HKSAR v. TAI CHUN LUN

DCCC 771/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 771 OF 2016

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REASONS FOR SENTENCE

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Charge

1.  D1, D2 and D4 respectively plead guilty to Charge 1, Charge 2 and Charge 4.  They are all conspiracy to defraud.  D3 pleads guilty to Charge 3, which is fraud.

2.  D2, D3 and D4 were sentenced in this court on 19 April 2017.  Each was sentenced to 180 hours of community service.

Facts

3.  Hong Kong International Terminal Limited (“HIT”) operated 12 berths at Kwai Chung Container Port.  They subcontracted the stevedoring services to Pui Kee Stevedore Company Limited (“Pui Kee”).  The director of Pui Kee was a Fok Chi Keung, and his two sons, Fok Sai Man and Fok Sai Tung, oversaw the daily operation.  Pui Kee had been providing services to HIT since the year of 2000.  It is said that after the present offences had come to light Pui Kee was dissolved in 2014.

4.  Pui Kee had to provide manpower to assist HIT’s operation.  At the material times, Pui Kee had about 10 foremen, including all the defendants.  These foremen were responsible for deploying workers.

5.  HIT engaged a company, MLCL, to provide container repair service.  Pui Kee was to provide one frontloader operator and one checker on each occasion to facilitate MLCL’s operation.  The checker would control the traffic in the repair area and assist MLCL’s staff to give instruction to the frontloader operator, who was to move the containers round the area.

6.  The manpower required of Pui Kee for the aforesaid service was uncertain.  HIT officers would inform Pui Kee’s foremen the number of checkers required in the daily operation deployment form.  The Pui Kee foremen responsible for the job would then return a daily duty roster called “Daily Duty Sheet”, recording the names of the checkers assigned to the job and the work locations.  The Daily Duty Sheets were then sent to HIT.

7.  HIT would verify the said record with Pui Kee every half month. Then HIT would calculate the service charges to be paid to Pui Kee.

8.  It transpires that Pui Kee had not provided that many checkers as reported to HIT.  That means HIT had paid Pui Kee more than they had to.

9.  Between 1 March 2011 and 19 July 2013, D1 made 72 false records in the Daily Duty Sheets.  He put down the names of 12 former colleagues or colleagues on leave on those documents, falsely claiming they had worked on those occasions as checkers.  As a result, HIT paid Pui Kee $32,880 more.

10.  D1 was arrested in June 2014.  Under caution he said he acted upon the instruction of the boss and other foremen in order to cover up the short supply of checkers.  On those short-supply occasions, the frontloader operator would take up the job of the checker as well or checkers already working elsewhere would be summoned to help.

11.  Pui Kee had about 10 foremen.  D1 to D4 were the only ones charged because of their admissions.  The named co-conspirators had not been charged.

Record

12.  D1 is now aged 31.  He, as the other defendants, has a clear record.

Mitigation

13.  The common ground of all the defendants is that they were not the originators of the crime.  The malpractice had been going on for some time with its start untraceable.  They and other foremen were simply acting on the boss’ instruction to make false entries on the Daily Duty Sheets.  The defendants themselves gained no benefit at all.

14.  Pui Kee was dissolved after the matter had come to light in 2014.  The defendants no longer work for that company or for the Foks.

15.  Counsel says D1 has been suffering diabetes and pancreatitis for years.  He has to take four injections a day.  Due to his health problem, he remains single.  He is now living with his aged parents.  D1 makes contributions to the household expenses.  Actually, he is the sole breadwinner.  The property they are living is still under mortgage.  Counsel also says D1 joined Pui Kee in 2005.  He was promoted to the foreman rank in 2011.  After Pui Kee closed down in 2014, D1 has found a job in another company and his living remains quite stable.  His present employer speaks well of him.

16.  Counsel has prepared a mitigation statement for D1. After some hiccups for which D1 himself should not be held responsible, Counsel foregoes that mitigation expressed in paragraph 33 to 35 of that statement.  Nevertheless, counsel says D1 is remorseful.  He has been frank with the ICAC since his arrest in June 2014.

17.  Counsel says D1 was himself a victim of the circumstances.  He was forced to conform to an already existing malpractice enforced by his bosses and endorsed by his predecessors and peers.  D1 himself did not gain benefit.  Actually, he sometimes had to do extra work due to the short supply of checkers.  Counsel says the short supply of checkers did not really affect HIT’s business.

