HKSAR v. NG CHUNG WO

HCMA264/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO. 264 OF 1999

(ON APPEAL FROM NKC 7263 OF 1998)

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J U D G M E N T

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1. The appellant was charged with two offences in relation to forged trade mark, contrary to section 9(2) and section 18(1) of the Trade Descriptions Ordinance, Cap.362. The particulars alleged that :

"1. On the 23rd day of June, 1998 at shop No. G44, Gala Shopping Arcade, Dundas Street, Mongkok, Kowloon, in Hong Kong, you had in your possession for sale goods, namely, 36 nos. of rucksacks, 72 nos. of handbags, 21 nos. of wallets, 10 nos. of cosmetic bags, 3 nos. of waist bags, 2 nos. of keyholders and 2 nos. of coins bags, to which a forged trade mark, namely, 'PRADA', was applied.

2. On the 23rd day of June, 1998 at shop No. S69, 2/F., Grand Tower Arcade, Grand Tower Hotel, Nathan Road, Kowloon, in Hong Kong, you had in your possession for sale goods, namely, 10 nos. of wallets, 7 nos. of keyholders, 6 nos. of waist bags, 3 nos. of cosmetic bags, 54 nos. of handbags and 33 nos. of rucksacks, to which a forged trade mark, namely, 'PRADA', was applied."

2. The appellant pleaded not guilty to the charges and was convicted by the learned magistrate. The sentence imposed was two terms of six months, to run concurrently. The appellant sought to appeal against both the conviction and sentence.

3. The learned magistrate had, in his Statement of Findings, very clearly stated both the prosecution and defence case from paragraphs 8 to 41. I shall not repeat all the details here, except to quote the following two paragraphs :

" The prosecution case, put shortly, was that the appellant was the proprietor of two shops which Customs Officers had raided and located quantities of various styles of bags and similar products bearing forged 'Prada' trademarks.

The defence case, put shortly, was that the appellant had purchased these items from a dealer he sometimes dealt with and he had taken some steps to satisfy himself as to the genuineness of the products so supplied. The statutory defences in section 26 were relied upon."

4. The prosecution had called a total of three witnesses. The admissibility of the cautioned statement of the appellant was challenged by the defence. The alternative procedure was adopted to deal with the issue of voluntariness. Eventually the statement was admitted into evidence. The trade mark certificate of Prada was admitted under section 84 of the Trade Mark Ordinance, Cap.43 and the business registration of the appellant's premises was dealt with as agreed evidence under the Criminal Procedure Ordinance, Cap.221. Although the learned Magistrate stated it was under section 65 of the Evidence Ordinance, I am sure it was just a slip.

5. Having carefully analysed the evidence, the Magistrate came to the view that he would accept the testimonies of the prosecution witnesses and in particular, he found he could rely on PW4's expert evidence. He rejected the appellant's evidence and concluded that the offences had been proved beyond a reasonable doubt.

6. In considering the defence case, the Magistrate was fully aware that there were two broad issues raised. He pointed out in his Statement of Findings that :

"49. The appellant through counsel relied mainly on two matters for his defence. Firstly, in final submissions but not in the course of cross-examination of PW4, it was sought to cast doubt upon her evidence of identification of the genuine/counterfeit items produced as exhibits. As I have indicated, I found her evidence reliable as to this and I accepted it accordingly.

50. Secondly it was said 'the second limb of my argument is about the statutory defence'. This was plainly a reference to section 26 of Cap.324.

51. Not surprisingly, given only passing reference was made in the evidence to '.... information supplied to him .... by another person .....' the appellant's submissions focussed more on the 'due diligence' defence in sectiion 26(1)(b) than that in section 26(1)(a) although I considered both.

52. It was for the appellant to establish a defence under section 26 and for him to do so on the balance of probabilities.

53. As I have said, I did not believe his evidence.

54. In any event, had I believed it I would still have found no section 26 defence had been established.

55. In my view the steps the appellant claimed to have taken were barely such as one would expect a layperson buying one item of 'Prada' product from a 'non Prada' outlet to take if concerned as to the genuineness of the item. Much more is expected of one in the appellant's situation i.e. a 37 year old merchant with 9 years relevant trading experience; buying in significant quantity brand name products which as a matter of territory-wide, if not almost world-wide, notoriety are the subject of widespread and high volume counterfeiting in this part of the world.

