SECRETARY FOR JUSTICE v. TANG SHU CHEONG

[English Translation - 英譯本]
CAAR 7/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

APPLICATION FOR REVIEW NO. 7 OF 2011

(ON APPEAL FROM TWCC NO. 1436 OF 2011)

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J U D G M E N T

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Hon Cheung JA (giving judgment of the Court):

Application for review of sentence

1. The Defendant pleaded guilty to three counts of “soliciting an advantage from public servant (sic)” contrary to section 4(2)(a) of the Prevention of Bribery Ordinance (“the Ordinance”), Cap. 201 of the Laws of Hong Kong.  The three counts were listed as charges 1, 3 and 5 on the charge sheet.

2. Mr. Ernest Lin, the Principal Magistrate, sentenced the Defendant to 8 months’ imprisonment on each of the three counts, with the sentences to run concurrently, making a total term of 8 months, and suspended the sentence for two years.  In addition, a fine of HK$15,000 was imposed on each count, making a total of $45,000.

3. The Secretary for Justice (“the Secretary”) now applies for a review of sentence, on the ground that the order for suspended sentence imposed by the Magistrate on the Defendant is wrong in principle or manifestly inadequate.

Background facts

4. The Defendant was a procurement manager working for the Hong Kong Cable Television Limited (“Cable TV”).  He was head of the Procurement Department and responsible for purchasing networking products.  Cable TV, formerly known as the Wharf Cable Limited, is a public body specified in Schedule 1 to the Ordinance.

5. Upon receipt by the Procurement Department of a procurement request, the subordinates of the Defendant would ask for quotations from suppliers and negotiate the price with them.  The Defendant would endorse the procurement application form and the purchase order to be delivered to the supplier in order to signify approval of the procurement.

6. Cable TV did not allow its staff members to solicit or accept any advantage from any person related to the business of Cable TV.

Charge 1

7. Richcom (HK) Limited (“Richcom”) is one of Cable TV’s suppliers of cabling accessories.  Mr. Au Chi Kong (“Au”) was the owner of Richcom, which had supplied power transformers to Cable TV since April 2009.

8. In February 2010, the Defendant and Au had phone discussions over the price of transformers for the next quarter.  When the Defendant and Au agreed that the quoted price for each transformer was $41.5, the Defendant solicited from Au a rebate of $2 for each transformer to be supplied to Cable TV for the next quarter.  Au did not give the Defendant any reply.  Subsequently, Au quoted a price of $41.5 for each transformer.  On 4 May 2010, the Defendant endorsed the purchase order for purchasing 5,000 transformers from Richcom at a unit price of $40, for a total price of $200,000.

Charge 3

9. Apart from transformers, Richcom had been supplying another type of products to Cable TV, namely optical nodes.  On 22 October 2010, the Defendant rang up Au and they discussed about the supply of optical nodes by Au’s company to Cable TV.  During the discussion, the Defendant solicited a rebate from Au again.  The Defendant initially asked for an amount equivalent to 5% of the purchase price for each optical node, but in the end lowered the amount solicited to $10,000 per month for a period of 12 months, totalling $120,000.  However, his request was turned down by Au.

Charge 5

10. During his contacts with Au, the Defendant had used “cake” as the code name for the rebate which he solicited in respect of the purchase of optical nodes.

11. On 26 November and 30 November 2010, the Defendant endorsed, respectively, two other purchase orders for the purchase from Richcom of 80 and 50 optical nodes for the unit price of $6,288 and $6,868, which meant a total purchase price of $846,440.  On the evening of 30 November 2010, the Defendant sent Au an English text message which read “WHEN LUNCH?” (meaning “when to have lunch?”).  On 1 December 2010, Au sent the Defendant an English text message in reply, saying “Next week.  What about the cake?  How big?”.  The Defendant replied by sending Au an English text message which read, “WHOLE CAKE 12 INCHES”.  The “12-inch cake” referred to the $120,000 rebate which the Defendant had solicited earlier on.

