HKSAR v. LI SHUJIN

HCMA 700/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO 700 OF 2014

(ON APPEAL FROM TWCC 2983 OF 2014)

_______________

_______________

_______________

J U D G M E N T

_______________

1.  The appellant appeals against the sentence of 10 months’ imprisonment imposed on her by Acting Principal Magistrate Mr Joseph To Ho‑shing for an offence of fraud. At the conclusion of the hearing I dismissed the appeal. These are my reasons.

2.  The appellant pleaded guilty to one count of fraud contrary to section 16A(1) of the Theft Ordinance Cap 210.  In this case the appellant had obtained an overpayment of Comprehensive Social Security Allowance (CSSA) by deception. 

Facts of the case

3.  Between 9 May 2005 and 31 January 2013 the appellant falsely represented to the Social Welfare Department (SWD) that she had disclosed all her assets and income in the review forms for CSSA.

4.  As early as May 2005 the appellant did not disclose her monthly retirement pension she received from Mainland China in the sum of between RMB2,193 to RMB3,931.  She also had not disclosed her security account held between 2005‑2006 holding shares in Links Limited nor did she declare that she had savings in her bank account over the prescribed threshold limit of granting CSSA.  If her assets had been disclosed or reported she would have been entitled to receive CSSA in the amount of HK$84,275.54.  She had in fact received HK$379,753 therefore there was an overpayment to her in the sum of HK$295,477.46.

Appellant’s grounds of appeal against sentence

5.  No issue was taken with the magistrates starting point of 21 months imprisonment and reductions given there from.

6.  The appellant appeals against her sentence on the ground that the magistrate failed to give any weight to the two factors below such that the proper sentence should be reduced to one which would allow for her immediate release or order that her sentence should be suspended based on the appellants old age, her extensive illness and the following further two factors :-

(i) the appellant had made and is making $400 in monthly repayments to the SWD.  At the time of sentence she had already repaid $3,077 and

(ii) the appellant applied the funds received fraudulently for the welfare of her 85 year old foster mother in China and for her own ill health.

Appellant’s mitigation before the magistrate

7.  At the first instance hearing the appellant was legally represented.  A background report was called for before sentencing the appellant.

8.  The court was told that she was 70 years of age, married, a person of clear record and of poor health. She was retired and received a monthly pension after serving her industrious life as a teacher in China. 

9.  The appellant committed the offence as she had been in financial hardship and used the money fraudulently obtained from CSSA to maintain her elderly foster mother in China. 

The magistrate’s Reasons for Sentence

10.  In passing sentence the magistrate made reference to the Secretary for Justice v Leung Wai Kei[1].

11.  He took the view that the starting point for an allowance defrauded in the amount exceeding HK$200,000 was a prison term in excess of 24 months.  He said[2]:

“9. In the instant case, the defendant committed the offence over a period of some eight years, in the course of which she repeated the false declaration seven times; and the amount involved was huge. At the current rate at which the defendant proposes to repay the government, full satisfaction will take 61 years. The defendant’s medical conditions can, in the court’s view, be adequately dealt with; medical treatment and attention are available at all Correctional Services institutions of Hong Kong. The court must not be seen to be encouraging anyone to siphon off scarce and valuable public resources by illegal means to the benefits of his relatives outside Hong Kong. In these circumstances, the court rules that there are no exceptional circumstances whatsoever such as would justify a suspension of the prison term.

10. According to Leung Wai Kei’s case, the sentencing court can impose a prison term in excess of 24 months when the amount of allowance defrauded exceeds $200,000.  The illegal gains the defendant have obtained in this case were almost one‑third above the top level in the sentence bracket.  In principle, a community service order should rarely be imposed in lieu of such a lengthy prison term.  In any event, the defendant is suffering from multiple illnesses and is of an old age; a community service order is unsuitable.”

Discussion

12.  Despite the magistrate indicating a starting point in excess of 24 months was appropriate, he took a starting point of 21 months.  He reduced that term to 14 months on account of the appellant’s guilty plea and clear record and granted her an additional discount of four months for the appellant’s old age and poor health.  This resulted in the sentence of 10 months’ imprisonment.

