customs and Excise officers.

4. Clearly, it is vital to a determination of the issues before me to decide whether "article" can include documents relating to the "article". In making his submission to me, Mr. Neoh attempted to distinguish the difference between an "article" and documents. He suggested that "articles" should be treated as real evidence. By way of analogy, he referred to the definitions contained in Ch. 1 of Phipson On Evidence 13th Edition on p. 3. Real evidence is defined as:

5. This definition is certainly of assistance. It indicates the different approaches which have been made by the courts to consider the evidential nature of "articles" and of the differences which can arise in treating documents as evidence. What it does not do is to assist us in resolving whether a document is an "article".

6. I regret that I have come to the conclusion that the Customs and Excise Ordinance is not a very satisfactorily drafted piece of legislation. The words ''article" and "document" are used fairly indiscriminately in different parts of the Ordinance and I do not believe that it is possible to come to any definite conclusion whether "articles" include documents on all occasions. In my view, the only possible approach is to examine each of the relevant sections individually and then attempt to determine its true effect. It is therefore necessary to consider in detail both section 20 and 21 of the Ordinance. I reproduce these sections here:

    (2)    Any member of the Customs and Excise Service and any authorized officer may require -

 

7. Mr. Neoh argued that the true construction of these sections was that each dealt with separate and distinct situations. In overall terms section 20 dealt with the position relating to documents and section 21 dealt with the position concerning "articles". on this basis, the powers of the Customs and Excise office were clearly limited in relation to documents. When they attended at premises for the purpose of inspecting documents, their powers were circumscribed and they had no authority to remove documents. If I understood him correctly, he agreed that much wider powers were conferred by section 21 in relation to "articles". Here the Customs and Excise office could seize articles. I regret that I see very little merit in this contention. I can see no reason why these two sections should not be read together. There may be many cases where Customs and Excise officers enter premises with a veiw to inspecting documents and then their suspicions are aroused that an offence may have been committed triggering off a situation where it is appropriate that the sanctions referred to in section 21 can properly be invoked. In this connection, it is particularly relevant to have regard to section 21(4) which specifically envisages a situation where documents are seized.

8. I have come to the conclusion that it is highly artifical and unsatisfactory to attempt to distinguish between "articles" and "documents". Having regard to the provisions contained in section 19 of the Interpretation and General Clauses ordinance Cap. 1, I have no doubt that I must attempt to interpret sections 20 and 21 in accordance with the stated objects of the Import and Export Ordinance. It would lead to a potentially unsatisfactory and inconvenient result if Customs and Excise officers were not able to remove documents from premises where they were making inspections if they had reason to believe that an offence or offences had been committed. It may well be the case that voluminous documents would have to be scrutinized and it would be impracticable for detailed investigations to take place at the premises. I am satisfied that the only realistic construction to be placed upon these sections is for them to be read together and not separately. I am further satisfied that in the context of particularly section 21 "articles" do indeed include documents and accordingly the answer to the point of law posed by 'tae parties is that the Customs and Excise officers were legally entitled to seize documents at the premises. I hope that this answer sufficiently resolves the matter raised in the second declaration which is sought. I will hear the parties on any further directions which may be sought in the matter and on costs.