HKSAR v. CHAN KING HONG

[English Translation – 英譯本]

HCMA 750/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 750 OF 2004

(ON APPEAL FROM TMCC NO. 3276 OF 2003)

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BETWEEN

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JUDGMENT

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1. The Appellant was convicted after trial on two counts of “fraud”, contrary to section 16A(1)(b) of the Theft Ordinance, Cap. 210 of the Laws of Hong Kong. He was sentenced to 6 months’ imprisonment for each offence, to be served concurrently. He now appeals against both conviction and sentence.

Proceedings at trial

2. Put simply, the prosecution’s case was that the Appellant was already heavily indebted but concealed that fact and obtained two further loans from two financial institutions without fully disclosing his debts. Details were set out in the respective “particulars of charges”:

Charge (1)

Chan King Hong, you are charged that on or about 9 November 2000, at Wing Hang Credit Finance Co. Ltd, Chung On Street, Tsuen Wan, New Territories, you induced Yim Wing Kwan of Wing Hang Credit Finance Co Ltd to grant you a loan of HK$130,000, resulting in prejudice or a substantial risk of prejudice to Wing Hang Credit Finance Co Ltd. You obtained such loan by fraud – namely by falsely representing that you have only applied for loans from Promise (HK) Ltd with a monthly repayment of $3,500; from HKCB Finance Ltd with a monthly repayment of $5,093; from Hong Kong Police Credit Union with a monthly repayment of $2,452.32; from JCG Ltd with a monthly repayment of $4,954; and have outstanding credit card payments of $1,500 – and with intent to defraud.

Charge (2)

Chan King Hong, you are charged that on or about 2 January 2001, at Sun Hung Kai Finance Co Ltd, Castle Peak Road, Yuen Long, New Territories, you induced Sun Hung Kai Finance Co Ltd to grant you a loan of HK$30,000, resulting in prejudice or a substantial risk of prejudice to Sun Hung Kai Finance Co Ltd. You obtained such loan by fraud – namely by falsely representing that you have only applied for loans from Promise (HK) Ltd with a monthly repayment of $3,500 – and with intent to defraud.

3. The Magistrate first summarized the evidence on Charge (1) as follows:

PW8 (Leung) is a marketing officer of Wing Hang. On 9 November 2000, he received and dealt with the Defendant’s application for $130,000. Leung asked for the Defendant’s … income proof and details of outstanding loans. The Defendant fraudulently claimed that he only owed (i) Promise $50,000 with a monthly repayment of $3,500; (ii) HKCB $80,000 with a monthly repayment of $5,093; (iii) Police Credit Union $50,000 with a monthly repayment of $2,452.

Leung then wrote the information on the loan application form (Exhibit P1). Leung recalled explaining a declaration clause in the application form which stated that the loan applicant must provide to Wing Hang true and accurate personal and loan details. Leung claimed that at that time he believed the Defendant had truly and fully disclosed all his debts. Leung and the Defendant both signed on the application form to verify the information.

Thereafter, Leung handed in the application to his supervisor, i.e. PW9 (‘Yim’) for approval. Yim did not meet the Defendant in person but testified that according to Wing Hang’s loan policy, if after deducting an applicant’s monthly expenditure from his monthly total income there was a $3,000 credit balance, the relevant loan application would be approved.

In deciding whether the Defendant’s loan application was to be approved, Yim had written the calculations on the back of the loan application form. (A) The Defendant’s monthly income was $22,860. (B) The Defendant’s monthly expenditure included (i) if Wing Hang granted the $130,000 loan to the Defendant as per his application, to be repaid in 32 instalments, the monthly repayment was expected to be $6,273; (ii) monthly rental expenses of $1,050; (iii) monthly repayment to the Police Credit Union of $2,452; (iv) monthly repayment to JCB of $4,954; (v) monthly payment of certain credit card bills of $1,500; (vi) monthly repayment to Promise of $3,500; … the total amount was $19,729.

