HKSAR v. YAU CHUN KIT

HCMA 645/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO 645 OF 2015

(ON APPEAL FROM STCC 1551/2015)

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REASONS FOR JUDGMENT

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1.  The appellant, a sergeant of the police force, pleaded guilty to 10 charges. One charge was fraud and 9 charges were brought under section 3 of the Prevention of Bribery Ordinance, out of which two charges were soliciting and all the other were accepting an advantage. He was sentenced to a total of 14 months’ imprisonment and ordered to pay restitution of HK$26,000.00 in respect of charges 3, 4 and 5 to the HKSAR Government. I have allowed his appeal against sentence and quashed the restitution order. These are the reasons.

2.  The facts he had admitted to reveal that he kept on borrowing money from a total of six colleagues over a period of 17 months (November 2012 to March 2014).  At the time of the borrowing he was the immediate superior of the police constables, except one (involving charges 3, 4 and 5) who had been separated from him by posting.  The total amount involved was HK$129,100.00, mostly repaid, except HK$26,000.00.

Grounds of Appeal

(1) The magistrate erred in imposing an immediate custodial sentences in the circumstances of the present case;

(2) Further or in the alternative, the total 14 months’ imprisonment failed to take account of the totality principle and was manifestly excessive; and

(3) The order of restitution to HKSAR Government leaving the victim out of pocket and tantamount to double punishment to the appellant was wrong in principle.

Respondent’s reply

3.  Respondent quoted the case of R v Lai Yuk-kui [1981] 691 at 695 and submitted that whilst an immediately custodial sentence, with usual minimum of 12 months should be imposed for offences under s 4 to 8 of the Prevention of Bribery Ordinance, Cap 201, Roberts CJ refrained from expressing views as to s 3 or 9 offences because those offences involve a far wider range of moral culpability.  That said, that case is not authority to support the proposition that custodial sentence is not inevitable for s 3 offences.  The respondent disagreed that there existed exceptional circumstances in the present case for suspending the custodial sentence:

(1) The guilty pleas were only entered after plea bargaining and shortly before the scheduled trial day.

(2) Although there was no evidence of outright corruption; or that his duties or the police force reputation being compromised, these did not set off against the aggravation that the lenders were all his subordinates and most of them his immediate subordinates some of whom even had to borrow money from financial institution or credit union to finance the loan to the appellant.  False pretence to obtain a loan was involved in respect of Charge 1.

(3) Whilst most of the loans, except HK$26,000.00, were repaid, they were not repaid timely: some were not repaid within 30 days.

(4) Loss of career, pension rights and fall from grace are not matters which constitute exceptional circumstances.

4.  The respondent also submitted that the restitution order under s 12(2) of the POBO is mandatory on the sentencing court.  The argument by the appellant counsel that there is room for maneovre is misconceived.  Repayment of a loan owed to the debtor and s 12(2) restitution to the Government are two different and totally unrelated matters.  Order of repayment to the victim might be fairer but the section simply does not admit such.  To order, as the appellant’s counsel submitted, “0” under s 12(2) and the whole of the outstanding amount to the victim is wrong in principle.

My judgment

Was an immediate custodial sentence wrong in principle, if not, whether the sentence of 14 months was manifestly excessive?

5.  The magistrate said this to justify an immediate custodial sentence:

“Section 3 of the Prevention of Bribery Ordinance applies to all public servants. However, it is all the more serious when the offences occur in Police Force which is run in strict discipline. If D, as sergeant, kept on borrowing money from his subordinates, it could compromise the integrity of the Police Force and undermine its efficiency and discipline.

D, instead of owing debts himself, was spreading his debts to a number of other officers. How could a Police Force function effectively if many of them were in debts and subject to threats or pressure from their creditors? The creditor and debtor relationship between sergeant and his subordinates could also undermine discipline and promote corruption.

The scale of this case call for deterrent sentence in the form of immediate custodial sentence of some length.”

6.  Having taken into account his personal background and commendation within the Force, the magistrate said:

“I recognize that it was personal failings of D in borrowing money from his subordinates and not outright acts of corruption in this case. However, as a sergeant, he allowed his personal financial difficulties to compromise the integrity and effectiveness of the Police Force on which the stability of Hong Kong relies. Despite all the personal merits, I still believe an immediate custodial sentence is called for, for the purpose of deterrent.”

