HKSAR v. LAI KAM CHEONG, LAWRENCE

HCMA115/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.115 OF 2002

(ON APPEAL FROM TWCC 1845 OF 2001)

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J U D G M E N T

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1. The appellant was convicted by Mr C.C. Poon on 4 January 2002 at Tsuen Wan Magistracy of the offence of possession for sale goods to which a forged trade mark was applied, contrary to section 9(2) of the Trade Descriptions Ordinance, Cap.362 ("the Ordinance").

2. The particulars of the charge are that on 27 July 2000 at Champion Office Supplies Company Limited in Kwai Chung, the appellant had in his possession for sale goods namely 2,550 ink cartridges, to which a forged trade mark, namely "Epson" was applied. He now appeals against the conviction.

The prosecution's case

3. At the trial, there was no dispute that on the day in question, Customs officers went to the appellant's company and there seized 2,700 ink cartridges, bearing the trade mark "Epson", out of which 2,550 were subsequently found by the expert witness to be counterfeits. The seized goods had been purchased by the appellant's company from another company. The expert witness was in fact the manager of Epson Hong Kong Limited. In the course of his evidence, he produced a flyer which had been printed by Epson and gave the address of the Epson Information Centre. In the same flyer was stated the names of 16 companies and their addresses and these were described as "Epson stations to recognize genuine goods". One of the companies stated was Maxland Computer situated at Kowloon Plaza in Castle Peak Road.

The defence case

4. The appellant gave evidence that he was the proprietor of his company which was established about 10 years ago and employed about 10 to 20 workers. It occupied about 7,000 sq. ft in two offices at the address in Kwai Chung. The seized goods had been purchased from a company whose contact person became acquainted with the appellant about three years ago. The appellant's company was a stationary wholesaler dealing in a whole range of stationary items and the seized goods were first purchased from the other company in January 1999 and thereafter his company purchased from this company on 30 to 40 occasions. He said that his company's gross turnover was about $20 million each year and the company from whom he bought the seized goods dealt in parallel products. He said that in the middle of 1998, the contact person of the other company brought some Epson ink cartridges to the appellant's company to promote them. She said that those were parallel goods. He took the goods to Maxland Company for examination and the personnel at Maxland took the goods inside for examination and when they brought them out again, they said that the goods were "Okay". He said he had done this on a number of occasions and on each occasion, the staff said that the goods were genuine goods. There were five different models in the goods which were seized by the Customs and Excise, so the appellant said he took each different model every time he received a sample to Maxland for examination. If the models were the same, he would not take them for examination on re-ordering the same model. If, however, the model was a different model, he would still take the sample to Maxland for examination again. In so far as the seized goods were concerned, he had not taken those actual goods for examination because he had taken samples of those models to Maxland for authentication when they were first submitted to him.

5. On the day of the appellant's arrest, he gave two statements to the Customs and Excise officers. In the first statement, he chose to remain silent. After the first statement was completed, the appellant telephoned his lawyer and told him about the incident. After hearing what the appellant said, the lawyer said he (the lawyer) would not have to attend at the Customs and Excise offices and he told the appellant to tell the truth because he was doing an honest business and he had nothing to fear. So when the appellant gave his second statement, he was very cooperative with the officers and whatever he was asked, he told them the truth, incident by incident, without holding anything back. In the second statement, the appellant was asked 31 questions by the officer, each of which he answered. In the appellant's answers, not once did he mention that he had taken the seized goods or samples of the same models as the seized goods to Maxland Company for authentication . In addition, in question 28, he was asked this question :

"Q(28): Then did you take the suspected counterfeit ink cartridges for Epson printer seized by the Customs to Epson HK Ltd or the distributor to check if there are any problems with the batch of goods and if (they) are genuine goods or counterfeit goods?

A(28): No, (I) didn't take (them) to (them)."

