ATTORNEY GENERAL v. KING FAT TRADING CO.

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

H E A D N O T E

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

IMPORT AND EXPORT ORDINANCE - FORFEITURE PROCEEDINGS - SMUGGLING ATTEMPT - NOT TECHNICAL OFFENCE - COMITY OF NATIONS - ORDER SHOULD BE MADE UNLESS GOOD REASON SHOWN BY CLAIMANT.

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

MAGISTRACY CRIMINAL APPEAL NO. 1000 OF 1989

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

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

J U D G M E N T

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

1. This is an appeal by way of case stated by the Attorney General against a decision by Mr Venning in Fanling Magistrates Court dismissing an application for forfeiture under the Import and Export Ordinance, Cap. 60.

2. On 7th September, 1987, one WONG Chi-wang pleaded guilty to (1) Attempting to export unmanifested cargo and (2) Attempting to export a prohibited article without a licence.

3. Wong was the driver of a lorry which was searched at the Man Kam To border control point. He had declared he was carrying 92 packages of yarn, which was covered by an export licence. Underneath the yarn were found 100 video cassette recorders, which Wong said belonged to him.

4. At the forfeiture proceedings, eventually held in February this year, the respondent claimed to be the owner of the goods. Wong, giving evidence on behalf of the claimant, said he had been asked to store them pending the obtaining of an export licence. As he had no storage space, however, and wished to take some of his own goods to China, he decided also to take the videos. When he was caught, he did not know what to say, so he said they were his own property.

5. The magistrate made no finding as to whether or not he accepted this evidence. He was satisfied that the respondent was the owner of the goods. He refused to order forfeiture of the goods because:

(1) It was a case of technical smuggling. An export licence would have been issued on application and payment of $110.

(2) He was required to consider 'the law and circumstances in Hong Kong'; whether or not there was an attempt to breach the laws of China was irrelevant.

(3) Forfeiture of goods valued at $217,500 would amount to undue hardship in the circumstances.

6. The questions for consideration of this court are:

(i) was I correct in law in declining to order forfeiture?

(ii) was I correct in law in exercising my discretion to order the return of the 100 sets of video cassette recorders and other ancillary items to the Respondent?

7. In R. v. Man Kim-ping & another MA646/85 Jones J. said:

"The correct testis that an order should be made unless some good reason is shown to the contrary. See Attorney General v. Chin Chak-wing (1961) H.K.L.R. 479, and Director of Immigration v. CHU Shiu-fat (1980) H.K.L.R. 780. The burden of proof which is the civil burden lies with the claimant on the balance of probabilities. Undue hardship suffered by a claimant is obviously a factor to be waken into consideration when a magistrate exercises his discretion. But, where as in the instant case on the agreed facts the appellants were completely blameless, the magistrate should exercise his discretion in their favour."

8. 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.

9. Manifests are necessary for the prevention of smuggling and the orderly conduct of trade. (See Attorney General v. Chung Chi-wing MA892/87).

10. In R. v. Lo Chi-kiu and another MA250/89 Wong J. held that the magistrate was wrong to hold that Chinese law was inadmissible to prove that the export of antiques was prohibited. Wong J. cited the dictum of Roberts C.J. in Attorney General v. So Ma-por (1981) H.K.L. R. at p.698:

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

He also cited O'Connor J. in R. v. Chan Kam-bor and others MA239/81 in which he said:

"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."

11. Mr McCoy, for the respondent, concedes that the magistrate's approach was wrong. There was in truth no basis, on the findings he made, for not forfeiting the goods. The answer to both questions is therefore no. It is to be hoped that in future, when dealing with applications for forfeiture under this section, magistrates will pay proper attention to the authorities cited.

12. There are, however, good reasons for not remitting the matter to the magistrate. There have already been six hearings in the Magistrates Court and three in the High Court. The respondent has suffered financially from the detention of the goods. They are now old models and the appellant has no interest in them. I therefore order that they be returned to the respondent.