THE QUEEN v. CHENG MA-CHOI

HEADNOTE

                Import and Export Ordinance - forfeiture - time irrelevant - Burden on respondent to establish hardship.

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

MAGISTRACY CRIMINAL APPEAL NO. 20 OF 1985

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BETWEEN

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JUDGMENT

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1. This is an appeal by way of case stated from a decision of the magistrate sitting at Fanling.

2. The questions of law for the court's decision were framed thus:

3. On 1st February 1984, the respondent and a co-defendant, TO Hung-yuen, pleaded guilty to a charge of importing unmanifested cargo, contrary to section 18(1)(a) of the Import and Export Ordinance. The goods in question were four bags of pearls, weighing 42 kilogrammes, 925 silver coins and two silver ingots.

4. They were brought into Hong Kong from China on 3rd December, 1983, on a truck driven by TO Hung-yuen. The respondent had assisted with the loading of the cargo onto the truck in China, but had entered Hong Kong separately. At the Man Kam To import control point, TO Hung-yuen, following the respondent's instructions, submitted on the import manifest that the truck was only carrying vegetables. Once TO Hung-yuen had entered Hong Kong, he again met the respondent, who was arrested while handling the goods at Fanling.

5. The respondent had promised to pay TO Hung-yuen $3,000 to bring the unmanifested cargo into Hong Kong. The respondent told the customs officer that the owner of the goods was a person named CHAN Wai-wah and gave his address. When he was contacted, Mr. Chan denied having any involvement with the goods and denied knowing the respondent.

6. The respondent admitted these facts. He and his co-defendant were each fined $10,000.

7. On 19th December a notice had been served on the respondent under section 27(3) of the ordinance, claiming that the unmanifested cargo was liable to forfeiture. A cross-notice was served on the appellant by the respondent on 20th December under section 27(5), claiming that it was not so liable.

8. On 11th May an application for forfeiture was made in Fanling Magistrates Court. The respondent was represented by a solicitor, but TO Hung-yuen did not appear in answer to the summons.

9. It was agreed that the application was made under section 28(7) of the Ordinance, which provides:

"    (7)     Upon the hearing of the application under this section, in any case other than a case referred to in subsection (6)(a) or (b) a magistrate may, if he is satisfied -

 

                order that the article, vessel or vehicle -

10. After reciting the facts and bringing the court's attention to the decision of Addison J. in R. v CHAN Kin-kwan⁽¹⁾ , in which the appellant sought unsuccessfully to set aside a forfeiture order, the Inspector of Customs applied for forfeiture of the unmanifested cargo.

11. The respondent did not give or call evidence. Nevertheless, after hearing submissions on behalf of the respondent, the magistrate ruled that ownership of the unmanifested cargo lay in the respondent and ordered that it be returned to him on payment of $5,000 to cover the costs of the Commissioner for Customs and Excise.

12. His reasons for this apparently illogical decision were stated to be:

13. The respondent has not appeared and is not represented in this appeal.

14. So far as (a) is concerned, the magistrate was clearly right. He had a discretion.

15. I do not, however, agree that the court may not have regard to the conditions under which the goods were exported from China, or that it is a matter of foreign law which must be proved by expert evidence.

16. In CHAN Kam-bor & others v R.⁽²⁾ , a case involving the attempted export of unmanifested goods from Hong Kong to China in a Chinese fishing vessel, enquiries revealed that the defendants had obtained written permission from the commune to carry dried oyster to Hong Kong for sale at Lau Fau Shan and that they entered the Colony lawfully and disposed of that cargo. They then purchased the goods the subject matter of the charge. O'Connor J. said,

"This action of their's, it appears, is contrary to the law and policy of China and would be disapproved by the Chinese authorities."

He went on to say,

"In passing sentence for an offence of facts of this nature, regard may be had to our relationships with other jurisdictions in the area and some regard should be paid to the comity of nations ..... It is clear that a continuing smuggling of articles of any type in either direction between Hong Kong and China is an irritant, tending to disturb the smooth relationship existing between Hong Kong and China."

17. This passage was cited with approval by the Court of Appeal in Attorney General v SO Chan-por and others ⁽³⁾. Roberts C.J. said at page 698,

"We agree that substantial weight can be given to the damage that is likely to be done to Hong Kong's relationship with other territories by activities of this nature."

