HKSAR v. YUEN KWOK KEE

CACC 336/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

criminal APPEAL NO. cacc 336 OF 2005

(ON APPEAL FROM DCCC No. 632 of 2005)

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REASONS FOR JUDGMENT

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

1.  On 21 December 2005, we allowed Yuen Kwok-kee’s appeal against sentence by reducing his total sentence from four years to three years’ imprisonment. We indicated that we would hand down our written reasons and this we now do.

Background Facts

2.  Yuen Kwok-kee – the appellant –was, at the material times, a settlement clerk of KKM Securities Limited (“KMM”) in charge of clients’ share-trading accounts.

3.  On a number of occasions between June 1994 and April 1998, the appellant misappropriated clients’ funds given to him for share purchases or sold clients’ shares without their permissions, and without accounting to them for the proceeds. Most of the offences were committed in 1997.

4.  The appellant defrauded 12 victims and the total amount involved was about $2 million. The victims were compensated by KMM for their losses.

5.  When committing the offences, the appellant was in his early to mid-thirties with a clear record. He was married and has a daughter. The appellant suffered loss in the stock market and hoped to recover the loss by using clients’ money. His financial problems were made worse by the 1997 recession.

6.  On 27 May 1998, before his crime came to light, the appellant left Hong Kong for Australia, deserting his wife and daughter. His wife had since divorced him.

7.  In Australia, the appellant cohabited with a Madam Choi whom he knew as a summer student in his office in 1997 and they have a son.

8.  The appellant returned to Hong Kong on 12 May 2005 with Madam Choi and their son, and surrendered to the police.

The Charges and The Sentence

9.  The appellant was arrested and charged with 10 counts of procuring the making of false entry in a bank record by deception and 14 counts of theft.

10.  The appellant pleaded guilty to all 24 charges before Deputy Judge J Ko in the District Court and was sentenced to the total term of four years’ imprisonment.

11.  The judge adopted starting points of 42 months’ imprisonment for each of charges 1 to 12 and 48 months’ imprisonment for each of charges 13 to 24, and discounted them by one-third to 28 months and 32 months respectively.

12.  The judge ordered the sentences on the 1^st to 12^th charges, and those on the 13^th to 24^th charges to run concurrently, with 20 months of the 32 months on the 13^th to 24^th charges to run consecutively to the 28 months on the 1^st to 12^th charges, making a total sentence of 48 months’ imprisonment.

13.  With leave of Cheung JA granted on 14 October 2005, the appellant appealed against the sentences.

The Grounds of Appeal

14.  Ms Connie KY Cheng, on behalf of the appellant, argued that the judge should have given him more than the one-third discount usually given for a guilty plea to reflect his great and genuine remorse by returning from Australia and surrendering to the police. 

15.  Ms Cheng also suggested that the judge erred by failing to give any credit to the appellant for his rehabilitation. Ms Cheng emphasized that the appellant had become “a family man with a full-time employment and a commitment to his family” and suggested that in all the circumstances, the 48 months’ imprisonment was manifestly excessive.

Discussion

16.  The customary one-third discount for guilty plea reflects the remorse of an accused and other associating factors such as the saving of time, expenses and the inconvenience to witnesses who otherwise have to give evidence in court. More importantly, it is the recognition of the accused’s co-operation with the authority, which renders the administration of justice smoother and more efficient.

17.  In the usual course of event, the one-third discount is the maximum discount for a guilty plea. Further discount can be given when the accused also assists the authority by providing information and/or giving evidence against other defendants, thus exposing himself or his family members to inconvenience or danger or risks of danger.

18.  To obtain such further discount, the accused must present to court relevant information, which was confirmed by the prosecuting authority.

19.  The Court of Appeal had stated in other cases, such as HKSAR v Kwan Chi Hung [2004] 2 HKLRD 460 and HKSAR v Lau Man Cheung [2003] 3 HKLRD 634, that where there was evidence of great remorse on the defendant’s part such as a conscience stricken defendant voluntarily surrendering to the authority or a defendant pleading guilty despite the total lack of evidence against him, a further discount could be given.

20.  We want to emphasize, however, that such further discount is an exception rather than the rule.

21.  It is difficulty to set out the precise circumstance in which such exceptional step should be taken, but a sensible tribunal should be able to recognise such circumstance when it does happen and to that extent, it is a matter for the trial judge to decide if any further discount should be given, and the extent of such discount.

22.  The appellant, having committed a series of offences over a period of four years, went to Australia to avoid the obvious consequences. He remained in Australia for seven years before returning to Hong Kong to surrender to the police.

23.  Clearly, the appellant was driven by a sense of remorse although the difficult life as an illegal immigrant and a fugitive might also have played a part.

24.  The fact that the appellant had become “a family man with commitment to his family” should be recognized although he was only able to do so by fleeing Hong Kong for a long time.

25.  On the other hand, a wrong signal must not be sent out to encourage defendant to flee the jurisdiction after committing serious offences by giving further discount.

26.  We must not ignore that fleeing the jurisdiction to avoid the consequences of a crime can itself be an aggravating factor. As Bokhary JA (as he then was) pointed out in R v Lam Kuen [1997] 4 HKC 429 at p 430:

“The courts would certainly encourage fugitives to give themselves up. On the other hand, we cannot give encouragement to people to abscond and hope that they would get a reduction of sentence if they can show that while at large they had stayed out of trouble. The applicant absconded which is to his discredit. He later surrendered which is to his credit. The two things cancelled each other out.”