On the basis that after deducting the Defendant’s total expenditure (i.e. $19,729) from his total income (i.e. $22,860) there was a credit balance of $3,131, which was in accord with Wing Hang’s loan policy, Yim thus put down his signature to confirm approval of that loan application. Yim further said that, as the Defendant still owed a personal loan to HKCB and had to repay $5,093 each month, Wing Hang approved the $130,000 loan to the Defendant on condition that he first had to pay off the debt to HKCB. As a result, after deducting the processing fees for the loan application, Wing Hang issued two cheques for the sums of $76,500 and $53,200 (Exhibits P3 and P4) and requested the Defendant to use the $76,500 to repay the debt to HKCB and produce proof of such repayment before Wing Hang gave him the remaining $53,200. This was done in order to allow the Defendant to save the monthly repayment of $5,093 to HKCB so that he could meet Wing Hang’s loan requirement (i.e. the policy of having a credit balance of $3,000 after deducting the total expenditure from the total income).

On behalf of Wing Hang, Leung also signed a loan agreement with the Defendant (Exhibit P2).

The agreed facts (Exhibit P29) indicate that, on the day the Defendant applied for the loan being the subject of Charge (1), he still had the following outstanding debts: Dah Sing $53,352, with a monthly repayment of $1,976; Asia $28,959, with a monthly repayment of $1,448; Standard Chartered $85,120, with a monthly repayment of $2,364 … [i.e. a total outstanding amount of $167,431 and a total monthly repayment of $5,788].

Although the Defendant represented to Wing Hang that he had some monthly credit card payments of $1,500, but the agreed facts show that at that time the Defendant had the following outstanding credit card debts: Standard Chartered $94,349, with a monthly repayment of $4,244; Bank of East Asia $29,678, with a monthly repayment of $1,596; Dah Sing $34,361, with a monthly repayment of $1,719 … [i.e. a total outstanding amount of $158,388 and a total monthly repayment of $7,559].

These figures indicate that, regarding the credit card payments, the Defendant failed to declare a monthly repayment of $6,059 (i.e. $7,559 less $1,500).

4. As for the evidence on Charge (2), the Magistrate stated as follows:

… PW10 (Wong) is the Deputy Loans Officer of Sun Hung Kai and, as such, was responsible for meeting the Defendant and handling his loan application.

The Defendant provided Wong with his ID card, residential address proof, Police warrant card, bank passbook, income records and loan records etc. Wong put down the information on the loan application form (Exhibit P5). Wong claimed that the Defendant requested a loan of $30,000.00, to be repaid in 18 instalments. The Defendant only claimed that he had an outstanding loan with Promise, with a monthly repayment of $3,500.00. Wong also said that according to the company’s rules, he had to remind the loan applicant to read the declaration clause in the loan application form which stated that the loan applicant must truly disclose all outstanding loan records. Wong filled out the outstanding debts column on the form with the information provided by the Defendant. They signed on the form to confirm its contents, and the application was then passed on to his supervisor Chow for approval (Chow did not testify at trial). The application was eventually approved, and after deducting the processing fees, Sun Hung Kai issued a cheque for $29,550.00 (Exhibit P7) to the Defendant on the same day. Sun Hung Kai and the Defendant also signed a loan agreement (Exhibit P6).

PW11 (Lam) is a branch manager at Sun Hung Kai. He did not handle the Defendant’s loan application, but he testified that at the time of the offence, Sun Hung Kai used a standard calculation method to determine whether or not to approve a relevant application. Lam said that Sun Hung Kai would divide the borrower’s monthly income by his monthly liabilities, and if the ratio was less than 90%, the loan would be approved. Lam claimed that, according to the loan application form in the present case: (i) the Defendant only applied for $30,000.000, to be repaid in 18 instalments, with a monthly repayment of $2,275.00; (ii) as the Defendant disclosed that he only had to repay $3,500.00 to Promise each month, his monthly total liability was $2,275.00 + $3,500.00 = $5,775.00. On the basis of a monthly income of $21,860 divided by the Defendant’s monthly liability of $5,775.00, the percentage was 26.4%, and therefore the Defendant’s loan application fulfilled Sun Hung Kai’s loan requirement.

