SECRETARY FOR JUSTICE v. NGAI FUNG SIN APPLE

[English Translation – 英譯本]
CAAR 1/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

APPLICATION FOR REVIEW NO. 1 OF 2013

(ON APPEAL FROM DCCC NO. 198 OF 2012)

________________

REASONS FOR JUDGMENT

Hon Yeung VP (giving the reasons for judgment of the Court):

Background facts

1. The respondent (Ngai Fung-sin) was born on the Mainland.  She came to Hong Kong in 1989 and reunited with her parents.  She is married and has two daughters, who are respectively nine and six years old.

2. On 12 December 2005 the respondent opened an account at the Bank of China (Hong Kong) (“the account’).  She was the sole signatory of the account.  Before 17 January 2011, no Canadian dollar had ever been deposited into or withdrawn from the account.

3. Between 17 and 21 January 2011, five sums of money in Canadian currency, totalling CAD$243,869.23, were transferred through the internet from an account held by two foreigners at the Hong Kong and Shanghai Banking Corporation Limited (Canada) into the account.  On 24 January 2011, the Hong Kong and Shanghai Banking Corporation Limited (Canada) informed the Hong Kong and Shanghai Banking Corporation Limited (Hong Kong) that these five internet transfers were done without authorization and that the holders of the account at the Hong Kong and Shanghai Banking Corporation Limited (Canada) did not know the respondent.

4. Between 18 and 22 January 2011 the respondent made six withdrawals from the account at three different branches of the Bank of China (Hong Kong).  The total amount withdrawn was HK$1,906,800, leaving only about CAD $140 in the account.

5. Each time after the respondent withdrew money from the account she returned to the Mainland on the same day.  After she left Hong Kong on 26 January 2011 she did not come back until 30 December 2011.

6. Since the police had been informed of this matter, upon the respondent’s return to Hong Kong on 30 December 2011 she was intercepted and arrested at the Lo Wu Control Point.

7. The result of these events was that the respondent was charged with one count of the offence of dealing with property known or reasonably believed to represent proceeds of an indictable offence, which is commonly known as the “money laundering” offence.

8. The respondent pleaded not guilty and was tried before District Judge Gary Lam (“the trial judge”).

9. On 4 January 2013 the trial judge found the respondent guilty and on 18 January 2013 sentenced her to 10 months’ imprisonment (“the sentence”).

10. On 23 January 2013 the respondent applied for leave to appeal against her conviction, but on 15 February 2013 she notified the court that she abandoned her application, so her application for leave to appeal against conviction was dismissed.

11. On 1 February 2013 the applicant (Secretary for Justice) took the view that the sentence was so lenient that a reasonable judge, applying his mind to all relevant factors, would not reasonably consider to be within the appropriate range of sentences; and therefore applied to this Court under section 81A of the Criminal Procedure Ordinance, Cap. 221 Laws of Hong Kong, for the review of the sentence.  Leave was granted by the Chief Judge of the High Court on 6 February 2013 for the applicant to proceed with the application.

12. On 8 May 2013 the respondent stated by way of affidavit that she abandoned her application for leave to appeal against conviction only because she was ignorant of Hong Kong law, but that recently she was informed by her family members that there was fresh evidence and statement which could prove that she did not have any intention to commit the offence and that she was made use of by some people without her knowing anything about it which resulted in her being convicted and sentenced of the offence.  She asserted that she did not want to give up her pursuit of the truth just because of her oversight.  She emphasized that if she had a conviction record, the future of her daughters would be adversely affected and that therefore she decided to resume her application for leave to appeal against conviction in order that justice would be done.

13. The content of the respondent’s affidavit was regarded as her application to the court for treating theNotice of Abandonment of her appeal as a nullity and for restoring her application for leave to appeal against conviction.

14. Therefore, we were required to deal with the respondent’s application for restoring her application for leave to appeal and the applicant’s application for review of the sentence.

15. After the hearing, we dismissed the respondent’s application but granted the applicant’s application for review of the sentence, and we increased the respondent’s sentence from ten months to two years.  The reasons for our judgment are set out below.

