HKSAR v. NG WING FAI

CACC 261/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 261 OF 2000

(ON APPEAL FROM DCCC 368 OF 2000)

________________

________________

J U D G M E N T

________________

Hon Mayo Ag. CJHC (giving the judgment of the Court):

1. The applicant was charged with one offence of falsely applying to goods a trade mark, contrary to section 9(1)(b) of the Trade Descriptions Ordinance, Cap. 362 ("the Ordinance") and two offences of applying a false trade description to goods, contrary to section 7(1)(a)(i) of the Ordinance.

2. After a trial in the District Court before H.H. Judge Day the applicant was found guilty of the section 9 offence and one of the section 7 offences. The prosecution did not proceed with the second section 7 offence i.e. the third charge and it was dismissed. The Judge sentenced the applicant to 2 years 3 months imprisonment on both counts and ordered that the sentences be served concurrently. The applicant now seeks leave to appeal against his convictions.

3. The offences arose out of a raid which was conducted by the Customs and Excise Department on 7 August 1998 at three separate premises in Kowloon Bay. They are all in close proximity to each other. The Judge adopted for convenience the approach used by the prosecution of referring to the separate premises as Units A, B and C.

4. Unit A is essentially the office premises of a firm trading under the name Cyberasia Technology Company ("Cyberasia"). This is a sole proprietorship of the applicant. However at the time of the raid the applicant was in Unit B with a man called Hung Kim-lung. The Judge described what was found in Unit B at p. 2 of his reasons for verdict:

"... among other things were found several thousand outer cases for Central Processing Units (CPUs), bearing a false 'Intel' trademark, a number of genuine Intel CPUs, whose speed had been re-marked, thousands of unmarked outer cases for CPUs, parts like heat sinks and cooling fans which help the CPU operate, three pad printing machines and 14 metal printing plates bearing words like 'Intel' and 'Pentium II' which could, for example, be used for printing on the outer cases, printing inks, an industrial oven, a laser engraving machine which could be used, for example, to engrave the trademark 'Intel' on CPUs and cartridges, tools and equipment for re-marking and one computer with mother board removed but still connected to the power supply."

5. So far as the other units were concerned the Judge had this to say at pp. 3 and 4 of his reasons for verdict:

"Other officers visited Unit A and found therein three persons, Ng Ting-fong, Ng King-fai and Choi Ka-man together with a number of items including 64 CPUs marked 'Intel' of which 54 had been re-marked, two drills, two computers with their mother boards removed but still connected to power, a number of documents relating to Units A, B and C, two manuals for the laser engraving machine found in Unit B and 37 pages, each of 140 stickers, marked 'Caution 2.8 V (3.3 V)'.

Unit A is where a company called Cyberasia Technology Company operates from, and the defendant is the sole proprietor of Cyberasia. In Unit C there were six persons: Chow Hon-cheong, Ng Chun-sen, Kwok Kit-yi, Poon Wing-tung, Cheng Kwong Wai-ping and Wong Wai-shan. Various items were found including thousands of outer cases bearing the 'Intel' mark of which 848 were counterfeit, 59 circuit boards, a number of 'Intel' accessories, 42 genuine 'Intel' heat sinks of which 41 had been re-marked, 369 'Intel' CPUs of which 218 had been re-marked and two computers which had their cases removed and processors missing.

Five computers were in Units A, B and C minus their cases and processors. This would enable a modified CPU to be easily plugged in and tested, but could also legitimately be used to test other components, for example a video or soundcard. Equipment was found in rooms B and C which had been used to alter and re-mark the CPUs and cartridges. The laser machine and the pad printing machines, for example, were found in Unit B along with a substantial number of cartridges which were in the process of being re-marked.

The oven in Unit B contained a tray of small chips with four fine wires attached, the same type as were attached to CPUs in Unit C, and close to the oven were other trays with similar units on them. Also in Unit C were two wire bonding machines of the type used to connect very thin wires to electrical components.

