HKSAR v. CHEUNG YIP SHING AND OTHERS

HCMA144/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.144 OF 2001

(ON APPEAL FROM SPCC 6110 OF 2000)

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J U D G M E N T

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1. The 1st appellant who was the 1st defendant at the trial was convicted of the first three charges, each contrary to section 118(1)(d) of the Copyright Ordinance, Chapter 528.

2. The first charge alleges that he together with the 2nd, 3rd and 4th defendants, on 25 January 2000, at Flat 1212B, Block B, Merit Industrial Centre, No.94 Tokwawan Road, without the licence of the copyright owner, had in their possession, a total of 1,358 infringing copies of copyright works, for the purpose of trade or business with a view to issuing to the public which is an act of infringing the copyright.

3. The second charge alleges that on the same day and at the same place, he, the 1st defendant together with the 2nd and 3rd defendants had in their possession, a total of 36,654 infringing copyrights of copyright works, for the purpose of trade or business and with a view to issuing to the public which is an act of infringing the copyright.

4. The third charge alleges that the 1st defendant together with 2nd and 3rd defendants on the same day and at the same place had in their possession 157 infringing copies of copyright works, for the purpose of trade or business with a view to issuing to the public which is an act of infringing the copyright.

5. The 4th defendant who is the 2nd appellant was convicted of four charges, the first charge as mentioned above and the fourth, fifth and sixth charges. These charges were all laid under the same section of the same Ordinance and the fourth charge alleges that on the same day, at the same place, the 4th defendant had in his possession 7,792 infringing copies of copyright works, for the purpose of trade or business with a view to issuing to the public which is an act of infringing the copyright.

6. The fifth charge also alleges that on the same day, onboard a light goods vehicle parked at the car-parking area in the basement of the said Merit Industrial Centre, the 4th defendant had, in his possession, 24 music compact discs, being infringing copies of copyright works, for the purpose of trade or business with a view to issuing to the public which is an act of infringing the copyright.

7. The sixth charge alleges that on the same day at a different location, namely Flat 710, Park Sun Factory Building, No.97-107 Wo Yi Hop Road, Kwai Chung, the 4th defendant had in his possession a total of 96,507 infringing copies of copyright works, for the purpose of trade or business with a view to issuing to the public which is an act of infringing the copyright.

8. The 5th defendant who is the 3rd appellant was convicted of one charge, the seventh charge which was laid under the same section of the same Ordinance and alleges that on the same day, onboard a private car parked at the car-parking area in the basement of the Merit Industrial Centre, he had in his possession 30 music compact discs, being infringing copies of copyright works, for the purpose of trade or business with a view to issuing to the pubic which is an act of infringing the copyright. They were all convicted of these charges on 14 December 2000 after a 7-day trial by Mr R.B. McNair, sitting at San Po Kong Magistracy.

9. The prosecution's case was that all the defendants were arrested in the course of working or being engaged in some capacity in relation to a warehouse at Flat 1212B, Block B, Merit Industrial Centre. Some 46,015 discs were found at or near 1212B but in the same building. The arresting officers were Customs Officers of the Copyright Division who were part of an operation targeting 1212B. Some of the defendants were transporting discs in vehicles while others were moving discs on trolleys. D1 and D4 had the keys to this warehouse. D4 also had the keys to another warehouse at Flat 710, Park Sun Factory Building, containing 96,507 discs.

10. The 2nd appellant sought leave which was granted to withdraw his appeal against convictions. His appeal was therefore only against the sentence. The 1st and 3rd appellants appeal against both their convictions and sentences. The 1st appellant was sentenced on the first charge to 20 months, on the second charge to 24 months concurrent, on the third charge to 12 months concurrent. The second appellant, on the first charge was sentenced to 18 months, on the fourth charge, 18 months concurrent, on the fifth charge, 18 months concurrent, on the sixth charge, 36 months concurrent. The 3rd appellant was sentenced on the seventh charge to 12 months' imprisonment.