7.  S 3 offence has the unusual feature that it is not necessary for the prosecution to prove corrupt purpose: they target corruption in the broader sense of that word rather than bribery.

8.  According to Bribery and Corruption Law in Hong Kong by Ian McWalters SC, 3^rd Edition:

“7.9 . . . That a particular class of agent, namely prescribed officers, are treated differently, even perhaps more severely, by the anti‑corruption legislation is simply the result of the legislature acceding to the Government’s policy objective of subjecting its employees to stricter and even harsher, controls over their conduct; a policy objective that flows from a recognition of the impact that the work of civil servants has on the daily lives of Hong Kong’s citizen, and the adverse consequences that are inevitably caused to the public interest by any lapse in their integrity. Subjecting civil servants to the penal provision may be regarded as a rather high price for them to pay to assuage society’s anxieties about corruption but it has played, and continues to play, a valuable role in maintaining a corruption free administration.

7.18 . . . its purpose is not to provide the Government with criminal law sanctions against civil servants who are in breach of disciplinary regulations – that may sometimes be its effect but it is not its purpose. Its purpose is far higher than that. Its purpose is to ensure that conduct which could render a prescribed officer vulnerable to, or could, in any way create circumstances conducive to, corruption is, when detected, ‘nipped in the bud’.

7.21 . . . the scope of the section is such that it is capable of encompassing within it conduct that traverses the full gamut of criminality – from the less serious forms of impropriety where corruption is in its most incipient form to the borderline section 4 where there is present the clear ‘whiff of corruption’.”

9.  Whilst the case of R v Chan Wing-leung, HCMA 29/1987 also dealt with s 3 offences involving a police sergeant borrowing money from junior colleagues, the court on appeal in replacing an immediate custodial sentence with a suspended sentence said:

“From all the cases to which this court has been referred in this appeal plus the information I have received from both counsel for the defence and counsel for the prosecution no one person has yet received an immediate custodial sentence for an offence committed contrary to s 3. I see no reason why on the facts of this case I should be the first to depart from that sentencing standard . . . ”

10.  I do not see how that case could be authority that non‑custodial sentence is the norm, especially in view of the cases of R v Cheng Chi‑sang, HCMA 1376/1996 and香港特别行政區訴周月好, HCMA 890/2009.  In the latter Deputy Judge Toh (“as she then was”) said this about Chan Wing‑leung:

「當年的案件很久之前，這和現在的情況有所不同。」

11.  Counsel for the appellant stressed that the appellant did not compromise his duties during the offence period, and sought to rely on a number of letters of commendation from the Hong Kong Police Force by way of additional evidence.  I refused this application because such are not conducive to the outcome of the appeal.  The magistrate had not overlooked this.  In fact, had his duties been compromised, or had there been actual corruption, the appellant would have been charged with other offences such as the offence of “Misconduct in public office”:

“7.17 A consideration of the role of section 3 must start with a recognition that it is an anti‑corruption measure, deliberately confined to prescribed officers, and intended therefore as a weapon designed to combat corruption in the civil service. It is part of an ordinance that was passed, according to its preamble, ‘to make further and better provision for the prevention of bribery and for purposes necessary thereto and connected therewith’. That such a provision might properly be regarded as an anti‑corruption measure is a reflection of the desire of the legislature to tackle corruption before and after it may have taken place, and echoes the view of Lord Justice Lawton in R v Wellburn where he recognized the preventive role of anti‑corruption statutes when he said at page 265:

The mischief aimed at by the modern statues dealing with corruption is to prevent agents and public servants being put in a position of temptation . . . ” (Bribery and Corruption Law in Hong Kong)

12.  In R v Lawrence, CACC733/1980, Silke J said:

“The true view of s 3 . . . is that it seeks to avoid a Crown Servant placing himself in a position where he is vulnerable. It is . . . a preventive section . . . ”

13.  The sort of vulnerability is further elaborated in HKSAR v Choy Tsz Keung, HCMA 274/2007, where Barnes J said:

“20. . . . The situation between the appellant and the serving prisoner is different. The relationship between them is such that the appellant had compromised his position and undermined his authority as a prison officer. Even if the chance of the appellant being blackmailed is remote, it remains a real possibility that the appellant feels obliged to treat his ‘money‑lender’ more leniently or favourably than what would have been required of him in his performance of his duty as a prison officer . . . ”

