HKSAR v LAU CHING MAN (D1) LEE CHUNG FAI (D2) WONG OI TING (D3)

DCCC 490/2021

[2023] HKDC 1265

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 490 OF 2021

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REASONS FOR SENTENCE

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INTRODUCTION

1.  There are three defendants in this case (D1-D3)  involving four charges of “conspiracy for an agent to accept advantage”, contrary to sections 9(1)(a)  and 12(1)  of the Prevention of Bribery Ordinance, Cap 201 and sections 159A and 159C of the Crimes Ordinance, Cap 200.

2.  D1 pleaded guilty to three of the four charges (Charge 2-4)  but pleaded not guilty to Charge 1.  D2 and D3 pleaded not guilty to their respective charge of Charge 3 and Charge 4.  As a result of plea bargaining, the prosecution was contended to leave Charge 1 in the court file and not to proceed against D1 on this charge without the leave of the court.  After the trial, in which D1 appeared as an accomplice witness for the prosecution, D2 and D3 was respectively convicted as charged.

PARTICULARS OF THE CHARGES

Charge 2

3.  Between 1 November 2018 and 20 February 2019, D1 conspired together with Le Do for D1, an employee of CPA to, without lawful authority or reasonable excuse, accept an advantage, namely gift, loan, fee, reward, or commission consisting of at least US$1,500, as an inducement to or reward for or otherwise on account of D1 doing or having done an act in relation to her principal’s affairs or business, namely to nominate Le Do as the travelling companion of D1 under the Scheme of CPA.

Charge 3

4.  Between 17 December 2018 and 19 June 2019, D1 conspired together with Le Do and D2 for D2, an employee of CPA to, without lawful authority or reasonable excuse, accept an advantage, namely gift, loan, fee, reward, or commission consisting of approximately US$5,000, as an inducement to or reward for or otherwise on account of D2 doing or having done an act in relation to his principal’s affairs or business, namely to nominate Dambrines as the travelling companion of D2 under the Scheme of CPA.

Charge 4

5.  Between 3 January 2019 and 23 January 2019 D1 conspired together with Le Do and D3 for D3, an employee of CPA to, without lawful authority or reasonable excuse, accept an advantage, namely gift, loan, fee, reward, or commission consisting of approximately US$3,500, as an inducement to or reward for or otherwise on account of D3 doing or having done an act in relation to her principal’s affairs or business, namely to nominate Ernst as the travelling companion of D3 under the Scheme of CPA.

FACTS

6.  Cathay Pacific Airways (“CPA”)  is an airline company based in Hong Kong.  At all material times, D1-3 were employees of CPA.  D1 was a Flight Purser whereas D2 and D3 were Flight Attendants.  As part of the terms of the employment, each single employee was entitled to enjoy the benefits under the “Companion Travel Scheme” (“the Scheme”)  to nominate a person as his/her travel companion who could purchase concessionary tickets from CPA.  The nominated travel companion was prohibited from paying to the employee and CPA’s employees were prohibited from selling the travel companion nomination to that person.

7.  At all material times, employees of CPA are prohibited from soliciting and/or accepting any advantage from any person for selling their travelling companion nomination under the Scheme to the latter or any other persons.  CPA would not have approved any travelling companion nomination and/or issued the flight tickets at concessionary rate under the Scheme if CPA knew of any acceptance of advantages for selling the travelling companion nomination to others.  The sale of travelling companion nomination is a clear violation of the CPA’s policy and also its anti-bribery policy, and it may cause monetary losses to CPA and damage to CPA’s reputation, brand image and integrity.

8.  In Charge 2, after discussion with Madam Le Do Trang Nha (“Le Do”), D1 nominated Le Do and she was first registered as the travelling companion of D1 on 30 January 2018 and again on 4 January 2019.  On 13 February 2019, Le Do told D1 that she needed to meet D1 for giving her cash US$1,500 for the travelling companion quota.  On 15 February 2019, Le Do came to Hong Kong and she eventually met D1 at a hotel in Hong Kong on 20 February 2019.

9.  In 2019, a total of 20 sectors of CPA tickets had been issued to Le Do.  The total concessionary fare of the said tickets charged by CPA was HK$19,540 whereas the lowest commercial fare offered by CPA for those tickets was HK$349,040.  The price difference was said to be HK$329,500. Apart from CPA and KA tickets, a total of 2 sectors of American Airlines (“AA”)  tickets were issued to Le Do and the total concessionary fare of these tickets charged by AA was US$84.86.

