HKSAR v. LEUNG WAI KEI

[English translation]
CAAR 6/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

APPLICATION for review NO. 6 OF 2006

(ON review FROM TMcC 3745 of 2005)

____________________

BETWEEN

____________________

_________________________

REASONS FOR JUDGMENT

_________________________

Hon Cheung JA (giving reasons for judgment of the Court):

1.  The Respondent Leung Wai Kei appeared in Tuen Mun Magistracy to meet 13 counts of “procuring entries in bank records by deception”, contrary to section 18D(1) of the Theft Ordinance, Cap. 210 of the Laws of Hong Kong. The particulars of charges are as follows:

The Respondent in Hong Kong did dishonestly, with a view to gain for herself or another or with intent to cause loss to another, procure the making of an entry in the record of the Hang Seng Bank, namely a deposit entry of HK$9,454.00 to an account of No. XXX by deception, namely by falsely representing to the Social Welfare Department that she had lost contact with her husband Ko Chung Keung (高忠強) since 20 July 2003 and had no other means to contact him, so as to  make herself eligible for the Comprehensive Social Security Assistance Scheme.

2.  The Respondent pleaded not guilty to the charges and was convicted on counts 3 to 13 by Deputy Magistrate Raymond Wong after trial. On 21 March 2006, the Magistrate sentenced the Respondent to 8 months’ imprisonment on each count to be served concurrently but suspended for two years. The Magistrate also ordered the Respondent to make restitution of $2,475.00 to the Social Welfare Department.

3.  The Secretary for Justice applied to the Magistrate for a review of the sentence. On 8 May 2006, the Magistrate refused the review application. The Secretary of Justice then applied to this Court for a review of the sentence. After hearing the application, this Court dismissed the application, for reasons to be set out below.

FACTS OF THE CASE

4.  In October 1999, the Respondent and her husband Ko Chung Keung (“Mr. Ko”), together with their 6-month old daughter, applied to the Social Welfare Department (“the Department”) for Comprehensive Social Security Assistance (“CSSA”). The family was granted unemployment assistance by the Department. On 5 May 2000 the Respondent gave birth to her second daughter, who was then also granted CSSA by the Department.

5.  On 28 September 2000, the Applicant informed the Department that Mr. Ko had been sentenced to imprisonment for three months for a criminal offence and she applied to replace Mr. Ko as the CSSA applicant. The Department ceased releasing CSSA payments to Mr. Ko on 26 September 2000 and started releasing the money to the Respondent instead.

6.  On 9 January 2001, the Respondent informed the Department that Mr. Ko was released from prison on 25 November 2000. The Respondent did not obtain CSSA between 25 July and 20 December 2001.

7.  On 21 December 2001, the Respondent applied for CSSA again but did not include Mr. Ko as a household member who was to receive CSSA.

8.  On 22October 2002, the Respondent and Mr. Ko applied to the Department to have Mr. Ko’s name added as a household member who was to receive CSSA. At that time both the Respondent and Mr. Ko were unemployed. Mr. Ko was injured and awaiting a medical report. The staff of the Department reminded the Respondent that if Mr. Ko could not produce his medical report, either of them must take part in the “Support for Self-reliance Scheme” (“the Self-reliance Scheme”) if they were to be eligible for CSSA. Subsequently, the Department received a medical report, which certified Mr. Ko’s disability to work up to 21July 2003 on account of his injuries.

9.  On 4 July 2003, the Department inquired of the Respondent about Mr. Ko’s injuries and reminded her that if she could not produce a medical certificate on Mr. Ko’s injuries, either of them would have to join the Self-reliance Scheme.

10.  On 27 October 2003, the Respondent notified the Department that Mr. Ko had not contacted her since he left home on 20 July. The Respondent signed a Review Form for the Department to confirm what she said.

11.  On 16 January 2004, the Department made an appointment with the Respondent for a case review, whereupon she made the following declaration in writing:

I do not have a job and I have to take care of my daughters. I have not heard from my husband. I do not intend to seek a divorce for the time being. If I hear from my husband, I will inform the Department as soon as possible. 

