HKSAR v. CHU LAI-MING KATHY

[English Translation – 英譯本]

HCMA 355/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 355 OF 2013

(ON APPEAL FROM KCCC NO. 481 OF 2013)

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JUDGMENT

Introduction

1.  On 12 September 2013, after hearing the case, I adjourned it to today for delivery of judgment.

Background

2.  The appellant Chu Lai-ming (the defendant at the trial) was charged with carrying on business as a travel agent without a licence, contrary to sections 9(a) and 48(1)(a) of the Travel Agents Ordinance, Cap. 218, Laws of Hong Kong.  The particulars of the offence were that on the 4^th day of October 2012, at Room 1012, 113 Argyle Street, Mong Kok, in Hong Kong, the defendant carried on business as a travel agent without a travel agent’s licence granted under the Travel Agents Ordinance.

3.  The appellant pleaded not guilty and was tried before Deputy Magistrate Chu Chung-keung.  On 7 May 2013, the magistrate found her guilty of the offence and fined her $4,000.

4.  She now appeals against her conviction.

Facts

5.  The appellant was the person-in-charge of a wedding services company called Amazing Wedding (hereinafter referred to as “the company”) which was wholly owned by her.  The services provided by the company included arranging for its customers to marry overseas and for the holding of wedding ceremonies.  It also advertised the so-called “one-stop service” and wedding “package” services (i.e. the provision of a whole set of agreed and prearranged wedding services), including arrangements for solemnizing marriage overseas, provision of wedding dresses and wedding suits, photo-taking and video-recording at the scene, make-up, vehicular transport, application for marriage certificates; and in addition, air tickets to the destination overseas and hotel rooms would be booked for the customers.  In respect of the air ticket and hotel room booking services, there were contractual arrangements between the company and Westminster Travel Limited (“Westminster”) (a licensed travel agency), under which Westminster was to book air tickets and hotel accommodation for the company’s customers, and Westminster would give the company a concessionary rate of 2 to 3% applicable to air tickets booked for long-term customers, but this was not a rebate.  Westminster would not issue to the company’s customers any documents attesting to the giving or receiving of any money, while the company would collect payments from its customers to pay Westminster.

6.  The main ground of defence relied on by the appellant during the appeal is the same as the one she relied on at the trial: the air ticket booking and hotel accommodation booking services provided by her company for the customers were free of charge and no money was earned from such services, so the company was not carrying on business as a travel agent.  In her evidence the appellant emphasised that the company provided overseas wedding one-stop service, by which it meant arrangements would be made for holding wedding ceremonies overseas, photo-taking and video recording at the scene and make up, that money would be earned from those services but that no money was earned from services related to hotel accommodation and air tickets.

Magistrate’s reasons for convicting appellant

7.  The guilty verdict given by the magistrate was based on the above-mentioned facts which were virtually undisputed and on his analysis of the provision which the appellant was alleged to have contravened.  He said:

“37. The court considered that the definition of ‘business’ needs not involve any monetary gain. The Business Registration Ordinance, Cap. 310, Laws of Hong Kong, deals with business registration. It is understandable that the business referred to in that Ordinance means commercial business carried on for the purpose of gain. Generally speaking, it is not necessary that ‘business’ must involve profit-making and benefit-gaining. I agreed with the arguments advanced by the prosecution in its submission. The circumstances in which a particular trade is carried on are different from those in which other trades are carried on, and the facts of a particular case are different from those of other cases. The court was to look into the facts of the present case. In the present case, the wedding services provided by the appellant included arrangements concerning hotel accommodation and air tickets. In other words, part of the services provided by the appellant’s company was to book hotel rooms and air tickets for the customers. That is to say, these services were part of the business carried on by the appellant and this part of her business was a travel agent’s business. The defence counsel referred to the organization of study tours by a school, but the nature of the appellant’s business was different from the nature of the organization of study tours. Generally, in a school, lessons are given but no hotel accommodation booking service or air ticket booking service is provided. Study tour is a kind of extra-curricular activity and the tuition fees do not include expenses for hotel accommodation or air tickets. That said, in each particular case there is bound to be some features which are different from other cases. The court’s view was that regardless of whether the appellant made any profit from the hotel accommodation booking and air ticket booking services which she provided for the customers, she had to obtain a licence before she could engage in such activities. That is to say, even if the appellant did not obtain any benefit from such activities, it is still true that she committed the offence stated in the charge. In any event, the court found that the hotel accommodation booking and air ticket booking services provided by the appellant for her customers facilitated her business transactions and solicitation of customers, and that the appellant did gain benefit and profit from them. There was nothing in the appellant’s case which could exempt her from holding a licence. Even if under the law the definition of ‘business’ is raised to such a high standard that in order to classify an activity as ‘business’ there must be benefit gained and profit made, the services provided by the appellant still fell within the meaning of ‘business’ and she could be regarded as having contravened the law.

