HCMA 406/2009

HEADNOTE

   The scheme of the Rehabilitation of Offenders Ordinance, Cap. 297 is that the availability of a spent conviction is based on what the courts consider to be the appropriate sentence.  Such a statutory scheme would be undermined if not overthrown if the courts were to impose less than the appropriate sentence so as to make spent convictions available.  If the legislature wishes to amend the statute to make spent convictions more widely available, that is another matter, being a matter for the legislature.

HCMA 406/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 406 OF 2009

(ON APPEAL FROM ESCC 954 OF 2009)

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BETWEEN

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J U D G M E N T

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1.  The Appellant, a man aged 50 and of previous good character, pleaded guilty before Ms Bina Chainrai in the Magistrates’ Court to possessing an infringing copy of a copyright work for the purpose of or in the course of a trade or business with a view to its being used by a person for the purpose of or in the course of that trade or business without the licence of the copyright owner of that copyright work, contrary to sections 118(2A) and 119(1) of the Copyright Ordinance, Cap. 528.

2.  It is stated in the particulars of offence that the infringing copies were of two computer programmes. As to the circumstances of the case, the Magistrate said this in her Reasons for Sentence:

“3:  Facts admitted by the Appellant disclosed that at 1500 hours on 21/11/2008, officers from the Customs & Excise Department conducted an anti-piracy operation at the premises of a company trading as ‘3R Media ProductionCompany’ at Room 2204, Wai Wah Commercial Centre, No.6 Wilmer Street, Sheung Wan. The Appellant met these officers and declared himself to be the responsible person of the company. The business registration of the company disclosed that he was the owner of the company, which had been operating since 2001. The search warrant issued from Kwun Tong Magistracy was shown to him, and the purpose of their visit was explained to him. The Appellant was asked to produce the computer licences for the programmes installed in the 6 computers in the office - there were 5 desktop computers and 1 notebook computer - for inspection.  The Appellant produced the licences. The result of the inspection was that there were multiple installations in two of the desktop computers and one of the notebook computers - the Microsoft Office 2003 software with identical PID numbers were installed in these three computers.  Multiple installation of a software programme without the authorisation of the copyright owner is illegal and the multiple installed programmes were infringing copies.  There was no licence for the Microsoft Office 2003 software.  Based on such multiple installations, at least 2 copies of the Microsoft Office 2003 software were infringing copies of the programme.  These infringing copies of a copyright work were used in the company’s computers, for the purpose of their being used in the course of the trade or business of the company.”

3.  After calling for and considering a Community Service Order Report, having been provided with the sentences in similar cases for the preceding 12 months and hearing mitigation, the Magistrate fined the Appellant $15,000.

4.  The Appellant asked the Magistrate to review her sentence. It was submitted to her on his behalf that although the $15,000 fine was not manifestly excessive or wrong in principle, it should be reduced to a sum not exceeding $10,000 to be accompanied perhaps by costs against the Appellant in the sum of $5,000 to bring the total back up to $15,000. She was asked to reduce the fine to a sum not exceeding $10,000 because, by reason of section 2(1)(a) of the Rehabilitation of Offenders Ordinance, Cap. 297, a conviction cannot be spent if the penalty imposed in respect of it exceeds imprisonment for 3 months or a fine of $10,000. The Magistrate declined to reduce the fine on review.

5.  The Appellant now appeals against that fine. Five perfected grounds of appeal against sentence have been filed on his behalf. They read:

“1.  Although the learned magistrate recognised that this was a case of multiple installation of software in three computers where there was no evidence in the case of one computer that this software was an infringing copy (AB 15; part of paragraph 3), in those circumstances the sentence of $15,000 was disproportionate to the gravity of the offence (see also the brief facts at AB 11 paragraph 7 and the charge sheet at AB3).

2.  Where it was stated in mitigation (AB21g) without challenge by the prosecutor or the court and repeated in the Community Service Report (18) that the additional cost of licences for the use of the software in the additional two computers would have been $600, the fine was excessive in proportion to the loss to the copyright holder.

