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Lee To Nei v Hksar

Judgment Cited authorities 7 Cited in Precedent Map Related
Vincent
Judgment Date30 March 2012
Year2012
Citation(2012) 15 HKCFAR 162
Judgement NumberFACC5/2011
Subject MatterFinal Appeal (Criminal)
CourtCourt of Final Appeal (Hong Kong)
FACC5/2011 LEE TO NEI v. HKSAR

FACC Nos 5 and 7 of 2011

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NOS 5 AND 7 OF 2011(CRIMINAL)

(ON APPEAL FROM HCMA NOS 403 AND 500 OF 2010)

_____________________

FACC No 5 of 2011

Between :

LEE TO NEI Appellant
- and -
HONG KONG SPECIAL ADMINISTRATIVE REGION Respondent

____________________

FACC No 7 of 2011

Between :

LAU HOK TUNG
 1st Appellant
WONG SHU WAH 2nd Appellant
Y & FUNG GARMENT COMPANY LIMITED 3rd Appellant
- and -
HONG KONG SPECIAL ADMINISTRATIVE REGION Respondent

____________________

Before : Chief Justice Ma, Mr Justice Chan PJ, Mr Justice Ribeiro PJ, Mr Justice Mortimer NPJ and Lord Millett NPJ
Date of Hearing: 13 March 2012
Date of Judgment : 30 March 2012

____________________

J U D G M E N T

____________________

Chief Justice Ma :

1. I agree with the Judgment of Mr Justice Ribeiro PJ.

Mr Justice Chan PJ:

2. I agree with the Judgment of Mr Justice Ribeiro PJ.

Mr Justice Ribeiro PJ:

A. The issues

3. These two appeals were heard together. The defendants were each convicted of possessing for sale goods to which forged trade marks had been applied, contrary to section 9(2) of the Trade Descriptions Ordinance (“TDO”).[1] Their appeals each raise the same questions of law, namely:

(a) whether the defence to the section 9(2) offence provided by section 26(4) of the TDO can only be made out if a defendant discharges the persuasive burden of proving the matters specified;

(b) if so, whether that derogates from the constitutionally protected presumption of innocence; and

(c) if so, whether section 26(4) should be read down as imposing only an evidential burden, with the persuasive burden remaining throughout on the prosecution.

In the light of the answers to these questions, it would fall to be decided how the two cases should be disposed of.

B. The statutory provisions

4. Section 9(2) provides:

“Subject to the provisions of this Ordinance, any person who sells or exposes or has in his possession for sale or for any purpose of trade or manufacture, any goods to which any forged trade mark is applied, or to which any trade mark or mark so nearly resembling a trade mark as to be calculated to deceive is falsely applied, commits an offence.”

5. Section 26(4) is in the following terms:

“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.”

C. The decisions below

6. Mr David J Dufton, sitting at Kwun Tong Magistrates Court, tried both cases at first instance. I shall in this judgment refer to the first as “the Lee Case”,[2] and the second as “the Lau Case”.[3]

C.1 The Lee Case

7. The appellant, Lee To-nei (“Lee”), was a shareholder in and a former director of Pacific Pharmaco Limited which operated a pharmacy in Mong Kok. On 25 February 2009, he was present in the shop and sold to an undercover officer of the Customs and Excise Department a bottle of Chinese herbal medicine which bore the trade mark “Man Shan”[4] which was suspected of being forged. Twenty-five other similar bottles were found in the shop.

8. The learned magistrate found that the prosecution had duly proved that Lee was in possession of all 26 bottles, that the trade marks they bore were forged and that Lee had possessed them for sale. He held that section 26(4) placed the persuasive burden on the defendant so that the defence would only avail him if he could prove on a balance of probabilities that he did not know, had no reason to suspect, and could not with reasonable diligence have ascertained, that the trade marks were forged. He found that Lee did not actually know and had no reason to suspect that they were false, but found that with reasonable diligence Lee could have discovered that the trade marks were forged and therefore that Lee had failed to make out the defence on a balance of probabilities.[5] No constitutional issue was raised at the trial.

