HKSAR v. WAN CHI WAI

CACC 105/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 105 of 1999

(ON APPEAL FROM DCCC NO. 924 of 1998)

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J U D G M E N T

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Woo, J (delivering the judgment of the Court) :

1. The Applicant faced 9 charges of lending money at an effective rate of interest exceeding 60% per annum, contrary to section 24(1) of the Money Lenders Ordinance, Cap163. Each of the 9 charges involved the lending of a sum of money to a particular person on a particular date. The Applicant pleaded not guilty and was tried before District Judge Longley. At the conclusion of the trial, he was found guilty of 7 charges, namely charges (4), (8), (10), (11), (12), (14) and (15). For charge (4), he was sentenced to imprisonment for a term of 2 years. Similarly, for each of the remaining 6 charges, he was sentenced to a term of 2 years' imprisonment, two months of each of such terms were ordered to run consecutively to the sentence of 2 years, making a total of 3 years' imprisonment in all.

2. The Applicant now seeks leave to appeal against sentence.

3. At the trial, 6 witnesses gave evidence that they borrowed money from the Applicant, after seeing the availability of loans advertised on leaflets that were posted at lift lobbies of housing estates in the Tuen Mun area. One of these 6 witnesses was a member of a police team investigating into loansharking activities in the Tuen Mun area. He was PW1, DPC16657. He posed as a person wishing to take out a loan, and he contacted the Applicant from whom he obtained the loan in charge (4). The other 5 witnesses who borrowed money from the Applicant were civilians. When the Applicant was arrested by the police, he was found to be in his own car with a small nylon bag hung across his shoulder, the contents of which included his identity card, China re-entry permit, a number of notebooks, 2 mobile phones, 5 pagers, bank card and a set of keys. The keys were those used for entering a flat inside which were found other documents which appeared to be money lending records. Two rubber chops were also found in the flat which bore telephone numbers that were the same as those used by or given to the 5 civilian witnesses. The notebooks, mobile phones, pagers and bank card were all found by the Judge as connected in various ways with the particular loans which were the subject of the charges of which the Applicant was found guilty.

4. In respect of the 7 charges of which the Applicant was found guilty, each relating to one loan transaction, the amounts of the loans were $2,000 once, $3,000 thrice, $4,000 twice and $5,000 once. The dates when the loans were made ranged from 1 October 1997 to 20 May 1998.

5. In his reasons for sentence, the Judge found that the Applicant played a very significant role in a substantial loansharking operation. However, considering his age and the amount of money involved, the Judge assumed in the Applicant's favour that he was not the principal behind the loansharking operation. The Judge also found that the rate of interest in respect of almost all of the loans well exceeded 1000% per annum, which he described as an extortionate rate. We have worked out from the figures in the transcript that the rate was slightly over 1000% per annum. The Judge lamented the effect of loansharking as follows :

"There can be few offences that are as widespread and occasion so much misery in Hong Kong loansharking. Those who engage in such activities are preying upon their fellow members of society when they are at their most vulnerable and desperate. Being legally unenforceable, these loans and the interest on them can only be enforced by fear of the consequences that the lenders might visit on the borrowers. The sort of threat necessary to instil that fear can be heard on the taped conversation (Exhibit P10) between DPC 16657 and the person who gave his name as TAM on 7 February 1998.

Even if you were not the person who gave his name as TAM on that occasion, you can have been under no illusion as to how these loans were enforced. The demeanour of Mr LEUNG Wai-yip, PW6, when he gave evidence in this case made very clear the fear that those who engage in this sort of offence can instil. That fear can and does drive some borrowers to despair and others to crime...."

6. The Judge then referred to the case of R v LUI Sau-cheong [1993] 2 HKCLR 298 for the description of the effect of loansharking operations made by Bokhary, JA when delivering judgment of the Court of Appeal. Bokhary, JA concluded :

"The courts have in recent years seen enough of the evils of loan sharking to become fixed with a duty to combat the same by penalties heavier than those imposed in the past."

7. The Judge also noted that the legislature had increased the maximum term of imprisonment on conviction on indictment for lending at an excessive rate of interest from 2 years to 10 years. Taking into account the Applicant's previous record, being 6 offences of possession for the purpose of trade or business of infringing copies of sound recordings in which copyright subsisted, the Judge was of the view that those records demonstrated that the Applicant had repeatedly committed offences which individually were minor but were offences committed by those at the edge of organised criminal activity and that the Applicant had shown no remorse whatsoever.