27.  In HKSAR v Chow Tak-fuk CACC 428/2004, Stock JA also commented:

“Whilst the courts must always encourage persons to surrender, so that some credit for that fact will normally be given, those who might be minded to flee should not be led to believe that if ultimately they return they will be in no worse position that had they not fled in the first place.”

28.  The appellant might not have absconded in its technical sense as he left Hong Kong before his crime came to light. However, by leaving Hong Kong, he would make the police investigation into the case more difficulty and more expensive.

29.  The police could not, for example, interview the appellant and obtain directly from him evidence relating to the circumstances in which the offences were committed. Having collected sufficient evidence, the police would have to find out the appellant’s where about and then seek his apprehension with the assistance of the Interpol and/or the Australian authorities.

30.  In that regard, what the appellant did would certainly render the administration of justice less smooth and less efficient.

31.  In any event, the judge clearly had taken into consideration all the relevant background facts. Having set out in detail the appellant’s background and the circumstances in which he committed the offences, the judge continued:

“The defendant began contacting his family in Hong Kong last year and asked his mother and his siblings for forgiveness. He had also contributed financially to his mother and his own daughter in Hong Kong born form his previous marriage.The defendant’s solicitor has urged upon me that the defendant is remorseful and feels sorry for betraying his victims. The defendant returned to Hong Kong voluntarily and surrendered himself to the authorities with a view to turn a new leaf in his life. The defendant apparently admitted under caution and has now pleaded guilty to all charges. The defendant has also written to this court personally to express his remorse.The defendant’s surrender, whilst welcome by this court, must be viewed in its proper context. The defendant has fled Hong Kong because of these offences for almost seven years.”

32.  On the facts of the case, we were not persuaded that the judge was wrong to give only a one-third discount to the appellant.

33.  The final sentence of 4 years’ imprisonment meant that the judge adopted a global starting point of 6 years and it fell upon us to decide if such starting point was manifestly excessive.

34.  This is a classic case of breach of trust, a breach of a very high degree of trust if we may add, and it occurred over a period of about 4 years on 24 occasions involving 12 clients.

35.  In R v Barrack (1985) 81 Cr App R 78 at p 82, the following factors were considered relevant in the determination of the proper level of sentence:

“	(i)	the quality and degree of trust reposed in the offender including his rank;
	(ii)	the period over which the fraud and thefts have been perpetrated;
	(iii)	the use to which the money or property dishonestly taken was put;
	(iv)	the effect upon the victim;
	(v)	the impact of the offences on the public and public confidence;
	(vi)	the effect on fellow-employees or partners;
	(vii)	the effect on the offender himself;
	(viii)	his own history; and
	(ix)	those matters of mitigation special to himself such as illness; being placed under great strain by excessive responsibility or the like; where, as sometimes happens, there has been a long delay, say over two years, between his being confronted with his dishonesty by his professional body or the police and the start of his trial; finally, any help given by him to the police.”

36.  The appellant betrayed the high degree of trust reposed in him by KMM and its clients and the many offences lasted a period of four years. Whilst the victims were compensated by KMM, it is unlikely that KMM will be able to recoup its loss from the appellant.

37.  The case is quite a bad case of the type. However, the Court of Appeal in Hong Kong has repeatedly emphasized that the amount involved is a important, if not a decisive factor in the determining the proper level of sentence and reference is often made to similar cases in England, although the courts must also have regard to local social and economic conditions.

38.  In R v Trevor Clark [1998] 2 Cr App R 137, it was decided that where the sum involved was between ₤100,000 and ₤250,000, three to four years would be appropriate, and cases involving between ₤250,000 and ₤1 million would merit between five and nine years.

39.  In S for J v Wong Kay Din (unreported) App for Rev No 7 of 1998, a case involving about $3 million, a sentence of 4 ½ years after trial was considered appropriate on review.

40.  In HKSAR v Wat Wai Leung (unreported) CACC 276/2000, the appellant was an assistant accountant with Maeda-Kumagai Joint Venture Corporation. Consequential upon his speculative investment activities, the appellant found himself to be financially embarrassed and he misappropriated about $2 million from his employee on four occasions over a period of about three months.

41.  Again referring to Trevor Clark (supra), the Court of Appeal adopted a global starting point of 3 ½ years’ imprisonment.

Conclusion

42.  We had considered the background of the case and the background of the appellant carefully. We bore in mind the number of offences involved and the period within which they were committed. We had also examined the sentences imposed in other cases involving breach of trust.

43.  We were persuaded that the total sentence of four years’ imprisonment, which meant a starting point of six years, was manifestly excessive. We were of the view that a more appropriate global starting point was 4 ½ years’ imprisonment and taking into consideration the guilty plea, a total sentence of three years’ imprisonment should be imposed.

44.  We therefore allowed the appellant’s appeal against sentence. We did not interfere with the sentences on the individual charges. However, we ordered that, of the 32 months’ concurrent sentence on the 13^th to 24^th charges, only 8 months had to be served consecutively to the 28 months’ concurrent sentence on the 1^st to 12^th charges. The total sentence was therefore reduced from four years to three years’ imprisonment.