Uniglobe Telecom (Far East) Ltd. v Hksar

Cited as:[1999] 2 HKLRD 44; (1999) 2 HKCFAR 214
Court:Court of Final Appeal (Hong Kong)
Judgement Number:FACC5/1998
Judgment Date:22 Mar 1999
FACC000005/1998 UNIGLOBE TELECOM (FAR EAST) LTD. v. HKSAR

FACC No. 5 of 1998

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 5 OF 1998 (CRIMINAL)

(ON APPEAL FROM CACC No. 104 OF 1998)

_____________________

Between:

UNIGLOBE TELECOM (FAR EAST) LIMITED Appellant
AND
HONG KONG SPECIAL ADMINISTRATIVE REGION Respondent

_____________________

Court: Chief Justice Li, Mr Justice Litton PJ, Mr Justice Ching PJ, Mr Justice Bokhary PJ and Lord Nicholls of Birkenhead NPJ

Date of Hearing: 11 and 12 March 1999

Date of Judgment: 22 March 1999

_____________________

J U D G M E N T

_____________________

Chief Justice Li:

1. I agree with the judgment of Mr Justice Litton PJ.

Mr Justice Litton PJ:

Introduction

2. On 21 November 1997 the appellant Uniglobe Telecom (Far East) Ltd was convicted in the District Court (Davies DJ) of two offences under s. 8(1) of the Telecommunication Ordinance, Cap. 106. The charges were:

" 1st Charge
Statement of Offence

Maintaining a means of telecommunication without a licence, contrary to s.8(1)(a) of the Telecommunication Ordinance, Cap. 106.

Particulars of Offence

Uniglobe Telecom (Far East) Limited, between 26th November and the 6th day of December 1996 inclusive, in Hong Kong, maintained a means of telecommunications, namely an external public telephone service between Hong Kong and China, without a licence.

2nd Charge
Statement of Offence

Using radio communication apparatus without a licence, contrary to s.8(1)(b) of the Telecommunication Ordinance, Cap. 106.

Particulars of Offence

Uniglobe Telecom (Far East) Limited, on or about the 6th day of December 1996, used radio communication apparatus installed in Flat 1215, Landmark North, Sheung Shui, to transmit telephone calls originating from Hong Kong to recipients in China without a licence."

3. On 17 July 1998 the Court of Appeal (Power V-P, Mayo and Stuart-Moore JJA) dismissed the appellant's application for leave to appeal against conviction. The Appeal Committee having granted leave on 10 November 1998 the appellant now appeals against conviction to this Court.

Background facts

4. The appellant provided for its subscribers what is called an international calling card service under licence granted by the Telecommunication Authority under the Telecommunication Ordinance, Cap. 106. The service enabled subscribers' telephone calls in Hong Kong to be routed to parties overseas. The licence, called a public non-exclusive telecommunications service licence ("PNET licence") permitted, and in effect limited, the appellant to providing a service as described in the First Schedule to the licence. This service comprised three elements:

(i) The system operated by the appellant at its own premises which validated their subscribers' calls and enabled their outgoing international calls to be routed overseas, by the interconnections described in paragraphs (ii) and (iii) below.

(ii) Interconnection with the local public switched telephone networks operated by licensed carriers under fixed telecommunication network services licences ("FTNS licences") which were the means by which access to the gateway overseas was attained.

(iii) The gateway itself operated by Hong Kong Telecom International Ltd (HKTI), through which all overseas calls must exit.

5. All overseas calls must exit through that gateway as HKTI had exclusive rights in respect of overseas calls. The service provided by the appellant is also described in the First Schedule to the licence as a telephone call routing service. In practice, what happened was this: A subscriber wishing to gain access to the appellant's service dialled 30023777 and an automatic computerized answering device located at the appellant's premises in Causeway Bay asked the subscriber for his personal identification number (PIN). Once the PIN number was validated by the computer, the pre-recorded voice asked the subscriber to dial the overseas number which was then recorded in the appellant's computer. The computer automatically routed the call directly to one of three FTNS carriers (Hong Kong Telecom Co. Ltd, New World Telephone Ltd and New T&T HK Ltd) with whom the appellant had accounts and the call would then be carried by the FTNS carrier to the gateway operated by HKTI under its exclusive licence. Through the gateway the call would then be transmitted overseas.

6. A piece of detail, referred to at trial but irrelevant for the purposes of the analysis on this appeal, is the "call back service". This enabled an outgoing overseas call to be converted automatically into an incoming call, as if generated by the overseas party. Not all overseas destinations had such a facility. Where such facilities existed and if the overseas rates were cheaper than the local rates, the cheaper rates would be charged to the calling card service provider who would therefore be able to charge its own subscribers a rate lower than that charged, say, by Hong Kong Telecom Co. Ltd on its International Direct Dialling ("IDD") service.

Facts giving rise to the charges

7. In June 1996 the appellant entered into a contract with a company called Bestlong International Ltd ("Bestlong"). The services to be rendered by Bestlong are stated in clause 1.1 of the contract to be:

"A global long distance call service which allows users to place long distance calls on a global basis via Bestlong long distance network and system."

8. Bestlong had no telecommunication licence. Between 26 November and 6 December 1996 test calls were made to Mainland China by Telecommunication Authority officials, using the appellant's service. It was discovered that 2.8% of such calls were made without going through HKTI's gateway, in breach of HKTI's exclusive rights. The calls were transmitted to Mainland China by means of an unauthorized microwave radio transceiver located at Bestlong's premises at Sheung Shui. The radio waves were beamed from those premises to a high-rise building in Shenzhen and then onward transmitted to other parts of Mainland China.

9. This gave rise to the two charges against the appellant, the subject of the present appeal. Bestlong's managing director was also charged with offences under s.8(1)(a) ["maintaining a means of telecommunication" without a licence] and s.8(1)(b) ["possession of radio communication apparatus" without a licence] to which he pleaded guilty.

The trial

10. At trial the prosecution's primary case was that the appellant had colluded with Bestlong to maintain a means of telecommunication without a licence, namely an external public telecommunication service which bypassed HKTI's gateway, and likewise had colluded with Bestlong to use the communication apparatus at Sheung Shui without a licence. This primary case failed. The trial judge, in his Reasons for Verdict, said:

" Having...

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