HKSAR v. SZE CHAK MING AND ANOTHER

HCMA1045/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.1045 OF 2005

(ON APPEAL FROM STCC 8408 OF 2005)

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J U D G M E N T

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1. This is an appeal by the appellants against their conviction at Shatin Magistrate’s Court on 17 October 2005 of the offence of possession for the purpose of, in the course of, or in connection with, any trade or business of infringing copies of copyright works with a view to committing any act infringing the copyright without the licence of the copyright owner, contrary to sections 118(1)(d) and 119(1) of the Copyright Ordinance, Cap.528 (“the Ordinance”).

2. The copyright works in question were 51 digital video discs (“DVDs”) of the film “The Duke of Mount Deer 2000”.  The 51 DVDs were seized by Customs Officers during the course of an anti-piracy operation on 27 August 2004 at Flat D, 1^st Floor, Chuk Lam Court, Lucky Plaza, No. 1-15 Wang Pok Street, Shatin.  They were in four boxed sets.  They were among 7,136 discs, comprising DVDs, VCDs and CDs, found in a bedroom at this flat.

3. The 1^st appellant had been seen coming out of the flat just prior to the Customs Officers entering the premises carrying a plastic bag containing 195 suspected infringing discs.  He had on him the keys to the main door and the iron gate of the flat.

4. The 2^nd appellant was arrested later that day after she had been contacted by Customs Officers.  She too was in possession of keys to the main door and the iron gate of the flat.  She was the sole proprietor of the firm “Christinnie Fashion Company” which was the tenant of the flat.  An electricity bill and a telephone bill bearing her name were found in the living room in the flat together with the tenancy agreement which bore her telephone number.  Her identity documents were found in another bedroom in the same flat.

5. The appellants elected not to give or call evidence.

6. There were essentially two matters in issue at the trial.  Firstly, whether the prosecution had proved that the 51 DVDs were infringing copies of copyright works and secondly, whether the evidence established that the two appellants were in possession of them.  If the prosecution had proved both these matters (as the learned magistrate so found) and in the absence of evidence from the appellants then in the circumstances there could be no doubt that the appellants were in possession of those items for trade or business with a view to committing an act infringing the copyright without the licence of the copyright owner.

7. The four grounds of appeal put forward by the appellants are directed both to the magistrate’s finding that the 51 discs were infringing copies of copyright work and his finding that the appellants were in possession of them.

8. I shall deal firstly with the appellants’ 2^nd ground of appeal that “there was no admissible evidence before the court to prove subsistence of copyright” in the 51 DVDs.  If the magistrate was not justified in reaching the conclusion that copyright existed in the film on the discs, then the question of whether they were infringing copies does not arise.

9. This ground of appeal is based on the failure to comply with section 121(10) of the Copyright Ordinance Cap.528.  Section 121 of the Ordinance provides a means by which a party to litigation can, inter alia, establish by means of an affidavit or affirmation sworn or affirmed by the copyright owner or someone on his behalf, and subject to evidence to the contrary, that copyright subsists in a particular work and the name of the owner of that copyright.  In Tse Mui Chun v. HKSAR (2003) 6 HKCFAR 601, the Court of Final Appeal held that hearsay evidence in such affirmations is permitted.

10. In this trial the prosecution produced for this purpose the affirmation of Mr Li Wui Ting who also gave oral evidence as the 1^st prosecution witness.

11. Section 121(1) of the Ordinance provides :

“(1) An affidavit which purports to have been made by or on behalf of the owner of a copyright work and which states —

(a)   the date and place that the work was made or first published;

(b)   the name, domicile, residence or right of abode of the author of the work;

(c)   the name of the owner of the work;

(d)   that copyright subsists in the work; and

(e)   that a copy of the work exhibited to the affidavit is a true copy of the work, shall, subject to the conditions contained in subsection (4), be admitted without further proof in any proceedings under this Ordinance.”

12. It is not suggested that the affirmation of Mr Li did not comply with the terms of sections 121(1) and (4) of the Ordinance but there is no dispute that the terms of section 121(10) were not complied with.  This provides that :

“So much of an affidavit as is admitted in evidence by virtue of this section is, unless the court otherwise directs, to be read aloud at the hearing and where the court so directs an account is to be given orally of so much of any affidavit as is not read aloud.”

13. Mr Davies for the appellants argues the failure to read aloud the affirmation in the absence of a direction from the magistrate that this need not be done renders the affirmation inadmissible.  He refers in particular to the passage of the judgment of the Court of Final Appeal in Tse Mui Chun in which the court said that “if a statutory shortcut to the proof of essential matters is to be taken advantage of it is essential that the conditions of the statutory shortcut be strictly observed”.