14.  All in all, the gravamen of the facts of this case was that the appellant placed the junior officers in an invidious position that they felt they had to lend money to him because he was a sergeant.  This placed pressure on the subordinates to not refuse his requests.  Some of them had to resort to borrowing from financial institution or credit union to come up with the money to lend to the appellant.  Given the latitude and duration of the offences, I am of the view that an immediate custodial sentence is called for.  I do not think that there existed any exceptional circumstances for suspending the immediate term.  Loss of pension rights and fall from grace were mitigating factors to be taken into account for reduction of sentence terms but do not in themselves constitute exceptional circumstances:

“the judge was right to have taken these factors into account, provided they were not given too much weight.” (per Stuart‑Moore VP, Secretary for Justice v Shum Kwk‑sher [2001] 3HKLRD 386)

15.  However, the totality of 14 months’ imprisonment was too high.  The appellant had already spent 4 months in prison, which means with remission for good behavior, a sentence of 6 months.  I would allow his appeal against sentence to the extent of passing a sentence which would enable his immediate release.

Restitution order of HK$26,000.00

16.  S 12(2) of the POBO deals with sentence relating to s 3 offences:

“Any person guilty of an offence under section 3 shall be liable on conviction to a fine of HK$1,000,000.00 and to imprisonment for 1 year, and shall be ordered to pay to the Government in such manner as the court directs the amount of value of the advantage received by him or such part thereof as the court may specify.” [underline added]

17.  This provision imposes a mandatory obligation on the sentence court to order the convicted person to pay to the Government a restitution, although a court has the discretion whether to order repayment of the whole amount or value of the advantage or only of a part of it.  The provision does not give the court a choice as to whom the repayment is made.  Normally, the full amount will be ordered, on the principle that no one is allowed to benefit on his ill‑gotten gains.

18.  In Bribery and Corruption Law in Hong Kong:

“11.134. . . . A restitution order is not a fine, nor is it the same as a compensation order – its effect is to restore to a party property which is legally his. To order less than the full amount is to deprive the lawful owner of his property and allow the offender to benefit from his crime. . . . it is contrary to any notion of what is right that a corrupt agent should retain the benefit of criminal against that he made whilst in the employ of his principal. An order for the full amount will also underline the gravity of the offence . . . ”

19.  Having said that, it is clear that the s 12(2) restitution order targets “advantage”. In the present case most of the loans had been repaid, except for the HK$26,000.00 which he had failed to repay to Lai Kin‑man.  All the ill‑gotten gains in this case was perhaps interests, which the Prosecution had not quantified.

20.  I have referred myself to the dialogue between trial counsel and the magistrate on this topic, at page 43 of the Appeal Bundle.  On refusing the Prosecution’s application for a restitution order in the sum of HK$58,100.00.

“Court: Yes. But the restitution order is a secret profit being kept by the defendant as an agent but, in this case, he has fully repaid all the debt except HK$26,000.00, so you are asking for all this restitution, there’s nothing to restitute because he haven’t [sic] (“hasn’t”) kept any secret profit except that HK$26,000.00.”

“Court: . . . so the only restitution order I should make is in relation to HK$26,000.00 . . . ”

“Court: Has he paid?

Mr Boyton: No, but he’s willing to pay . . .

Mr Boyton: The problem is, if you make this order, then the victim, Lai Kin Man, is not going to get any money . . . then he’s been punished twice . . .

Court: Will he pay now?

Mr Boyton: Can I --- he doesn’t have the money.

Court:  If he pays back, then I can allow him just to do it now so that to avoid double punishment.”

21.  We can gauge from the above dialogue that the magistrate was of the view that as there was no positive signs that the appellant was going to repaid the outstanding amount, such could be said to be an advantage that he kept for himself and those proceeds would have to be regurgitated.  As a result, a restitution order to the HKSAR Government in that amount was made.  At the hearing of the appeal, that amount was duly repaid to Mr Lai, and Mr Lai had signed an acknowledgement of receipt.  

22.  I am of the view that the restitution order is obsolete and redundant, and so ordered it to be quashed.