18.  Counsel says D1 was simply ignorant of the legal implications of what he had been told to do.  He just followed instructions. There was no breach of trust involved.

19.  D1 is willing to pay compensation to HIT despite he had gained no benefit himself.

20.  Counsel says D1 made full admission to ICAC in June 2014 but he was only charged after 26 months in August 2016.  That delay caused D1 stress and anxiety, particularly in light of his health condition. Nevertheless, D1 has moved on since the incident.

21.  Counsel refers to this court a string of authorities and precedents pleading lenient sentence and discount due to the said delay. 

Community service report

22.  As in other defendants’ case, I have called for Community Service Report.  For D1, the probation officer recommends that he be put on community service for a duration of 180 to 240 hours.

Sentence

23.  This is an exceptional case.  The defendants only acted out of misguided loyalty.  Over a period of time, when there was a short supply of checkers, the defendants put down the names of some ghost checkers on the Daily Duty Sheets.  They did not originate such malpractice.  It had gone on for quite some time.  It is said that other foremen did the same. Apparently, all acted under the boss’ instruction.

24.  While each defendant falsified the work record a number of times over a period of time, they did not do it on a daily basis but only when there was a short supply of checkers.

25.  The defendants apparently conformed to an already existing malpractice for fear of going against the boss.  They only executed what they were instructed to do with a view to smooth things out.  It is unfortunate that they failed to see the serious consequence, but it cannot be ignored that they made no personal gain themselves.

26.  In June 2014, arrests were made.  D1 to D4 made admission.  As a result of their own admission, they became the only ones being charged.  Now, they are convicted upon their own plea.

27.  There was a gap of 26 months between the arrest in June 2014 and the time the defendants were charged in August 2016.

28.  The prosecutor has helpfully filed a chronology of events.  Obviously, investigation of such kind took time.  Investigators or the Department of Justice, as legal advisors, cannot be blamed. Yet the fact remains that the defendants have been left in anxiety for 26 months before they were charged in August 2016.  Since then, more months had lapsed until D1 is sentenced today.  His misdeeds went back to as early as 2011 - 2013.

29.  Pui Kee closed down in 2014.  D1 no longer works for Pui Kee or for the Foks.  There is no likelihood of his reoffending.

30.  D1, apart from the present stigma, has enjoyed a clear record and apparently is a responsible citizen and breadwinner of his family.  Since his arrest, he has moved on with his life.

31.  D1 is apparently a man of modest means.  He is willing to compensate HIT.  However, I take the view that he did not gain anything from his misdeed; Pui Kee did.  It is easy for HIT to go after Pui Kee or the Foks for compensation.  I am therefore not minded to make any compensation order against D1 or other defendants.  In fact, the prosecutor has not sought for such order.

32.  There are some cases cited to me regarding sentence.  Needless to say, each sentence is to be decided on its own facts. It is worthy to mention a similar case.  That case is brought to the court’s attention by D4’s counsel.  It is CACC 430/2003, HKSAR v Chan Kin Yan. That defendant was a sales manager.  She pleaded guilty to 10 counts of forgery for fraudulently describing some ordinary customers as special customers on the sales documents.  Only special customers could enjoy special price quotes.  The difference of sale price would be reimbursed by the goods supplier when the defendant’s employer made such claim to the supplier on the ground that the goods were sold to special customers.

33.  That defendant was not the originator of the scam, which actually had been perpetrated for some time and also by others in the company.  The defendant was just doing what others in her company had been doing.  She conformed to the malpractice under pressure in order to reach sales targets.  She did not pocket the difference of the sale prices.  The incidental personal gain was just a few hundred dollars of commission, but it was not for that she perpetrated the forgery.

34.  That defendant’s misdeeds came to light as the sales fell through but the employer had bought the subject equipment from the supplier already.  The sentencing judge considered that the defendant’s misdeed had caused the employer $1 million.  He sentenced the defendant to 15 months’ imprisonment on each of the 10 charges, all sentences to run concurrently.

35.  The appellate court, however, viewed that case as one of exceptional circumstances.  The appellate judges’ opinion was that a suspended sentence or community service order was suitable.  Since the defendant had been detained for five months already, the appellate court altered the sentence to allow for her immediate release.

36.  On 19 April 2017, I sentenced D2, D3 and D4 each to 180 hours of community service.

37.  D1 is in a similar situation as the other three defendants.  I shall also put D1 on community service order for 180 hours for his pleading guilty to Charge 1.