56. I was satisfied no defence under section 26 had been established. I was satisfied the prosecution had proven each of the two charges to the required standard and I convicted accordingly."

7. The perfected grounds of appeal against the conviction were stated as follows :

"1. The reliability of PW4's Miss Yim Siu Ling's expert evidence was a crucial factor in the defence case. PW4's evidence would only have been treated with little or no weight by the Learned Magistrate if the Court had had the assistance of defence counsel who in this case failed in his duty to cross-examine PW4 in an effective and professional manner; thereby depriving the defendant of an opportunity to substantially discredit the expert witness. See paragraphs 23, 39, 40, 41 and 49 of the Statement of Findings. See pages 121, 126, 129 and 130 of the Appeal Bundle and pp.106-109 of Defence counsel's Final Submissions. The failings by Defence counsel caused the Magistrate to place no weight upon defence evidence which might have clearly undermined the prosecution's case.

2. The Defendant has since the conclusion of the case been able to support his claim that PW4, has given an unreliable account in her evidence when identifying counterfeit features of a Prada haversack, by the production of additional evidence supported by his affirmation dated the 10th September 1999."

Hence, counsel's competence in the conduct of the trial, especially the way he had dealt with the prosecution expert's evidence, became the main complaint in this appeal.

8. On the question of incompetence of trial counsel as a ground of appeal, the following two authorities were relevant to illustrate the test adopted in Hong Kong and Australia :

1) In R. v. Birks (1990) 48 A Crim R 385, Gleeson CJ stated :

"As a general rule an accused person is bound by the way the trial is conducted by counsel, regardless of whether that was in accordance with the wishes of the client, and it is not a ground of setting aside the conviction that decisions made by counsel were made without, or contrary to, instructions, or involve errors of judgment or even negligence. However, there may arise cases where something has occurred in the running of the trial, perhaps, as the result of 'flagrant incompetence' of counsel, or perhaps from some other cause, which will be recognised as involving or causing, a miscarriage of justice. It is impossible, and undesirable, to attempt to define such cases with precision. When they arise they will attract appellant intervention."

2) In R. v. Mo Lee Kuen [1993] 1 HKCLR 78, the Hong Kong Court of Appeal held :

"Other than in cases of flagrantly incompetent advocacy the Court of Appeal will not interfere with a conviction on the ground that counsel made a decision which later appeared to have been in error, even where the decision was contrary to the accused's wishes."

9. I could not agree that trial counsel had been incompetent in the conduct of the case. It was true that the Magistrate had criticized trial counsel that certain matters should have been put to the expert, but it did not necessarily mean that what counsel had done was incompetent. I would have thought that if the learned Magistrate considered there was any merit in the point raised in the final submission, he could have invited the defence to apply to recall the expert for further questions to be put to the expert. In any case, according to the transcript, the Magistrate did comment that he had taken note of what counsel had submitted and if he wanted to inspect the items, he would do so later. That was what counsel was inviting the court to do. The present case was quite different from the situation in HKSAR v. Cheung Kau & Others [1998] 2 HKC 709, where Beeson J found that the combined effect of the failure to seek a separate trial and the omission to disclose the appellant's clear record amounted to flagrant incompetence on the part of trial counsel which, in turn, would render the conviction unsafe.

10. Counsel had prepared a detailed explanation regarding why he had adopted the approach at the trial. He said in his letter to this court that :

First, Ms Yim in her capacity as expert witness for Prada had been cross-examined by me in other previous trial where I had destroyed her evidence by, inter alia, confronting her with exhibits on which she had eventually made fatal mistakes in court. Taking the same step in Ng Chung Wo's trial is tactically undesirable, in my judgement, as there was no element of surprise. I believed that Ms Yim was prepared for that.

