ATTORNEY GENERAL v. LEUNG KIN WAI

IN THE COURT OF APPEAL

Application for Review
1996, No. 5

----------------------

----------------------

J U D G M E N T

----------------------

Power, V.-P.(giving the judgment of the Court):

1. This is an application for Review of sentence brought by the Attorney General.

2. This respondent faced two charge of soliciting an advantage and five of accepting an advantage. These charges were brought under s.9(1)(a) of the Prevention of Bribery Ordinance, Cap.201. The first soliciting charge involved a company called Tex-Ray Textile Company Ltd., a Taiwan textile manufacturer, and it alleged that the respondent had solicited from Tex-Ray a reward or commission based on the value of business turnover between Mattel Toys Vendor Operations Ltd., his employer, and Tex-Ray for placing textile orders with Tex-Ray. It occurred in August or September 1991. The second charge was in very similar terms to the first charge it being alleged that a similar solicitation was made to a Mr. Chu Hai-tang, another Taiwan textile manufacturer, in November or December 1993.

3. In consequence of those solicitations amounts were paid. The third charge and fourth charges detailed that Tex-Ray paid an amount of $110,000 on 16th May 1994 and an amount of $210,000 on 18th May 1994. The fifth, sixth and seventh charges detailed that Chu Hai-tang had paid $46,885 on 25th July 1994, $54,600 on 3rd January 1995 and $69,707 on 16th February 1995.

4. The respondent pleaded not guilty to those charges and was found guilty after trial before His Honour Judge Sweeney in the District Court and sentenced overall to imprisonment for two years and was fined $300,000.

5. The Crown case was that the respondent worked for the Hong Kong branch of Mattel Toys and had done so 1983. He had a successful career at Mattel rising from a fabric buyer to management level. He was first the senior purchasing supervisor in 1990 and in mid-1992 became a senior manager in the Buying Division. He held this post until he resigned from the company early in 1995.

6. It was the Crown case that the respondent was a key position to influence the sourcing of fabric supplies during the latter part of his employment with Mattel. It was common ground that he was contractually bound to report any commission, fee, benefit or anything else of value that was derived in any way from a Mattel supplier. According to the evidence he made an approach to a Mr. Lobo Lin, who was the sales director of Tex-Ray. Mr. Lin said that was approached for money payments and was prepared to make these payments to the respondent so that Tex-Ray could "get a fair chance to tender". The same sort of approach was made to Mr. Chu Hai-tang. Mr. Chu paid to get, as he said, many more chances of business.

7. The respondent at trial vigorously defended the charges suggesting that the payments were nothing to do with corruption but were linked to business ventures contemplated between himself and the payees. In fact the judge was satisfied, and not surprisingly on the evidence, that gross breaches of trust had occurred from which the respondent had profited to the extent of almost half a million dollars. He sentenced him to two years on the first charge and fined him $300,000 on that charge. He then imposed sentences of 2 years on each of the other charges ordering that all sentences be concurrent. He said when sentencing:

"There are two sets of offences here:- the soliciting and acceptance of bribes from Mr. Ray Lin and the soliciting and acceptance of bribes from Mr. Chu Hai-tan. I will treat the soliciting and the acceptances as part and parcel of the same offence and make those sentences concurrent.

The Defendant is of course entitled to a discount for his previous good record. There is provision for a substantial fine in the ordinance and, as it happens, the Defendant has the ability to pay a substantial fine. That factor will cause me to further reduce the prison terms I might otherwise have imposed. I take three years as a starting point for each set of offences in the circumstances."

8. The Attorney General submits that the sentences were wrong in principle and manifestly inadequate. It is the contention of the Attorney that no real regard was given either to deterrence or to the breach of trust. Mr. McWalters, who appears for the Attorney, points to the fact that there were two sets of offences and that the trial judge, although acknowledging this, gave no proper heed to it when he came to impose the sentence. He submits further that it was plainly wrong to give a one-third discount on account of previous good character and that it was plainly wrong not to have made orders under s.12 for, in effect, restitution.

9. As I have indicated the trial judge found, and was perfectly right to do so, gross breaches of trust which involved commercial corruption. We note that there was no remorse on the part of the respondent. He vigorously contested the charges maintaining that wholly false allegations were being made against him. We do not need to state again the strictures repeatedly made by divisions of this court stressing the seriousness of commercial corruption. Such offences are properly likened to an insidious cancer secretly gnawing at the vitals of commerce. The trial judge, when he came to sentence, rightly referred to the fact that there were "two sets of offences". He, in our view, rightly took three years as the proper starting point for each set. He was thereafter, however, we are satisfied, in error. Each set of offences should have been separately dealt with. In each case three years as the judge held was an appropriate sentence. The judge was, further, in error in allowing a one year discount for good character. We are satisfied that the three year sentence on each set of offences should have been reduced to 2½ years, that being six month reduction for good character. Had the sentences be made consecutive, as he should have been, that would give a totality of five years. We are satisfied that the "totality principle" calls for a reduction of 1 year giving an overall sentence of four years. This is a very considerably increase on the sentence that was imposed and in accordance with the decision in Wong Kwok-wai [1991] 2 H.K.L.R. 384, we reduce that by a further six months giving a totality of 3½ years.

10. We grant the application and vary the sentences by imposing a concurrent sentences of 2½ years on charges 1, 3 and 4 and concurrent sentences of 2½ years on charges 2, 5, 6 and 7. The second set of concurrent sentences is to be partly consecutive and partly concurrent with the first set insofar as it will commence after one year has been served of the first set of concurrent sentences making a sentence overall of 3½ years.

11. We turn to the application that has been made in relation to an order under s.12 of the Prevention of Bribery Ordinance which requires that any person guilty of an offence under the relevant part of the Ordinance "shall be ordered to pay to such person or public body and in such manner as the court directs the amount or value of any advantage received by him or such part thereof as the court may specify". We are satisfied that the judge was wrong in the circumstances to imposed the fine of $300,000. That order is quashed. An order should have been made under s.12. It is, we are satisfied, mandatory to make such an order. Adopting the reasoning of Sears J. in the Caltex Oil Hong Kong Limited v. Deputy District Judge Christie and the Attorney General M.P.1542 of 1994 we held that "such person" in the present circumstances is the employer Mattel. This is, in effect, a restitution order. Nothing has been said that would properly allow us to make an order in any sum less than the amount that was obtained. We order, therefore, that the respondent pay to Mattel $491,000, the aggregate amount that was obtained in the five accepting charges.