The Magistrate’s reasons for sentence

12. Neither the prosecution nor the defence requested the Magistrate to provide Reasons for Sentence in writing.  However, according to the transcript which recorded the Magistrate’s decision on 29 August 2011 dismissing the Secretary’s application for review of the suspended sentence , the suspended sentence was imposed on the Defendant for the following reasons:

1)   The present case was not the most serious of its kind.

2)   The Defendant did not obtain any actual advantage.

3)   There was no evidence to show that the Defendant had used threats, inducements or other means to solicit money.

4)   The Defendant had been detained for two weeks pending reports.

5)   Imposing a custodial sentence on the Defendant would not bring practical benefits to the public.

6)   There were exceptional circumstances in the present case which justified a lenient treatment.

Sentencing principles

13. We start by reiterating the sentencing principles laid down by the courts for offences involving corruption and bribery.  In Lai Yuk-kui v. The Queen [1981] HKLR 691, Roberts CJ laid down the following sentencing guidelines for magistrates in relation to the offence under section 4(2) of the Ordinance:

“ An immediate custodial sentence should normally be imposed, whether the offender is a public officer or not. The usual minimum imprisonment imposed by the court for relatively minor cases of corruption in the public sector should be 12 months. A fine, a probation order, or a suspended sentence should be imposed only in exceptional cases where the facts or the circumstances of the offender justify it.”

14. In HKSAR v Li Cheuk Ming [1999] 1 HKLRD 59, the Court of Appeal (Chan CJHC, Liu and Leong JJA (as they then were)) had this to say (at 60):

“ ..., bribery and corruption have been for ages regarded as crimes which are intolerable in a civilised society. They are cancerous activities in a healthy and sound society and their impact to the entire society could be serious, far-reaching and adverse. They must be eradicated quickly and thoroughly, otherwise they would spread to the whole community like a prairie fire that never burns out and the consequence is disastrous. As the Court of Appeal stated in Secretary for Justice v Lau Cho Man (unrep., AR No 8 of 1997, [1997] HKLY 337):

Corruption strikes at the root of a clean and efficient system which all of us value so much and which has brought success to Hong Kong.

Thus, as was said by Roberts CJ in Lai Yuk Kui v The Queen [1981] HKLR 691:

The imposition of deterrent sentences on those who are convicted of bribery is an important factor in the community’s efforts to eradicate corruption.

It was stated by the Court of Appeal in the case of R v Chan Koon Kwok Arthur [1990] 2 HKLR 458:

  Attempts to inhibit the spread of corruption necessarily involve an element of general deterrence, even in the case of a first offender, so that the gravity of offences in breach of the Prevention of Bribery Ordinance (Cap. 201) may properly be marked.”

15. In Li Cheuk Ming, the Court of Appeal also laid down the following guidelines on the scope of exceptional circumstances:

“ …, exceptional circumstances are mainly judged on the basis of degree and common understanding. Generally speaking, exceptional circumstances can be categorised into personal exceptional circumstances, exceptional circumstances relating to the nature of the offence, and exceptional circumstances relating to the consequences. The definition of exceptional circumstances varies from case to case. The circumstances are usually very extreme or it could attract an immediate outpouring of public sympathy.”

The Defendant’s position

16. Mr. Char, Counsel for the Defendant, opposed the application for review.  He put forward nine grounds of objection, most of which are directed at the Magistrate’s reasons for upholding the suspended sentence.  Mr. Char submitted that deterrence should not be the sole sentencing consideration.  He pointed out that, back in the 1970’s and 1980’s, when corruption was deluging Hong Kong, it was necessary for the courts to adopt a robust attitude and impose deterrent and enhanced sentences in order to combat corruption.  Today, Hong Kong is one of the cleanest territories in the world. According to the Corruption Perceptions Index 2010 published by Transparent International, Hong Kong ranked 13 among 178 countries and territories (Hong Kong ranked 12 in 2011).  Mr. Char said he did not mean that the courts can slacken their grip on corruption cases as Hong Kong becomes a relatively clean territory.  What he wanted to point out is that, in determining sentences for corruption offences nowadays, Hong Kong courts no longer have to follow the extreme approach adopted in the 1970’s and 1980’s when the courts sentenced with a “rather be severe than lenient” mindset and left aside rehabilitation as a sentencing consideration.  Mr. Char submitted that the cases relied on by the Secretary (such as Lai Yuk Kui, Li Cheuk Ming, and Secretary for Justice v. Kwan Chi Cheong [2009] 4 HKLRD 273 and so on) were completely different in nature from the present case.  First, the Defendant was not a government servant.  Second, the Defendant had never obtained any bribes.  Third, it was not because of the intervention by the ICAC that the Defendant did not receive any bribes; rather, the case was that, whether or not Au accepted the Defendant’s requests for bribes, the Defendant proceeded to issue purchase orders to Au in accordance with the normal procedures of his company.