Grounds of appeal against conviction by the 1st and 3rd appellants

11. The first ground of appeal advanced by both appellants is that the magistrate misdirected himself in law as to the extent of the element of strict liability in offences under section 118(1) Cap.528, in paragraphs 7 and 8 of his Statement of Findings. The first particular relied upon by the appellants under this first ground was that the magistrate failed to consider whether and to hold that the phrase "for the purpose of trade or business" referred to D1's or D5's own trade or business and not possessing the discs as an employee of another's business. Section 118(1)(d) provides :

"A person commits an offence if he, without the licence of the copyright owner -

(d) possesses for the purpose of trade or business with a view to committing any act infringing the copyright.

an infringing copy of a copyright work."

12. The 1st appellant had admitted in his cautioned statement that he was a packaging worker at room 1212B for over a month. The inference from that that the magistrate must have drawn was that the 1st appellant's possession was for the purpose of the trade or business of pirated CDs of his employer. The 3rd appellant admitted delivery of inlaid cards to room 1212B but not possession of the discs. The only inference that the magistrate must have drawn from that was that the possession by the 3rd appellant was for the purpose of his own trade or business of pirated CDs, namely issuing to others.

13. At the trial, counsel for the appellants conceded that the possession was for the purpose of trade or business. In my judgment, "for the purpose of trade or business" can be for the purpose of trade or business of any person, either the defendant or his employer or any person connected with the business of the defendant or his employer. Section 118(1)(d) has subsequent to the trial been amended to make this point absolutely clear. The phrase "for the purpose of trade or business" has now been amended to read "for the purpose of, in the course of, or in connection with, any trade or business."

14. The second particular relied upon by the appellants under this first ground is that the magistrate failed to consider whether, and to hold that the phrase "with a view to committing" referred to the intention of the appellants as opposed to some other party having such a "view". The other particular relied on by the appellants under this ground is that the magistrate failed to consider and to hold that the "act infringing the copyright" in the present offence, namely "issuing to the public" was defined by the terms of section 24 as applied by section 199, Cap.528 and that therefore the prosecution had the burden of showing by evidence beyond reasonable doubt that the appellants personally "had a view to" (that is, an intention to) issue copies to the public in the circumstances defined in section 24 as applied by section 199.

15. In my judgment, this submission by Mr Tracy, on behalf of the appellants is misconceived. Section 24 and section 199 speak of section 24 being the relevant provision where one is dealing with issuing of copies to the public, but section 24 is concerned with the case of direct infringement of a copyright. Where there is indirect or secondary infringement of a copyright, then sections 30-34 of the Ordinance apply. Section 31 of the Ordinance says that :

"The copyright in a work is infringed by a person who, without the licence of the copyright owner -

(a) possesses for the purpose of trade or business.

a copy of a work which is, and which he knows or has reason to believe to be, an infringing copy of the work."

16. Therefore, in proving an offence under section 118(1)(d), the prosecution has to prove that the copy of the work which is possessed for the purpose of trade or business is an infringing copy and the defendant knows or has reason to believe that the copy is an infringing copy of the work. This was specifically found by the magistrate in his Statement of Findings when he said at paragraph 30 of his Statement of Findings :

" I found it proven beyond any reasonable doubt that each of the Defendants knew that they had in their possession optical discs that were copies of copyright works."

17. In my judgment, the phrase "with a view to issuing to the public" in the particulars of the charges is otiose. The phrase "with a view to issuing to the public" also appears in paragraph 31 of the magistrate's Statement of Findings when he made his finding that :

" Having considered all the facts and circumstances I drew the only inference open to me that these Defendants were in joint possession of these discs which were copies of copyright works for the purpose of trade or business with a view to issuing to the public."

Again the use of the phrase by the magistrate was unnecessary. It was no doubt because of that and because of the particulars of the charge alleging "with a view to issuing to the public" which led Mr Tracy to make the submission that he did. In my view, the magistrate was entitled to draw the inference that the 1st and 3rd appellants knew or had reasons to believe that the compact discs in question were infringing copies of copyright works. In my judgment, in a prosecution under section 118(1)(d), it is incumbent upon the prosecution to prove that the defendant knew or had reasons to believe that the copy of the work possessed by him for the purpose of trade or business was an infringing copy of the work.

18. The second ground of appeal is that there was no or no sufficient evidence against the appellants to establish the specific intentions required in relation to the matters pleaded in the grounds relied upon in the first ground of appeal. This ground must also fail in view of what has been said above in relation to the matters relied upon in the first ground.