‘The agreed facts’ indicate that on the day the Defendant made an application to Sun Hung Kai, he was indebted not only to Promise but also to 8 other financial institutions, with a total outstanding amount of $564,001.00 and a monthly repayment of $31,831.00.

‘The agreed facts’ also indicate that on 17 December 2001 the Defendant filed a petition for bankruptcy, and when the court made a bankruptcy order against him in March 2002, he was still indebted to Wing Hang for $102,255.00 and to Sun Hung Kai for $17,298.00.

The Police subsequently conducted 4 recorded interviews with the Defendant and the Defence agreed that all these interviews were made voluntarily by the Defendant:

(i)         Record of Interview dated 23 June 2003 (Exhibit P28(1)) – the Police inquired about the Defendant’s loan applications with 12 financial institutions, but the Defendant basically replied ‘I don’t remember’.

(ii)        Record of Interview dated 24 June 2003 (Exhibit P28(2)) –  the Defendant mainly replied ‘I don’t want to talk’.

(iii)       Record of Interview made on the morning of 23 July 2003 (Exhibit P28(3)) – the Defendant requested to have lunch before he continued to give a statement, hence the interview was terminated.

(iv)       Record of Interview in the afternoon of the same day (Exhibit P28(4)) – the interview was terminated due to typhoon.

5. Finally, the Defendant’s version is as follows:

The Defendant testified that in 1999, his father’s animal feed company went into financial difficulties. By reason of senility, his father was unable to borrow money from the banks, so he borrowed money from various financial institutions for his father.

The Defendant admitted that, on the day set out in Charge (1), his monthly income was $22,860.00 and his monthly loan repayments to the various financial institutions amounted to $21,800.00. But the Defendant claimed that his father had assisted him in repaying the loans, so he could still manage financially.

Regarding Charge (1), the Defendant originally applied to Wing Hang for a $200,000.00 loan and wished to repay by 48 instalments. The Defendant provided the following details of his loan application:

The Defendant stated that a staff of Wing Hang received him and asked for his ID card. The staff walked away with the ID card and after a while returned with a pile of documents. The Defendant said that, as he had borrowed money from Wing Hang on three occasions, he believed that the documents the staff was holding were his previous loan records.  When asked if he had other outstanding loans, he took out 3 to 4 credit cards from his wallet and showed them to the staff, telling him that besides the credit card loans, he also had other outstanding debts with other financial institutions. The staff then gave him pen and paper and asked him to call the related financial institutions to find out the outstanding loan amounts. He then did so and wrote down the names of the financial institutions, the respective outstanding loan amounts and the monthly repayment sums on the piece of paper. The staff took away that piece of paper and asked the Defendant to go out for a walk. After an hour or so, the staff told him that Wing Hang could only approve a loan amount of $130,000.00, and two cheques were issued, one to be used for repaying the debt to HKCB.

Regarding Wing Hang’s loan application, the Defendant submitted Exhibit D1, which consisted of his Police warrant card, residential address proof and bank passbook etc. He said that he had provided Wing Hang with Exhibit D1 when he applied for the loan.

Regarding Charge (2), the Defendant’s version of events is as follows: The Defendant received a document from Sun Hung Kai which read ‘Pre-approved loan $30,000.00’, so he went to the relevant branch and submitted Exhibit D2 to a staff of Sun Hung Kai, including his Police warrant card, residential address proof, income proof and bank passbook etc. He said that the staff photocopied the above documents. He emphasized that when he filled out the loan application form, he told the staff that he was still indebted to other financial institutions and also had some outstanding credit card payments. The staff replied ‘That’s ok, no need.’ He claimed that when he signed the application form, the statement that he owed Promise money with a monthly repayment of $3,500.00 was not included in the form at all. The Defendant also said that the staff then took ‘all the documents’ into a room and told him after a while that his loan application had been approved. He reminded the staff again that he had some other outstanding liabilities, but the staff impatiently scolded him, saying ‘it’s ok, no need to be so troublesome’. He finally took a cheque issued by Sun Hung Kai.