12.  On 9 July 2004, the Department made another appointment with the Respondent to conduct the half-yearly case review. The Respondent restated in a written declaration that:

I do not have a job and I have to take care of my daughters. I have not heard from my husband since the time of my previous declaration. As my children are very young, I do not intend to seek a divorce for the time being. If I hear from my husband, I will inform the Department as soon as possible.   

13.  Although the Respondent claimed that she had not heard from Mr. Ko since he left home, there was evidence to show that during the 10 months between 13 February to 29 December 2004, the Respondent and Mr. Ko had on 9 occasions departed from and returned to Hong Kong at the same time. Three of those occasions were in February, August/September and December when they were away from Hong Kong for 5 days. They were away from Hong Kong for two days on 5 other occasions; and on the last occasion, they were out of town for one day.

14.  In his Reasons for Verdict dated 3 March 2006, the Magistrate found that, as a matter of fact, the Respondent and Mr. Ko were together between February and December 2004.

REVIEW OF SENTENCE

15.  Pursuant to Section 81A(1) of the Criminal Procedure Ordinance, Cap. 221 of the Laws of Hong Kong, the Secretary for Justice may apply to the Court of Appeal for a review of any sentence on the ground that the sentence “is not authorized by law, is wrong in principle or is manifestly inadequate”.

16.  In The AG v. Lam Kam Tai [1972] 1 HKLR 324, the Full Court of Hong Kong laid down the principles governing a review of sentence and provided an interpretation of the term “manifestly excessive or manifestly inadequate” under section 81A. The Full Court held that a court would not vary a sentence imposed by a lower court simply because it disagreed with that sentence. In deciding whether or not to vary a sentence, the court should consider the following questions:

(1)        Is the sentence so manifestly inadequate or so grossly excessive that it leaves one with a sense of shock or outrage?

(2)        Is the sentence so grossly excessive or so manifestly inadequate that no judge properly exercising a judicial discretion in the same circumstances would have imposed it?

(3)        Is the sentence out of all proportion to the gravity of the offence?

REASONS FOR SENTENCE

17.  The Reasons for Sentence given by the Magistrate on 21 March 2006 are the same as his reasons for refusing the application for review of sentence by the Secretary for Justice. These reasons are summarized as follows:

(1)        The circumstances of the present case were different from, and less serious than, those in other cases;

(2)        The net proceeds obtained by the Respondent from the offence were $225 per month, totalling $2,475. The total amount of CSSA she received from March to December 2004 was $94,362.00, of which $2,475.00 (i.e. $225 x 11 months) was single parent supplement;

(3)        The Respondent had a clear record;

(4)        She had two young daughters, aged 5 and 6 and were studying in the kindergarten and primary 1, who needed her care and attention;

(5)        She still had affection for her husband and had twice attempted suicide. In committing the offences, she might have been influenced to a certain extent by her husband, who had 18 criminal convictions between 1988 and 2005;

(6)        She had been detained for 19 days when the court called for reports; and

(7)        There had been some delay in the prosecution process.

18.  The Magistrate considered that the first two reasons alone constituted strong grounds for not imposing an immediate custodial sentence. Also taking into account the other factors, the Magistrate concluded that there were exceptional circumstances in the present case for not passing an immediate custodial sentence on the Respondent.

19.  The Magistrate pointed out in his Reasons for Verdict that since 22 July 2003, either the Applicant or Mr. Ko had to take part in the Self-reliance Scheme if they were to be eligible for CSSA. The Respondent concealed the relevant facts, as a result of which the Department was deceived into continuing to make CSSA payments to them despite the fact that neither of them had joined the Self-reliance Scheme. However, in considering the sentence, the Magistrate emphasized that the Department had only overpaid $2,475 to the Respondent. His reasons are summarized as follows:

(1)        When the Respondent was granted CSSA in her own name in December 2001, Mr. Ko was not included as a household member. At that time she was already eligible for CSSA without having to join the Self-reliance Scheme. She stated in the Department’s Case Review Form that she was still having feelings for Mr. Ko and hoping he would return to her, and therefore she did not think of a divorce.

