HKSAR v. TAM SZE YAN CYNTHIA

HCMA1003/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.1003 OF 2002

(ON APPEAL FROM ESCC 3649 OF 2001)

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J U D G M E N T

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1. This is an appeal against conviction of two charges of fraud, contrary to section 16A of the Theft Ordinance, Cap.210 and against sentence of a total of nine months' imprisonment.

2. The case against the appellant was that on two occasions, namely on 27 June 2001 and 14 July 2001, she obtained two loans from two lending institutions by deceit. The loan in respect of the first charge was in the sum of $180,000, whilst that in respect of the second charge was $80,000.

3. In her June application she declared her only liability was a monthly loan repayment of $13,398 when in fact she had 15 outstanding fixed loans repayment amounting to $120,464 per month. Upon approval of her application she received a cheque for $53,349.

4. In her July application she declared that her only liability was a monthly loan repayment of about $45,567 but in fact she had 16 outstanding fixed loans repayment amounting to $133,862 per month. Moreover, her July application was made one day after she had tendered her resignation. Upon approval of her application, she received a cheque for $30,415.

5. The appellant's monthly salary at the time of these two loans was $77,160.

6. Various people from the lending institution gave evidence as to how the loans were approved. The appellant did not give evidence but called two character witnesses.

Grounds against conviction

7. Mr Chandler, who represents the appellant here and below, advanced a total of eight grounds of appeal, but sought leave to abandon the 7th ground in the course of the appeal.

8. I shall firstly deal with Grounds 1 and 5 together. Mr Chandler complained that the evidence was insufficient to establish the intention to defraud as defined in section 16A(2) of the Theft Ordinance, Cap.210. It was submitted that in that section there was no express reference to the element of dishonesty and so does not admit any objective element of the Ghosh test. It was further submitted that the magistrate erred in relying on subsequent default in payment of the loan where there was no such evidence in the trial, when the risk of prejudice should have been appreciated at the time of the approval of the loan.

9. Section 16(2) provides that :

"For the purposes of subsection (1), a person shall be treated as having an intent to defraud if, at the time when he practises the deceit, he intends that he will by the deceit (whether or not the deceit is the sole or main inducement) induce another person to commit an act or make an omission, which will result in either or both of the consequences referred to in paragraphs (a) and (b) of that subsection."

10. The consequences referred to include either :

(a) in benefit to any person other than the second-mentioned person;

(b) in prejudice or a substantial risk of prejudice to any person other than the first-mentioned person.

11. Whilst the word "dishonesty" is not expressly stated in the section, I agree with the submission of the respondent that offences of deception, conspiracy to defraud and the like import the element of dishonesty, and thus the two step tests in Ghosh applies.

12. Given the fact of the omission on the part of the appellant to declare the complete picture of her liabilities, and that her monthly actual loan repayment liabilities well exceeded her monthly income at the time of the application, the magistrate was correct in finding that the appellant had been deliberate in her omission and practiced a deceit which she knew full well had operated in the minds of those approving the loans. By virtue of the size of her loan repayment commitment per month, the magistrate correctly concluded that there was little prospect that the appellant would be able to repay the loans and it was obvious that there would be substantial risk of prejudice to the lending institutions. Whilst the magistrate did mention that the Sun Hung Kai loan was not repaid, she did not rely on this fact to come to her findings. No doubt the acts of the appellant, viewed objectively, were dishonest and I am of the view that the magistrate had sufficiently considered the subjective mind-set of the appellant at the time of the application of the two loans.

13. Under Ground 2, Mr Chandler complained that the magistrate had failed to give any or sufficient weight to the appellant's good character. In directing herself as to the appellant's previous good character the magistrate said this :

"I agree with counsel that the Defendant is highly unlikely to get involved in criminal activities.

In this case the unlikelihood of the Defendant committing an offence or telling a lie is much less than any person with a clear record. I will keep this at the forefront of my mind when I consider the evidence."

14. Let me say on the outset that by looking at the context of the whole good character direction in the Statement of Findings, the word "unlikelihood" must have been a typo and the magistrate could not have meant anything other than "likelihood".

15. Mr Chandler complained that the magistrate, by her finding that the appellant was highly unlikely to get involved in criminal activities, was perverse in reaching her conclusion to find her guilty of the offences. With respect to Mr Chardler, what the magistrate did was to bear in mind the appellant's good character when considering the evidence. After consideration and analysis of the evidence, she was satisfied that the offences were made out and convicted the appellant. A magistrate is not required to set out in detail her entire thought process and I do not see anything perverse in reaching the conclusion she did.

16. Under Ground 3, Mr Chandler complained that in relation to Charge 2, the magistrate had erred in convicting the appellant on the basis that her representation was a continuing state of affairs, and the approval of the loan was also a continuing act without exercising the power under section 27 of the Magistrate Ordinance to amend the charges.