The Defendant claimed that, towards the end of 2001, his father sought financial assistance from him again, and he well knew that the situation was beyond redemption and therefore decided to apply for bankruptcy.

The Defendant claimed that when the Police conducted the recorded interviews with him, they only showed him 10 odd loan application forms and did not show him all the documents that accompanied the forms. He was unable to reply to the questions by reason of the long lapse of time. He had requested to take a look at the relevant supporting documents to enable him to clearly respond to the allegations against him, but the matter was delayed once and again, and the Police never responded to his request and instead laid charges against him. He felt this was gravely unfair.

Appeal against conviction

6. The Appellant raises four grounds of appeal against conviction.

7. Ground (1) is that the Magistrate erred in allowing the prosecution to lay a Charge (3) – a charge based on the same facts as those for Charge (2) but raised in the form of an “attempt” offence – as an alternative to Charge (2), and still convicting the Appellant of Charge (2) in the end.

8. The Appellant relies on section 51(3) of the Criminal Procedure Ordinance, Cap. 221 of the Laws of Hong Kong, which provides as follows:

… any allegation of an offence shall be taken as including an allegation of attempting to commit that offence; and where a person is charged with attempting to commit an offence … but not with the completed offence, then he may be convicted of the offence charged notwithstanding that he is shown to be guilty of the completed offence.

9. What the Appellant means is that, under the second limb of section 51(3), if a person is charged with an “attempt”, he must be convicted of the “attempt”, even if the evidence proves that he has committed the completed offence. The Magistrate has, it is submitted, contravened section 51(3) by convicting the Appellant of Charge (2) instead of Charge (3).

10. I do not consider the Appellant’s argument valid.

11. In my view, the above provision is applicable where a person is only charged with “attempt”, for the purpose of preventing an offender from being acquitted because he has completed the relevant offence but has not been charged with the completed offence. On the contrary, the first limb of section 51(3) states that an allegation of a completed offence includes an allegation of “attempt”. This means that if the evidence does not show that an offence has been completed but does prove that the offender had the actus reus and mens rea of “attempting” to commit that offence, then, notwithstanding the contents of the charge sheet, the court is entitled to convict the offender of “attempting” to commit that offence. A similar provision can be found in section 159G(3) of the Crimes Ordinance, Cap. 200 of the Laws of Hong Kong, where such an intention is even more clearly spelt out. That section provides as follows:

Where a person is charged with an offence, he may be convicted of having attempted to commit that offence even though he was not charged with the attempt.

12. In any event, judging from the effect thereof, what the prosecution did in the present case did not deviate from the provision of the Criminal Procedure Ordinance or the Crimes Ordinance. In light of the case of R v Campo Elkin Velasquez [1996] 1 Cr App R 155 cited by the Respondent, it is not novel for the prosecution to lay a charge of “attempt” for consideration by the court as an alternative to a completed offence. Furthermore, at the commencement of trial in the present case, the prosecution clearly explained this to the Magistrate, and the defendant could not possibly say he was unaware of the prosecution’s intention. This was what the prosecutor said:

Perhaps I need to explain this again. That is, in response to the first hearing for fixing date, we did not call as witness one Mr Chow Ming Yiu of Sun Hung Kai Finance Co Ltd in relation to Charge (2). Of course I am not talking about giving evidence at this stage, but this is part of the prosecutions case, this Mr Chow Ming Yiu is in the trial but we have not included him as witness. I understand that Mr Chow Ming Yiu was responsible for approving the loan by Sun Hung Kai.

