HKSAR v. CHU KA MAN

CACC 1/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 1OF 2010

(On Appeal From District Court Criminal Case No. 1167 of 2008)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Cheung JA (giving Reasons for Judgment of the Court) :

1.  The applicant who was the 1^st defendant in the trial below, was convicted after trial by Deputy District Judge M Chow of seven charges. The first charge was using a false instrument contrary to section 73 of the Crimes Ordinance (Cap. 200). The second to seventh charges were identical, namely, procuring the making of an entry in a record of a bank by deception, contrary to section 18D of the Theft Ordinance (Cap. 210). The applicant was sentenced to imprisonment for three years and four months. She applied for leave to appeal against sentence. We allowed her application, treated it as the appeal proper and reduced the sentence to three years and two months. We now give our reasons.

Facts

2.  The brief facts are that the applicant and the 2^nd defendant were directors and shareholders of a company called Top Master Factory Limited (‘Top Master’).  In March 2005, the applicant and the 2^nd defendant through Top Master obtained a loan of HK$1,521,000 from Orix Asia Ltd. (‘Orix’).  The loan was obtained fraudulently in that it was claimed that Top Master had purchased three sets of machines and they were then mortgaged to Orix as security for the loan.  In truth Top Master did not purchase the machines.  This was the subject matter of the first charge.  Between 16 December 2005 and 16 January 2006, on six occasions, the applicant and the 2^nd defendant again through Top Master obtained loans in the total sum of about HK$1 million from Nanyang Commercial Bank (‘NCB’). The loans were obtained on the basis that two customers of Top Master were owing it money.  The alleged debts were assigned to NCB as security for the loans.  In truth there were no debts owing to Top Master and the alleged debts were created by forged documents.  This was the subject matter of the second to seventh charges.

3.  Of the HK$1.52 million obtained from Orix, Top Master had paid back by way of a deposit and eleven instalment payments a total of HK$812,000.

4.  Of the HK$1 million obtained from NCB, the applicant had since repaid $300,000 to the Bank.

5.  The applicant was made bankrupt after her arrest.  The trustee-in-bankruptcy (‘the trustee’) received HK$134,000 from her.  The trustee had since paid dividends of HK$14,672 to Orix and HK$14,415 to NCB respectively.

6.  Thus at the date hereof, Orix had been repaid by about HK$830,000 (with about HK$700,000 outstanding) and NCB HK$315,000 (with about HK$700,000 outstanding). 

The Judge’s reasons

7.  In her Reasons for Sentence, the Judge stated that

‘ 31. As to Charge 1 I impose a sentence of 3 years.

32.As to Charge 2 to 7, each charge is 2 years. Charge 2 to 7 to be run concurrently and 1 year to be run concurrently to Charge 1.  A total of 4 years.

33.I further give discount for three months for each defendant in agreeing the prosecution case that reduced substantial amount of time in preparing the prosecution case to be adduced in court.  I further allow 3 months for the delay of prosecution through no fault of the defendants.  It comes to 3½ years for each defendant.

34.As to D1, I further allow 2 months deduction in respect of her restitution.  D1 is 3 years and 4 months and D2 3 years, 6 months.’

Grounds of appeal

8.  The first ground of appeal is that the total sentence before deduction should be three years and not four years. The Judge merely stated one year of the two years sentence under the second to seventh charges was to be concurrent to the three year sentence under the first charge.  She did not specify that the other half of this two year sentence should be consecutive. 

9.  Further the applicant argued that the sentence of three years and four months’ imprisonment was manifestly excessive.

10.  No complaint was made of the three year sentence imposed for the first charge.

11.  In respect of the second to seventh charges, it was submitted that the two year sentence for each of the charges was excessive.  The proper range should be between 15 and 18 months. 

12.  The deduction of three months for agreeing to the bulk of the prosecution evidence and another three months for the two and a half year delay in prosecution were too low.