A compressor was in Unit B which could be used with the paint spray gun found there. A sandblaster which could be used to remove markings was in Unit B. In Unit C were numerous 'Intel' boxes and barcode labels showing 'Intel' product numbers and the speed of the processors. There was also a sealing machine and a shrink-wrap oven for wrapping plastic foil over products.

There were other items pointing to the same inevitable conclusion that Units B and C were being used to alter 'Intel' CPUs and mark them with higher than original speeds, whilst at the same time thousands of cartridges were being prepared with false information on them. The equipment and materials were there for these items to be professionally packaged and passed off as the genuine article."

6. There was further evidence suggesting a linkage in the business activities conducted in the three units. The Judge referred to this at p. 5 of his reasons for verdict:

"In Unit A were found numerous documents:

1) A tenancy agreement for Unit A in the name of the defendant and Ng Ting-fong.

2) A tenancy agreement for Unit B in the name of Loxzus Technology Company.

3) Receipts for management fees in relation to Units A, B and C.

4) Rental receipts for Units A and B.

5) Electricity bills for Units A, B and C.

6) A receipt for a deposit for electricity supply to Unit B.

7) A rates demand for Unit B.

8) Employment applications and copy identity cards for Kwok Kit-yi and Cheng Kwong Wai-ping were in Unit A, although when Customs & Excise visited the premises on 7 August, both persons were actually in Unit C.

9) The employment record of Choi Ka-man was in Unit A as indeed was Mrs Choi, but although the record of Poon Wing-tung was found in Unit A, Mr Poon was actually in Unit C when Customs & Excise arrived.

Apart from the documents, two manuals were found in Unit A which belonged to the laser machine in Unit B, and two drills were found in Unit A, one of which had a serial number only three removed from that on a similar drill in Unit B. Sixty-four 'Intel' processors were in Unit A, 54 of which had been remarked in the same way as others in Units B and C."

7. The main issue which had to be determined was the extent if any to which the applicant was involved in the operations in Units B and C.

8. In a cautioned statement the applicant admitted that he was the sole proprietor of Cyberasia whose place of business was Unit A. The business of the company was buying and re-selling computer spare parts. He did not make any other admissions relevant to these offences.

9. However he went into the witness box and provided an explanation for the presence of the goods which were the subject matter of the charges and of the overall circumstances surrounding this matter.

10. He said that his friend, Mr Lau Chun-yung who was a Taiwanese gentleman conducted a business out of Units B and C. He suspected that Mr Lau did indeed modify computer parts and re-mark them but this was none of his business. So far as the 64 CPUs which had been found in Unit A were concerned he admitted that he had bought these from Mr Lau for re-sale shortly before the raid had taken place.

11. The explanation he gave for the presence of documents relating to Units B and C being found in Unit A was that Mr Lau often went to Taiwan and he had asked the applicant to keep these for him. The reason for the manuals being in his office was that Mr Lau did not read English and had requested him to translate them for him. The manuals had been left in his office after one of his visits. He gave explanations for other items found.

12. The Judge did not accept the explanations proffered and was satisfied at the appropriate level that the applicant was guilty of counts 1 and 2 as charged.

13. Ground one of the perfected grounds of appeal contains two complaints that the Judge interrupted the applicant's testimony.

14. It is apparent from a perusal of the transcript that there is no merit whatever in this ground. The first so-called interruption referred to relates to a question the Judge asked concerning the physical presence of Mr Poon in Unit C at the time of the raid. This was in connection with the fact that documentation concerning his employment had been found in Unit A. The Judge simply asked whether it was a coincidence that Mr Poon had been working in Unit C at the time of the raid. This was a perfectly legitimate question.

15. The second matter complained of is even more frivolous if that is possible. It related to evidence concerning some stickers which had been found. The Judge simply informed the parties that he understood the explanation which had been proffered.

16. Complaint is made in ground two that the Judge had questioned the applicant in an "adversarial manner" at page 58A-T of the appeal bundle.