10.  In Charge 3, through the introduction of D1, D2 came to know Le Do and they discussed about nominating Le Do’s friend to be his travel companion for a reward of US$5,000.  On 3 January 2019, D1 congratulated D2 for the deal and in reply, D2 told D1 that he would transfer 10% of his sales proceeds to D1.  On the same day, Mr Marc Alexandre Dambrines was registered as the nominated travelling companion of D2. 

11.  In 2019, a total of 23 sectors of CPA and Dragon Airlines (“KA’)  tickets had been issued to Dambrines.  The total concessionary fare of the said tickets charged by CPA was HK$26,600 whereas the lowest commercial fare offered by CPA for those tickets was HK$439,310.  The price difference was said to be HK$412,710.

12.  In Charge 4, D3 approached D1 on January 3 2019 and expressed her interest in selling her travel companion nomination.  Through the introduction of D1, Le Do struck a deal with D3 to sell her travelling companion quota for US$3,500. Le Do suggested selling the travelling companion quota of D3 to her friend at US$5,000 and D1 could keep the difference of US$1,500.  On 8 January 2019, a transaction of US$5,000 was remitted from HSBC bank in United States and a sum of HK$39,024.50 (after currency exchange)  with payment details “FOR MARIAH ERNST” was deposited into D1’s mother HSBC Account. 

13.  On 16 January 2019, D1 transferred HK$27,300 from D1’s HSBC Account to D3’s HSB Account.

14.  On 23 January 2019, Madam Mariah Adams Ernst was registered as the nominated travelling companion of D3.

15.  In 2019, a total of 6 sectors of CPA tickets were issued to Ernst.  The total concessionary fare of the said tickets charged by CPA was HK$8,230 whereas the lowest commercial fare offered by CPA for those tickets was HK$121,810.  The price difference was said to be HK$113,580.  Apart from CPA, a sector of AA ticket and a sector of Iberia ticket were issued to Ernst and the concessionary fare of these tickets charged were US$27.51 and Euro €102.38 respectively.

BACKGROUND AND MITIGATION

D1

16.  D1 is now 36 years old and has a clear record.  She joined CPA as a flight attendant in 2008.  She was then promoted to the position of flight purser in 2018.

17.  In 2020, D1 was one of those staff members being laid off by CPA due to the Covid-19 pandemic.

18.  D1 is married. She and her husband have a 3-year-old son.  D1 is now a housewife and used to be a salesperson in dental industry before her conviction.

19.  In mitigation, Ms. Lisa Remedios, counsel for D1, submitted that during the time when D1 was working in CPA, her performance had always been outstanding and hence she was promoted to the position of flight purser at the age of only 31.  Her work performance is well recognized among her ex-colleagues and can be noted from the two mitigation letters written by them.

20.  Defence also referred the court to other mitigation letters written by D1’s younger sister, husband, two secondary schoolmates, and the pastor from the Methodist Church. They all asked for leniency from the court. 

21.  Ms. Remedios also emphasized the following individual circumstances of D1:-

(1)  D1 has been very stressed since being prosecuted and giving birth to her son, to the extent that she has to seek psychological medical counseling;

(2)  D1’s son is very young and dependent on D1. At such a young age which needs parental care and guidance, the absence of D1 would definitely affect her son a lot; and

(3)  D1 tries to move on and be a role model to her son by becoming a Christian, attending church sermon regularly with her husband and son, as well as doing voluntary works in local farm.

22.  Ms. Remedios further referred the court to D1’s own mitigation letter and said she has a deep and genuine reflection upon herself.  Apart from D1’s own reflections, Ms. Remedios also pointed out that D1 has always been active in joining voluntary works/activities, showing that D1 has a very positive character.

23.  In fixing the starting point, Ms. Remedios highlighted the fact that a travelling companion must be on a lower priority than a normal passenger who is paying full fares and as such, under the Scheme, the seats being allotted to travel companions were seats that CPA was not able to sell at normal commercial fares.  The travelling companions were thus merely filling up the remaining seats which were unsold.

24.  It is submitted therefore that CPA did not suffer any full fare loss (in terms of the so-called “lowest commercial fare” referred by the prosecution in the Amended Summary of Facts)  in this case, since the seats taken by travelling companions were unsold to begin with.  In fact, it is submitted that CPA had benefited by selling those unsold seats to travelling companions at concessionary rate.

25.  Therefore, D1 invited the court to only take into account of the amount of advantage received by D1 in the three charges (i.e. HK$23,424.50)  when assessing the seriousness of the offences.