Our opinion

17. With respect, we do not agree with Mr. Char’s submissions on sentencing principles.  After years of efforts, Hong Kong has managed to free itself of corruption and depravity and build a clean society.  However, it has to be borne in mind that a lot of adverse consequences usually arise from complacence or letting the guard down.  Corruption and bribery is an occult malignant tumour.  If it were allowed to freely grow and fester, it would certainly corrode once again the probity and efficiency upon which the various systems in Hong Kong operate,  impacting the society of Hong Kong where the rule of law is upheld.  We reiterate that the most effective way to combat corrupt practices is to strictly follow the longstanding practice of the courts, namely the imposition of deterrent sentences.  To show that the courts will not tolerate this type of offences, the courts will depart from the norm of imposing immediate custodial sentences only where there are indeed exceptional circumstances.  If the courts do not adhere to this principle, a wrong message will be conveyed to the public that corruption is a common and acceptable societal practice, and this will significantly undermine the anti-corruption achievements that Hong Kong has over the years worked hard to build up.

18. The case of Kwan Chi Cheong shows that the “deterrent sentence” approach is applicable to the corruption offences in both the public sector (including the government and other public bodies) and the private sector.  In some of the corruption cases involving public bodies, the defendants may bear a higher degree of culpability.  However, this is to be reflected by the length of sentence, not by the mode of sentence.  Therefore, in the present case, even if the Defendant were not a government servant, this would not have justified a departure from the above sentencing principle.

19. With respect, we do not agree with the Magistrate that in the present case there are exceptional circumstances which call for a suspended sentence.  In our view, the seriousness of the present case lies in the fact that the three offences lasted nine months and the Defendant repeatedly took the initiatives to solicit advantages from the supplier, such advantages being a rebate of approximately $10,000 (for charge 1) and sums of $120,000 (for charges 3 and 5).  Although the Defendant continued to issue purchase orders to the supplier before he obtained the rebates, this was not because he changed his mind; instead, he continued to solicit rebates from the supplier at the same time.  In the end, it was only because of intervention by the ICAC that his attempts failed.

20. In any event, even if the Defendant had not obtained any advantage from the offences, this would not have constituted a reason for departing from the sentencing principle, because the culpability of soliciting an advantage rests upon the Defendant’s demand for rebate and does not depend on whether he actually obtained an advantage: see AG v. Yung Tak Kee [1983] 1 HKC 331, 333D.

21. Mr. Char has also relied on a number decided cases involving corruption in which suspended sentences were imposed.  In our opinion, each case was decided in light of its own facts and no generalization can be drawn from those decisions.

1)   In HKSAR v. Yick Tze Kai [2007] HKEC 1789, the Court of Appeal allowed the appeal and ordered that the original sentence of 7 months’ imprisonment be suspended for two years.  The case involved a public servant who contravened section 9(3) of the Ordinance by furnishing false information to obtain housing allowance.  It should be noted that the case involved serious delay on the part of the prosecution. And in our opinion, cases of this sort have their own special features and are to be distinguished from cases in which a rebate was solicited by an officer of a public body.

2)   In HKSAR v. Chan Chong-chi [2000] HKEC 1076, which involved an appeal against sentence in respect of the offence of “offering an advantage to an agent” contrary to section 9(2)(a) of the Ordinance, Suffiad J ordered that the original sentence of 3 months’ imprisonment be suspended for one year.  There were exceptional circumstances in the case, namely that the agents in question had indirectly lured the appellant to offer an advantage to them, that there had been serious delay in the prosecution of the case, that there was a great disparity between the sentence imposed on the appellant and the sentences imposed on the co-defendants, and that the appellant had, subsequent to his pleading guilty, given evidence against other accomplices.

