HKSAR v. YEUNG MING CHU

HCMA 392/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 392 OF 2009

(ON APPEAL FROM KTCC 261/2009)

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REASONS FOR JUDGMENT

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1.  The Appellant was convicted in the Magistracy of one charge of Possession for sale or for any purpose of trade or manufacture goods to which a forged trademark was applied, contrary to s.9 (2) as read with s.18 (1) of the Trade Descriptions Ordinance, Cap. 362.  She was convicted after trial before Deputy Magistrate Jason Wan and sentenced to 6 month’s imprisonment.  She appealed initially against conviction and sentence, but abandoned her appeal against sentence on 2 November 2009.  On 3 November 2009 I allowed the appeal against conviction and advised that I would hand down my reasons at a later date.  These are my reasons.

2.  The evidence at trial was given by two Customs Officers (COs) and by way of Admitted Facts.  The Appellant elected not to give evidence and did not call any witnesses.  The facts found by the magistrate were that the COs had laid an ambush outside the flat particularised in the charge.  PW1 said they were outside the flat by 6.15 p.m. and PW2 said they were there about 6.20 p.m.  The wooden door and the iron grille were closed.

3.  Both officers saw the Appellant leave the flat at 6.30 p.m. approx.  She was carrying a small handbag but nothing else.  The Appellant was intercepted, taken inside the flat immediately and a body search was done by PW2, a female officer, in one of the rooms; nothing suspicious was found.

4.  PW1 checked the back door to the flat.  It was locked from the inside and various items were placed in front of it blocking easy egress.  There was no one else in the flat.  The flat was 300 sq. ft. approx and contained no domestic furniture.  The two main rooms had shelves filled with quantities of what were later shown to be counterfeit handbags and watches.  Photographs taken at the time show the flat was like a small warehouse.

5.  It was an agreed fact that a key case was found in the Appellant’s bag.  It was agreed that the Appellant was neither the landlady, the tenant, nor the resident of the flat.

6.  The COs rejected suggestions made to them in cross-examination that the Appellant had left the flat followed by two European women, whose particulars were recorded by PW2.  The notebook of PW2 was produced for inspection at the request of the defence, but it did not contain the particulars alleged.  The Appellant exercised her right not to give evidence.  The respondent, in reliance on The Queen v. Chong Kin-cheong HCMA 196/1995 submitted that the Appellant was in a position which cried out to be explained by her – but that was not so.  The situation in that case was of a totally different character.

7.  The sole ground of appeal was that the primary facts did not lead to the only irresistible inference of the Appellant’s guilt and in particular :-

(a) The magistrate had failed properly to apply the test in Kwan Ping-bong v R [1979] HKLR 1.

(b) In eliminating the conclusion favourable to the Appellant the magistrate never referred to PW1’s evidence that it was difficult for the true owner of the goods to have left the room by the back door.

(c) The magistrate did not, or failed to, show he had considered an important primary fact which would have led to an inference of innocence i.e. that the Appellant’s keys were not connected to the premises.

8.  The magistrate had to consider as the sole issue whether the Appellant had been in possession of the goods in the flat, but in his Summary of Facts omitted to consider sufficiently the question of custody and control.  He postulated only 2 possibilities - either the Appellant was a customer, or she was the person responsible for selling the goods.  The magistrate found it highly unlikely that the person who owned, or was responsible for, the goods would have allowed a customer, in all likelihood a stranger, to remain alone in the flat with access to counterfeit items which, although not of the highest quality, were valued in excess of $300,000.

9.  To allow a customer untrammelled access was to risk theft of the stock and also to risk exposing the illegal activity which was taking place in a supposedly residential flat.  The magistrate could think of no other possibilities which might explain the Appellant’s presence in the flat.  He ruled out the possibility of the Appellant being a customer and found that the goods were kept in the flat for the purposes of sale.  He concluded that at the material time the Appellant was the person in charge of the flat where they were stored or at least responsible for selling the goods and thus in possession.  He convicted the Appellant.

10.  The prosecution evidence was less than clear on certain matters, including the times of arrival and interception and whether keys were found.  PW1 and PW2 when giving evidence appeared to be confused, forgetful or both.  Their evidence was that the ambushing group of COs arrived outside the flat at 6.15 p.m. (PW1) or 6.20 p.m. (PW2) and that the Appellant left the flat at 6.30 p.m., at which time she was intercepted.  Neither witness had noticed whether she had unlocked one or both doors in order to leave the flat although they had heard some sounds from inside.  An opened combination padlock was hanging on the wooden door, but there was no evidence as to how or when it got there.

11.  When cross-examined as to times PW2 gave confused answers.  Her relevant notebook entry was brief and not very useful.  One entry recorded an obviously wrong time, 17.30 p.m., which had had to be corrected to 18.30 p.m.  PW2’s memory of events was poor, perhaps unsurprisingly, as the trial took place a year after the arrest.  No attempt was made at trial to resolve uncertainties by reference to witness statements; assuming that such statements had been prepared by the witnesses.  Whatever the correct times were, it was obvious that the time during which the Appellant was known to be inside the flat was very short – 10 minutes or less.