Why does the prosecution have to put in this alternative Charge (3)? This is because after the prosecution has presented all evidence and exhibits, the prosecution will submit that, looking at all the circumstantial evidence, the prosecution can prove that the only and irresistible inference which can be drawn is that the Defendant has committed the offence set out in Charge (2). However, if there is a technical problem, the issue is that since Mr Chow has not been called as witness, the position is that when the Defendant made the representation as alleged, at law this constituted an ‘attempt’ to commit the offence. Therefore, when no conclusion is reached in respect of Charge (2), the prosecution will call upon the Court to consider Charge (3).

Of course, if there is evidence to establish Charge (2), it is not necessary for the Court to rule on Charge (3). This is the situation of the case as at today.

He subsequently added the following:

A related Ordinance is section 51 of the Criminal Procedure Ordinance … this section 51 provides a basis for the issue here, and subsection (3) states that ‘any allegation of an offence shall be taken as including an allegation of attempting to commit that offence; and where a person is charged with attempting to commit an offence or with any assault or other act preliminary to an offence but not with the completed offence, then he may be convicted of the offence charged notwithstanding that he is shown to be guilty of the completed offence.’ Therefore this includes an attempt.

In fact, from both a procedural and a legal perspective, the prosecution is not obliged to lay this alternative Charge (3). Nor has the prosecution consulted the defence before laying this charge. However, if such a possibility arises at the close of the prosecution case or in the course of trial, it will be very unfair to the defence if the prosecution then asks the court to consider the alternative charge. Therefore, on behalf of the prosecution, I consider it necessary to notify or forewarn the defence at the outset that this case may involve an ‘attempt’ to commit an offence.

Of course, for Charges (2) and (3), the prosecution is merely requesting … I am sorry, your Worship, because I … I am so sorry, your Worship, as I just saw and wanted to keep a law officer here and then the trial started.

Therefore, the prosecution is not requesting the Court to make a ruling on both Charges (2) and (3), but only if – and the prosecution only wishes to adopt a cautious approach, that is, if there is no ruling on Charge (2), I urge your Worship to consider this Charge (3).

13. To sum up, although the prosecution may be said to have been over cautious, this constituted neither an error of law nor a material procedural irregularity. Therefore, the Magistrate’s judgment is beyond reproach.

14. The Appellant’s Ground (2) of appeal is that the Magistrate erred in allowing the prosecution intentionally not to mention Mr Chow Ming Yiu in the particulars of Charges (2) and (3) as the person to whom the false representation was directed. For that reason, the Magistrate was unable to consider fully or at all whether Mr Chow Ming Yiu had been deceived. As a result, it was wrong for the Magistrate to convict the Appellant of Charge (2). At the same time, the Appellant was also deprived of the right to a fair trial.

15. The Mr Chow referred to here is a staff of Sun Hung Kai Finance Co Ltd who was responsible for approving loan applications. The reason why the prosecution laid Charge (3) for “attempt” as an alternative to Charge (2) for the court’s consideration was for fear that the Magistrate might not be sure if Sun Hung Kai had actually been deceived, because this Mr Chow was not included as prosecution witness (it is known that he had left Sun Hung Kai and did not wish to testify). This can be seen from the prosecution’s submission as quoted in paragraph 12 above.

16. On the question of whether Mr Chow’s failure to testify would render the trial unfair or the Magistrate’s verdict erroneous, I answer in the negative.