26.  In particular, Ms. Remedios relied on a magistracy appeal case: HKSAR v Lai Chin Pang[1] in which the appellant was convicted after trial of two counts of “accepting an advantage as an agent”.  The facts of the case were very similar to this case.  The appellant was also employed by CPA as a flight attendant.  He nominated a person who could purchase discounted tickets from CPA in exchange for a total payment of HK$30,000 as benefit.  Gall J held that the initial sentence of a total 12 months’ imprisonment passed by the magistrate was manifestly excessive and substituted it with 4 months’ imprisonment in respect of each charge, to be served concurrently.

27.  Ms. Remedios invited the court to refer and adopt the sentence in Lai Chin Pang and on top of that, slightly increase D1’s total term of imprisonment in order to reflect the element of conspiracy in this case.

28.  Also, relying on  the Court of Final Appeal’s decision in Z v HKSAR[2], the defence also urged the court to grant D1 the full 50% discount (including the one-third reduction for pleading guilty)  for her assistance to the authority by not only gave statements but also proceeded to give truthful and material evidence against D2 and D3.

29.  Apart from the 50% discount, it is also submitted that D1 indicated to the Prosecution that she was willing to pay CPA the entirety of the amount she received in this case (HK$23,424.5)  in the letter dated 17 November 2021.  After the arrangement by ICAC, D1 had already made the payment of HK$23,424.5 directly to CPA on 18 July 2023.

30.  Finally, it is submitted that the sentences on Charges 2-4 to run concurrently in majority because of the principle of totality.

D2

31.  D2 was born in Hong Kong.  He is now 28 years old and has a clear record.  He is also currently single.

32.  D2 completed A levels and always had a keen interest in sports.  He was trained in Karate and eventually represented Hong Kong in the matches.

33.  D2 eventually switched to work at CPA from July 2018, which led to the circumstances surrounding the present offence.  In mitigation, Mr. Boyton said the offence occurred at the very early stages of entering the company and was clearly influenced by his peers.  After his arrest, D2 has been under immense psychological stress, and he has been constantly reflective of this grave mistake that he made.

34.  It was submitted that D2 fully accepts and understands that a prison sentence is inevitable, and he is willing to accept his punishment and serve the time in order to open a new chapter of his life.

35.  D2 is willing to comply with the restitution order regarding the advantage that he accepted within this case.  In fact, D2 has already made a full repayment to CPA, and it is submitted that the court should take this into consideration as well when passing the final sentence.

36.  Regarding the sentence, Mr. Boyton agreed that for a section 9 offence, an immediate custodial sentence is unavoidable.  However, for cases such as these, there is no fixed tariff and as such the sentencing exercise is at the court’s discretion to be considered on a case-by-case basis.  D2 also relies on the case of Lai Chin Pang which is described as an analogous case for comparison.

37.  It is submitted that D2’s culpability lies towards the low end of the scale.  Although there are no sentencing guidelines, this is patently not a case of abuse of public office, nor a case where a large-scale financial fraud was perpetrated.  This is a case where D2 was either greedy or in financial difficulty, and upon persuasion, decided to participate in something which he believed was common practice and “thoroughly perpetrated throughout the industry”.

38.  In fact, it is further submitted that D2’s culpability is certainly lower than that of D1.  D2 was not the person who actively sought out and recruited other people to participate in the selling of the companion quota.  Further, D2 only agreed to participate as a result of D1’s persuasion and due to the fact that he was experiencing financial difficulties at the time.

39.  It is also submitted that D2 did not at the time know about the gravity of the offence.  He foolishly committed a mistake based on ill advice and he is very remorseful about his misdeeds.  He accepts that he is now facing a period of imprisonment and is willing to serve the time in order to turn over a new leaf.  Since the incident, D2 has ceased employment as a flight attendant, and has decided to pursue his career to becoming a physiotherapist. He took up further studies at the Hong Kong Polytechnic University, and in fact just completed his final exams, hoping to obtain a physiotherapy license in the near future and the chance of his re-offending is thus extremely low.

D3

40.  D3 is now 33 years old and has a clear record.  She is also currently single and lives with her parents and elder brother in a public housing unit in Tsuen Wan.  She has attained Form 7 education and had worked as a flight attendant of CPA between March 2015 and August 2019 when she was arrested.  She has a clear a record.

41.  During D3’s employment by CPA, she has been awarded 2 certificates of recognition by the company in 2015 and 2019.  She has also spent her leisure time by attending English, Japanese, nutrition, occupational training and aroma classes.  She has further participated in volunteer work and despite her modest income, she made donations to a number of charitable organizations such as World Vision and the Cancer Fund.