8. The Judge adopted a starting point of 2 years' imprisonment, and proceeded to pass the sentences referred to earlier.

9. In the Perfected Grounds of Appeal against Sentence, Mr Tse, for the Applicant, raised two grounds, namely, that the starting point adopted by the Judge for each offence of 2 years was manifestly excessive and wrong in principle and secondly the overall sentence of 3 years was manifestly excessive.

10. Mr Tse referred us to HKSAR v SO Tang-fat & Another, Criminal Appeal No. 183 of 1997 (7 November 1997, unreported) where the Court of Appeal confirmed the sentence of 2 years of imprisonment imposed on one of the Applicants before them. He was found guilty after trial for having together with others assaulted and committed false imprisonment to enforce an illegal loan owed to another. The offence involved only a single incident. Based on this authority, Mr Tse argued that the 2 years of imprisonment as a starting point adopted by the Judge in the present case was excessive.

11. Mr Tse also referred us to HKSAR v WONG Kwok-choi, Criminal Appeal No. 636 of 1998 (30 July 1999, unreported) where delivering the judgment in Chinese, the Court of Appeal, identically constituted as the present one, gave sentencing guidelines in respect of the same offence as that the Applicant was found guilty of. After reviewing the cases dealing with such sentences, the Chief Judge enumerated some factors aggravating sentence, including whether the lending was part of the an organised business, the extent of such business, the rate of interest charged, whether there was any triad element, and whether violence, threats or improper means were used, etc. In that case, the applicant Wong advertised the availability of loans in newspapers, ran his lending activities in a systematic manner, charged a rate of interest of 900% and used foul languages and menacing terms when he was chasing some of the borrowers to repay. He was previously a police officer which showed that he knowingly breached the law. He pleaded guilty to one of the charges at the commencement of the trial and pleaded guilty to the remaining 10 charges after the prosecution had concluded its case. The trial judge gave a 20% discount for the pleas, and also gave some discount for Wong's clear record. The loans involved ranged from $1,000 to $10,000. The trial judge used 9 months of imprisonment as the starting point, and considering the mitigating factors, he sentenced Wong to 5 months' imprisonment for the first of the 11 charges and 6 months' imprisonment for each of the remaining 10 charges. The sentences were made partly concurrent and partly consecutive so that the total came to 25 months. Taking into account the totality principle, the Court of Appeal opined that the proper starting point should have been 2 1/2 years for all the charges. Considering the pleas of guilty which were not made at the earliest opportunity and the clear record, the Court of Appeal was of the view that the total sentences should be 2 years' imprisonment. Since the sentences imposed by the Judge was 25 months in all, the Court of Appeal declined to interfere.

12. On behalf of the Applicant, Mr Tse compared the criminality between Wong in WONG Kwok-choi and the Applicant before us. He submitted that Wong was convicted of 11 offences whereas the Applicant was convicted 7 offences. Wong had used threats and foul languages against some of the borrowers whereas the Applicant had not. Wong was a former police officer and aged 39 years whereas the Applicant was a civilian and aged 20 years at the time of the offences. On the other hand, Mr Tse conceded that there were factors which were likely to be viewed less favourably to the Applicant as compared to Wong. The period of the loans made by Wong was from November 1997 to May 1998 while the Applicant's loans were made for a longer period from October 1997 to May 1998. Wong charged interest at the rate of about 900% per annum whereas the Applicant's exceeded 1000% per annum. Wong had a clear record but the Applicant did not.

13. The sentencing guidelines in WONG Kwok-choi were made by this Court on 30 July 1999, which were not known to the Judge who passed sentence on the Applicant on 8 February 1999. It is generally difficult to compare the criminality of defendants in different cases. We as the Court of Appeal, do not have the impression gained of the Applicant as the Judge did when passing sentence after a relatively lengthy trial before him. On the other hand, even entering into the comparison exercise does not help the Applicant. Considering the fact that the Judge found that the Applicant had played a very significant role in the loansharking transactions and he knew that threats were and would be used to enforce repayment, the Applicant's criminality was serious. Further, the advertising of the business was made by posters at the lift lobbies of housing estates in Tuen Mun, obviously to attract the inhabitants of the locality. Judging from the articles found in the Applicant's possession and in the flat to which he had access, the loansharking operation, with others also involved, was more widespread and organised than that operated by Wong in whose case there was no evidence of the existence of other accomplices. The Applicant also visited the borrowers at their residence in order to assess their credit-worthiness. If the borrowers refused or were unable to repay, their addresses being known to the Applicant's organisation could lead to dire consequences to them. From these angles, the culpability and criminality of the Applicant appear to be more serious than Wong's.

14. In the circumstances, we are of the view that the sentences totalling 3 years imposed by the Judge cannot be said to be manifestly excessive or wrong in principle. We therefore dismiss the application.