Grounds of the respondent’s application for treating the abandonment of her application as a nullity

16. In her affidavit the respondent explained that after the sentence was passed she was put in jail and could not extensively seek advice from professionals whom she trusted as to the details and procedures of her appeal, so that gradually she slacked off in her search for justice, with the result that she abandoned her application for leave to appeal.

17. The respondent stated that having thought over this matter again and again and after she learnt from her family members that there was fresh evidence which could prove that she had no intention to commit the offence, that she had been made use of and that she was wrongly sent to jail because she, out of kindness, wanted to help a friend, she decided to resume her application for leave to appeal in order that her conviction would be quashed and justice would be done.  She averred that her abandonment of the appeal was only an indication that she was reconciled to the reality and that she treated what happened as a lesson she should learnt, but it did not mean that she admitted she was guilty.

18. The respondent had abandoned her application for leave to appeal and accordingly the Court of Appeal had dismissed her application.  The well established legal principle is that the court has no jurisdiction to deal with afresh a person’s application for leave to appeal unless the person’s abandonment of that application is treated as a nullity.  The court has repeatedly stressed that the person has to adduce sufficient evidence to show that the abandonment of his application was not the result of an informed decision, i.e. his mind did not go with the act of the abandonment, before he could convince the court to treat the abandonment as a nullity.

19. In HKSAR v Law Sui Kei [2007] 3 HKLRD 114 the Court of Appeal expounded on the legal principle about treating a Notice of Abandonment as a nullity as follows:

“ (1) The right of appeal is conferred by statute. Once an (appeal) applicant has abandoned an appeal, which has accordingly been dismissed, the Court of Appeal does not have any inherent jurisdiction to entertain the reopening of the appeal unless the act of the abandonment is treated as a nullity, or the matter is referred to the Chief Executive under section 83P of the Criminal Procedure Ordinance. Only under the following circumstance may the court treat an applicant’s act of abandonment of an appeal as a nullity: the act of abandonment was not the result of the applicant’s deliberate and informed decision, in other words, the mind of the applicant did not go with his act of abandonment.

  (2)    Whether an applicant’s act of abandonment will be regarded as a nullity depends on his understanding of the effect or consequences of the document he was signing or, perhaps, misapprehending the effect of an appeal were he to persist.  If the erroneous advice relied upon by the applicant relates to the nature or effect of the act of abandonment, the Notice of Abandonment willbe regarded as a nullity.  If the applicant who, properly informed, knew the nature and effect of the document he was signing and, with that knowledge, deliberately signed the document, it will be hard pressed to show that that act is a nullity.”

20. This principle was reaffirmed by the Court of Appeal in HKSAR v Ooi Lim Khoon [2011] 5 HKLRD 100.  The Court of Appeal further held that in considering whether an appellant’s abandonment of his appeal was a nullity, the court’s concern was whether the abandonment of the appeal was the result of a deliberate and informed decision, and that the court did not enquire into the prospects of success of the appeal.

21. The respondent obviously was aware of the consequence which the abandonment of her application for [leave to] appeal would lead to.  When she signed the Notice of Abandonment of her appeal she knew the nature of the Notice and certainly understood its effect.  She also stated that she decided to abandon her application for [leave to] appeal against conviction only after careful consideration.  It was only subsequently for some reason she changed her mind and hoped that she would be granted leave at her renewed attempt to appeal.  The appellant’s decision to abandon her appeal was a deliberate decision made after she had considered the matter, and was a decision that accorded with her intention.

22. In these circumstances the respondent’s application did not comply with the principle laid down in Law Sui Kei.  This Court does not have jurisdiction to reopen the appeal which she hoped to lodge.

23. Furthermore, looking at the background of this case and taking into account the respondent’s manner of dealing with the large amounts of money of dubious origin in the account, it could be said that the argument that she was just misled by her good friend and that when she was dealing with the money she had no reasonable grounds to believe that it was “black money” was plainly unconvincing.

24. Therefore, we rejected the respondent’s application for treating the Notice of Abandonment of her appeal as a nullity.  We only dealt with the applicant’s application for review of the sentence.