(2)        Between October 2002 and July 2003, during which Mr. Ko was included as a family member and obtained CSSA, he sustained injuries and, as certified by the doctor, was unable to work. Therefore, neither of them was required to take part in the Self-reliance Scheme during that period.

(3)        Although the Respondent falsely represented to the Department in October 2003 that Mr. Ko had left home since July of that year, the Department had stopped making CSSA payment to Mr. Ko since July of that year. Only the Respondent and her two daughters continued to receive CSSA payments. This showed that Mr. Ko’s status would not have a direct bearing on the Respondent’s eligibility for CSSA.  During this period, the Respondent was only overpaid single parent supplement in the sum of $225 per month.

THE CSSA SCHEME

20.  We agree that the actual amount of CSSA that the Respondent received by deception is an important sentencing consideration. The CSSA Scheme of the Department was set up not pursuant to any legislative provision but in accordance with administrative policies. The Department has issued “A Guide to Comprehensive Social Security Assistance”, which states that an applicant must satisfy the following three conditions to be eligible for assistance: 

(1)        Residence requirements;

(2)        Financial tests;

(3)        Additional criteria for able-bodied adults. A person aged 15 to 59 in normal health has to meet one of the following conditions:

(a)              being unable to work in circumstances which the Department considers reasonable (for example, studying or having to look after young children or sick or disabled family members at home); or

(b)             earning not less than $1,450 per month and working not less than 120 hours per month; or

(c)              if unemployed or earning less than $1,450 per month or working less than 120 hours per month, actively seeking full-time jobs and participating in the Self-reliance Scheme of the Department.

21.  According to the documents submitted by the Department, by agreeing to join the Self-reliance Scheme, an applicant indicates he is willing to prove that, in the course of receiving CSSA payments, he makes all efforts to participate in all activities arranged by the Department for the purpose of assisting him in finding a paid full-time job.  The applicant is required to sign a Job Seeker’s Undertaking to indicate that he fully understands he must fulfill all his obligations under the Self-reliance Scheme.  If an applicant refuses to sign the Job Seeker’s Undertaking or fails to comply with any of the requirements stated in the Job Seeker’s Undertaking, he is no longer eligible for CSSA and the Director of Social Welfare is then entitled to:

1)       stop processing his application for CSSA;

2)       stop releasing any further approved CSSA payment to him and other members of his household; and

3)       request him to repay any sum of CSSA money that has been overpaid to him/his family by reason of the said non-compliance.

$2,475 OR $94,362?

22.  At the hearing of this application, Counsel for the Secretary for Justice informed us that the Respondent had not signed the Undertaking for the Department although her husband had done so. At trial, the Secretary for Justice had not adduced any evidence in connection with the Undertaking.

23.  As far as sentencing is concerned, the Respondent was personally eligible for CSSA. After her relationship with Mr. Ko turned sour, she had to take care of the two daughters and was therefore not required to join the Self-reliance Scheme. Had Mr. Ko been able-bodied, he would have had to join the Scheme to be eligible for CSSA. However, the Department had not made CSSA payment to Mr. Ko, so even if the Department required either the Respondent or Mr. Ko to join the Self-reliance Scheme, that requirement would only be applicable to Mr. Ko. As the Department had not made CSSA payment to Mr. Ko, the Respondent’s eligibility for CSSA would not have been affected by the fact that neither she nor Mr. Ko was on the Scheme, and the Department would not have suffered any loss in that respect. It appears from the Magistrate’s Reasons for Verdict that the Department had not adduced evidence at trial to prove that, when the Respondent was eligible for CSSA without having to take part in the Self-reliance Scheme and Mr. Ko was not paid under CSSA, the usual practice of the Department was to exercise its discretion not to make CSSA payments to the Respondent. Nor was there evidence at trial to indicate that Mr. Ko had an income which would affect the Respondent’s financial condition and disqualify her for CSSA. For these reasons, we consider that the Magistrate was justified in holding that the actual proceeds received by the Respondent from the offence amounted only to $2,475.

