HKSAR v MUI KWOK KEUNG

DCCC 890/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 890 OF 2012

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

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

Reasons for Sentence

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

1.  Champerty is a common-law offence and attracts a maximum term of imprisonment of 7 years.

2.  I have convicted the defendant after trial of five charges of champerty.  The defendant is a practising barrister of nearly 20 years’ call.  This is a fall from grace and should be the end of his professional career at the Bar.  I have found that he offered five laymen, PW1 through to 5, a champertous agreement on the basis that he would maintain, promote, conduct their civil litigation in return for 25 per cent of their awards, 30 per cent where PW1 is concerned.  If he was not successful, they would not pay any legal fees at all.  I accepted the prosecution witnesses’ evidence and rejected the defendant’s case and the defence witnesses. 

3.  I do not intend to repeat the facts or the evidence.  I gave a very detailed judgment where I set out the credible evidence of each prosecution witness and how they came to agree to a champertous agreement, an offence I am sure they were unaware of before this trial.

4.  I found that the facts of the case proved pure champerty, and borrowing a quote, I described it as being “in its most obnoxious form.”  A member of the legal profession has abused his position and trust of his lay clients.  There are no guidelines for this offence.  It is a rare offence and each sentence will depend on the facts of each case.  The fact it is rare and no longer an offence in some jurisdictions is not a factor that will attract leniency.  In fact, I can say from the outset this is a very serious case.  I cannot imagine it getting much worse.

5.  The defendant acted wholly inappropriately and in total disregard of his honourable profession.  As a member of the Bar, he should have no direct contact with any lay client.  Yet with all five prosecution witnesses, he dealt with them directly and independently of any solicitors.  He cold‑called PW1 and solicited him, tempting him with success with untruths.

6.  He managed to engage all five witnesses, represent them and settle cases on their behalves.  This applies to PW2 through to PW5 and it seems without the appropriate solicitors’ participation.  I suspect some impropriety and knowledge on the part of solicitors on record but do not go any further than I have my suspicions.  

7.  I am sure these witnesses were not aware of the illegality of their agreement and were not necessarily willing participants of a crime.  They did not agree and agree to keep quiet.  The defendant preyed on their ignorance.  None of these prosecution witnesses were familiar with the legal profession or had any prior experience in litigation.  They all trusted the defendant to represent them properly and agreed the fee structure as offered.  As I said previously, any layman would see the no-win-no-fee arrangement attractive.  They are as laymen, however, unaware of the mischiefs behind champertous agreements especially if the champertor is a barrister. 

8.  There are some aggravating factors here that I consider relevant to sentence:

9.  The way the defendant dealt with each prosecution witness shows an element of exploitation especially where PW5 is concerned.  He has lent most of them money during the course of their litigation I am sure to keep them sweet and on board.  PW5 in particular was a man easily malleable.  He did not question why the defendant took 62 per cent of his award.  He believed what he was told and trusted the defendant.  He agreed to open a joint account with the defendant so that the defendant could control the award.  The defendant took advantage of this man shamelessly and took from him what was rightly his because he knew he was an easy target. 

10.  In addition, I am sure the defendant fabricated documents to try and create a doubt in some of the prosecution witnesses’ evidence.  It was a desperate attempt to explain why each prosecution witness had paid significant sums of money into Madam Chan’s bank accounts at the defendant’s instructions after each award was received.  That is grave and appalling conduct from a man in the legal profession.  He tried to hide these funds by having them deposited in Madam Chan’s accounts, never his own.

11.  I have heard little in way of mitigation except for the defendant’s educational background, his family background and his previous profession before becoming a barrister.  The defendant obviously worked hard to better himself but, unfortunately, resorted to what he had to have known were illegal acts to benefit himself financially.  He is unfit to be a member of the Bar.  

12.  A term of imprisonment is entirely appropriate. I have carefully considered the facts surrounding each charge and each prosecution witness as well as the facts I find aggravating.  I have also taken into consideration the defendant had previously a clear record.  I do find a starting point of 2 years’ imprisonment for Charges 1, 2, 3 and 4 appropriate. I see no reason for any discount. 

13.  For Charge 5, I find a starting point of 2 years and 10 months appropriate to reflect the serious exploitation I found of PW5 by the defendant.  Again I see no reason for any discount.

14.  I do take into account the totality principle, the time span of each offence and that they would overlap naturally.  I also take into account the separate and distinct champertous agreements made with five individual laymen.

15.  For Charge 1, I sentence the defendant to 2 years’ imprisonment; Charge 2, 2 years’ imprisonment; Charge 3, 2 years’ imprisonment; Charge 4, 2 years’ imprisonment; Charge 5, 2 years and 10 months’ imprisonment.  Of the 2 years for Charges 1, 2, 3 and 4, for each sentence, I will order that 2 months be consecutive to Charge 5 and the balance concurrent.  That is an additional 8 months consecutive to Charge 5.  Accordingly the term of imprisonment will be a total of 3 years and 6 months.

16.  I will deal with compensation.  I will not adjourn the matter of compensation today.  The prosecution have asked for a compensation order of $1,509,750.  I have checked their figures and that amount does represent 25 per cent of the awards paid into Madam Chan’s accounts for PW2, 3 and 4.  For PW5, the amount is more than 25 per cent as the defendant only gave him 38 per cent of his award.  The compensation does reflect and deduct loans to prosecution witnesses made by the defendant as well as medical report expenses and other matters the prosecution agrees to.

17.  Prosecution has applied pursuant to section 73 of the Criminal Procedure Ordinance, Cap 221.  Having considered the application, the wording of that section, I do agree that witnesses PW2, 3, 4 and 5 have suffered a loss of property; in this case, money.

18.  Prosecution says that all of those witnesses would have been entitled to take out civil proceedings against the defendant as they paid over money that was pursuant to an illegal contract.  By making a compensation order, I am circumventing the trouble and expense that each prosecution witness would have to go through to pursue the defendant for this sum of money.

19.  The defendant’s instructions to Mr Li are that he has nothing to say in relation to this application for compensation.  I did propose to ask for submissions as to the defendant’s means as I should look into means if I am minded to consider compensation, but the defendant has nothing to say in relation to this.  I take his silence to mean that this application is not challenged.  I find the compensation application reasonable. Defendant was in my view paid, where some charges are concerned, twice.  The question I posed was why should the defendant benefit and the prosecution witnesses not get the full extent of their damages?

20.  I order compensation as follows.  The defendant is ordered to pay as compensation to PW2 HK$425,000; to PW3, HK$235,000; PW4, HK$90,000; to PW5, HK$759,750.  That is the total of the amount applied for by the prosecution.

21.  Without being informed of the defendant’s means, I will make an application that this sum be paid in full into court on or before 1st August 2013.  That is a time period of four months. 

(Discussion re disposal of exhibits and bail money)

22.  Seeing that it is PW5 that is owed the most amount, I will order that the defendant’s $20,000 bail be taken and applied to the compensation of PW5 first.  It will be applied to compensation payable to PW5.  His compensation order of $759,750 will be reduced by $20,000 payable on or before 1 August.