The magistrate's findings

6. The hearing was completed on 28 December 2001. The magistrate did not announce his verdict until seven days later. He gave oral reasons in court for his verdict. He summarized the appellant's case and mentioned that the appellant's evidence was that he had taken the sample provided by the seller to the Epson authorized dealer for authentication and found the provided sample to be a genuine Epson product. The magistrate also mentioned that the appellant said that he would do so every time he bought goods of a different model from the seller for the first time. He mentioned that the appellant testified that he would not do so on re-ordering as goods appeared to be of the same packaging and from the same place of manufacture. The magistrate concluded that he could not attach any reasonable weight to the appellant's evidence because there was nothing to confirm the source of the provided sample and he questioned whether the sample really did come from the alleged authorized dealer in Singapore. He therefore rejected the appellant's case and found that the appellant failed to prove a statutory defence under section 26(1) and section 26(4) of the Ordinance.

The statutory defences

7. Under section 26 of the Ordinance in sub-section 1, it is stated that :

"(1) In any proceedings for an offence under this Ordinance it shall ... be a defence for the person charged to prove

(a) that the commission of the offence was due to a mistake or to reliance on information supplied to him or to the act or default of another person, an accident or some other cause beyond his control; and

(b) that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself or any person under his control."

In sub-section 4, it is stated that :

"In any proceedings for an offence under section 9(2) it shall be a defence for the person charged to prove that he did not know, had no reason to suspect and could not with reasonable diligence have ascertained, that a forged trade mark had been applied to the goods or that a trade mark or mark so nearly resembling a trade mark as to be calculated to deceive had falsely been applied to the goods."

Grounds of appeal

8. The appellant, through his counsel, has advanced two grounds of appeal, the first of which was that the magistrate erred in finding that the appellant had not exercised or that he had failed the required standard of diligence for the purpose of the statutory defences available to him. One of the particulars of that ground was that the magistrate wrongfully rejected the case of the appellant that he had taken the provided samples for authentication. Seven matters are then listed as matters which the magistrate failed to take into account. The second ground of appeal was that the magistrate erred in law in that he wrongfully considered that the appellant was required to take positive action to ensure that the goods delivered to him would come from "the authorized dealer" or alternatively "any authorized dealer" who had supplied the provided sample.

Findings

9. The appellant was represented at the trial as he was on the appeal by Mr Yeung. All the points which the magistrate is now alleged to have failed to take into account were testified to by the appellant and were mentioned by counsel to the magistrate in his final address. There is nothing to suggest that the magistrate failed to consider any of these matters before coming to his decision. In the light of the fact that throughout the second statement when the appellant claimed he was trying to be as cooperative with the Customs officer as he could, he failed to mention taking of the samples to Maxland for authentication and in answer to a direct question, he said that he had not taken any of the samples for authentication, it is hardly surprising that the magistrate rejected that aspect of the appellant's case. The magistrate was entitled to come to that conclusion. As Keith J said in The Queen v. Hui Kee Fung, HCMA 196/1994 at page 7 :

"... appeals from decisions of magistrates on questions of fact should not be regarded by the litigants as simply another opportunity to re-try the facts. An appeal to the High Court is not a rehearing of the case. The Judge does not even see the witnesses. It will be rare indeed for a Judge to say that the findings of fact made by the magistrate were so contrary to the weight of the evidence that doubts as to the correctness of the magistrate's findings exist."

10. The second ground of appeal is that the learned magistrate erred in law in that he wrongfully considered that the appellant was required to take positive action to ensure that the goods delivered to him would come from the authorized dealer or alternatively any authorized dealer who had supplied the provided sample. In my judgment, there is nothing to this ground of appeal. The magistrate had, after due consideration, rejected the defence that samples of different models were taken to Maxland for authentication. In the circumstances of this case, I find that I need not decide on whether the magistrate's comment is correct that even putting the appellant's case at its highest, he was doubtful if what the appellant did amounted to reasonable diligence, in the context of that phrase as it is used in section 26 sub-section 4 of the Ordinance mentioned above. Each case depends upon its own facts.

11. The appeal against conviction is hereby dismissed.