HKSAR v. LEE SZE TING

HCMA 723/2010

HEADNOTE

1.  There are many different situations in which there arises the question of whether or not some fact could with reasonable diligence have been discovered. While it can be helpful in any given situation to consider what has been said about the approach to that question in other situations, differences of context must always be borne carefully in mind.

2.  Where public health and a regulatory regime for safeguarding it is involved and there is an official website that can be consulted with a view to discovering the position, it is not enough to assume that everything is in order or give no thought to whether everything is in order.  To make out a defence of not knowing of non-registration and not having been able to discover it with reasonable diligence, it is not enough in such a context to say that one does not know about a requirement for registration laid down by the regulatory regime or that one assumed that registration had been effected.  That was in essence the stance adopted by the Appellant.  It does not bring her within the defence provided by Regulation 36(1C) of the Pharmacy and Poisons Regulations.  The Magistrate was right in holding that the Appellant had not made out that defence.  The Appellant is free of moral turpitude, but she is not free of guilt in law. 

HCMA 723/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 723 OF 2010

(ON APPEAL FROM ESCC 240 OF 2010)

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BETWEEN

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J U D G M E N T

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3.  This Appellant, a woman in her early 30s and of previous good character, appeals against her conviction in the Magistrates’ Court on a charge of possession of a pharmaceutical product which was not registered for sale or distribution, contrary to Regulations 36(1) and 40 of the Pharmacy and Poisons Regulations.  The particulars of the charge are that “on the 9^th day of June 2009, outside the premises of Hung Fook Tong Herbal Tea & Soup Square at Shop G12, Tai Koo MTR Station, in Hong Kong [she] did possess a pharmaceutical product or substance, namely 3 bottles of Alli Capsules, which was not registered with the Pharmacy and Poisons Board for the purposes of sale, distribution or other use”.  Alli is a pharmaceutical product or substance.  Counsel for the Appellant says that Alli is now, but accepts that it was not at the material time, registered with the Board.

4.  Three perfected grounds of appeal against conviction have been filed.  Paragraph (1C) of Regulation 36 of the Pharmacy and Poisons Regulations provides that:

“It shall be a defence to a charge against any person for contravening paragraph (1) if the person proves that he did not know and could not with reasonable diligence have discovered that the product or substance was not registered with the Board.”

By the first ground of appeal, it is said that the Magistrate “erred in law in holding that the Appellant had failed to discharge [that] burden.”

5.  Why it is said that the Magistrate had so erred is to be found in the second and third grounds of appeal.  It is said in the second ground that the Magistrate ought in all the circumstances to have held that the Appellant had proved on a balance of probabilities both (a) that she did not know that Alli was not registered with the Board and (b) that she could not with reasonable diligence have discovered that it was not thus registered. As to the circumstances relied upon in this connection, this ground says that those circumstances include a series of facts pertaining to the Appellant, namely that she:

“(i) was not a pharmaceutical or medical professional;

(ii) did not know that ‘Alli’ was classified as a pharmaceutical product;

(iii) had no knowledge of the registration system for such products or how to access information as to whether such a product was registered;

(iv) was not herself involved in the marketing of pharmaceutical products, except to the extremely limited and marginal extent that, as a casual favour, she assisted long-standing friends who operated such a business over the internet to deliver ‘Alli’ to one of their customers;

(v)     was, as a result of the very long period she had lived in the United States, familiar with ‘Alli’ as a wholly legitimate product which could be purchased freely without control or supervision over the counter in shops and supermarkets, the consequence of such knowledge and experience being that she had no suspicion about the legal status of this product in Hong Kong and was therefore not put on inquiry, and could not reasonably be expected to be put on inquiry, as to whether that product was subject to regulation in Hong Kong,”

6.  The third ground reads as follows:

“Further, the learned Magistrate, while properly treating the statutory defence provided under section 36(1C) of the Pharmacy and Poisons Regulations as imposing an objective test, failed to recognise that the requisite standard to be applied in a particular instance is nevertheless not inflexible but depends to a crucial degree on the personal characteristics of the defendant and other relevant circumstances, and that accordingly the degree of diligence to be expected of a layperson in the world of pharmaceutical products, such as the Appellant was, in discharging the onus placed on a defendant by this defence is substantially less onerous than it is in the case of defendants whose profession, business or occupation involves them closely with pharmaceutical products and who must therefore be expected to possess, and should possess, some knowledge of the régime of legal regulation pertaining to them.”