13.  In respect of the restitution by the applicant, the complaint was that the two month deduction was too low.

Our view

14.  Under common law, unless the court specifies a sentence to be consecutive it is presumed that the sentence will be concurrent with the other sentences.  Hence in Blackstone Criminal Practice (2011 ed.) para E2.11 it is stated that

‘ Where an offender is convicted on more than one count, the court should impose separate sentences on each count. Prison sentences may run concurrently or consecutively, or there may be a mixture of concurrent and consecutive sentences. The court should make it clear which sentence relates to which count and whether the sentences are concurrent or consecutive. If it fails to do so, it is presumed that the sentences are concurrent.’

Section 68 of the Criminal Procedure Ordinance (Cap. 221) enables the Court to direct a sentence to commence at any time during or at the expiration of another sentence. Similarly provisions are contained in section 82(1) and (2)(a) of the District Court Ordinance (Cap. 336).

15.  Although the Judge only stated at paragraph 32 that one year of the sentences for the second to seventh charges was to run concurrently to the first charge, having regard to what she said regarding the total sentence of four years and the final sentence of three years and four months after deduction, we are of the view that the reference to the one year concurrent sentence must be an error and the intention of the Judge was really a one year consecutive sentence in respect of the second to seventh charges to the three year sentence under the first charge.  The confusion was by the use of language only and not her true intention.  Mr. Egan who appeared together with Ms Cherry Hui on behalf of the applicant accepted that if we are of this view then his argument on the actual length of the sentence will not succeed.

16.  In considering the appropriateness of the sentence, we have to take an overview first.  The applicant practised deception on two financial institutions.  She was one of the two persons in charge of Top Master.  The total amount that was obtained by the deception was about HK$2.5 million.  This amount must be the basis for assessing the starting point of the sentence rather than the actual loss suffered by the two financial institutions.  Forged documentations were used in both deceptions.  In respect of the Bank, six loan applications were made in the course of a four week period.

17.  In the circumstances, we consider that a four year starting point for all the charges cannot be faulted.

18.  In respect of the second to seventh charges, a total of HK$1 million was obtained from NCB, six false transactions were carried out in a four week period.  While we agree that there may be room for argument whether it was excessive to impose a two year sentence for the third, sixth and seventh charges where the amounts were HK$80,528, HK$117,499 and HK$59,233 respectively, the Judge had effectively only adopted a two year sentence for this group of charges.  In the circumstances of this case we will not disturb the individual sentences imposed on these six charges.  In our view the two year sentence for this group of charges was appropriate and the one year consecutive sentence was also appropriate.

19.  We do not consider that each of the three month deduction for agreeing to the prosecution evidence and delay in prosecution to be inadequate.

20.  We, however, allowed the appeal because we considered that the two months deduction for the applicant’s repayment of Top Master’s liability was not adequate.  Of the loan of HK$1.5 million obtained by Top Master from Orix in March 2005, it had repaid about HK$800,000 by way of a deposit and 11 instalment payments between April 2005 and February 2006.

21.  There was evidence that in August 2005 the applicant raised a loan of HK$500,000 on the mortgage of her property and used the money for Top Master.  This is an indication that part of repayment to Orix came from the applicant personally.  This is about HK$225,000 representing payment of five instalments of HK$45,000 per month from September 2005 to February 2006.  The 2^nd defendant stated that he had not raised any fund for Top Master. 

22.  On top of that the evidence showed that the applicant personally repaid HK$315,000 to NCB.

23.  The Judge only gave the applicant a two month deduction on account of the substantial repayment on her part.  When contrasted with the position of the 2^nd defendant who had made no repayment at all and received a slightly higher sentence of three years and six months, we are of the view that the applicant did have a justifiable grievance that her efforts in repayment had not been given proper recognition. Accordingly we ordered a further deduction of another two months from the total sentence and arrived at a final sentence of 3 years and 2 months’ imprisonment.