HKSAR v. CHOI SUM TONG

CACC 11/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

criminal APPEAL NO. 11 OF 2005

(ON APPEAL FROM DCCC NO. 429 of 2004)

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J U D G M E N T

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Stuart-Moore, Ag CJHC (giving the judgment of the Court):

Background

1.  On 3 January 2005, the applicant pleaded guilty in the District Court before Judge Whaley to a charge of conspiracy to defraud, contrary to Common Law and section 159C(6) of the Crimes Ordinance, Cap. 200. He was sentenced on 5 January 2005 to 2 years and 8 months’ imprisonment against which he now seeks leave to appeal.

2.  The facts were straightforward.  The applicant, who was the 3^rd defendant named in the charge sheet, was the sole operator of De Oakland Company (“De Oakland”).  He had been acquainted with D1 since 1976 and was subsequently introduced by D1 to D2 both of whom, at the material time for the purposes of this case, were shareholders and directors of Delta Industrial Company Limited (“Delta”).

3.  In early 1996, Delta found itself in financial difficulties, faced as it was with having to make loan repayments to banks.  At the request of D1, the applicant helped Delta solve its cash flow problem by opening Letters of Credit (“L/Cs”) in favour of De Oakland and by falsely representing to the banks the quantity of the goods described in the L/Cs which had been inflated in value by three to four times.  The applicant also signed false documents, prepared by D1 and D2, to be submitted in support of the L/C applications and for the release of the L/C proceeds.  After receipt of the proceeds, the applicant returned these to Delta in full by means of cheques drawn on the De Oakland account.  Thereafter, D1 would pay De Oakland the amount for the goods which had been purchased from De Oakland with the L/Cs and, in this respect, this seems to have been a business venture from which the applicant made a profit.  Had the applicant not been persuaded to enter the scheme, no doubt D1 and D2 would have for some other willing participant with the consequent loss of the business to himself.

4.  The L/C applications and related documents signed by D1, D2 and the applicant caused the various banks involved to issue a total of 14 local L/Cs and subsequently to release L/C proceeds in the combined sum of $14,781,465 in favour of De Oakland over the period between 1 April 1996 and 23 March 1999.  Ultimately, the banks suffered no loss.

Grounds of appeal

5.  Three substantive grounds of appeal were raised by Mr McGowan on the applicant’s behalf in which disparity of sentence was argued, the starting point of 4½ years was criticised and the delay in prosecuting the case and the applicant’s character were said to have been factors in mitigation which ought more to have been taken into account.  Our main concern has been focused on the ground relating to disparity.

(1)  Disparity

6.  D1 and D2, who each pleaded guilty to 10 charges of conspiracy to defraud involving L/Cs in sums totalling just over $8.747 million between January 1997 and April 1998, were both sentenced to 18 months’ imprisonment.  The 1^st charge, to which the applicant had pleaded guilty, was not proceeded with by the prosecution against D1 and D2 and was allowed, so far as they were concerned, to remain on the file. 

7.  On the face of matters, therefore, it appears somewhat curious that the applicant, who, as a misguided friend of D1 and D2 dishonestly sought to give them financial assistance by resorting to a conspiracy with them to defraud the banks, should be sentenced to 32 months when D1 and D2 each received a sentence of only 18 months, albeit for conspiracies which involved a much smaller financial sum when taken in their totality. 

8.  There is, however, a simple answer to this to which we shall turn in a moment, but we are satisfied that this case falls squarely within the position set out by the Lord Chief Justice in R v Stroud [1977] 65 Cr App R 150 which was cited by Power JA in R v Chan Wai-chiu & Ors [1994] 3 HKC 212 at 214-215 as follows:

“The Lord Chief Justice went on: ‘This in our experience is a somewhat novel argument. The practice of the court to give effect to what is popularly called ‘the disparity argument’ is itself a relatively new feature in the practice of this court. It arises only when the would-be appellant has received a sentence which the court thinks proper in itself but which is so disparate when compared with other sentences passed at the same time’ – I would venture to italicize those four words ‘at the same time’ – ‘that a real sense of grievance may thereby be engendered in the person upon whom it is passed’.

[Counsel for the applicant] submits that this passage has application directly to the circumstances of this case and that ‘a real sense of grievance’ has been engendered. The Lord Chief Justice, however, went on to say:

It was never intended that a sentence should be reduced on the basis of disparity unless there was such a glaring difference between the treatment of one man as compared with another that a real sense of grievance would be engendered in the case of a man suffering the more serious penalty. [Emphasis supplied.]”

9.  As we have indicated already, D1 and D2 were not being sentenced for the conspiracy in the 1^st charge of the indictment.  Instead, they were sentenced on 10 other charges (charges 2 to 11) of conspiracy in relation to individual L/Cs during the period between 29 January 1997 and 21 April 1998 involving a total sum of just over $8.747 million.  These offences also involved Delta and were committed in identical fashion to and at more or less the same time as a series of 11 other L/C frauds covered by a separate charge sheet in DCCC 288/2003.  In that other case, D1 and D2 had contested the charges of conspiracy to defraud and were sentenced on 3 October 2002 by Deputy Judge Smout to 19 months’ imprisonment.  The total sum involved was over $7.5 million.  Judge Whaley, in the matter now before us, rightly remarked that 19 months was a “very lenient sentence”.  Nevertheless, having given consideration to the fact that D1 and D2 had already completed their sentences by the time he passed sentence on them in the present case, he took the view that concurrent terms of 18 months on each charge were appropriate for both of them. 