24.  In any event, although the Secretary for Justice averred in his written submissions that the Respondent’s actual gain amounted to $94,362 and not $2,475, Mr. Patrick Cheung, Deputy Principal Government Counsel, for the Secretary for Justice conceded at the hearing that the Respondent’s actual gain amounted only to $2,475.

25.  In these circumstances, we will adopt the figure of $2,475 as the Respondent’s gain and, on this basis, consider whether the sentence in the present case is manifestly inadequate.  

GROUND OF APPLICATION

26.  The Secretary for Justice contends that it is a serious offence to defraud public funds and a heavy sentence should be imposed to reflect the gravity of the offence, and therefore an immediate custodial sentence should be imposed on the Respondent in order to achieve deterrence.

DISCUSSION

27.  We agree that the CSSA Scheme is intended to help those in genuine need of assistance. Our society does not tolerate any act of defrauding public funds by dishonest means. However, we do not endorse the view that an immediate custodial sentence should be imposed on each and every person guilty of defrauding public funds. Each case presents its own facts and each defendant has his own circumstances, and it would go against sentencing principles to lay down a hard-and-fast rule of adopting  immediate imprisonment as a starting point. The following factors should be considered in determining whether a severe sentence is to be imposed:

(1) whether the defendant pleaded guilty;

(2) the amount involved and the length of time over which the offence was committed. It should be noted that, even where a huge total amount is involved, this may be an accumulation of small amounts received by the applicant per week/per month;

(3) the circumstances leading to the offence. There is an obvious difference between a legitimate claim which became false due to a change of circumstances and a claim which was false from its inception;

(4) the purpose for which the money has been used: using the money for providing household necessities will more readily attract the court’s sympathy than spending the money on luxuries;

(5) the defendant’s character and previous records;

(6) circumstances specific to the defendant, such as illness, disability, family difficulties, etc; and

(7) whether the defendant has voluntarily repaid, in whole or in part, the amount that has been overpaid to him.

28.  We do agree that in appropriate cases, the court is under a duty to impose a deterrent sentence in order to curb the offence. However, a regime of draconian penalties and severe laws is neither a panacea nor the only solution for evils in our society. The Government has to take other measures, such as publicity campaigns and education, to promote civic awareness, so that those with working capacity and normal health will understand that public assistance schemes are designed only for people facing extreme financial difficulties and are not intended to encourage people to place long-term reliance on public assistance or to displace the principle of self-sufficiency. Furthermore, the Government should provide more job opportunities for those recipients of CSSA who are able-bodied so that they can stand on their own feet instead of having to rely on public assistance. The Government should also provide more child-care services so that mothers with working capacity will feel at ease in working outside home. At the same time, the Government should more strictly examine and verify the background and eligibility of applicants for public assistance, and should also enact legislation to monitor the CSSA Scheme.

29.  The Secretary for Justice has cited cases from other jurisdictions showing other courts’ approach to offences involving fraud on public assistance. These cases do not indicate that immediate imprisonment must be adopted as the starting point for this type of offence. Indeed, some of the cases indicate that, even where a custodial sentence is likely to be imposed, the court should not say that a different approach will be taken only in exceptional circumstances. For example, the offender might be in dire poverty but still have to support others financially, or might have committed the offence because he could not withstand family pressure. Although these circumstances are by no means unusual in this type of offence and hence not truly exceptional, a consideration of other relevant circumstances may warrant a more lenient approach to sentencing. For this reason, it is safer to say that imprisonment will be adopted as a starting point in appropriate cases than to say that there must be exceptional circumstances before the court can impose a non-custodial sentence: see Kovacevic [2000] 111 A Crim. R. 131.