7.  It appears that the Appellant had a friend who sought her assistance in making delivery to customers, offering to pay her transportation expenses.  The three bottles of Alli capsules the subject-matter of this charge were found on the Appellant when she was making a delivery for that friend.  Posing as a customer was a pharmacist with the Department of Health.

8.  Alli is a pharmaceutical product or substance. It was not at the time registered with the Pharmacy and Poisons Board.  So the Appellant’s possession of these Alli capsules was an offence as charged, subject to a defence under paragraph (1C) of Regulation 36.  She sought to make out this defence.  The Magistrate accepted that the Appellant did not know that Alli was not registered with the Pharmacy and Poisons Board. But the Magistrate did not accept that the Appellant could not have with reasonable diligence discovered that it was not thus registered.  That is now attacked, hence the grounds of appeal to which I have referred.

9.  There are many different situations in which there arises the question of whether or not some fact could with reasonable diligence have been discovered.  While it can be helpful in any given situation to consider what has been said about the approach to that question in other situations, differences of context must always be borne carefully in mind.

10.  In R v Mulitex (Experts) Ltd [1996] 4 HKC 442 Stock J (as he then was) had to consider the defence provided by s. 12(2) of the Trade Descriptions Ordinance, Cap. 362.  By s. 12(1) it was an offence to import or export any goods to which a false trade description or forged trade mark is applied.  Section 12(2) made it a defence for an importer or exporter of such goods to prove that he did not know, had no reason to suspect and could not with reasonable diligence have found out that they were goods to which a false trade description or forged trade mark is applied.

11.  At p. 431A-D, Stock J said:

“In the context of the statutory framework before me and of s 12, when it is common knowledge that parts of this region have an unhappy reputation for the production of goods with false trade descriptions, there is a very clear and strong burden on businesses in Hong Kong that import goods to ensure that in so far as is at all practicable, the goods they import do not infringe this law. That requires positive action on their part; and the requirements of the section are not fulfilled by an attitude which says that it was not unreasonable to make this assumption or that. In this case, nothing at all was done to inquire and to ensure, and the appellant has not, as the magistrate rightly put it, made even the beginnings of a defence under s 12.”

12.  A very different case is that of Peco Arts Inc v Hazlitt Gallery Ltd [1983] 3 All ER 193.  The context there was the period of limitation for an action for relief from the consequences of a mistake.  Section 32(1)(c) of the Limitation Act 1980 provided that such period of limitation “shall not begin to run until the plaintiff had discovered the … mistake … or could with reasonable diligence have discovered it”.  At p. 199 f-g Webster J said:

“Taking into account these authorities I conclude, first of all, that it is impossible to devise a meaning or construction to be put on those words which can be generally applied in all contexts because, as it seems to me, the precise meaning to be given to them must vary with the particular context in which they are to be applied. In the context to which I have to apply them, in my judgment, I conclude that reasonable diligence means not the doing of everything possible, not necessarily the using of any means at the plaintiff’s disposal, not even necessarily the doing of anything at all, but that it means the doing of that which an ordinarily prudent buyer and possessor of a valuable work of art would do having regard to all the circumstances, including the circumstances of the purchase.”

13.  In the particular context of that case, it is readily understandable that even a plaintiff who had not done anything at all may be in a position to say that he could not with reasonable diligence have discovered the relevant fact.

14.  The present context is wholly different from the one in the Peco Arts case.  Where public health and a regulatory regime for safeguarding it is involved and there is an official website that can be consulted with a view to discovering the position, it is not enough to assume that everything is in order or give no thought to whether everything is in order.  To make out a defence of not knowing of non-registration and not having been able to discover it with reasonable diligence, it is not enough in such a context to say that one does not know about a requirement for registration laid down by the regulatory regime or that one assumed that registration had been effected.  That was in essence the stance adopted by the Appellant.  It does not bring her within the defence provided by Regulation 36(1C).  The Magistrate was right in holding that the Appellant had not made out that defence.  The Appellant is free of moral turpitude, but she is not free of guilt in law. 

15.  For the foregoing reasons, the appeal is dismissed.