19. The third ground of appeal was that the learned magistrate, in relation to the 1st appellant's appeal, erred by allowing in evidence and relying upon in his "Statement of Findings" of the following matters :

(1) At paragraph 1 of the said Findings, the sentence "They were privately represented".

(2) In paragraph 3 of the Statement of Findings, the sentence "The arresting officers were Customs Officers of the Copyright Division who were part of an operation targeting 1212B."

(3) On page 8 of the Statement of Findings when the magistrate was summarising the contents of the 1st appellant's Cautioned Statement, he said : "D1 refused to answer questions about who employed him and how many bosses there were in the company."

20. It was said that the above three matters which were improperly admitted and relied upon by the magistrate may have improperly affected him when he came to his conclusion at paragraph 20 of his Findings that he found the 1st defendant to be an untruthful witness.

21. In my judgment, there is no merit whatsoever to this ground. The learned magistrate was a professional magistrate sitting as judge and jury. The three matters complained of were statements of facts which were in fact true and, in my view, it is wholly groundless to say that because of these matters, the magistrate came to the wrong conclusion that the 1st defendant was an untruthful witness.

22. The third ground of appeal relied upon by the 3rd appellant was that the magistrate erred in holding that he was acting in joint enterprise with the other defendants. This ground can conveniently be dealt with together with the fourth ground relied upon by the 3rd appellant which is that the magistrate erred in finding that in reply to the caution, the 3rd appellant had said that the two sealed packets that he was holding were "... packing paper to be used as covers for pirated optical discs ... to be taken to 1212B." The matters relied upon in this ground are that in evidence-in-chief, the Custom Officers who arrested the 3rd appellant did not give this evidence and that the notebook entry of that officer containing this alleged verbal admission had not been adopted by the 3rd appellant by him writing words such as "I agree", "It is true" or "I understand".

23. As Mr Tse, counsel for the respondent submitted, the admissibility of this record of interview was not challenged at the trial. Also, at the end of the interview, the 3rd appellant wrote the following words :

"I, MA Chan-ting, have read the above record of interview, consisting of 3 pages. It is an accurate record of questions asked, and answers I provided."

The 3rd appellant in his evidence confirmed the accuracy of the post record.

24. In his evidence-in-chief, the officer concerned had said that in reply to the caution, the 3rd appellant said the discs were taken to there for someone. This evidence was clearly at variance with what was contained in the record of interview. But the magistrate did deal with this discrepancy in his Statement of Findings when he said :

" ... PW4's evidence in court as to the chronological order of events at this point was somewhat inconsistent with his post-record of the events. This inconsistency went to the officer's credibility and not to any other material issue. It had been almost one year since the incident had taken place. I found him to be an honest witness who was confused on a point of chronological order of events and I accepted the post-record as the reliable chronology of events at this juncture."

25. For the reasons given above, I find that the magistrate was entitled to rely upon the answer given by the 3rd appellant as recorded in the record of interview. This answer was an admission that he was taking those two packs to the Flat 1212B and that those two packs were packing paper to be used as covers for pirated optical discs. This was not the only piece of evidence against the 3rd appellant because in the car which he had driven into that building were found 30 infringing copies of copyright works. His explanation in court that he was not aware of those 30 infringing discs being in the car and that it was not he who had placed them there was rejected by the magistrate as untrue. Given the whole of the evidence surrounding the activities which were going on that day and of what was found inside Flat 1212B, in my judgment, the magistrate was entitled to find that what the 3rd appellant was doing that day was part of the joint enterprise that he had with the other defendants. In my view, the various defendants concerned with the activities which were going on that day in the Merit Industrial Centre where Flat 1212B was situated could have been charged with being jointly in possession of all the infringing copies found in that building that day, but it was tidier to charge the different defendants with different charges of possession of the infringing copies. These two grounds of appeal must therefore also fail.

Appeals against sentence

Grounds of appeal

26. The original ground of appeal against sentence relied upon by the 1st and the 3rd appellants was that the learned magistrate misdirected himself in law by holding that the maximum penalty for this offence in the magistracy was imprisonment for four years. During the hearing of the appeal and after submissions made on behalf of the respondent by Mr Tse, Mr Tracy appearing for these two appellants conceded that the maximum penalty was four years and that the magistrate was quite correct to proceed on that basis. This ground of appeal was therefore withdrawn.