18. As to (c), there is no doubt that the $10,000 fine is irrelevant so far as the forfeiture proceedings are concerned. Macdougall J. likewise had no doubts about the matter in Director of Immigration v CHJ Shiu-fat ⁽⁴⁾ . In that case the magistrate was of the opinion that a fine of $2,000 must have been considered by the trial magistrate in the earlier criminal proceedings to be an adequate penalty against the respondent; a forfeiture order would be a further penalty and thus cause undue hardship to the respondent. Macdougall J. held this to be wrong and said at p. 781,

"If the view taken by the learned magistrate were correct it would mean that a court would be always obliged to exercise its discretion in favour of a claimant who had been convicted and punished in respect of the earlier prosecution relating to his use of the vehicle for the carrying of illegal immigrants. This cannot possibly have been the intention of the legislature."

19. He then quoted a passage from the judgment of Hogan C.J. in Attorney General v CHIN Chek-wing ⁽⁵⁾ :

"The forfeiture provisions of this section were put into the ordinance for the purpose of enforcing it and serving as a deterrent against its contravention. They were put there to be used should the prescribed conditions arise, unless some good reason is shown to the contrary. The facts disclosed on the case stated in the present instance would not, in our opinion, justify a refusal to use them."

That was a decision of the Full Court.

20. Macdougall J. concluded,

"It seems to me to be implicit in the court's reasoning that where there is a complete absence of fault by the claimant the magistrate should exercise his discretion in the claimant's favour ..... I do not think, however, that it follows from this that where there is fault on the part of the claimant the court must necessarily order forfeiture. If good reason is shown as to why forfeiture should not be ordered, the magistrate may properly refuse to make such an order. Nevertheless, in the exercise of his discretion, he must bear in mind the purpose of the forfeiture provisions and not make an order the result of which would be to frustrate the object of the legislation or to impair its effectiveness."

21. Finally, in paragraph (d), the magistrate has failed to give any reasons - apart from the fact that the goods were not prohibited or dutiable - why it was not for the claimant to show undue hardship. Here he also ignores the authorities that are binding on him.

22. In R. v CHAIN Kin-kwan ⁽¹⁾ - the case which was actually cited to the magistrate - Addison J. said,

"For an appellant to succeed he must show undue hardship. All orders of forfeiture involve hardship."

Later he said,

"Mr. Hingorani also contends that undue hardship results because of the considerable financial loss attaching to the appellant from the order of forfeiture. He is not a man of substantial wealth ..... There is a fallacy in this argument, as I see it, in that it would put a premium on a person always to smuggle or attempt to smuggle goods into another country of a value far in excess of his financial wealth. Should these articles be seized he would always be able to say that he suffers ruin."

He concluded,

"He willingly took a huge gamble and the hardship he presently suffers can in no way be said to be disproportionate to the size of his gamble. In other words it is not an undue hardship."

23. In R. v WONG Chor-yen ⁽⁶⁾ Macdougall J. said at page 8,

"The appellant was not required to show a negative. He was required to prove affirmatively that he was the owner of the goods. If he failed to call sufficient evidence to establish that claim to the required standard of proof he cannot be heard to complain that the court did not find in his favour."

24. It cannot be said that the mere serving of a notice on the respondent under section 27(3) confers ownership of the goods upon him. Unlike the case of a vessel or a vehicle, ownership of which is easily ascertainable, the Commissioner of Customs is not in a position to know who owns an article that has been seized in these circumstances. The preceding sub-section deals with the commissioner's discretion to restore any article, vessel or vehicle to the person who appears to him to be the owner. I think the omission in sub-section (3) of the words "The person who appears to him to be" must be an error by the draftsman.

25. It is common sense that there can be little hardship in an order for forfeiture unless the respondent is the owner of the goods. See HUI Yen v. R.⁽⁷⁾ . Here the evidence is all the other way. The respondent told the Customs Officer, when the cargo was seized, that he was not the owner. He did not take the opportunity of going into the witness box and claiming that, in fact, he was the owner. I do not understand, therefore, how the magistrate could have come to his conclusion as to the ownership of the goods.

26. In HUI Yen (above) Mayo J. said,

"There was no satisfactory evidence before the magistrate upon which he could make a determination as to whom the goods belonged to. In the absence of satisfactory evidence as to ownership I do not think it was open to the magistrate to make any order for the return of the goods to the owner thereof."

27. In the present case the respondent smuggled a valuable cargo out of China and was caught by the Hong Kong Customs. He then denied that he owned the goods. No good reason was shown why forfeiture should not be ordered. I am satisfied that the goods should not have been returned to the respondent.

28. It follows that both questions must be answered in the negative. I also order that the goods be forfeited to the Crown.

(1)    Crim. App. No. 652/83

(2)    Crim. App. No. 239/81

(3)    1981 HKLR 686

(4)    1980 HKLR 780

(5)    1961 HKLR 479

(6)    Crim. App. No. 349/83

(7)    Crime App. No. 91/81