3)   In HKSAR v. Tong Woon Tong, Ho Shun [1998] HKEC 747, which concerned an appeal in respect of the offence of “offering an advantage to a public servant” contrary to section 4(1)(a) of the Ordinance, Beeson J substituted suspended sentences for the 5-month and 6-month custodial sentences respectively imposed on the two defendants.  In that case, the two defendants were respectively 74 and 62 years of age, and the first defendant was in poor health.  In an attempt to obtain permission to import foreign workers, the two defendants had by telephone offered an advantage to a public servant, but the offer was turned down.  The public servant made a report to the ICAC, which then arranged undercover officers to meet the two defendants, and the defendants again proposed to offer an advantage to the officers.  Beeson J suspended the sentences “as an act of mercy”.  No such exceptional circumstances exist in the present case.

4)   In AG v. Yukta Bahadur Gurung and Anthony Armitage [1989] 2 HKLR 338, two members of the British Armed Forces in Hong Kong received bribes and sent a large quantity of gold bullion by chartered aircraft from Hong Kong to Nepal.  The first defendant was sentenced to 12 months’ imprisonment suspended for two years and fined HK$80,000.  The second defendant was sentenced to 12 months’ imprisonment suspended for two years and fined HK$31,000.  The two defendants were also ordered to return part of the bribes.  The Court of Appeal dismissed the Attorney General’s application for review and upheld the suspended sentences.  The Court of Appeal considered that there were special features in the case, that the offences would not tarnish the image of Hong Kong, and that the two defendants had assisted the ICAC in the investigation of other similar offences.  The background facts of that case are different from those of the present case, which involves the subject of business ethics.

5)   In AG v. Hector Joseph Carlyle (CAAR 22/1976), the Court of Appeal dismissed the Attorney General’s application for review of an order suspending a 12-month custodial sentence.  In its judgment, which did not set out the particulars of offence, the Court of Appeal pointed out that it was necessary to preserve the discretion of the trial judge.  We agree that the making of an order for suspended sentence is a matter within a magistrate’s discretion.  However, in the present case, the Magistrate’s order has fallen outside the range of sentences which a judge, applying his mind to all relevant factors, could reasonably consider appropriate to impose: see Attorney-General’s Reference (No. 4 of 1989) [1990] 1 WLR 41, 46A.

22. Furthermore, Mr. Char pointed out that the Magistrate had taken into account the Defendant’s personal circumstances:

1)   The Defendant pleaded guilty at the first opportunity.  He has a clear record and it is very unlikely that he would commit the offence again;

2)   He is the sole breadwinner of his family.  He did the unlawful acts out of desperation as he was in urgent need of money to pay his son’s school fees;

3)   He had been leading a law-abiding life working diligently.  He obtained his master’s degree through continuous education.  He had been promoted from time to time by reason of his outstanding performance at work;

4)   He is suffering from anxiety disorder and depression which require regular medication, and his condition may deteriorate with incarceration;

5)   Following his arrest, he had taken the initiative to resign, thereby losing a stable and well-paid job;

6)   His background report and community service report have made very positive comments on him;

7)   He has already paid a high price for his folly, having lost a stable and well-paid job and been remanded for two weeks, and having to pay a fine of $45,000 and act gingerly in order not to commit any offence within two years.

23. Although case law has made it clear that exceptional circumstances include personal exceptional circumstances, the defendant’s personal background as a sentencing consideration is accorded lesser weight as far as offences involving corruption and bribery are concerned: see Kwan Chi Cheong.  In any event, the personal background put forward by the Defendant in the present case does not reveal any exceptional circumstances which justify a suspended sentence.

Conclusion

24. In our view, the Magistrate’s imposition of a suspended sentence is wrong in principle.  We allow the application for review of sentence.  We uphold the sentence of the 8 months’ imprisonment and the fine imposed by the Magistrate but set aside the order for suspension of the sentence.

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. Edmund Cham, Solicitor.