27. The general ground relied upon on behalf of these two appellants was that the sentences imposed on them were excessive. The 1st appellant had the keys to Flat 1212B and was the person who was in charge of receiving delivery of numerous discs to that flat. He was also in charge of the delivery of three large trolley-loads. The magistrate correctly drew the inference that he was one of the persons in charge of the warehouse in addition to making discs deliveries. The number of discs involved in the charges against him came to more than 36,000. In my view, the total sentence of two years' imprisonment for the three charges that the 1st appellant was convicted of is neither excessive nor wrong in principle.

28. The 3rd appellant was convicted of one charge, the seventh charge, which alleged that he was in possession of 30 infringing discs. He was sentenced to 12 months' imprisonment. In my view and in the light of my comments about the propriety of the magistrate's finding that all these defendants were engaged in a joint enterprise on the day in question, the 3rd appellant was fortunate that he was only charged with the one offence. The sentence of 12 months imposed upon him was neither manifestly excessive nor wrong in principle and the appeals against sentence by the 1st and 3rd appellants are therefore dismissed.

29. The 2nd appellant at the outset of the appeal had sought leave which was granted to withdraw his appeal against the sentences passed in respect of charges one, four and five. His appeal was only against the sentence imposed upon him in respect of charge six namely, 36 months' imprisonment.

30. Ms Wong, appearing for the 2nd appellant, relies on "SJ v. Choi Sai Lok & another" [1999] 4 HKC 334 for the proposition that the correct starting point for these offences should be 18 months and that a distinction should be drawn between the proprietors of retail outlets and warehouses who commit these offences and the persons employed by them. That case decided that immediate custodial sentences should be imposed for offences such as the present offence unless the circumstances could truly be said to be exceptional. The case did not purport to lay down any tariffs for possession of infringing copies of copyright, but it was said inter alia that the differences in sentences would be justified by the number of infringing copies involved. Guidelines for this type of offence were sought in "The Queen v. Li Wan-kei and another" CACC13/1997 but the Court of Appeal declined to give them.

31. Ms Wong also made the point that because the magistrate had said in his Statement of Findings that the 2nd appellant was a person of good character and clear record, he should have been treated as such when sentence was assessed. The 2nd appellant, in fact, did not have a clear record. He had four previous convictions, all for gambling offences and these convictions were in 1993 and 1994. I found it difficult to understand why the magistrate had referred to the 2nd appellant as a person of good character and clear record. It was, therefore, quite wrong of the appellant to contend that he should be treated as a person of good character.

32. In relation to the final matter relied upon by the appellant, it is true, as was stated by the magistrate, that if the appellant had not volunteered the information after his arrest that some of the keys in his possession were keys to the Flat 710, the existence of those premises would not have been known to the investigating officer. That is, of course, true but that matter had not escaped the attention of the magistrate and therefore it was a matter which the magistrate had obviously considered when assessing sentence. The magistrate had said :

" ...He had co-operated with the officers and had volunteered the information about 710 without which the latter warehouse and discs wouldn't have surfaced in the investigation."

33. It has to be borne in mind that the number of infringing copies found on those premises totalling 96,507 was substantial. The appellant was in possession of the keys to both flats and his main tasks were to transport cartons of discs between 1212B and 710 and storing cartons of discs in his van at home until delivery instructions were received from a man Ng Ka Wai. The magistrate drew the inference that the 2nd appellant was one of the persons in charge of 1212B along with the 1st appellant, and of the premises at Flat 710. In my view, the magistrate was entitled to draw such an inference.

34. In relation to the person Ng Ka Wai, it was also contended by Ms Wong that the appellant was only an employee of Ng, and that this was borne out by the fact that there was, as an admitted fact at the trial, a cheque drawn by Ng for the payment of the January 2000 rent, rates and management fees of Flat 710. In my view, that does not necessarily conclusively show that the appellant was but an employee because Ng could have been a partner and it could have been that it so happened that he was the person who drew the cheque for the payment of that month's outgoings. Furthermore, the magistrate having considered the substantial quantity of discs, shelving, cartons, plastic bags, inlaid cards and other items found at the two flats, drew the inference that those two premises were major illicit disc distribution and transit centres.

35. Taking all these matters into account, my judgment is that the 36 months imposed by the magistrate for charge six was neither manifestly excessive nor wrong in principle. All the appeals against sentences are therefore dismissed.