17. First, it is apparent from the Magistrate’s summary of the prosecution case that he was aware of the fact that Mr Chow had not testified. Furthermore, according to another witness Lam, who testified in place of Mr Chow, it was Sun Hung Kai’s policy at that time that an applicant’s existing debt must be below a certain percentage of his monthly income before he could successfully apply for a loan. The details are set out in the Magistrate’s summary referred to above. This, together with the evidence of Wong, Sun Hung Kai’s Deputy Loans Officer, that he had only obtained part of the existing debt information from the Appellant (and such evidence was accepted by the Magistrate), led to the only irresistible and reasonable conclusion that Sun Hung Kai had been deceived by the Appellant in granting the loan: Hong Kong Archbold 2004, page 1272, paragraph 22-141. Of course, two other possibilities existed, namely that Mr Chow Ming Yiu recklessly granted the loan to the Appellant with the knowledge that the information submitted by Wong was incomplete; or that the Appellant and Mr Chow Ming Yiu conspired to obtain the loan by failing to disclose all relevant information to Wong. However, these are plainly speculations which the Magistrate was not bound to consider. Furthermore, I notice that the particulars of charge for Charges (2) and (3) had been amended a few times in relation to the details of the party who had been deceived, with the final version not referring to a particular individual but merely to “resulting in prejudice to Sun Hung Kai Finance Co Ltd”. In the course of the amendments, the Defence had never raised any objection.

18. Finally, the two cases set out in the Appellant’s List of Authorities, namely R. v. Chan Kang-to [1997] HKLRD 412 and R. v. Rozeik [1996] 3 All ER 281, are both distinguishable from the present case on both facts and law. I fail to see how they can be of assistance to the Appellant.

19. The Appellant’s Ground (3) of appeal is that, in delivering the oral verdict, the Magistrate stated for the first time that the Appellant’s monthly salary was insufficient to meet his existing debts, and hence he must have known that his loan applications could not possibly succeed if he had fully disclosed his debts to the two finance companies. In making this statement, the Magistrate had not only deprived the Appellant of his right to respond to the statement, but had also made an unwarranted assumption in concluding that the Appellant had no income other than his monthly salary.

20. I see nothing in this ground of appeal.

21. Judging from the prosecution’s evidence and the facts admitted by the defence, the prosecution case had all along been that the Appellant’s debts exceeded his income, and this formed the basis of the crux of the prosecution’s case theory, namely to invite the court to draw an inference that the Appellant had attempted to obtain new loans by concealing certain facts. This is very clear and may even be said to be a matter of common sense, as the prosecution mentioned in its closing submissions. Similarly, in his testimony and (to an even larger extent) under cross-examination, the Appellant had explained how he could repay his old debts. I see nothing surprising in the Magistrate drawing a conclusion by following the prosecution’s arguments. The contention that the Appellant had been deprived of his right to respond is even more perplexing. The two cases referred to by the Appellant, namely HKSAR v. Yu Fai Tat FACC 1/2004 and HKSAR v. Chan Tit-shau FACC 8/2004, are vastly different from the present case on both facts and law and therefore have no referential value.

22. Regarding the Appellant’s income, it must be a fixed monthly salary as he is a police officer. Besides, as is clear from the Magistrate’s summary referred to above, the Appellant made no mention in the course of his testimony of any financial assistance other than that from his father. This being the case, the Magistrate was justified in saying that the Appellant’s financial resources were limited. In any event, the Magistrate’s analysis of the Appellant’s financial situation, as quoted below, is in my view entirely reasonable. He said:

On the ‘admitted facts’, as at the date set out in Charge (1), the Defendant’s income was $22,860.00 per month and his loan repayments amounted to $21,800.00 per month.  This sum does not include the $130,000.00 loan for which he applied to Wing Hang. The estimated monthly repayment for this loan alone is $6,273.00. In addition, the Defendant has to provide financial support to his 4 family members, and the other necessary expenses (such as living costs) come up to at least $6,000.00 per month. The Defendant’s total monthly expenses far exceed his income. During cross-examination, the Defendant had no option but to say ‘my father was responsible for most of the loans’. He further claimed that his father gave him $40,000 to $50,000 towards the end of each month. Such an explanation is clearly contradictory to the Defendant’s claim that he had applied for the loans in order to provide financial assistance to his father.

The Defendant’s claim that the financial problems of his father’s animal feed business in 1999 prompted him to borrow money for his father is also very flimsy, as he started borrowing money from Wing Hang back in 1997, when he obtained a loan of $160,000.00. He obtained from Wing Hang further loans of $70,000.00 and $200,000.00 in 1998 and 1999 respectively.