9. Lee’s appeal against conviction and sentence came before Deputy High Court Judge E Toh.[6] Her Ladyship upheld the magistrate’s findings and approach to the statutory provisions but was also faced with the constitutional challenge under discussion. She considered the decisions of this Court on reverse onuses and held that in the circumstances of the present case, guidance was to be found in two English decisions, namely R v S[7] and R v Johnstone.[8] Following those decisions, the Judge held that it was rational and proportionate for section 26(4) to impose the persuasive burden of negativing knowledge, etc, on the defendant.[9] However, her Ladyship reduced the sentence from 6 months’ to 8 weeks’ imprisonment.

C.2 The Lau Case

10. The 1st appellant, Lau Hok-tung (“Lau”) and the 2nd appellant, Wong Shu-wah, were both directors of the 3rd appellant, Y & Fung Garment Co Ltd (“Y & Fung”). Y & Fung operated two warehouses and eight shops which sold garments. Customs and Excise officers raided those premises after conducting what were termed “test buys” at each shop, resulting in the defendants being charged with possessing for sale or other purposes of trade 8,337 garments to which had been applied forged trade marks. The trade marks forged were those of Abercrombie & Fitch, Reuhl, Hollister, Lacoste, Timberland and Tommy Hilfiger.

11. In a careful and thorough Statement of Findings, the magistrate found it proved beyond reasonable doubt that the defendants were in possession of all the goods seized for the purpose of sale or trade and, save for a relatively small number of garments, that they bore forged trade marks. Turning to section 26(4), which he again regarded as imposing a persuasive burden on the defendants, he found that there were substantial reasons for suspecting that the trade marks were forged and also that the defendants could, using reasonable diligence, have discovered that this was so. He therefore found that the defendants had failed to make good the defence and convicted them as charged. No constitutional issue was raised.

12. He was upheld on appeal by McMahon J. On the constitutional challenge, the Judge also held that the imposition by section 26(4) of a persuasive burden on the defendants was rational and proportionate, adopting the rationale of R v S[10] and R v Johnstone[11](to which I shall return). Lau’s appeals against conviction and against his sentence of 8 months’ imprisonment were dismissed.

D. The reverse onus principles applied to section 26(4)

13. The presumption of innocence is constitutionally protected[12] and the principles applicable when statutory reverse onus provisions encroach upon such protection are well-established. They are laid down in a number of decisions of this Court, notably in HKSAR v Lam Kwong Wai,[13] HKSAR v Hung Chan Wa[14]and HKSAR v Ng Po On.[15]

14. The starting point is the basic rule of the criminal law that an accused person is presumed innocent and that the prosecution bears the burden of proving his or her guilt beyond reasonable doubt.[16] However, it is clear that a statute may reverse the burden, abrogating the presumption by placing a persuasive burden on the defendant to prove specified matters on a balance of probabilities as a condition of avoiding liability.[17]

D.1 Does section 26(4) reverse the onus?

15. The first task is therefore to construe the impugned provision to determine whether it does reverse the onus.[18] As was pointed out in Ng Po On,[19] little discussion is needed where the relevant provision expressly places the burden on the accused. Section 26(4) is such a provision. It says in terms that “it shall be a defence for the person charged to prove” the specified matters and so clearly does reverse the burden.

D.2 Does section 26(4) derogate from the presumption of innocence?

16. The second task is to ascertain whether such reversal of the onus engages and derogates from the presumption of innocence. In the case of section 26(4), the answer is plainly “Yes”.

17. The burden placed on the prosecution by section 9(2) is relatively light. It must first prove possession of the goods by the defendant in circumstances establishing that they are possessed for sale or other purposes of trade. Secondly, it must prove that the trade marks applied to those goods are in fact forged.

18. However, the statutory intent is plainly not to penalise the possession of goods bearing forged trade marks as a matter of absolute liability in respect of the falsity of the marks. Sections 9(2) and 26(4) must be read together. The gravamen of the offence is that the accused possesses the offending goods knowing, or having reason to suspect that they bear forged trade marks or in circumstances where, using reasonable diligence, he could have ascertained that the marks are false. I shall call these collectively “the three conditions”.

19. The offence might of course have been drafted so as to require the prosecution to establish one of the three conditions beyond reasonable doubt. Instead, it places the burden on the accused to negate all three. If at the end of the day, the court is not satisfied that the accused has successfully negated all three conditions on the balance of probabilities, the defence fails and (assuming that the...

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