Mitigating factors submitted by respondent

25. At the trial the respondent explained that she committed the offence because in her mind what she intended to do was just to help her friend and she thought that what she was asked to do would cause her no sweat at all.

26. The respondent stated that she was a good friend of Madam Chen Yan [transliteration of 陳雁], who was a Mainlander, and that at the request of Madam Chen she let Madam Chen use the account for receiving a sum of remittance in Canadian currency.  It turned out that within five days five sums of remittance, totalling CAD$243,869.23 were paid into the account.  The respondent further said that she had acted upon Madam Chen’s instructions on a number of occasions to withdraw cash and had taken a total of HK$1,906,800 to the Mainland, which she gave to Madam Chen.

27. The respondent maintained that she did what she did out of kindness but was made use of by her friend.  She asserted that in this incident she not only did not gain any benefit, but she had spent time and had suffered financial loss in the form of traffic expense, though it was small in amount.  At the trial, the respondent’s legal representative repeatedly submitted that she had two young daughters who needed her care and attention, and asked the court to temper justice with mercy by giving her a lighter-than-usual sentence. Her legal representative urged the court that the circumstances of this case, in particular the family condition of the respondent, were such that it was open to the court to deal with her with compassion and leniency.

Trial judge’s reasons for sentence

28. Before passing sentence, the trial judge called for a welfare report on the two daughters of the respondent.  The trial judge said that the respondent’s mother-in-law could come to Hong Kong from the Mainland to help her take care of her daughters and that the respondent’s mother, if necessary, could also help her in that matter.

29. The trial judge emphasized the serious nature of the offence of “money laundering” and pointed out that according to the sentencing guideline set in HKSAR v Hsu Yu Yi [2010] HKLRD 536, if the “black money” involved was between $1,000,000 to $2,000,000 the starting point should be in the order of three years’ imprisonment.

30. The trial judge said that besides the $1,900,000, cross-border criminal activities were also involved in this case.

31. Having said that, the trial judge went on to say, ‘The defendant is a first time offender.  She explained that she just wanted to help a good friend.  The “money laundering” activities were parts of one single, isolated incident.  The defendant wrongly reposed her trust in her good friend.  The wrong she did was failure to make enquiries, not knowingly breaking the law.’

32. Finally, the trial judge made the following comments:

‘ As regards the term of imprisonment, the defendant is indeed different from the offenders in the usual “money laundering” cases who sold their accounts to some people or gave some people the use of their accounts. I can exercise my discretion and give her a shorter sentence. In my view, the appropriate starting point is 10 months’ imprisonment. Since the defendant is convicted after trial, she is not entitled to the one third discount given in the case of a guilty plea and, in the absence of any other mitigating factors capable of reducing the sentence, I sentence her to 10 months’ imprisonment. I emphasize that the court has treated the defendant in a particularly lenient way and has imposed a prison term as short as possible.’

Applicant’s grounds of review

33. Mr. Tam, Deputy Director of Public Prosecutions, for the applicant, submitted that the “black money” involved in this case was close to HK$2,000,000, which was transferred to the account on five separate occasions without the authorization of the owners.  Mr. Tam stressed that the respondent made six withdrawals within five days, withdrawing over HK$1,900,000 in cash and on the very same day she personally took the cash to the Mainland.

34. Mr. Tam submitted that the amount of “black money” involved was substantial, that the respondent had actively participated in the crime and that the case had an international dimension.

35. Mr. Tam emphasized that in cases of this nature in which the “black money” involved amounted to $2,000,000 or so, the sentence should not be less than two years and the appropriate starting point should be three years.

36. Mr. Tam contended that the trial judge should not have given the respondent an exceptionally lenient sentence just because she wrongly trusted her friend and the wrong she did was failure to make enquiries about the source of the “black money”.

37. Mr. Tam pressed the point that as far as the “money laundering” offence is concerned, the ‘defendant’s ignorance of the actual source of the “illicit money” is not necessarily a mitigating factor.  On the other hand, if there is evidence to prove that the money involved in the offence was actually “illicit money”, that it was derived from serious crimes and that the defendant was aware of its origin, that would be an aggravating factor.’