42.  Ms. Cindy Kong, counsel for D3 submitted that the present offence is relatively minor in nature.  It is a one-off incident from which D3 has only made a modest amount.  While it is true that she has sold her companion pass for the sum of HK$27,300, HK$9,681 out of this amount has been spent by D3 to pay for the air tickets booked by Ernst, leaving an actual profit of only HK$17,619 with D3.  D3 was in financial difficulty when she has committed the offence as she was under pressure to settle her credit card bills.  Out of her own initiative, D3 has already compensated CPA HK$27,300 on 19 July 2023.

43.  Ms. Kong said D3 has waited for almost 4 years since her arrest for the case to be concluded.  During the period, she has acquired new skills and had been working in a wedding dress shop.  With a clear record, having to lose her job and undergo a lengthy period of uncertainty have been a torturing experience to her and her elderly parents. 

44.  Referring to the mitigation letters, Ms. Kong said D3 has demonstrated her remorse and the parents’ care and support are vivid between the lines.  Her commission of this offence is apparently a fall from grace and out of her character. 

45.  Taking into consideration D3’s clear record, the simple operation, small scale of this one-off incident orchestrated by D1 involving a relatively modest gain to D3 which has already been compensated to CPA, Ms Kong urged the court to be lenient with D3’s sentence so that she can rehabilitate and resume a normal life. 

CONSIDERATION

46.  In sentencing, I have considered the whole circumstances of the case, including its nature and facts, background of the defendants and the mitigations put forward on their behalf. In SJ v Kwan Chi Cheong and Others [2009] 4 HKLRD 273 and HKSAR v Pau Chin Hung, Andy [2014] 1 HKLRD 600, the Court of Appeal held that corruption offences amounted to evils, whether in its acceptance or by the offering of an advantage, which struck at the heart of commercial and public life if they were left unchecked.  Even a first offender charged with an offence of corruption under the Prevention of Bribery Ordinance (Cap 201)  (“the Ordinance”), must usually expect a deterrent sentence, unless it was merely a technical breach.  The personal circumstances of the offender did not carry much weight and the courts should apply this whether the corruption was in the public sector or in the private sector.

47.  In this case, the charges were brought pursuant to the Ordinance and were clearly of a corrupt nature.  Except in exceptional circumstances an immediate custodial sentence was called for.

48.  Having said that, the sums of the advantage received by D1 to D3 are by no means large in this case. In D1’s case, it is a total of HK$23,424.50, in D2’s case, HK$39,000 and in D3’s case, HK$27,300.

49.  In respect of the actual financial loss suffered by CPA on the issue of concessionary flight tickets to the travel companions in respect of the three charges, the prosecution has emphasized the sums of the price difference between what they called “the lowest commercial fares” for those companion flight tickets issued and the concessionary fares of the companion flight tickets.  In Charge 2, the total price difference is said to be HK$329,500; in Charge 3, HK$412,710 and in Charge 4, HK$113,580.

50.  Counsels for D1 and D3 both submitted in their written mitigations that the actual financial loss suffered by CPA through the sale of these concessionary flight tickets, if any, is minimal, to which counsel for D2 also adopted in his oral mitigation.  As we all know, by reason of the low priority of the companion ticket, it is not unusual that holders of such tickets would be unable to board the flight if the flight is actually fully booked. Sometimes, those companion tickets holders would be told to just wait at the boarding gate until the very last minute before they would be allowed to board the plane or worse still, be even told to leave when the seats are all sold out at normal fares and they have no alternative but just to wait for the next available flight which may even not within the same day.

51.  This morning, Ms. Remedios further referred me to the ticketing policy issued by the CPA to its staffs which reads :-

“It is also important to note that if a last minute revenue passenger is accepted on a full flight, an ID passenger (i.e. discounted fares passenger)  may be off loaded even after they have received their boarding pass. This may occur at the check-in counter, boarding gate or even on board the aircraft, depending on the situation. If asked to disembark from the aircraft please do so quickly and quietly.” (“emphasis added”)

52.  As counsels have rightly submitted, it is therefore only when there are some empty seats left on the plane that holders of companion tickets may board the plane in order of priority according to the seniority of the crew booking the flight.  The sale of such companion tickets, they argued, even represents some small profits to CPA given the seats concerned will otherwise be unoccupied to begin with.

53.  In the circumstances, I agree with the defence submissions that the actual financial loss suffered by CPA should not be calculated with reference to the full or even the lowest commercial fares of the flight tickets as submitted by Mr. Fergus Chau , SPP for the prosecution.  Viewed in this angle, the actual financial loss in the three charges as calculated by the prosecution is thus misconceived and has been grossly inflated without due consideration of the policy and practice of CPA and the commercial reality.  In sentencing, in terms of the advantage received by each defendant, it is only fair that I should only take into account of the amount received by each defendant in the three charges as stated in paragraph 47.