13.  Mr Richard Wong for the appellant, took no issue with the starting point adopted by the magistrate and the reductions made.  It was his submission that although the magistrate correctly considered the sentencing principles as laid down in Leung Wai Kei, the magistrate failed to give any weight to the repayments made and continued to be made by the appellant to the SWD and that the money obtained fraudulently was spent to maintain the appellant’s elderly foster mother in China.  Mr Wong relied on para 27 of Leung Wai Kei where Cheung JA said:

“27. The following factors should be considered in determining whether a severe sentence is to be imposed:

……

(4) the purpose for which the money has been used: using the money for providing household necessities will more readily attract the court’s sympathy than spending the money on luxuries;

……

(7) whether the defendant has voluntarily repaid, in whole or in part, the amount that had been overpaid to him.”

14.  Although the magistrate did not explicitly or clearly state upon sentence that he had given any discount for the above two factors it is clear from his reasons for sentence[3] enunciated in paragraph 10 above that the magistrate gave thought to these factors. 

Issue in the present appeal

15.  The ultimate issue in the present appeal is whether the resulting sentence of 10 months’ imprisonment passed by the magistrate was wrong in principle and/or manifestly excessive. 

16.  The magistrate considered the sentencing principles laid down in Leung Wai Kei.  He correctly stated that the court has to decide whether a custodial sentence is warranted, and if so, whether it is appropriate to impose a community service order in lieu of imprisonment or suspending the sentence.  He considered that a suspended sentence should not be imposed in light of the length of time the offence lasted, the repeated false representations to the SWD and the substantial loss caused.  He was of the view that a community service order was inappropriate because such an order should not be made in lieu of what would otherwise be a lengthy sentence, in any event, the appellant was apparently not suitable for such an order because of her age and health. 

17.  On behalf of the respondent Mr Ivan CK Cheung PP referred to other decided cases namely; HKSAR v Ngai King Ping[4], HKSAR v Li Kwai Sho[5], HKSAR v Wong Tung Hiu[6]. Those appeals were cases where the appellants concealed their assets or income from the SWD and obtained overpayments of CSSA in varying amounts all of whom received immediate custodial sentences. 

18.  In parity with the cases cited above, the magistrate was plainly correct in taking the view that an immediate custodial sentence was warranted.  In Leung Wai Kei the Court of Appeal observed that[7] :

“….(3) In cases involving some intentional and persistent fraud, an immediate custodial sentence is justified.”

19.  Further in Leung Wai Kei, the Court of Appeal stated that in cases involving amounts over HK$200,000 were clearly regarded as the most serious category of cases, if a sentence of imprisonment was warranted it was one in excess of 24 months after trial (see para 47 at 221)[8].

20.  The observations made are clearly apposite in the present case.  The appellant’s application for CSSA was false from its inception, she concealed her income and assets repeatedly by making false representations in seven review interviews over the years.  The offence was committed over a period of about eight years and involved a loss of over $200,000 to the SWD.  

21.  Despite the magistrate expressing that the proper sentence after trial was one which warranted a sentence of over 24 months[9] no reason was stated by him for departing from his view of a starting point in excess of 24 months and taking a starting point of 21 months’ imprisonment. 

22.  The magistrate had adopted a starting point considerably lower than that laid down in Leung Wai Kei.  The starting point adopted by the magistrate was very clearly generous to the appellant.  Despite giving her the usual discount for her plea of guilty and previous good character, he discounted her sentence by a further 4 months for her old age and poor health. 

23.  If any further credit was to be given to the factors of the appellant’s restitution and the use of the fraudulently obtained money to maintain her elderly foster mother, those factors would have been adequately reflected by the generous starting point adopted. 

24.  In considering all the circumstances and the factors in the present case the resulting sentence of 10 months was not manifestly excessive nor wrong in principle.  I therefore dismissed the appeal.