Second, the defence exhibits having been examined and found by Ms Yim as genuine Prada products were collected from Prada's solicitor by a solicitor not involving in this case, sealed and kept in his custody. The chain of exhibits was established, so was the state of the exhibits being genuine products.

Third, only after Ms Yim gave evidence regarding the yardsticks for differentiating the genuine products from the counterfeit then the defence could see how far the defence exhibits matched the yardsticks.

Fourth, putting the defence exhibits to Ms Yim for examination again in court would afford Ms Yim a second bite of the cherry. It is tactically undesirable.

Having considered the above factors, I saw no advantage but risk to re-call Ms Yim and confront her with the defence exhibits which bear the features inconsistent with her evidence. My view was that showing the trial magistrate the exhibits and pointing out the intrinsic discrepancies would sufficiently undermine the reliability of Ms Yim's evidence.

Last but not least, I had explained the factors and tactics to the appellant and he fully understood and agreed."

11. Obviously there were different options open to counsel at the time and he had, after explaining his concern and analysis to his client, taken one of the possible courses of action. Although the Magistrate eventually did not accept his submission, and even if counsel's approach was, in hindsight, erroneous, it was not incompetence, let alone flagrant incompetence. This could not be a ground of complaint. The principle stated in HKSAR v. Lui Kwong Fai, CACC 672/1997 would be relevant here.

12. In reading the transcript, it occurred to me to be quite obvious that the emphasis of trial counsel was on the statutory defence. Counsel for the appellant may well think that there should be more attack on the expert or that he would have adopted a completely different approach, but it could not be said that the other counsel must have been incompetent. In this regard, I would agree with the respondent's submission and I was not persuaded that I should overturn the conviction on this ground.

13. Regarding the second ground, I was not convinced of its merit either. I could see no justification to admit the affirmations as new evidence under section 83V(1) of the Criminal Procedure Ordinance, Cap.221. The contents of the affirmations, in any event, contained many opinion statements and arguments. In my view, they did not advance the appellant's case further. On this point, I would also agree with the respondent's submission. In the circumstances, despite counsel's able arguments, I would dismiss the appeal on conviction.

14. In relation to sentence, the learned magistrate noted that the appellant had a similar conviction in 1996 for a similar offence and was fined $18,000. Having considered, inter alia, the issue of prevalence and international comity, he came to the conclusion that a deterrent sentence would be warranted and therefore a term of six months for each offence was imposed and they were ordered to run concurrently. In his reasoning, the Magistrate had made comparisons to the offence of selling pirated video and audio compact discs.

15. I do not think that it is wrong, as the appellant had submitted, to compare the present offence to the cases involving pirated discs. However, there is a very recent authority of Secretary for Justice v. Lam Chi Wah [1999] 4 HKC 350 which dealt with offences involving forged trade mark. In allowing the application for review, the Court of Appeal had stated the factors to be considered. The Court held, inter alia, that :

" While we do not think that this is an appropriate case to set any guideline, we would take this opportunity to give a serious warning to potential offenders of such offences. For hawkers and small traders of counterfeit goods, heavy fines which need not necessarily be linked to the value of the goods may have to be imposed in future. The purpose of such fines would be to deliver the message that this type of crime does not pay. Whatever profits they may make out of selling counterfeit goods will be stripped from them by heavy fines. For a repeat offender, an immediate custodial sentence may have to be seriously considered. On the other hand, for wholesalers, they would have to face prison terms unless there are special circumstances. We would hasten to add that financial difficulties and a clear record would be unlikely to be regarded as special circumstances."

16. It appeared that the appellant was not really a wholesaler. He would be in the category of repeat offender as he had a similar conviction in 1996. He was fined HK$18,000 on that occasion. There were quite a number of items involved in the present case, and I accepted the learned Magistrate's remark that the mitigation was not substantial; however, I considered that, in principle, a suspension of the term of imprisonment with a heavy fine could be sufficient deterrence and punishment for the appellant for the offences.

17. I had therefore allowed the appeal on sentence and ordered that the imprisonment terms be suspended and a total fine of HK$180,000 be imposed ($90,000 for each offence). I had given the appellant time to pay in view of the amount.