54.  In HKSAR v Cheng Chong Shing [2003] 3 HKLRD 989, the defendant, a senior freight officer of Qantas Airways Ltd, accepted HK$330,000 from customers for showing favour in the reservation of cargo space.  The defendant pleaded guilty to two charges of accepting an advantage, two charges of conspiracy to accept advantages and one charge of conspiracy to use a document with intent to deceive his principal.  A total sentence of 2 years and 8 months was considered appropriate on a plea.

55.  In R v Kung Ying-man, Spencer CACC 513/1986, the defendant, the sales manager of Cathay Pacific Airways pleaded guilty to 13 charges of accepting an advantage involving a total of HK$315,000.  A starting point of 27 months was adopted.

56.  The above cases are far more serious in terms of the nature of corruption and the amount of advantage involved.

57.  By comparison, the facts of the case are exactly on all fours with Lai Chin Pang.  In that case, one of the reasons why Gall J. upheld the ground of appeal that the totality of sentence (12 months)  is manifestly excessive is the offence was not prevalent. 

“16. It is apparent from the statistics given to me by Miss Cheng for the respondent and the material she elicited from Cathay Pacific Airways that this type of conduct is rare and that over the last few years there have been only three prosecutions. This information was not made available to the magistrate who seems to have been led to believe the offence was prevalent. Therefore whilst the element of general deterrence referred to in Kwan Chi Cheong above remains there is no need for deterrence in respect of the appellant.”

58.  Before the hearing today, I have directed the prosecution to confirm the number of cases of this type of offence which has been prosecuted since Lai Chin Pang and I am informed that in the past 10 years, only three CPA employees have been found selling the companion tickets and that is the three defendants in this case.  CPA could not provide any further figure or statistic about any other similar case earlier which indicates that even in the period of about twenty years after Lai Chin Pang, this type of offence is still few and far between and thus is far from prevalent.

59.  Although Lai Chin Ping was only a magistracy appeal decision which is not binding on this court, I find the reasons of the sentence persuasive and in my judgement a period of short custodial sentence is already a sufficient deterrent to these three defendants with hitherto clear records and who were otherwise upright citizens.  In my judgment, a starting point of 6 months’ imprisonment imposed on each charge for each defendant in respect of a modest payment ranging from HK$24,000 to HK$39,000 is a fair, just and balanced sentence.

60.  In D1’s case, in respect of Charge 2, Charge 3 and Charge 4, I shall adopt a starting point of 6 months’ imprisonment in each charge.  D1 pleaded guilty to all these charges and what is more she also assisted the prosecution by becoming an accomplice witness and give truthful and material evidence against the other two co-defendants.  On top of the usual one-third discount for her timely plea, I shall further reduce the sentence by 50% for her assistance to the authority.  The sentence on each charge is therefore 3 months’ imprisonment.

61.  Furthermore, for her full restitution both in Charge 2 and Charge 4, I will further reduce the sentence on each of these two charges by 1 month to 2 months’ imprisonment.  

62.  The three charges are separate and distinct and the sentences should be consecutive to each other in principle (i.e. 7 months’ imprisonment)  but because of the totality principle, I consider an overall 6 months’ imprisonment is already sufficient to reflect the criminality of all these charges.  To achieve this, I order that sentences on Charge 2 and Charge 4 to run consecutively and one month of the sentence on Charge 3 to run concurrently with the sentences on both Charge 2 and Charge 4 with the remainder of the sentence to run also consecutively.

63.  In D2’s case, in Charge 3, as said, I shall adopt a starting point of 6 months’ imprisonment and reduce the sentence by 1 month to take into account of the restitution.  The sentence on Charge 3 is therefore 5 months’ imprisonment.

64.  In D3’s case, in Charge 4, I shall also adopt a starting point of 6 months’ imprisonment and similarly reduce her sentence by 1 month on account of her full restitution.  The sentence on Charge 4 is therefore 5 months’ imprisonment.

65.  Finally, under section 12 of the Ordinance, I am required to make an order to require the three defendants to return the advantage received in each charge and accordingly, I formally make an order for D1 to repay HK$23,424.50, D2 to repay HK$39,000 and D3 to repay HK$27,300 respectively.  All those sums have already been fully repaid by the three defendants to their employer, CPA before the hearing today as confirmed by the prosecution.