17. According to the wordings of the particulars of the charge, the deceit, i.e., the false representation, was made at the time of the application which induced the approval of the loan. It is not restricted to the time before the appellant appended her signature onto the application form when all words and acts of the appellant, no matter whether before or after she signed on the application form, was part and parcel of the representation. There was no need to amend the charge pursuant to section 27. It is clear from the evidence of the representatives of the lending institutions that had they known of the substantial commitment of the appellant, they would not have approved the loans. The false representations were thus operative and had induced the loan approval.

18. Under Ground 4, Mr Chandler submitted that although the appellant had tendered resignation on 13 July 2001, she did not leave the force until 15 September 2001. She was effectively still a Woman Police Inspector on 14 July 2001 when she made her loan application. Mr Chandler argued that the magistrate had erred in finding that the representation by the appellant of the nature of her employment was a continuing one and extended throughout the operative period of the loan. Furthermore, it was also argued that as it was the staff who copied the information from the computer screen from the rolled over loan and received confirmation from the appellant that there was no change in her place of employment and telephone number, there was no representation from the part of the appellant.

19. Mr Reading for the appellant had readily conceded that the wordings in the particulars of Charge 1 could have been more tidily drawn. However, the respondent submitted that the appellant was never misled as to the basis of that charge, namely, that the representation was by way of an omission to disclose material particulars that she had already submitted her resignation which she knew full well would affect the approval of loan. I agree. It makes no difference whether such information came from her directly or she confirmed such information when being asked. This was a deceit relating to the future. I agree with this submission entirely. I find that the magistrate was correct in finding that the representation by the appellant relating to her employment a continuing one. Mr Chandler's argument, if accepted, would be to invite unscrupulous individuals to make use of the time gap between the submission of resignation an the actual date of cease of employment to apply for and receive loans which they never had the intention or ability to repay.

20. Under Ground 6 Mr Chandler criticized the magistrate for accepting evidence of PW2 and PW3 which he said had already been demonstrated to be unreliable. Emphasis was placed on the fact that PW2 had not disclosed his interview with the appellant as to her liabilities in his first statement to the police.

21. The magistrate was alive to the criticisms made by counsel in his submissions at the trial. Although it is well settled that a magistrate is not required to deal with every single issue raised, she had dealt with the necessary issues in considerable details and resolved discrepancies before she made her findings. She had seen and heard the witnesses and was entitled to make findings as to which witness' evidence she accepted. I would not venture to disturb her conclusion of facts relating to credibility and reliability of witnesses.

22. Having considered all the grounds, I find nothing before me to persuade me that it would be just to reverse the convictions entered by the magistrate. This appeal against conviction is dismissed.

Appeal against sentence

23. The magistrate, in adopting a starting point of six months' imprisonment for each of the two charges, said this in her Statement of Findings :

"Having regard to the Appellant's background, mitigation and meritorious service to the police, I adopted a starting point of six months for each charge. There were no other mitigating factors and the Appellant was not entitled to any further discount."

24. The complaint of Mr Chandler, conceded by Mr Reading, is simply that the magistrate should have adopted a starting point first before she went on to consider whether there were mitigating factors instead of adopting a starting point after taking into account mitigation.

25. I agree that this unfortunate approach adopted by the magistrate is flawed. What she should have done was to state the starting point for each offence, and then went on to consider the mitigation and to give any discount she considered appropriate.

26. The maximum sentence for these offences is 14 years' imprisonment. The legislature has taken a serious view of offences of this type. Whilst taking into account the appellant's own personal circumstances and bitter lesson of the present conviction, the magistrate was correct in finding that the appellant was the author of her own misfortune. Whist this case might have arisen from mismanagement of her own financial affairs, the fact that the appellant chose to practise a deception when she knew full well that had the lending institution known of her actual financial as well as employment status they would never have approved of the loans warrants a serious view to be taken. The rules of approval of loans pertaining to the institution might have been lax, but that does not mean that such should be subjected to exploitation and abuse. A stern sentence is called for and an immediate custodial sentence is by no means wrong in principle. The magistrate had considered the appropriateness of a suspended sentence but rightly found no exceptional circumstances to justify one in the present case. It is also clear that by choosing to fight the case, the appellant thus lost the credit that would otherwise have been afforded to her had she chosen to plead guilty at the very beginning. I am of the view that six months' imprisonment on each charge after trial is by no means manifestly excessive, and that is the sentence I would have imposed had I been the trial magistrate.

27. I do not agree that the two incidents are part and parcel of one single continuous transaction which called for concurrent sentences. They are proximate in time, but they are distinct offences. Two completely different lending institutions and two loans of different sizes were involved. Consecutive sentences are not wrong in principle. The magistrate has properly considered the totality principle and ordered partially consecutive sentences. From the perspective of the nature of the offences and from that of the offender, the sentences are entirely appropriate and I hereby affirm the sentence passed by the magistrate.

28. I have also borne in mind Mr Chandler's submission that a substantial part of the sentence had already been served by the appellant by the time she was granted bail pending appeal, and the balance of the sentence is just slightly more than one month. He submitted that this is a case where I should tamper justice with mercy and reduce the sentence to such an extent as would allow her immediate release. However, I take the view that an unmeritorious appeal should not be a means to buy an appellant out of completing a justly imposed sentence. The rest of the sentence is to be served forthwith.