38. Mr. Tam considered that even if the respondent’s assertion that she had never received any reward for committing the offence was true, so that her culpability was lesser than that of the defendants in other cases of similar nature who had received a reward, the trial judge should not have drastically reduced the starting point from the appropriate term of three years to 10 months.

39. Mr. Tam submitted that there were three aggravating factors in the present case: (1) The amount of money was about $1,900,000; (2) The respondent not only gave the account to another person for that person to use, but also within a matter of five days, she, on six occasions, personally withdrew the money and took the cash to the Mainland, which demonstrated that she actively and personally participated in the “money laundering” activities; and (3) an international element existed in this case, because the “illicit/black money” had its origin in Canada but was remitted to Hong Kong and then taken to the Mainland by the respondent.  Mr. Tam added that the not guilty plea of the respondent showed that she was unremorseful.

40. Mr. Tam concluded that the original sentence of ten months’ imprisonment fell “outside the range of sentences which a judge, applying his mind to all the relevant factors, could reasonably consider appropriate”.

Respondent’s position

41. Mr. Yip, counsel for the respondent, submitted that the sentence in a “money laundering” case had to be determined according to the circumstances of that particular case, and that the court should take into account other factors apart from the amount of money involved and the cross-border criminal activities in order to reach the appropriate sentence.  Mr. Yip emphasized that a close and profound relationship existed between the respondent and Madam Chen Yan and that in the respondent’s mind, what she intended to do was only to help Madam Chen but she was made use of by her and hence committed the offence.  Mr. Yip considered that these factors should be regarded as mitigating factors, and he cited HKSAR v Chiu Kit & Zhao Hongqing (CACC 210/2009) and HKSAR v Chan Wai Yan [2012] 4 HKLRD 189, 195 (paragraphs 22-24) to support his position.

42. Mr. Yip also stressed that the respondent had no previous convictions and that she did not obtain any personal gains in this case.  He argued that the trial judge was reasonable in finding that the present case was different from the usual “money laundering” cases in whichwhat the offenders did was selling their accounts to some people or giving some people the use of their accounts.  He said the trial judge’s taking into account of the condition of the respondent’s two daughters in passing sentence was an approach which struck a proper balance between compassion and justice, because only the respondent could properly take care of her two daughters.

Discussion

43. This Court has on many occasions repeated the warning that “money laundering” is a very serious crime.  One of the reasons is that in a modern society perpetrators of serious crimes are very often motivated by financial gains, so that to combat the crime of “money laundering” can be an effective measure against such serious crimes.

44. Generally speaking, the sentence passed in a “money laundering” case is primarily to reflect the amount of the “illicit/black money” involved.  Neither the fact that the “illicit/black money” was actually not derived from an indictable offence nor the defendant’s ignorance of the actual source of the “illicit/black money” is necessarily a valid mitigating factor.  On the other hand, if there is evidence which can prove from what serious crimes the “illicit/black money” was derived and if the defendant was aware of the origin of the “illicit/black money”, that would be an aggravating factor (see Secretary forJustice v Lau Man Ying [2012] 4 HKLRD 429 and HKSAR v Xu Xia Li & Anor [2004] 4 HKC16).  Based on the same rationale, the fact that the defendant of a “money laundering” case has not obtained any financial benefit is not a mitigating factor.

45. The respondent claimed that she wrongly believed her good friend and that her sole purpose of using her own bank account to receive the remittances was to help her friend. She stressed that the help she gave to her friend caused her no sweat and that she obtained no benefit at all from what she did.

46. What the respondent said was nothing but her own one-sided version of the story.  Even on her own evidence, Madam Chen was just her friend, she should not have succumbed to the influence of her friend and committed the offence.  The principles laid down by this Court in Chiu Kit & Zhao Hongqing and Chan Wai Yan are not applicable to a relationship between friends, otherwise in any case of “money laundering” the defendant can say that he committed the offence because he was influenced by his friend and ask for leniency on this ground.  In a “money laundering” case, the sentence ‘should mainly reflect the amount of “black money” laundered and not the benefit obtained by the defendant or others.  The reason being that it is very difficult to prove the benefit concerned…’ (see paragraph 13 of the judgment of Secretary for Justice v Wan Kwok Keung, CAAR13/2010).