14. It has to be borne in mind that what the court was dealing with in that case was an affirmation which failed to state all the matters referred to in paragraphs (a) to (e) of section 121(1).

15. The Court of Final Appeal expressly stated :

“… A s.121 affidavit or affirmation is not admissible in evidence unless it states the matters required to be stated by paragraphs (a) to (e) of subsection (1).  Each of these paragraphs must be complied with.  If any is not complied with, the affidavit or affirmation is not admissible. …”

16. Section 121(10) is a quite different provision.  Unlike section 121(1) which makes admissibility conditional upon strict compliance with its terms, section 121(10) is referring to the procedure to be adopted after the affirmation is admitted into evidence.  Admissibility is not conditional upon compliance with its terms.  If prejudice was caused to a defendant by non-compliance with its terms then non-compliance might be fatal to a conviction.  This is not a case where it is suggested that any prejudice was caused to the appellants who were represented by Mr Davies at trial and who was fully aware of the contents of the affirmation.  There is nothing in this ground of appeal.

17. There was evidence before the court upon which it was perfectly entitled to come to the conclusion that copyright in the film which was the subject of the DVDs subsisted and belonged to Upland Films Corporate Ltd, a Taiwanese company.

18. It is the 1^st ground of appeal that next needs to be considered, namely that there was no admissible evidence before the court that the discs were infringing copies.

19. The basis for this ground of appeal, at least in Mr Davies’ written submission, is that it was necessary for the prosecution to call an expert to establish that the discs were infringing copies and that they had not done so.  Although Mr Li Wui Ting, the assistant manager of the Video Licencing Division of TVBI Co. Ltd (“TVBI”), had been permitted by the court to express an opinion about certain matters including whether in his opinion these were infringing copies, the prosecution had never applied to the court to have him declared an expert.  It is not entirely clear whether the magistrate did treat Mr Li as an expert.

20. The magistrate’s first reaction to Mr Davies’ submission that since no application had been made to treat Mr Li as an expert witness his evidence was nothing more than hearsay was :

“He wasn’t called as an expert witness.  He was called to give evidence in respect of copyright, Mr Davies.  I fail to see how that equates with an expert.”

When Mr Davies had then responded :

“No, I think he was called as an expert to determine they were infringing copies, Sir.  That was where — he comes in two roles.”

The magistrate replied : “Yes.”

21. In his Statement of Findings the magistrate referred to Mr Li as having given “a very clear account of his duties and expertise” and later on had said that he believed Mr Li and “accept his evidence when he states that the subject items are not genuine copies and are not parallel imports from another country”.  While these comments might, if taken alone, indicate that he was treating Mr Li as an expert, he, on the other hand, had stressed that he did not accept that Mr Li’s evidence was “mainly or wholly hearsay”.  He said that Mr Li was in a position himself to give evidence on the matters put.  He had read the licencing contracts and knew the licencing structures of TVBI.

22. It did not require the opinion of an expert in order to conclude that the 51 DVDs were not authorised by his employer TVBI.  Expert opinion is only permissible where :

“… the subject matter of the opinion is such that a person without instruction or experience in the area of knowledge or human experience would [not] be able to form a sound judgment on the matter without the assistance of witnesses possessing special knowledge or experience in the area. …”

See R. v. Bonython (1984) 38 SASR 45.  A magistrate without any special knowledge or experience in the area was well able to reach a conclusion based on the five reasons given by Mr Li.

23. These were as follows :  Having worked in the licencing division of the company authorised to publish the film all over the world except Taiwan, Japan and Korea for more than five years, having been responsible for marketing the company’s films in Hong Kong and overseas, being aware of the licencing structure of the company and having personally read its licencing contracts, he could testify from first-hand experience :

(1) that his company had never authorised Cheuk Ying Video Culture and Commercial Union Co. Ltd to publish this film;

(2) that the sound track of the tape was that of TVB, an associated company in the same group;

(3) that the English name of the series was wrong;

(4) that his company’s products would bear an IFPI code; and

(5) that his company had never published films in DVD format as opposed to VCD.

24. Mr Li did not give any evidence as to the significance of the IFPI code which might have necessitated expert evidence.

25. Having accepted Mr Li to be a credible witness, the magistrate was bound to find that the 51 DVDs had not been produced with the authority of TVBI which was authorised to publish the film everywhere except Taiwan, Japan and Korea.