38. The undercover police constable, namely PW2 went to the appellant’s company to investigate without disclosing his police identity.  He was served by a staff member of the appellant’s company, who showed him the leaflets, exhibits P4 and P5 and explained to him their contents.  Actually, this could already prove that hotel accommodation booking and air ticket booking services were included in the wedding services provided by the appellant’s company.  If a customer specifically instructed that he did not require them to make any arrangement concerning hotel accommodation or air tickets, that would be a special arrangement.  The appellant, being the proprietor of the company, did contravene the law.  Furthermore, the contents of the cautioned statement made by the appellant also proved that hotel accommodation and air tickets were included in the services provided by the appellant’s company.  That was a separate item of evidence which proved that the appellant did contravene the provision.  I found that the prosecution had proved beyond reasonable doubt that the appellant did commit the offence.  Without the least hesitation, I convicted the appellant as charged.”

Grounds of appeal

8.  Mr. David Iu, for the appellant, put forward four grounds of appeal.  Grounds of appeal (3) and (4) are about findings of fact and since I consider that they have no bearing at all on the prospects of success of this appeal, I deal with them first.

9.  Ground of appeal (3) is a complaint that the magistrate erroneously found that if a customer of the appellant did not require them to make any arrangement concerning hotel accommodation or air tickets, that would be a “special arrangement”.  Mr. Iu submitted that the magistrate distorted the defendant’s case and evidence.  According to the defendant’s evidence, if a customer of the company did not require them to book hotel accommodation or air tickets for him, that was the customer’s own decision freely made by the customer himself as a consumer, and that the company would not give the customer any discount or concession in this respect.  Mr. Iu therefore argued that since it was the customer’s own decision freely made by the customer himself, that had nothing to do with the company or its mode of operation.

10.  Actually, the defendant’s evidence was that the hotel accommodation booking and air ticket booking services were quite troublesome, and that the customers could freely make their own decisions as to whether they would require the company to do the bookings for them.  The phrase “special arrangement” used by the magistrate means that if a customer, by exercising his own free will, made the decision not to use the company’s services and made other arrangements concerning hotel accommodation and air tickets, such arrangements would be different from the one-stop service and package services provided by the company.  Indeed, they differed from the services offered by the company generally.  There was no distortion of the defendant’s case or her evidence, nor was there any error as to the facts.

11.  Ground of appeal (4) is an allegation that the magistrate erroneously, arbitrarily and without any reason rejected the evidence of the third defence witness DW3.

12.  In HKSAR v Cheung Yu-kay [transliteration of 張裕驥] HCMA 186/2013 (Date of Reasons for Judgment: 9 May 2013, unreported), I said:

“14. As regards whether a magistrate should accept the evidence given by a prosecution witness and reject the appellant’s evidence, this is a decision which should be made by the magistrate in respect of the relevant facts. The Court of First Instance has repeatedly said that a magistrate has the benefit of having seen and heard the witnesses and observed their demeanour and the manner in which their evidence is given, so that in assessing the veracity, credibility, reliability of each witness and the weight to be attached to the evidence of each witness, the magistrate enjoys an immense advantage when compared with the appellate court. Whether a witness is credible and reliable is purely a matter for the trial magistrate to decide. The appellate court will not and should not disturb findings made by a magistrate unless the finding in question is manifestly unreasonable, illogical, contrary to the inherent probabilities, not supported by any evidence, or even contradicts the evidence, or the magistrate, in dealing with the evidence, omitted, failed to consider or analyse, or made wrong references to, material matters.”

13.  I must point out that when it comes to decide whether to accept the evidence of a certain witness or to reject the evidence of another witness, the magistrate enjoyed a special advantage.  Moreover, I do not agree with Mr. Iu’s argument that the magistrate employed markedly different criteria in assessing the prosecution witnesses’ evidence and DW3’s evidence, or that he examined the evidence of the defence witnesses in accordance with a higher standard.