23. It also has to be pointed out that the fact that the Appellant’s debt exceeded his income was not the sole reason for convicting him. On pages 13-15 of the Magistrate’s written judgment, he set out a number of reasons for rejecting the Appellant’s evidence, which were all related to the circumstances when the Appellant handed in his application and waited for approval. He also pointed out how the Appellant’s case was inherently improbable.

24. The Appellant’s Ground (4) of appeal is that, in assessing the evidence of PW8 to PW10, i.e. Leung, Yim and Wong, staff of Wing Hang and Sun Hung Kai, the Magistrate stated that their evidence was consistent and corroborated each other on the details, but then he failed to canvass the inconsistencies and contradictions pointed out by the Counsel for the Appellant in his closing submissions.

25. The closing submissions of Counsel for the Appellant occupied 8 pages of the transcript. Upon careful reading, I notice that Counsel had indeed advanced a lot of criticisms on the evidence of Leung, Yim and Wong. However, these criticisms were all very minor and were mostly concerned with the circumstances of obtaining the existing loan details from the Appellant and of approving the loan. The intention was to raise the possibility that the relevant witnesses had turned a blind eye and recklessly granted loans in order to compete for businesses. The problem is that none of these criticisms is particularly remarkable and the Appellant has not highlighted any of them before me. On the contrary, as the Respondent has pointed out, when the prosecution was making its closing submissions, the Magistrate took the initiative to refer to some of the existing debts listed on the back page of one of the loan application forms (Exhibit P1), as a result of which the prosecution had to immediately apply to further amend the particulars of Charge (1). This suggests that the Magistrate did notice the contradictions among the prosecution witnesses’ evidence or between such evidence and the submitted documents, but that he might not have considered them so significant that he had to deal with them one by one.

26. In any event, having assessed the evidence of the prosecution witnesses, the Magistrate considered that they had been meticulous in approving loan applications but their memory might have faded with the passage of time. He said:

The three witnesses who had handled the Defendant’s loan application from Wing Hang and Sun Hung Kai, that is Leung, Yim and Wong, were unable to recount every detail of the relevant loan applications made by the Appellant by reason of the long lapse of time since the date of the offences. However, as Wing Hang and Sun Hung Kai had put in place very clear loan policies, the witnesses were all able to say affirmatively that they would determine whether to grant the loan to the Defendant by applying the prescribed ‘formulae’ to the income and expenditure information provided by him and believed by them to be true and complete. The fact that two cheques were issued by Wing Hang, on condition that the Defendant must first repay the debt owed to HKCB and submit proof of the repayment, shows that Leung and Yim had seriously considered the income/expenditure information provided by the Defendant.

As for the loan involving Sun Hung Kai, Wong stated that although the Defendant only disclosed the debt owed to Promise, he had also considered the debts which the Defendant owed to HKCB and the Police Credit Union (these were shown in the Defendant’s bank passbook). However, the Defendant submitted proof that the debt to HKCB had been fully repaid, and the entry for the Police Credit Union could be regarded as a savings item and hence was not considered part of the Defendant’s expenses. Although the Defendant claimed that Leung, Yim and Wong selectively wrote down part of the debts owed by the Defendant, the above evidence shows that they had seriously and carefully handled the Defendant’s loan information. Furthermore, although Leung and Wong were responsible for meeting the Defendant and handling the Defendant’s relevant loan applications, they had no authority to approve the loans. There was thus no reason for Leung and Wong to deliberately make false statements or conceal the Defendant’s debts. The fact that Wing Hang and Sun Hung Kai only allowed more senior officers to approve loans also indicates that the two institutions were very strict and careful in approving loan applications.