26. It is not, therefore, correct to allege as in ground 1 of the Grounds of Appeal that there was “no admissible evidence before the court that the discs were infringing copies of copyright works”.

27. The question then arises is whether there was sufficient evidence to conclude beyond reasonable doubt that these were infringing copies and to rebut the suggestion put to Mr Li in cross-examination that these were parallel imports.

28. In other circumstances Mr Li’s evidence that the Cantonese dubbing on the DVDs was that produced by TVB, a company in the same group, might alone have been sufficient to rebut any suggestion that these might have been parallel imports from overseas, in particular Korea, Japan or Taiwan.

29. However, during the course of cross-examination, after having said that the Cantonese dubbing was done by TVB, Mr Li went on to say that although TVB and TVBI were in the same group, they operated separately.  He was then asked : “And TVB are perfectly at liberty to licence that dubbing to anybody they like”, to which he had answered : “You can put it that way.”  Later he admitted that he had not read TVB’s contracts.

30. He nonetheless insisted that the sound track had never been sold out to other companies except within the group.  When asked how he knew if he had not himself checked, he said that he knew as a result of a telephone conversation to a Peggy Ng within the legal section of TVB.  This telephone conversation was expressly referred to by the magistrate.

31. It was however hearsay and accordingly it is inadmissible evidence that TVB had never licenced their dubbing to a manufacturer in Korea, Japan or Taiwan.

32. The magistrate appears to have come to the conclusion that the discs were not parallel imports on the basis of Mr Li’s evidence that they were not but, as I have said, that evidence is based on hearsay.

33. Even though the magistrate appears to have reached the conclusion that these discs could not be parallel imports on the wrong basis, it is open to this court to look at all the evidence and to consider whether there is a possibility that they could have been parallel imports.

34. I have concluded that there is no realistic possibility that they could be parallel imports.  Firstly, there was evidence from Mr Li that although the boxes containing the sets stated that the sound track was in Mandarin, in fact it contained a Cantonese sound track as well.  An authorised licencee of the copyright would have stated on the packaging that it contained sound tracks in both dialects.  More significantly, the packaging of the authorised products distributed by TVBI bears the logo and name of that company in English.  The packaging of the alleged infringing discs bears the same logo and name alongside the words “TVBI copyright provided by Television Broadcast International Ltd”.

35. I am satisfied that the only reasonable inference is that these discs were infringing copies of the copyright of TVBI rather than parallel imports.  The logo and words cannot simply refer to the sound track which was created and subject to licencing by TVB rather than TVBI.  I am satisfied that the evidence established that these were infringing copies of copyright works.  The 3^rd ground of appeal accordingly must fail.

36. The 4^th ground of appeal is that the magistrate erred in finding that the appellants were in possession of the discs.

37. I find the magistrate’s finding that the defendants were in possession to be fully justified by the evidence.  The 1^st appellant was seen coming out of the flat carrying a bag containing 195 DVDs which were suspected, but not proved, to be infringing copies.  He was in possession of the keys to the wooden door and the iron gate of the flat.  When the Customs Officers entered, they found the door to the two bedrooms open and a very substantial quantity of DVDs, VCDs and CDs and 51 infringing copies that were the subject of the charge.  In the absence of any evidence to the contrary the inference is overwhelming that the 1^st appellant had knowledge of and custody and control of the DVDs in that bedroom.

38. In so far as the 2^nd appellant is concerned, she was the tenant of the flat as the flat had been let to a firm solely owned by her since the previous August.  The 2^nd appellant was in possession of the keys to the flat.  Her personal identity documents were found in the bedroom which was not being used to store the DVDs, VCDs and CDs.  Utility bills bearing her name were found in the living room.  The only reasonable inference from the evidence was that at the time of the alleged offence she was occupying the premises.  There was nothing to suggest that the room in which the discs were stored had been kept in any way separate from the rest of the flat.  The door was open.  In the absence of evidence to the contrary the magistrate was entitled to infer that the discs would not have been stored openly in the flat of which she was the tenant without her knowledge and consent.

39. The facts of this case are quite different to those in HKSAR v. Siu Mo Nor Isis (2005) 3 HKC 130 to which I have been referred, where the accused, unlike the 1^st appellant, had no property interest in the premises and the court could not infer the necessary custody and control to constitute possession.  The necessary elements of knowledge and custody and control to establish possession were established in this case.

40. I accordingly dismissed the appeals of the appellants.