Grounds of appeal (1) and (2)

14.  The focal points of this appeal are actually the following opinions expressed by the magistrate:

(1) Regardless of whether the defendant made any profit from the hotel accommodation booking and air ticket booking services which she provided for the customers, she had to obtain a licence before she could engage in such activities, otherwise she committed the offence under section 9(a) of the Travel Agents Ordinance, namely carrying on business as a travel agent without a licence.

(2) The finding made by the magistrate that even if under the law the definition of “business” is raised to such a high standard that in order to classify an activity as “business” there must be benefit gained and profit made, the services provided by the defendant still fell within the meaning of “business”.

15.  These two points can be found in paragraph 37 of the magistrate’s Statement of Findings quoted above. Grounds of Appeal (1) and (2) are that in holding/making these opinions/findings the magistrate committed errors of law.  The following is Mr. Iu’s submission relating to these two grounds:

“Ground of appeal (1)

12. Section 4(1) of the Travel Agents Ordinance, Cap. 218, Laws of Hong Kong, provides that:-

“Subject to subsection (2), a person carries on business as an outbound travel agent if, in Hong Kong, he carries on the business of obtaining for another person —— (Amended 10 of 2002 s. 4)

(a) carriage, by any means of conveyance, on a journey which is to commence in Hong Kong and which thereafter is to take place mainly outside Hong Kong; or

(b) accommodation at a place outside Hong Kong for which payment is, or is to be, made to that person by or on behalf of that other person of an amount on account of the cost of that accommodation.”

13. In other words, according to this provision, A (which stands for the appellant) carries on business as an outbound travel agent and is subject to the regulation and control of the Ordinance if and only if she carries on a business involving overseas journeys and overseas accommodation arrangements.

14. Under section 2(1) of the Business Registration Ordinance, Cap.310, Laws of Hong Kong:-

“business”（商業、業務）means any form of trade, commerce, craftsmanship, profession, calling or other activity carried on for the purpose of gain and also means a club; (Amended L.N. 88 of 1975; 32 of 1975 s.2)

15. In other words, according to this provision, business must involve benefit and gain.

16. In the present case, A obtained no profit or benefit at all from the arrangements made concerning hotel accommodation and air tickets.

17. At the trial, the prosecution did not dispute this point.

18. Although definitions of “business” are also provided in other Ordinances apart from the Business Registration Ordinance and according to those definitions, non-profit-making activities can be regarded as “business”, as far as this case is concerned, the Business Registration Ordinance is the Ordinance most pertinent to the facts and circumstances of this case.

19. It is clear that there are different and contradictory definitions of “business” in different Ordinances.

20. The court should apply to A’s case the definition most beneficial to A.

21. Essentially, A’s position is that A did not obtain any benefit or profit at all from the activities in question, so A has never carried on business as an outboard travel agent, therefore she did not commit the offence stated in the charge sheet.

Ground of appeal (2)

22. The magistrate committed an error of law in that he erroneously found that even if under the law the definition of ‘business’ is raised to such a high standard that in order to classify an activity as ‘business’ there must be benefit gained and profit made, the services provided by A still fell within the meaning of ‘business’.

23. The magistrate… in paragraph 37 of the Reasons for Verdict [sic] said: “In any event, the court found that the hotel accommodation booking and air ticket booking services provided by the appellant for her customers rendered it easier for her to solicit customers [the corresponding Chinese characters are有助上訴人較易招來顧客], and that the appellant did gain benefit and profit from them.  There was nothing in the appellant’s case which could exempt her form holding a licence.  Even if under the law the definition of ‘business’ is raise to such a high standard that in order to classify an activity as ‘business’ there must be benefit gained and profit made, the services provided by the appellant still fell within the meaning of ‘business’ and she could be regarded as having contravened the law.”

24. The above finding made by the magistrate was wrong.

25. First of all, the hotel accommodation booking and air ticket booking services provided by A for her customers did not necessarily facilitate her business transactions and solicitation of customers [the corresponding Chinese characters are有助A交易招來顧客].  According to A’s evidence … A relied on her Wedding Package to attract customers.  The attraction which A publicized was her good reputation, not the air ticket booking and hotel accommodation booking services which were provided for free for the customers.

26. Moreover, no direct relationship existed between whether the solicitation of customers was rendered easier and whether benefit and profit were gained.

