HKSAR v. PANG CHI WAH

HCMA1243/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO. 1243 OF 1998

(On appeal from NKC8015 of 1998)

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J U D G M E N T

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1. On 19 November 1998 the appellant appeared before J L Saunders Esq., magistrate, and pleaded guilty to two charges. The first was for offering for sale 597 CD Roms which were infringing copies of copyright works without licence from the copyright owner. The second was for possession for sale 2,300 CD Roms to which a forged trademark was applied. He was sentenced to six months' imprisonment for each charge to be served concurrently. He appeals that sentence.

2. The prosecution's summary of facts revealed that customs officers targeted a shop which they suspected was offering pirated CDs for sale. They executed a search warrant, seized a number of CD Rom discs and arrested the appellant, who said he was the shop's proprietor. Some of the discs seized, now the subject of these charges, were found to infringe existing copyrights. The appellant, under caution, said he was the sole proprietor and had purchased the offending material for sale from a roving unnamed salesperson. Cash of $8,860 represented the proceeds of two days' sales.

3. He had a clear record.

4. The magistrate first considered what a starting point after trial would have been and said that would have been in excess of 12 months' imprisonment in accordance with current sentencing practice. I record verbatim what he took into account when arriving at that, namely:

"(1) there has been long-established concern, both locally and internationally, over these products, it being recognised that an unchecked trade has a deleterious effect on Hong Kong's international relations;

(2) the area over which this magistracy has jurisdiction is notorious as the seat of offences of this nature;

(3) it is an offence of considerable prevalence. New instances of these offences come before this court every single day of the week;

(4) the numbers involved on a daily basis in this magistracy alone range from a few hundred to several tens of thousands;

(5) the legislature has recognised the problem, with several amendments to the relevant law drastically increasing the maximum sentences that may be imposed; (6) by the time of this offence, the prevailing maximum penalty is a fine at Level 5 - $50,000 per infringing copy - and four years' imprisonment, hence two years' imprisonment in the magistracy;

(7) even prior to these amendments, there had been judicial recognition of the problem;

(7.1) deterrent sentences had been found appropriate, even for young persons with hitherto clear records; (7.2) the Court of Appeal has indicated that deterrent sentences are called for - 'We consider that heavy sentences are called for';

(8) the continued incidence of these offences suggest that the levels of deterrents are lacking in effectiveness;

(9) this was a substantial operation. There were 1,877 infringing CD Roms."

5. I respectfully agree with all his reasons, save that there were overall 2,897 offending CD Roms.

6. The magistrate then went on to say that a total sentence of eight months, after allowing for his guilty plea, would be appropriate for an employee in a shop such as the one from which the goods were offered for sale. I pause here to say that I believe in the context of what comes later this is a misprint and should be "employer". He says further:

"However, I imposed a sentence of six months' concurrent on each charge. I now do not recall why I reduced the sentence below the normal sentence that I would have imposed."

7. What then happened was that the appellant applied to have those sentences reviewed. At the review, counsel said, and this was proffered for the first time, that the appellant was not in fact the proprietor but an employee. The magistrate chose to accept that, notwithstanding the appellant's earlier acceptance of a summary which included that he had the appearance of and admitted to being sole proprietor. Then counsel submitted that this put the appellant into the less culpable class of offending, namely an employee working for wages, which should result in a fine or suspended sentence or in any event a less serious sentence than that which had originally been imposed.

8. But the magistrate rejected that submission. He regarded the sentence as being overly lenient for a proprietor and therefore not inappropriate for an employee and was not prepared to make any adjustment.

9. Before me, counsel for the appellant argues that was the wrong approach. He says that having accepted the appellant was, after all, an employee, he should have had regard to the reduced culpability and passed a lesser sentence; if he chose to be lenient before, then that leniency should persist from a lower starting point, and it was not right that he did not do so because he had forgotten the reasons for that.

10. I do not believe he should be so bound. The review process allows a magistrate to step back and have another look at how he sentenced. The magistrate did just that. He was, I believe, generous in accepting from the bar table the assertion that the defendant was, after all, an employee when he twice had admitted he was proprietor; had conducted himself as such, having himself purchased for sale the offending material; and then admitted all this at the first hearing. If he really was an employee, would that not be the first thing he would divulge after his arrest?

11. But even if that was so, was his sentence wrong in principle or manifestly excessive?

12. In the case of R v NG Wai-ching Magistrate's Appeal 1310 [1996], Leonard J said:

"The typical case is one where a young man with no previous convictions is employed to sell the goods from a small shop for a salary. When arrested and charged, he pleads guilty and says that he had not been employed there for long."

13. He went on to say:

"It is very unfortunate that, despite their efforts, the Customs & Excise appear to have been unable so far to catch the big fish of the trade and can only bring the minnows before the courts. Without their salesmen, however, the big fish cannot operate and so the salesmen must be deterred. Experience has shown that they are not deterred by fines, so that resort needs to be had to custodial sentences, even where the offender is a young person with a clear record."

14. Since that decision some two years ago, there has been no sign of any reduction in this sort of offending; indeed the reverse. It behoves the courts to continue to pass the message therefore that offenders caught must expect a deterrent sentence. As the Court of Appeal said in R v LEE Wan-kei & another [1997] no. 13, "Hong Kong's reputation as a fair trading centre must be protected".

15. Counsel has put before me all that can be said about this offender. He says the magistrate should not have imposed a deterrent sentence without considering whether there were any other means of dealing with him. I have already dealt with this. He says he should have called for a background report. But he was not invited to do so, either at sentence or at review. And whilst the appellant is young, he is not so young that reports were necessary as a matter of course.

16. All in all, I do not fault the magistrate's starting point of 12 months for each of these offences reduced by a third for the co-operation and plea. Allowing for a further reduction of two months for the clear record, the sentences to be served concurrently because of a common criminality, I find the overall term of six months neither wrong in principle nor manifestly excessive.

17. The appeal is dismissed.