17. The passage in question reads:

"COURT: Well, the prosecution may say hence the boxes, so he should be asked to explain the boxes. If he's up to some other mischief then I'm afraid that's bad luck, isn't it?

MR HEMMINGS: Yes, although of course, your Honour, it's a question that's come from your Honour, not from the prosecution, but I leave it entirely in your Honour's hands. If you feel that it's not necessary to warn him that he has a right against incriminating himself into some other matter which is not before this court, I leave that entirely in your hands.

COURT: I appreciate why the warning would need to be given, but if the defendant is giving evidence and he were to say that.

MR HEMMINGS: I don't know whether that may be right, I just have to be very cautious.

COURT: I know you don't, but then the defendant could basically frustrate any cross-examination if he were to say, 'Well it's nothing to do with this, but I don't want to answer you because it might incriminate me on something else,' any defendant could take that line in a trial, couldn't he?

MR HEMMINGS: Very well.

COURT: Why did you have so many Intel boxes?

A. After I have sold the goods to my customers and the customers didn't want the boxes, I kept them. The CPUs shown in photo 25 were sold to -- without any boxes, and I put the boxes at the place where it was ... inaudible) by and the customer ... (inaudible) boxes.

COURT: These aren't boxes returned by your customers, they're flat, they've never been used.

A. After selling the CPUs to my customers, if the customers didn't want to have the CPUs with the boxes, so I kept the boxes and it was -- they were originally folded but I unfolded them in order to save space. It's different from what they call the brand new box.

MR HEMMINGS: Sorry, I'm instructed there's one sentence that was not interpreted, your Honour.

COURT: Have you missed a sentence out?

INTERPRETER: ... (inaudible).

UNIDENTIFIED SPEAKER: No, because it's more convenient to deliver the goods without the box."

This ground appears to be partially misconceived. Very few questions were put to the applicant. There is largely just an exchange between counsel for the applicant and the court. There is no merit in this ground.

18. In ground three complaint is made that the Judge entered into the arena by inviting prosecuting counsel to ask further questions of the applicant after he himself had asked some questions.

19. It is apparent from the context of this complaint that even after the initial conclusion of the applicant's cross-examination a number of issues still remained outstanding. It was perfectly in order for the Judge to extend an invitation to counsel to ask further questions after he himself had attempted to clarify matters. Incidentally there is nothing in the complaint that counsel for the defence had no opportunity to object to this course of action being pursued. It is apparent at p.59 line O of the appeal bundle that Mr Hemmings was not minded to object. There is nothing in this ground.

20. Ground 4 is framed in this way:

"4. The Learned Judge misdirected himself by stating that the finding of the tenancy agreements in room 2 of Unit A 'plainly gives the lie to the defendant's evidence that Mr. Lau gave him the documents in a folder, and he put them all together in a drawer a few days before the raid.'

The Appellant was never cross-examined about how he handled the bundle of documents after he had received them from Mr. Lau. Moreover the Appellant in his evidence in chief stated that he had removed a document from the bundle and put in (sic) into a (different) drawer."

21. One of the main points being made by Mr Hemmings for the applicant in this ground is that the applicant was not sufficiently put on notice during cross-examination that his testimony concerning the whereabouts of the various documents was being called in question. In this connection he referred to the judgment of Li CJ in Lo Chun-nam v. HKSAR FACC 6/2000 unreported where the Chief Justice considered the principles enunciated in Browne v. Dunn [1894] 6 R. 307.

22. The present case can clearly be distinguished from Lo Chun-nam. No particular significance attached to the contents of the documents. The critical question related to the circumstances surrounding where they had been found and how they might have got there. It must have been very clear to the applicant that the explanations he was attempting to proffer were bound to be critically reviewed by the Judge. In addition to this, it should have been obvious to the applicant that this was a matter which needed to be attended to. There could have been no prejudice to the applicant occasioned by the way in which the Judge dealt with the matter. This ground must also fail.

23. The case against the applicant was an overwhelming one and these convictions were in no way unsafe or unsatisfactory. The application for leave to appeal against convictions is dismissed.