HKSAR v. CHEUNG CHI CHIU

HCMA208/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.208 OF 2004

(ON APPEAL FROM FLMP 176 OF 2003)

----------------------

----------------------

-------------------------

J U D G M E N T

-------------------------

1. The appellant was convicted on 15 August 2003 on his own plea of importing unmanifested cargo into Hong Kong, namely 188 plastic sieves and 5,720,000 pieces of cigarette, contrary to s.18(1)(a) of the Import and Export Ordinance, Cap.60 "the Ordinance".

2. The admitted facts showed that on 26 March 2003, the appellant had driven a container on a lorry into Hong Kong and upon an inspection the above dutiable cigarettes were found hidden behind the plastic sieves. The cigarettes were valued at $8,580,000 and the duty evaded by the importation unmanifested was $4,598,880.

3. The appellant admitted that he had agreed to transport the goods into Hong Kong for another for the sum of $6,000. The appellant was, upon conviction, sentenced to 10 months' imprisonment.

4. On 5 May 2003, a Consent Order was made for the temporary release of the tractor and the trailer together with the two keys to the tractor upon the appellant paying a security deposit of $35,000 in respect of the total vehicle and the keys.

5. One of the terms of that order was that the appellant should return the vehicle, keys and trailer to the Customs and Excise Department ("C&E") three working days before the forfeiture hearing.

6. The amount of the security deposit was arrived at upon a valuation produced by the appellant which showed that the tractor portion of the tractor and trailer was valued at $20,000 and the trailer was valued at $15,000.

7. The vehicle, keys and trailer were released to the appellant on or about 5 May 2003, and the appellant returned the vehicle and keys to C&E on 7 July 2003, but failed to return the trailer.

8. At a hearing on 18 December 2003 and 7 January 2004, the prosecution applied for forfeiture of the tractor and keys and forfeiture of the deposit under s.29 of the Ordinance.

9. A finance company, Pacific Finance (Hong Kong) Limited, as the owner of the tractor portion of the vehicle under a hire purchase agreement, appeared as claimant and an order was made releasing to that finance company the tractor together with its keys upon payment of $20,000.

10. The appellant asked for a refund of the security deposit, and the court made an order that the deposit of $35,000 be forfeited.

11. The appellant now appeals the forfeiture of that security deposit.

12. Under s.29(2) of the Ordinance a court may forfeit the security deposit paid where the article in respect of which the security deposit was lodged is not surrendered upon the due date to the C&E. In her reasons, the magistrate held that the forfeiture of the security deposit and the forfeiture of items held by C&E pursuant to the Ordinance are punitive and are to act as a deterrent. With this I agree.

13. What I must consider, however, is that where a value is reached for a piece of property, which is released on a security deposit, whether the forfeiture ordered by the court should exceed the value of the item which is used to arrive at the amount of that security deposit. I accept that the forfeiture of the item itself is punitive in nature, but I am unable to accept the argument of the magistrate that the amount forfeited by way of security deposit should exceed the value of an item covered by the security deposit.

14. Miss Yam for the respondent accepts that the forfeiture should relate only to the value of the trailer, being the sum of $15,000. Mr Ng for the appellant agrees.

15. This appeal is allowed to the extent that the sum of $20,000 being that part of the security deposit ordered to be paid by the appellant which related to the tractor portion of the tractor and trailer should be returned to the appellant and that the forfeiture of the security deposit relating to the trailer in the sum of $15,000 shall remain forfeited.