HKSAR v. CHAN SHUI WAI

DCCC 48/2020

[2020] HKDC 459

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 48 OF 2020

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REASONS FOR SENTENCE

The defendant pleaded guilty to a charge of "Theft". As a rent collecting agent, the defendant stole rent paid by a tenant in a total sum of approximately $1 million over a period of 9 months.

Summary of Facts

Background

2.  The Chan's clan of Luk Keng Village formed a Tso ("the Tso").  The defendant is a member of that clan and a beneficiary of the Tso.

3.  The Tso owns 4 shops situated at Chung Ying Street at the border.  These 4 shops were leased to Mr. F.P. Chan (PW4), who operated a cosmetics retail business.  PW4 paid the Tso a total sum of $94,000 by cheques each month as rent.

4.  The Tso appointed 3 clansmen (including PW1 Mr. Y. Chan and PW2 Mr. S.H. Chan) as its registered managers in the capacity of trustees.  The 3 registered managers opened a joint bank account for the purpose of receiving rent for the Tso.  Initially, PW1 was responsible for collecting rent for the Tso.  The tenant would issue cheques drawn in PW1's name, which would be deposited into the joint bank account.

5.  The Tso holds an annual meeting around Lunar New Year to go through its finances and to pay out dividends to its beneficiaries.

6.  In October 2014, members of the Tso elected the defendant as its agent and entrusted him with the task of collecting rent from the 4 shops at Chung Ying Street.  He was told not to receive payments in cash or to deposit cheques into his own bank account.  The practice of the tenant issuing cheques drawn in PW1's name was to be continued.

The offence

7.  In April 2018, the defendant asked the manager of the 4 shops (PW3 Madam Chan; daughter of PW4) to issue cheques drawn in his name to settle the rent.  PW4 nevertheless issued cheques drawn in PW1's name, but the defendant refused to collect them. He insisted on his request.  Thinking that the defendant was the Tso's agent, PW3 and PW4 complied.

8.  From April 2018 to the end of January 2019, PW4 paid 11 months of rent (for the 4 shops) by cheques drawn in the defendant's name.  A total sum of $1,034,000 was paid in 44 cheques.

9.  On 1 February 2019, as the Tso's annual meeting was approaching, PW1 and PW2 discovered that the defendant did not deposit the rent in the designated bank account.  They texted him and pressed for restitution.  The defendant admitted to them that he had embezzled the rent money; was unable to repay the sum; and felt shameful.  He repaid only a small sum by putting $10,000 into the designated bank account.  He did not show up at the annual meeting and became out of reach.

10.  Police investigation revealed that the defendant deposited the 44 cheques issued by PW4 into his own bank account.  After the cheques were deposited into his bank account each month, the money would usually be withdrawn (mostly at ATMs) in several attempts within a few weeks.  In other words, the defendant's bank account hardly had a substantial balance.

11.  The defendant was arrested on 11 October 2019.  Under caution, he admitted the offence as described above.  He claimed that he had spent most of the money on gambling, personal expenses and lending to friends.  He indicated his willingness to repay the Tso gradually by deducting his annual dividend.

Mitigation & Sentence

12. The defendant is now 53 and has a clear record. He is married to his second wife, who resides in Shenzhen. The defendant has 2 adult daughters from his 1^st marriage and they seldom contact him. Defence counsel Mr. Cheung informed me that the defendant was a hair stylist earning about $15,000 per month. Subsequent to his arrest, he has been unemployed since December 2019.

13. In mitigation, Mr. Cheung submitted that the present offence is attributable mainly to the defendant's gambling habit (horse racing and mahjong). He was simply unable to make ends meet. Mr. Cheung further submitted that many fellow clansmen have forgiven the defendant and jointly wrote a mitigation letter. When the "theft" was discovered, not the entire clan was in favour of alerting the Police. Although the defendant is unable to repay the Tso in one go, he is willing to forfeit his annual dividend (ranges between $20,000 to $100,000) until the stolen sum is fully repaid.

14. Time after time, the court has expressed in very clear terms that being in financial difficulty (however serious) is no mitigating factor for committing a crime. If gambling debts were the cause of committing the present offence, the defendant has no one but himself to blame.

15. As Mr. Cheung has rightly accepted, this case is a classic Barrick type of breach of trust situation. The defendant took advantage of his position as a rent collecting agent. He abused the trust of the Tso and committed a theft against his clansmen continuously for a period of 9 months. He must have also known that the balance of the designated bank account was not regularly monitored. According to HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017, if the amount stolen is between $1 million and $3 million, the sentence ranges from 3 to 5 years' imprisonment.

16. The defendant had stolen just slightly more than $1 million. Having considered everything said by Mr. Cheung and all the documents contained in the mitigation bundle, I see no reason to depart from the starting point of 3 years' imprisonment. With the timely guilty plea, the sentence is reduced to 2 years. Apart from this, I see no other mitigating factors which warrant any further reduction. I sentence the defendant to 2 years' imprisonment.