27. Finally, I notice from the Magistrate’s calculations that at the time of the offence set out in Charge (1), the Defendant’s debts, not including his daily expenses, amounted to $495,753, and he had to repay $21,801 each month, but his monthly salary was only $22,860. One month later, i.e. when the offence set out in Charge (2) was committed, his debts had accumulated to $667,964 with the monthly repayment increased to $35,331, but his monthly salary remained unchanged. In my view, had the Appellant made full and frank disclosure of his financial condition, no processing officer would have failed to notice it no matter how reckless he might be.

28. The Appellant’s appeal against conviction is dismissed.

Appeal against sentence

28. The Appellant contends that the Magistrate failed to consider, properly or at all, imposing a suspended sentence, and that, in all the circumstances, the sentence of 6 months’ imprisonment is manifestly excessive.

29. The Magistrate’s reasons for sentence are set out below:

For the purpose of sentencing, I have obtained a Community Service Order Report and a Background Report, the contents of both of which are agreed by the Defendant. The Defendant is 44 and his parents are both aged 70.  His wife is a housewife and they have two sons aged 20 and 15. The Defendant joined the Police Force in 1979 and, according to Inspector Ng, the Defendant’s supervisor, the Defendant’s performance had all along been satisfactory. He was recommended for promotion twice but failed on both occasions. In mitigation, the defence stressed that the Defendant has the full support of his family, but as he will be losing his job and pension due to his conviction, this will have grave repercussions on his family. Furthermore, the Defendant had continued to repay the debts to the various financial institutions and only filed a petition for bankruptcy when he found himself truly insolvent. He says he will not commit any offence anymore.

Apart from the above mitigating factors, I have also borne in mind that the Defendant has a clear record. However, he is convicted after trial and has shown no remorse. When he testified at trial, he had put the blame on several staff members of banks/financial institutions and had also raised serious and unfounded allegations against his colleagues who conducted the recorded interviews.  Read between the lines, the two reports suggest that the Defendant shows a lack of remorse. I have therefore excluded the possibility of imposing a community service order or a suspended sentence.

In light of the gravity of the present case, I adopt 6 months’ imprisonment as a starting point for each of the offences. After considering the mitigating factors submitted by the Defendant, I do not think any of them warrant a reduction of the 6-month term. I have also considered the case of Tam Sze Yan Mag. App. 1003/02, which is similar to the present case. The appellant in that case was also convicted of two charges of ‘fraud’ and sentenced to 6 months’ imprisonment for each offence, and part of the sentences was to run consecutively, making a total of 9 months’ imprisonment. The two offences in the present case were committed separately, on different dates and with different institutions being deceived, and the two sentences should in principle run consecutively. However, in light of the totality principle, I order that the two sentences are to run concurrently.

30. I do not see any problem with the sentence imposed by the Magistrate. In fact, although he did not elaborate on why a suspended sentence was not appropriate, this was apparently related to the Appellant’s lack of remorse, and in any case he had considered the possibility of a suspended sentence. In any event, a 6 months’ immediate custodial sentence is neither wrong in principle nor excessive.

31. As for the case relied on by the Appellant, HKSAR v. Lau Oi Lin HCMA 519/2003, it was, in simple terms, a unique case. As it has clearly stated in its judgment, the Court of First Instance in that case imposed a suspended sentence by reason of “exceptional circumstances” such as the Defendant’s remorse and her family background. There are no exceptional circumstances in the present case. The Appellant claims that he has just mended the relationship with his wife and their relationship cannot withstand a custodial sentence. It would be regrettable if that were the case, but this cannot be the reason for imposing a suspended sentence.

32. Finally, I have also taken into account the fact that the Appellant had already served 2 months of the sentence by the time he successfully applied for bail pending appeal. Applying the discount that a prisoner normally obtains, this means that he had already served half of his sentence. Nevertheless, after careful consideration, I do not think that the Appellant will suffer any injustice by being required to continue to serve the remaining term. On the contrary, I do not think that the Appellant should benefit from his successful bail application.

33. The Appellant’s appeal against sentence is also dismissed and he is to be immediately remanded in prison.