30.  Much as social background may vary from country to country, recipients of public assistance are usually from the grassroot level of the society with little or no income. They are the disadvantaged. In this respect, the situation in Hong Kong is not significantly different from other countries, and therefore Hong Kong courts are entitled to consider the sentencing principles laid down by precedents of other jurisdictions.

31.  We cannot ignore the fact that the amount involved in the present case is merely $2,475. The Respondent travelled out of Hong Kong on a number of occasions when she was receiving public assistance, and this was incongruous with her status as a CSSA recipient. Nevertheless, the assistance funds she and her daughters obtained were all spent on basic necessities. The travelling expenses for her overseas tours were probably borne by Mr. Ko, who was not on CSSA. The Respondent was therefore not using public funds for a luxurious life. When the Respondent re-applied for CSSA on 21 December 2001, Mr. Ko’s name was not included on the list of household members claiming CSSA. She did not deceive the Department on that occasion. The Magistrate ruled that from February to December 2004, the Respondent was together with her husband but falsely represented to the Department that she was still out of contact with him. The application was legitimate at the inception but became false due to a change in circumstances, and this is obviously different from an application which was false ab initio.

32.  The Respondent and Mr. Ko were rescued in the South Asian Tsunami Disaster. Their rescue received extensive coverage in the media and resulted in the prosecution of the Respondent. Before she applied for CSSA, the Respondent did have a job. She had also started her own business but it subsequently failed. We believe and hope that, having survived the tsunami, she will seriously reflect on the meaning of life and understand the importance of moving away from poverty by means of self-reliance.

33.  We endorse the reasons given by the Magistrate and agree that there were exceptional circumstances in the case that justified a suspended sentence. The application for the review of sentence is therefore dismissed.

SENTENCING GUIDELINES

Request by the Secretary for Justice

34.  The Secretary for Justice has requested us to lay down sentencing guidelines for offences involving fraud on public assistance. Mr. Cheung for the Secretary for Justice submitted that, in the absence of exceptional circumstances, a deterrent sentence, namely an immediate custodial sentence, should be imposed for this type of offences. As for the term of imprisonment, Mr. Cheung submitted that if the amount involved was from $10,000 to $100,000, the starting point should be 12 to 18 months; and if the amount involved was from $100,000 and $200,000, the starting point should be 18 months to 3 years.

English cases

35.  The authorities cited by Mr. Cheung do not lend support to his stance that an immediate custodial sentence should be imposed save in exceptional circumstances. In R v. Livingston Steward and others [1987] 9 Cr. App. R. (8), the English Court of Appeal laid down sentencing guidelines for offences involving fraud on public assistance. The Court pointed out that these cases were usually dealt with by the “magistrates’ courts”. Taking the figures in 1985 as an example, of the 6,368 cases in which the defendants were convicted, only 2.5% resulted in immediate custodial sentences, and all the remaining cases resulted in non-custodial sentences. On the other hand, the “Crown Court” dealt with more serious cases of fraud on public assistance. The Court of Appeal pointed out that this type of cases often involved aggravating features such as professional fraudsters, sophisticated and large-scale fraudulent schemes (for example, defrauding public funds by means of frequent use of different names or addresses or of forged documents), and a huge amount of money. The starting point for this type of cases should be 2½ years’ imprisonment. For cases of fraud on public funds which did not involve the above features, the Court of Appeal said that, as circumstances differed from case to case, the sentencing court had to consider the following:

(i)   Was an immediate custodial sentence truly necessary? The Court of Appeal pointed out that, for cases before the Crown Court which were relatively more serious, a non-custodial sentence might not be appropriate.

(ii)  If a custodial sentence was necessary, should the court make a community service order of the same nature or impose a suspended sentence? The Court of Appeal considered it more appropriate to impose a suspended sentence or a community service order in the majority of these cases.

(iii)  In cases involving less than £10,000, if a community service order or a suspended sentence did not apply, an appropriate sentence upon conviction after trial would be imprisonment for 9 to 12 months.