27. Furthermore, the Travel Agents Ordinance does not expressly provide that if a defendant attracts customers by providing hotel accommodationbooking and air ticket booking services for them, such services shall be regarded as ‘business’, and that the defendant commits an offence.

28. All in all, the magistrate’s finding was wrong.”

16.  On behalf of the respondent, Ms. Mok, Acting Senior Public Prosecutor, submitted in reply that in Cap. 218, there was no definition of “business”, nor was there any stipulation that monetary gain was necessary when determining whether a “business” was carried on.

17.  Ms. Mok also referred to the definitions of “business” in other Hong Kong ordinances:

          (a) Section 54 of the Evidence Ordinance, Cap. 8: — “business”（業務）includes any activity regularly carried on over a period of time, whether for profit or not, by any body (whether corporate or not) or by an individual.

          (b) Section 2 of the Sale of Goods Ordinance, Cap. 26: — “business”（業務） is defined to be including a profession and the activities of a public body, a public authority, or a board, commission, committee or other body appointed by the Chief Executive or Government.

          (c) Section 2 of the Partnership Ordinance, Cap. 38: — the meaning of “business”（業務） includes every trade, occupation or profession.

          (d) Section 2 of the Transfer of Business (Protection of Creditors) Ordinance, Cap. 49: — “business”（業務）means a business, or any part thereof, consisting of a trade or occupation (other than a profession) whether or not it is carried on with a view to profit.

          (e) Section 2, Interpretation and application, of the Business Registration Ordinance, Cap. 310: — “business”（商業、業務）means any form of trade, commerce, craftsmanship, profession, calling or other activity carried on for the purpose of gain and also means a club.

18.  Ms. Mok emphasized that the definitions of “business” set out above showed that only in section 2 of the Business Registration Ordinance, Cap. 310, was “business”（商業、業務）defined to be an activity carried on “for the purpose of gain”, no other provisions in other Ordinances required that “business” had to involve gain or monetary benefit, that therefore generally speaking, profit or monetary benefit was not necessarily an ingredient of “business”, and that there was no indication in the Travel Agents Ordinance, Cap. 218, that the presence of monetary profit or benefit was necessary for something to be defined as “business”.

19.  Since the Travel Agents Ordinance does not provide any definition for “business”, recourse should be had to section 19 of the Interpretation and General Clauses Ordinance, Cap. 1, Laws of Hong Kong, and the word “business” should be given a fair, large and liberal construction and interpretation:

“An Ordinance shall be deemed to be remedial and shall receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Ordinance according to its true intent, meaning and spirit.”

20.  There being no definition of “business” in the Travel Agents Ordinance, the requirement that there must be profit should not be added to the meaning of “business”, because by so doing a narrow interpretation would be imposed on the word “business” and its meaning would be unduly restricted, and that is contrary to the intent and spirit of section 19.

21.  The Travel Agents Ordinance is to “provide for the control and regulation of travel agents, the appointment of a Registrar of Travel Agents, the establishment of an Advisory Committee on Travel Agents, the licensing of travel agents, the establishment of a reserve fund and a Board to administer the fund, the imposition of levies on travel agents and for matters connected therewith or incidental thereto.”  (see the long title of the Travel Agents Ordinance).  The ultimate purpose of the Ordinance is to protect the interests of consumers.

22.  This can be illustrated by the following example: Someone set up a company, which books air tickets and hotel accommodation for customers free of charge.  This company goes so far as to give its customers discounts on air tickets and hotel accommodation so much so that it suffers a loss.  However, the nature of the business carried on by this company is the same as the business of an outbound travel agent.  In order to protect consumers’ interests, it has to be subject to the control and regulation of the Travel Agents Ordinance.

23.  The respondent’s view is that when a person or a company books air tickets and hotel accommodation for others, even if the services are provided for free, so long as such activities are carried on a regular basis, then regardless of whether such activities are for profit or not, that person or that company is carrying on business as an outbound travel agent, and that therefore even if the court accepts that the defendant did not make any profit or obtain any monetary benefit from the air ticket booking and hotel accommodation booking services which she provided for the customers, what she did was carrying on business as an outbound travel agent.

24.  In my judgment, the respondent’s view on “business” is correct.  If, by providing free travel agency service, the agent or agency concerned can then be exempted from the control and regulation of the Travel Agents Ordinance, this will go against the Ordinance’s purpose of protecting consumers’ interests or undercut its potency.