10.  The judge’s principal concern had been directed at an assessment of the extent to which the sentences imposed in 2002 on D1 and D2 would have been affected if they had also been sentenced at that time for the 10 offences on the present charge sheet.  He set out his reasons with clarity and with scrupulous fairness.  In our opinion, no disparity can be said to arise in relation to the applicant either from the leniency of the sentences imposed on D1 and D2 in DCCC 288/2003 as these were imposed by a different judge on a different occasion where their good fortune is not something from which the applicant can benefit or, with reference to the present matter, from the imposition of 18-month sentences which were perfectly proper having regard to the sentences they had already served. 

11.  The question we have had to ask ourselves is whether right-thinking members of the public, with full knowledge of all the relevant facts and circumstances, learning of his sentence would consider that something had gone wrong with the administration of justice (see: R v Fawcett [1983] 5 Cr App R (S) 158 at 161).  Whilst, on its face, there seems to be a stark difference between the sentences imposed by Judge Whaley in relation to D1 and D2, on the one hand, and that of the applicant, on the other, we are satisfied that a full knowledge of all the relevant facts and circumstances does not, in the event, lead to the conclusion that something has gone wrong such as to lead to a justifiable sense of grievance on the part of the applicant.

12.  The sentencing judge had all the relevant facts in mind and took the view that given the unusual circumstances which applied only to D1 and D2 in that they had already completed a sentence of imprisonment, the new sentence of imprisonment should be substantially less than that which would otherwise have been warranted.  The fact which moved him to this significant reduction did not apply to the applicant.  Furthermore, the applicant is not entitled to the indirect benefit of an unduly lenient sentence passed on another occasion by another judge (that is to say, the sentence by Deputy Judge Smout).  It is also to be noted that the period covered by the conspiracy charge to which the applicant pleaded guilty was considerably longer than the period covered by the offences to which D1 and D2 pleaded guilty before Judge Whaley.

13.  We are satisfied, therefore, that in all the circumstances there was no disparity from which a true sense of grievance on D1’s part can be said to arise.

(2)  The starting point

14.  Mr McGowan accepted that this court has at no stage laid down sentencing guidelines for frauds of the kind with which we are concerned.  He took us to a number of previous decisions of this court in an endeavour to show that other similar cases may have been dealt with more leniently.  Perhaps a slightly better point was that by looking at the chronological sequence of L/Cs in the present case, ignoring the totality of the 14 L/Cs, the maximum exposure to the banks at any one time was in the region of $2 million.

15.  The judge, when seeking some guidance as to an appropriate sentence, referred to HKSAR v Cheung King [2001] 3 HKLRD 68 in which, as it happens, both members of the court as presently constituted were also concerned.  We approved the starting point of 4½ years in that case which concerned a single L/C involving US$891,000 (contrary to what is stated in the headnote which omits to point out that this was United States currency) from which the appellant received no financial benefit.  Although the appeal against sentence in that case was successful, this was for reasons which have no bearing on the present case.

16.  We have concluded that the starting point which the judge adopted on the facts before him was in line with current sentencing policy for offences such as this.  We have found no substance in this ground.

(3)  Delay and character as mitigating factors

17.  In his final ground of appeal, Mr McGowan submitted with no great enthusiasm that delay and the applicant’s clear record were insufficiently taken into account by the judge.

18.  In our view, neither of these criticisms carries any weight.

19.  So far as the alleged delay is concerned, the judge specifically made reference to the fact that the investigations into the offences before him in relation to the applicant, as well as D1 and D2 and a fourth defendant (D4), “only began in February 2003”.  This was followed by the arrest of the applicant, D1 and D2 on 16 February 2004 and they were charged, together with D4, on 2 March 2004.  We accept Mr Jonathan Man’s submission for the respondent that, given the complexity of the case and the number of persons who were charged in relation to the offences disclosed by the investigation, no undue delay can realistically be suggested.

20.  There is a further factor also.  D4 was the first of those charged to indicate that he intended to plead guilty.  In due course, D4 pleaded guilty to 4 of the conspiracies later admitted by D1 and D2.  He gave non-prejudicial statements to the ICAC indicating his willingness to testify against D1 and D2.  It was only then that they indicated their willingness to plead guilty to the 10 conspiracies in charges 2 to 11 and, at that stage, made non-prejudicial statements implicating the applicant.  After receipt of these, the applicant for the first time indicated that he, too, would plead guilty.

21.  So far as the applicant’s character is concerned, the judge made reference to this when passing sentence by saying:

“	33.	The 3rd defendant is 46 years of age and he has a clear record.  I accept that he also is a responsible husband who is well spoken of clearly by his family and friends.  I note that he has also been involved in doing voluntary work, inter alia, for the Neighbourhood Advice Action Council for which he has received commendations and awards.
	34.	Unfortunately, the offence of which he has been convicted is a very serious one involving the submission of false documentation to banks in support of no fewer than 14 letter of credit applications over a period of three years, involving a total sum of some $14.78 million.
	35.	I take a starting point of 4½ years’ imprisonment as being appropriate in this case, which should be reduced to three years for his plea of guilty and general co-operation. In recognition of his good character and in particular, the voluntary work that he has been involved in, I think it right to reduce that by a further four months to 32 months’ imprisonment.” (Appeal bundle pp. 42-43)

It is plain from this passage that the judge gave generous allowance for the positive aspects of the applicant’s good character.

Conclusion

22.  For the reasons we have given, the application is dismissed.