12.  Evidence about the existence and possession of keys was vague and unsatisfactory.  It was an Admitted Fact that a keycase had been found on the Appellant, but neither witness could say whether that case actually contained keys and, if so, which doors, if any, they fitted.  The extent of PW2’s evidence on this point was that if keys had been found on the Appellant they would have been tested to see if they fitted doors in the flat, but she could not remember whether keys had been found.  PWl was asked about keys, but could not remember if keys were found or tested.  He appeared to have noticed the opened padlock on the wooden door before the Appellant came out of the flat, but overall his evidence was not helpful.

13.  It appears to have been accepted implicitly by prosecution and defence representatives, that no keys relating to the flat were in the possession of the Appellant.  Certainly there appear in the transcript comments by the Appellant’s legal representative to that effect.  [B135, 136 and 139]  If that were so it is unfortunate that it was not incorporated as an admitted fact.

14.  Evidence was given that the back door of the flat was locked from the inside and items were stored in front of it.  Although the Magistrate in his Statement of Findings referred to the door as being “blocked”, in the context of his comments and from the evidence of PW1 it is clear that he did not mean that egress was wholly prevented, but rather that it was impeded.

15.  This was relevant to the question of possession and also as to whether there was anyone else in the flat at the time of the raid.  PW1 was certain that if anyone else was in the flat and had left by the rear door he would have heard them leaving.  Given the size of the flat, the way it was fitted out and PWl’s description of the area as ‘calm’, it could be inferred safely that no one left through the back door during the 10, or fewer, minutes that the ambushing officers were in position.  However, it would have been sensible to station a CO outside the rear door to detain anyone who might leave through the back door, but that was not done.

16.  The prosecution had to satisfy the court beyond reasonable doubt that the Appellant had possession of the counterfeit items in that she had custody or control of them; that she knew they were counterfeit and that she had the intention of possessing them for the purposes of trade or manufacture.

17.  The only evidence to establish those matters was that the Appellant was shown to have been in domestic premises fitted out as a storage facility, with goods later shown to be counterfeit, for a period of about 10 minutes.  The Appellant was not the owner, or the tenant of the flat.  There was no evidence that she had keys to the premises.  She had made no admissions on arrest and had no obligation to explain her presence.

18.  Mr Saroney SC, who appeared for the Appellant, submitted that the magistrate took too limited a view of possible explanations for the Appellant’s presence and had ‘skated over’ considerations of possession.  As he suggested, the inference that the Appellant was a customer could not be ruled out, despite the magistrate’s purporting to do so.  It was possible that the Appellant was a friend of the owner of the goods, or a friend of the vendor.  He might have added that it was also possible that she was a cleaner, or a delivery worker.

19.  He referred to R v Chan Ping & Anor [1986] HKC 414, where Kempster JA considered the question of possession in relation to a dangerous drugs case and stated:-

“I am of the opinion that a person may be held to be in possession of land, as of a chattel, if sufficient evidence is forthcoming to demonstrate both physical control over it, in the sense of ability to use as may be desired, within the parameters of practicality and the law, and to exclude others, and of an intention to exercise such control.  Once possession has been acquired, the ability and intention to retain that possession will readily be inferred.  Possession is not lost for instance while the possessor is asleep.  Possession is not to be equated with use or enjoyment.

The fact that a person is asleep on the only bed in a room, does not, in my opinion, demonstrate that such person is the sole or joint occupier of that room, whether as tenant, licensee, mortgagee, or trespasser, so as to be deemed in possession of it.  He or she may equally well be a visitor or a member of the occupier’s family.  No more does it suffice to establish even control, let alone custody, of the room.”  [@ 419]

20.  In this case there was no, or insufficient evidence to establish that the Appellant had effective custody or control over the goods, or that she knew the goods were counterfeit, or that she intended possessing them for sale, or for any purpose of trade or manufacture.  It was not possible to impute to the Appellant knowledge that the goods were counterfeit – she had no keys – she made no admissions and there were other possible explanations for her presence there.  It was not open to the magistrate in such circumstances to conclude, as he did, that the Appellant could not have been a customer and so must have been in possession of the goods.

21.  I allow this appeal against conviction and quash the sentence of imprisonment imposed on the Appellant.

22.  I order that costs of the trial in the court below and of this appeal be to the Appellant, to be taxed if not agreed.

23.  In conclusion I would comment that the investigation of this case leaves something to be desired.  I have already pointed out that commonsense would suggest that a CO should have been assigned to guard the rear door on ambush.  Neither PW1 nor PW2 was sufficiently observant to note how the Appellant had opened the front door, or doors.  The confusion in court between PW1 and PW2 over their time of arrival at the scene and the time the Appellant emerged from the flat could have been avoided, if, at the outset, they had synchronised their watches and made accurate notebook entries.  Further, their failure to make a record about the recovery or the testing of keys, either in their notebooks or in witness statements, compromised the value of their evidence.

24.  Given the number and nature of the counterfeit items it must have been obvious that the trial would take some considerable time to prepare.  In that time the COs, in all likelihood, would conduct many similar operations.  Both those factors meant that their memories could fade, or become confused.  That appears to be what happened and they had inadequate written records to remedy their shortcomings.