47. We cannot overlook the fact that each time when money was remitted to the account the respondent would, shortly afterwards, withdrew most of the money in the form of cash and take it away from Hong Kong.  This showed that she definitely had reasonable grounds to believe that these sums of money came from some suspicious sources.

48. The trial judge said that the culpability of the respondent was different from that of the offenders in the usual “money laundering” cases who sold their accounts to some people or gave some people the use of their accounts.  We do not understand what difference the trial judge was referring to.  If the trial judge compared the respondent’s conduct with the conduct of the offenders in the usual “money laundering” cases, namely selling their accounts to some people or giving some people the use of their accounts —— those offenders only sold their accounts or allowed some people to use their accounts for “money laundering” but they did not directly take part in dealing with the illicit/black money —— [he should have noticed that] the culpability of the respondent was more, not less, serious than that of those offenders.

49. The respondent not only allowed other people to use the account to receive “illicit/black money” which came from a foreign country, but she also directly dealt with the “illicit/black money”, including withdrawing the money from the account and then taking it away from Hong Kong.  The fact that she did not gain any benefit was not a valid mitigating factor.

50. We do not approve the trial judge’s passing an extremely lenient sentence on the respondent for the reason that she was different from the offenders in the usual “money laundering” cases who sold their accounts to some people or gave some people the use of their accounts.

51. In our view, actually there is an aggravating factor in this case in that the respondent personally dealt with the “illicit/black money” in the account, in particular she withdrew the money and shortly after that she took it away from Hong Kong.

52. At the trial, it was submitted on behalf of the respondent that she had two young daughters who needed her care and attention.  The court was urged to take into account the effect of the respondent’s sentence on her daughters and to sentence her leniently and in a compassionate way.

53. It is certainly true that when passing sentence the court should not totally ignore the consequences which the defendant and his family would suffer as a result of the sentence, but in considering the sentence to be passed in respect of a serious crime, the court cannot pay too much attention to how the defendant and his family would be affected by the sentence and so sentence the defendant in an exceptionally compassionate manner; otherwise, a wrong message could be given which might encourage criminals to commit serious crimes.

54. “Money laundering” is a very serious crime, because it indirectly furthers the commission of serious crimes, especially international crimes; therefore, the court must deal with “money laundering” seriously in order to produce a deterrent effect.  As a matter of fact, the effective crackdown on “money laundering” can discourage the commission of other serious crimes.

55. On the authority of Wan Kwok Keung, Hsu Yu Yi, HKSAR v Poon Lok Man (CACC 171/2012) and HKSAR v Zhan Jian Fu (CACC 258/2007), when the amount involved in the “money laundering” is $2,000,000 or so, the starting point is around three years’ imprisonment.

56. The “illicit/black money” involved in the present case was about $1,900,000.  The facts showed that what the respondent did was not limited to allowing the account to be used for “money laundering”; in addition to that she personally and actively dealt with the “illicit/black money”.  We cannot shut our eyes to the international element featured in this case, i.e. the “illicit/black money”, which had its origin in Canada, was remitted to Hong Kong and then taken to the Mainland by the respondent.

57. In our judgment, even looking at this case from the angle most favourable to the respondent, the sentence which fits her should not have been less than imprisonment for two years and six months.  The original sentence of 10 months’ imprisonment was manifestly lighter than any of the sentences in the range of sentences which a reasonable judge would reasonably consider to be appropriate.

58. Taking into account the fact that this application was an application for review of sentence and that this matter had hung over the respondent’s head for a long time, we came to the conclusion that the appropriate sentence was two years’ imprisonment.

59. We granted the applicant’s application for review of sentence and increased the respondent’s sentence from 10 months’ imprisonment to two years imprisonment.

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. P. Y. Lo, Barrister-at-law.