25.  I must specifically point out that I do not agree with Mr. Iu’s interpretation of the word “business”. As regards the “business” in the Business Registration Ordinance, Cap. 310, Laws of Hong Kong, both of the Chinese terms“商業”[commerce] and“業務”[business] are included in the meaning of the English word “business”.  From this it can be seen that that Ordinance deals with commercial business, not just business.  For this reason, under that Ordinance “business” must be for the purpose of gain.  The respondent has referred to other Ordinances.  None of them rules out the possibility of a business not carried on for profit or for the purpose of gain.  I find that the business which is subject to the control and regulation of the Travel Agents Ordinance, Cap. 218, is not necessarily a business carried on for the purpose of gain.

26.  Furthermore, I do not agree with Mr. Iu’s argument that the court should apply to the defence case the definition most beneficial to the defendant.  When the meaning of the legal provision in question is clear, this argument is of no assistance to the court.

27.  Before I leave this issue, I have considered whether the wording of section 4(1) of the Travel Agents Ordinance (see paragraph 12 of Mr. Iu’s submission set out in paragraph 15 supra) can support the appellant’s argument, since this provision is worded in this way:

“…任何人在香港經營以下業務，即屬經營外遊旅行代理商業務…

… a person carries on business as an outbound travel agent if, in Hong Kong, he carries on the business of obtaining for another person…”

[The following discussion is based on the quoted Chinese characters.] The characters 經營 seem to suggest commercial business, and the characters used in this provision are“旅遊 [travel] 代理 [agent] 商 [businessman, merchant, trader]”業務 [business], not just“旅遊 [travel] 代理 [agent]”業務 [business]. After consideration, I believe what the provision says is that if the conditions laid down in this provision are fulfilled, then the person concerned carries on business as an outbound travel agent. The character 商 [businessman, merchant, trader] does not occur in the conditions, so it should not affect the interpretation of the word 業務 [business]. As for the characters 經營, although usually they collocate with 生意 [trade, business], 商業 [commerce], but they just mean to start and carry on doing something and doing something regularly, so they cannot affect the interpretation of the characters 業務 [business] themselves.

28.  I also fully endorse the magistrate’s opinions as to whether the hotel accommodation booking and air ticket booking services which the defendant provided for the customers were provided for the purpose of gain.  Such services were constituent parts of the one-stop service offered by the defendant’s company and were also essential elements of the “package” services.  The magistrate found that the hotel accommodation booking and air ticket booking services facilitated the appellant’s business transactions and solicitation of customers, and that the appellant did gain benefit and profit from them.  Ms. Mok submitted that judging from all the evidence, the one-stop marriage service (including booking air tickets and hotel accommodation for the customers) provided by the appellant was surely business carried on for the purpose of gain.  Obviously, the booking of air tickets and hotel accommodation for the customers was one of the attractions of the one-stop service provided by the company and was also one of the services contained in the whole package of services.  Westminster would offer discounts to long term customers, including the appellant’s company.  A customer who booked air tickets and hotel accommodation on his own probably had to pay a higher price.  The appellant’s company booked air tickers and hotel accommodation for the customers because they wanted to persuade the customers to buy their wedding package.  Their purpose was to make profit.  The gist of the appellant’s grounds of appeal is in effect the suggestion that the air ticket booking and hotel accommodation booking services should be separated from other services in the whole wedding package.  Such approach was not only contrary to the evidence, but was also unrealistic.  I agree with her views.  Mr. Iu submitted on behalf of the appellant that no benefit or profit was derived from the air ticket booking and hotel accommodation booking services, and that such services were provided free of charge or even on a voluntary basis.  He went on and argued that if such services were used to attract customers, the purpose was to publicize the good reputation of the company, not to publicize the voluntary air ticket booking and hotel accommodation booking services.  I consider that these arguments, for example the argument that the purpose was only to publicize the good reputation of the company (impliedly suggesting that the purpose was not to promote the sales of the company’s services), are nothing but sheer sophistry, which are destructive of the real meaning of the word “voluntary” and constitute an insult to that word.  The conclusion I draw is that the purpose of the inclusion of the air ticket booking and hotel accommodation booking services, out of which the appellant gained no profit, in the wedding package was nevertheless still profit making.

Conclusion

29.  For the above reasons, I dismiss the appeal and affirm the conviction.