36. In R v. Graham and Another [2005] 1 Cr. App. R. (S) 640, the English Court of Appealconsidered the need to revise the sentencing principles set out in Steward. The Court concluded that those principles could by and large be upheld but, in view of the increasing prevalence of cases involving fraud on public assistance, the court must impose a deterrent sentence in appropriate cases. The Court of Appeal also adjusted the threshold amount laid down in Steward from £10,000 to £20,000, which meant that imprisonment for 9 to 12 months was warranted where appropriate in cases involving less than £20,000.

Australian cases

37. In Kovacevic, the Supreme Court of South Australia held that, while a deterrent sentence was appropriate in cases involving intentional and continuing fraud on public assistance, the need for a deterrent sentence did not necessarily override other considerations. The Court held that the sentencer should have regard to all relevant factors and give the offender an opportunity to rehabilitate, which would be beneficial to the society and the offender alike. Further, a more lenient sentencing approach could be taken in appropriate circumstances.

Situation in Hong Kong

38. According to the information supplied by the Secretary for Justice, the numbers of convictions for fraud on public assistance over the past 5 years are as follows:

2002	2003	2004	2005	2006
15 cases	35 cases	34 cases	86 cases	130 cases

39. The Secretary for Justice could not prove whether the steady increase in this type of cases over the years was due to an increase in the number of fraudulent acts or due to more stringent investigation by the Department which unearthed more cases of fraud. Nor could the Secretary for Justice adduce evidence to refute the proposition that it was the increase in the number of CSSA applicants in the wake of economic downturn over the past years which led to a proportional increase of instances of fraud. It appears from the information provided by the Secretary for Justice that the convictions in 2006 were for offences committed prior to 2006. There is no evidence in the present case to suggest that a majority of CSSA recipients habitually rely on public assistance and refuse to work. In any event, judging solely from the rise in the relevant figures, we agree that this type of cases is becoming prevalent.

Hong Kong cases

40. According to the 2006 figures, of the 129 cases in which the defendants were convicted, non-custodial sentences in the form of community service orders or suspended sentences were imposed in 56 cases, whereas immediate custodial sentences were imposed in the remaining cases. All these cases were dealt with by magistrates.

41. The Secretary for Justice has analyzed 90 of those cases in terms of the nature and length of sentence. The sentences are classified under six bands:

	Amount involved	Term of immediate imprisonment	Number of cases, and percentage out of the 90 cases
(1)	Less than $10,000	14 days to 6 months	26 cases, 29%
(2)	$10,000 to $50,000	2 to 6 months	28 cases, 31%
(3)	$50,000 to $100,000	4 to 6 months	11 cases, 12%
(4)	$100,000 to $150,000	1 to 6 months	5 cases, 6%
(5)	$150,000 to $200,000	3 to 9 months	7 cases, 8%
(6)	Over $200,000	2 to 8 months	13 cases, 14%

42. The smallest amount involved was approximately $569 whereas the largest was $590,000. Community service orders or suspended sentences had been imposed in all the six bands of cases.

43.  The information provided by the Secretary for Justice shows that, up to 2006, only one case involving fraud on public assistance had been tried by the District Court. That case is HKSAR v. Ma Kim Hung CACC 32/2002, in which the defendant defrauded CSSA funds for the total sum of $425,244.00 over a period of 3½ years, although the 25 charges against him involved an amount of $258,892.00. The defendant pleaded guilty to the charges. The trial judge adopted 2½ years’ imprisonment as the starting point and gave a one-third discount for the defendant’s guilty pleas and further reduced the term by two months as the defendant had repaid the amount in question. The defendant was therefore sentenced to 18 months’ imprisonment. The Court of Appeal held that, in view of the substantial amount being defrauded over an extended period of time, the trial judge was correct in adopting 2½ years as the starting point. However, as the defendant had made restitution and there had been delay in prosecution, the Court of Appeal further reduced the sentence by 9 months and arrived at a final sentence of 9 months’ imprisonment.

