HKSAR v. CHAN YIU FAI AND OTHERS

CACC 375/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 375 OF 2013

(ON APPEAL FROM DCCC NO 459 OF 2013)

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REASONS FOR JUDGMENT

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Hon Barnes J (giving the Reasons for Judgment of the court):

Introduction

1.  The 1^st and 2^nd applicants were respectively D3 and D4 in the District Court proceedings and we will continue to use the same terminology when we refer to them. 

2.  A total of five defendants appeared before HH Judge D’Almada Remedios in the District Court.  D1 was involved in all four charges (Charge 1 – 4). Each charge alleged a conspiracy to defraud either the Hong Kong and China Gas Company Ltd (Gas company), or CLP Power Hong Kong Limited (Electricity company), or both (utility companies), between D1 and one of the other four defendants, by tampering with and altering the gas and/or electricity meters installed in restaurants to reduce the meter readings, thereby causing loss to the said companies.  D3 was involved in Charge 2 while D4, Charge 3. 

3.  D3 pleaded guilty to Charge 2 after the conclusion of a voir dire. The judge adopted a starting point of 24 months and gave D3 a 20% discount upon his late plea and a further 2 months reduction on account of him having made full restitution.  D3 was thus sentenced to 17 months’ imprisonment. 

4.  D4 pleaded guilty to Charge 3. The judge adopted a starting point of 15 months.  After given D4 the full one-third discount and a further 2 months reduction for making full restitution, D4 was sentenced to 8 months’ imprisonment. 

5.  Both D3 and D4 sought leave to appeal against the sentences imposed – with D3’s application being out of time. 

6.  At the conclusion of the hearing, we granted leave to D3 to appeal against sentence out of time, treating the leave application as the appeal proper, we allowed the appeal and set aside the sentence of 17 months’ imprisonment.  In its place we substituted a sentence of 12 months.  We dismissed D4’s application for leave to appeal against sentence. 

7.  We indicated we would give our reasons in due course, which we now do. 

Summary of facts

8.  The facts disclosed that in January 2012, the Gas company received an anonymous letter alleging that some syndicate might have conspired with persons in charge of restaurants to tamper with gas meters.  A report was made to the police and as a result of police investigation, D3 and D4 were arrested and charged with their respective offences. 

9.  It was common ground that both D3 and D4 were introduced to the fraud by D1. 

10.  The modus operandi of D1 was that after becoming a regular customer of a particular restaurant and getting to know the operator or proprietor, D1 then suggested to the operator or proprietor to have the gas or electricity meter installed in the restaurant tampered with so as to reduce the charges payable to the utility companies.  Upon reaching an agreement, D1 and another person “Ah Kwan” also known as the “Master” (師傅) then went to tamper with the meters installed once a month.  D1 was then paid a reward which he shared with the “Master” after confirmation that the utility bill was lower than usual.

11.  In the case of D3, who operated two restaurants (one in Tseung Kwan O and the other in Tai Po), the estimated loss to the utility companies amounted to $720,228 over a period of two years and four months.

12.  In the case of D4, who operated one restaurant, the estimated loss to the Gas company was $208,828 over a period of one year and eleven months.

Background and mitigation

13.  D3 was aged 37 with a clear record. He was deaf in one ear since childhood.  His father is suffering from terminal lung cancer.  He had made full restitution.  He was said to be a man of positive good character in that he assisted what were described as the “grassroots or [people from the] elderly homes” by providing them with discounts on the price of food from the restaurants he operated.

14.  Counsel for D3 submitted that D3’s deafness and his father’s illness amounted to exceptional circumstances such as to warrant the suspension of any period of imprisonment.

15.  D4 was 52 years of age. He has 12 previous convictions, most of them related to dishonesty. He had been out of trouble for 8 years prior to the present offence.  Although there was a shortfall of $16,000 when D4 mistakenly believed that the deposit he had paid to the Gas company would go towards the sum of full restitution, it was clear that for all intents and purposes D4 had made full restitution as he had given a cheque in the amount of $16,000 to his solicitors to pass on to the Gas company prior to sentence.

16.  Counsel for D4 also submitted that the full restitution made by D4 amounted to a special circumstance such as to warrant a suspension of a term of imprisonment.

Reasons for sentence

17.  The judge rejected counsel’s submissions in relation to the deafness of D3 and the illness of his father as special circumstances.  Whilst accepting that full restitution was a mitigating factor, she refused to accept that as an exceptional circumstance which justified a suspended sentence.  

18.  The judge took into account the following: the tampering did not cause any risk to lives or safety; the manner in which the meters were altered was simple but difficult to detect; and the amount of loss caused to the utility companies over an extended period of time was significant. Noting that there were no guidelines or tariff for these offences of dishonesty, she came to the view that an immediate custodial sentence was appropriate.  

19.  In respect of D3, the judge adopted the same starting point of 24 months’ imprisonment which she had adopted for D1.  Citing the case of HKSAR v Leung Cho Yi (CACC 385/2008), the judge gave D3 a 20% discount for his plea after a voir dire.  She also gave him a further discount of 2 months to reflect the making of full restitution.  D3 was then sentenced to 17 months’ imprisonment.

20.  As for D4, the judge adopted a starting point of 15 months and gave D4 the full one-third discount.  She also gave D4 a further deduction of 2 months for the full restitution made.  D4 was thus sentenced to 8 months’ imprisonment.

Grounds of appeal

21.  Both counsel (Mr John Hemmings for D3 and Mr Harrison Cheung for D4) put forward similar grounds of appeal.  They can be divided into three areas: (1) that the judge failed to give sufficient regard to (a) the restitution made; and (b) the role played by each of them as opposed to that played by D1, the instigator; (2) the overall sentence was manifestly excessive; and (3) there was disparity between the sentences the applicants received when compared with the sentences imposed on defendants in a case of similar nature in the District Court (DCCC 462/2013).