3.  The learned magistrate was supplied by the prosecution with details of fines imposed in of supposedly similar offences in other cases.  The only information about the offences supplied to the court was that they involved ‘company using infringing software’.  There was no information before the learned magistrate (AB22g) as to whether those other offences involved the use of entirely unlicensed software or, as in this case, unlicensed additional use of licensed software.  Although the learned magistrate correctly said that the sentencing norm was a fine (see AB16 paragraph 10), at no point did she explain why, having regard to the facts of this case, she considered a fine of $15,000 was appropriate.

4.  The learned magistrate had ordered the confiscation of all the exhibits (a computer tower, 2 computer notebooks, a monitor, a keyboard and a mouse) on the day she requested CSO reports. (One of the computers would have had licensed software).  (See AB21u & 11 paragraph 7).  Neither at the time of sentence (2 weeks later) nor in her Reasons for Sentence has she taken into account the financial implications of such confiscation.

5.  Notwithstanding the concession made by the appellant’s solicitor when seeking on review to bring the fine down to $10,000 that the fine was not manifestly excessive (AB 23k) the fine imposed was disproportionate to the criminality involved and particularly so having regard to the good character of the appellant.”

6.  As to why she dealt with the case by way of a fine, the Magistrate said this in her Reason for Sentence:

“8:  It was urged upon me in mitigation by Counsel on behalf of the Appellant that the Appellant was aged 50 years, and the sole proprietor of the company in question, which was an advertising firm.  He was married and had twin sons who were studying in New Zealand.  His company had a nett profit in the previous year of about $300,000 and he himself drew about $25,000 from the company each month.  The infringing software programmes were a gift from the suppliers of the computers in question. The other software were all licensed.  The Community Service Order report was a favourable one and recommended community service.  But having considered all the matters before me, I thought that a fine was the appropriate sentence and accordingly I fined the Appellant.”

7.  She then noted that the maximum sentence for this offence is 4 years’ imprisonment and a fine of $50,000 for each infringing copy. Here as she noted, there were two infringing copies. The statistics shown to her showed, she noted, fines ranging from $5,000 to $50,000.

8.  As to why she imposed a fine of $15,000, she said this in her Reasons for Sentence:

“Having considered, all that had been urged upon me and the contents of the report before me, the circumstances of the offence and the circumstances of the Appellant, I fined him $15,000.  In my view that was the appropriate sentence in the circumstances.”

9.  On the matter of making a spent conviction possible, she quoted the following statement from Cross and Cheung on Sentencing in Hong Kong, 5^th ed. (2007) at pp 513-514.

“It is wrong in principle, therefore, for a court to impose a disproportionate sentence in order to defeat the purpose of the Ordinance.  Conversely, a court ought not to adjust downwards an otherwise appropriate sentence simply in order to enable an accused to take advantage of the spent conviction scheme: HKSAR v. Yeung Bik-shan, MA 1183/2001.  The sentencer should disregard the effects of the Ordinance in its determination of the appropriate sentence for the offender.”

10.  In my view, that is a correct statement of the approach properly to be adopted. Quite plainly, the scheme of the statute is that the availability of a spent conviction is based on what the courts consider to be the appropriate sentence. Such a statutory scheme would be undermined if not overthrown if the courts were to impose less than the appropriate sentence so as to make spent convictions available. If the legislature wishes to amend the statute to make spent convictions more widely available, that is another matter, being a matter for the legislature. The grounds of appeal filed and urged on the Appellant’s behalf are directed to contending that the $15,000 fine was disproportionate.

11.  I do not think it right to proceed on the basis that the Magistrate was unaware of the financial implications of the confiscation which she ordered. Just because she did not refer to those implications, it is not to be thought that an experienced magistrate would be unaware of something so obvious. Nor do I think that the Magistrate had to say more than she did to explain why she considered a fine of $15,000 appropriate. All things considered, I do not think that the $15,000 fine or the way in which it was arrived at provides any proper basis on which to interfere with the sentence passed by the Magistrate.

12.  Accordingly, the appeal is dismissed.