44. Further, the sentences imposed by the Court of First Instance in the following magistracy appeals are set out below:

(1) HKSAR v. Lai Cheuk King (黎綽琼) MA 994/2004. The amount involved was $146,000.00. The defendant pleaded guilty to 20 counts of defrauding public assistance. A term of 15 months’ imprisonment was taken as the starting point and was reduced to 10 months on account of the guilty pleas.

(2) HKSAR v. Lee Pui Sun (李佩申) MA 986/2004. The amount involved was $13,282.50. The defendant pleaded guilty to 17 counts of defrauding public assistance and was sentenced to 12 months’ imprisonment.

(3) HKSAR v. Cho Kwun Wah [1998] 2 HKC 738. The defendant pleaded guilty to 11 counts of defrauding public assistance, which involved a total sum of $11,706.00. He was sentenced to 12 months’ imprisonment.

(4) HKSAR v. Wong Kam Sang MA 1156/1999. The defendant was convicted of 13 counts of defrauding public assistance, which involved a total sum of $61,158.19. The defendant pleaded guilty, and the court adopted 15 months’ imprisonment as the starting point and reduced the term to 10 months for the guilty pleas.

(5) HKSAR v. Lee Man Fan (李文範) MA 647/2006. The defendant received public assistance in the sum of $187,843.38. He first repaid $100,000 to the Department and the outstanding $80,000 was to be repaid by monthly instalments of $3,000 each. The magistrate adopted 12 months’ imprisonment as the starting point and reduced the term by one-third for the guilty pleas. The term was further reduced by 2 months because the defendant had returned half of the overpaid CSSA money. The final sentence was therefore 6 months’ imprisonment. On appeal, the Court of First Instance reduced the sentence to 5 months on humanitarian grounds, and this enabled the defendant to be released immediately.

Immediate imprisonment should not be the starting point

45. On the basis of the above information, we do not agree with the suggestion that the magistrates in Hong Kong have misunderstood the sentencing principles or overlooked the seriousness of this type of cases in determining sentence. We believe that, as frontline legal personnel, the magistrates do understand that, for this type of offence, which is usually committed by disadvantaged members of our society, a non-custodial sentence or a suspended sentence is more appropriate for the defendants, their families and our society as a whole.

46. Despite the remarks made by the courts in Lee Pui Sun and Lai Cheuk King that frauds on public assistance are becoming rampant and even deluging in certain districts, the Secretary for Justice has not provided us with any information on the ratio of fraudsters to the number of CSSA recipients or the ratio of the amount being defrauded to the total expenditure. In light of the sentencing principles, the actual sentences passed by the courts and the social conditions, we do not consider it necessary at this stage to adopt the guideline suggested by the Secretary for Justice, namely that an immediate custodial term should be taken as the starting point save in exceptional circumstances. As mentioned above, we agree that, judging solely by the increase in the number of relevant cases, this type of offence is becoming prevalent. We also agree that, where an immediate custodial sentence is appropriate, the court has to impose a longer term of imprisonment. However, we do not agree that an immediate imprisonment term must be taken as a starting point in order to achieve deterrence. On the contrary, the sentencing principles laid down in Steward are to be preferred:

(1)     The court should first consider whether a custodial sentence is necessary;

(2)     If a custodial sentence is appropriate, the court may consider imposing a community service order in lieu of imprisonment or suspending the sentence;

(3)     In cases involving some intentional and persistent fraud, an immediate custodial sentence is justified.

Terms of immediate imprisonment

47. Where a defendant is convicted after trial and an immediate custodial sentence is warranted, the appropriate terms of imprisonment are in our view as follows:

	Amount involved	Term of immediate imprisonment
(1)	Less than $50,000	Less than 9 months
(2)	$50,000 to $100,000	9 to 15 months
(3)	$100,000 to $200,000	15 to 24 months
(4)	Over $200,000	Over 24 months