Discussion

22.  At the outset, both counsel made it clear that they were not suggesting that an immediate prison term was wrong in this case.  They referred to the other District Court case simply to support their submission that the starting points adopted for D3 and D4 respectively were too high.

23.  We will just briefly address the disparity point. It is true that all but one restaurant owners/operators in DCCC 462/2013 were put on a Community Service Order (CSO).  The remaining restaurant owner/operator was found to be not suitable for CSO due to an injury and he was given a suspended sentence. 

24.  It is trite law that where sentences were passed on different occasions by different judges on different accused for the same offences, the only consideration would be whether the sentence passed on the appellant was appropriate (see R v So Hung Lee and Anor [1986] HKLR 1049; HKSAR v Cheng Sau Yuk [2012] 5 HKLRD 415). 

25.  What we had to decide was whether the starting point adopted by the judge was too high and whether adequate discount was given to reflect the full restitution made.

D3

26.  In the case of D3, the judge had indeed imposed the same starting point on both D1 and D3.  Bearing in mind that D1 was clearly the instigator and mastermind of the scheme, while D3, who was a man of clear record and positive good character, had plainly succumbed to temptation placed in his path by D1, it was in our view wrong to adopt the same starting point for both of them.

27.  Whilst we could not ignore the fact that the utility companies suffered loss to the tune of $720,228, we accepted the fact that it was an accumulation of smaller monthly amounts over a period of two years and four months.  We were of the view that having considered the role D3 played as against that of D1, a sentence of 20 months’ imprisonment after trial would have been appropriate. 

28.  D3 did not plead guilty at the beginning of the trial. He only pleaded guilty after the conclusion of a voir dire.  No issue was taken by Mr Hemmings on the judge’s adoption of a 20% discount, following the decision in Leung Cho Yi (supra). 

29.  We now come to address the issue of full restitution.  It is well recognized that restitution is a powerful mitigating factor which warrants a specific discount over and above the usual discount given for plea (see HKSAR v Leung Shuk Man [2002] 3 HKC 424).  As to the percentage to be given, it is very much case-sensitive and lies in the discretion of the sentencing judge.  If full restitution is made early by a defendant who enters a timely plea, an overall discount up to 50% may be appropriate (see Leung Shuk Man above).

30.  The judge gave D3 a two month discount for restitution, which amounts to a 9% discount from the 24 months she adopted as a starting point.  In our view, such a percentage does not give sufficient recognition to the rather substantial sum of over $700,000 made – particularly when exactly the same deduction of 2 months was given to D4 in respect of a less substantial amount.

31.  We are of the view that a further deduction of 4 months is appropriate in all the circumstances of this case.

32.  For these reasons, the appropriate sentence for D3 is one of 12 months (20 months less 20% for late plea less a further 4 months for restitution).

D4

33.  Although D1 was charged with D4, due to the plea bargaining offered by D1, only D4 was sentenced for Charge 3.  We were unable to proceed on the basis that the judge would have adopted the same starting point of 15 months for D1 had he been convicted of this charge.  All we could do was to look at all the circumstances to see if the starting point of 15 months adopted was correct.

34.  Mr Cheung prayed in aid the sentences imposed for similar offences overseas: one on abstracting electricity (R v Lee Paul Harrison [2001] EWCA Crim 2427), and the other on a conspiracy to defraud British Telecom by allowing persons to make overseas calls without payment (R v Tahir Aslam [1996] 2 Cr App R (S) 377), to support his contention that the 15 months adopted by the judge was too high – where there was no tariff or sentencing guidelines for this offence.

35.  We do not find the levels of sentence adopted in the UK of any practical use in this matter.

36.  Bearing in mind the role played by D4 (which was similar to D3); the amount involved ($208,828); the period involved (one year and eleven months); and D4’s previous record of dishonesty (meaning that he was not entitled to be treated on a par with a person of previous good character), we were of the view that the 15 months adopted by the judge was appropriate.

37.  D4 was given a full one-third discount for his plea and there was, understandably, no complaint there. 

38.  Coming to the issue of restitution, Mr Cheung prayed in aid the fact that D1 did not make any repayment to the utility companies while D4 made full restitution including D1’s share.  Mr Cheung submitted that D4 should be given a bigger discount on the basis that D4 had paid more than double the amount unjustly enriched by him as he had agreed to pay D1 half of the saved expenses.

39.  We were not impressed with this submission.  As a result of carrying out the conspiracy to defraud, the Gas company suffered a loss of $208,828.  D4 made full restitution to the victim and this fact must be recognized.  The keyword is “restitution”, not the amount “unjustly enriched”.  Had D1 been found guilty of this charge and been sentenced, D1 of course could not claim any benefit of having made any restitution, but that does not mean D4 could claim a bigger discount for having made full restitution. 

40.  The 2 months deduction given by the judge, together with the full one-third discount for plea, amounted to a discount of about 47%.

41.  In all the circumstances of the case, we did not find the discount given by the judge on restitution inadequate.

42.  For these reasons, the sentence imposed on D4 (8 months) was appropriate and could not be said to be manifestly excessive.

Conclusion

43.  For the reasons stated, we granted leave to D3 for leave to appeal against sentence out of time, and we allowed his appeal to the extent that we set aside the sentence of 17 months’ imprisonment and substituted it with 12 months’ imprisonment. 

44.  We dismissed D4’s application for leave to appeal against sentence.