HKSAR v. HUI KAM

HCMA 778/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 778 OF 2000

(On Appeal from Shatin Magistracy Case No. STCC 1039/2000)

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J U D G M E N T

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1. The Appellant pleaded guilty in Shatin Magistracy to 1 charge of dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) of the Organised and Serious Crime Ordinance, Cap.455, Laws of Hong Kong. She was sentenced to 10 months imprisonment. She now appeals against the sentence.

2. The prosecution case as admitted by the Appellant is that between January 1999 and May 2000, funds totally approximately $6.5 million were deposited into the Appellant's bank account. These funds were withdrawn in cash and paid immediately into various other bank accounts. The Appellant admitted under caution that these funds were from her elder brother and they were proceeds of bookmaking activities on Hong Kong horse racings. The bookmaking activities were carried out in the Mainland. The Appellant also admitted that she was aware that the funds were proceeds of bookmaking activities.

3. In sentencing, the Magistrate considered that a substantial term of immediate custodial sentence is called for to reflect the gravity of the offence. He adopted 18 months as the starting point and reduced it by 6 months on account of the guilty plea and by another 2 months to take into account her clear record and the fact that she was made use of by her elder brother. He therefore sentenced the Appellant to 10 months imprisonment.

4. Four grounds were advanced in support of the appeal. Firstly, it was said that the Magistrate wrongly failed to call for background report before passing sentence. Secondly, it was argued that the Magistrate was over-influenced by the maximum penalty for an indictable offence of a similar nature and it was wrong in principle to impose a deterrent sentence on the Appellant, being a first offender. The third ground stated that the Magistrate failed to sufficiently consider the personal circumstances of the Appellant and the special circumstances leading to the commission of the offence. The fourth ground turns on the Magistrate's failure to consider other alternative sentence, namely, suspended sentence and community service order.

5. Before the hearing of this appeal, the Appellant had applied for bail pending appeal. The application was refused, but Jackson J who heard the application ordered that a background and community service suitability report be prepared for the appeal. The report is now available before this Court. The report reveals that the Appellant is a 45 years old housewife who was hitherto of clear record. She is married with 2 adult children. She came from a large family and the brother for whom she dealt with the bookmaking proceeds is her eldest brother. Favourable comments were passed on the Appellant by her parents, siblings, husband and children. There is no doubt that she has a stable family and strong family support. She is considered suitable for a community service order.

6. The main thrust of the submission of Mr McCoy SC, who appeared for the Appellant, is that this Court should consider substituting the immediate custodial sentence with a community service order or a suspended sentence. Emphasis was placed on the Appellant's clear record, the fact that she committed the offence out of misplaced loyalty to her brother, that she did not appreciate the gravity of her deeds and also that she derived no personal gain from the commission of the offence.

7. It is more convenient to begin with the second ground of appeal and to consider it in the context of whether a custodial sentence is called for in this case. There can be no doubt that the offence itself is a serious one. A conviction in the Magistrate Court carries with it a maximum sentence of $500,000 and 3 years imprisonment. If convicted on an indictment, the maximum sentence is $5,000,000 and 14 years imprisonment. In this connection, I am unable to discern anything in the Magistrate's oral reasons for sentence or his Statement of Findings that he was in any way over-influenced by the maximum penalty for an indictable offence of a similar nature. This part of the ground of appeal is hardly made out. The offence in question is one which justifiably calls for a deterrent sentence, both in the sense of deterring the individual offender and of deterring the community as a whole.

8. It is not too difficult to appreciate that the handling and disposal of proceeds of crime is very often an integral and important part of a criminal plan. The incentive to offend will clearly be curtailed if criminals cannot dispose of the fruits of the crime. It is therefore important to impress upon members of the public the serious consequences of dealing in and disposing of proceeds of crime even when one is helping his family member. Where a deterrent sentence is called for, then it is not wrong in principle to impose an immediate custodial sentence on a first offender.

9. Quite apart from the offence itself, the circumstances of this case also suggest that this is a serious case. The withdrawals and deposits were systematically carried out by the Appellant over a period of 17 months and some $6.5 million was involved. Clearly, there was a substantial bookmaking operation behind the scene. While the Appellant might not have expected to go to prison for what she did, the fact remains that she was fully aware of the nature and source of the funds she was dealing with. She ought to have appreciated that her brother's bookmaking operation in the Mainland could not have been implemented without her assistance in Hong Kong. The Magistrate's view that this is a case which calls for the imposition of a custodial sentence cannot be faulted.

10. I turn then to the fourth ground of appeal and that relates to whether the Magistrate ought to have passed a suspended sentence or a community service order. In order that a suspended sentence can be properly passed, it must be demonstrated that there are exceptional circumstances justifying suspending the custodial term. The fact that the Appellant had pleaded guilty, is of clear record and has a good family background and support do not constitute exceptional circumstances. Two matters had been urged by Mr McCoy SC for the Appellant. Firstly, that the Appellant was manipulated by her elder brother and it was due to a misplaced family loyalty that the Appellant did as instructed by her brother. Secondly, the Appellant had received no personal benefit from her deeds. I do not consider that these are exceptional circumstances. It is not uncommon for criminals to make use of their family members to hide or dispose of proceeds of crime partly because it is easier and more convenient to derive assistance from within the family. The relationship between the Appellant and the main penetrator of the crime therefore does not per se constitute an exceptional circumstance that justifies suspending the sentence. For the same reason, the fact that the Appellant derived no personal benefit from committing the offence is also not a ground for suspending the sentence.

11. On the alternative of a community service order, I accept that this was an option available to the Magistrate. Custodial sentence and community service order have been recognised as alternatives of sentencing that carry equal punitive value. The probation officer's report also shows that the Appellant is a suitable candidate for a community service order. However, where, as is here, there are 2 equally appropriate sentencing options available to a Magistrate, and the Magistrate has made an election, he cannot be criticised for having opted for one and not the other. The Magistrate was merely exercising his discretion when sentencing the Appellant and it is not for this Court to substitute its own discretion for that of the Magistrate, unless it can be shown that the Magistrate had erred in the exercise of his discretion.

12. I turn finally to the remaining grounds of appeal. I agree that it would have been better for the Magistrate to call for a background report before sentencing the Appellant. This is so even though the Magistrate had concluded that a custodial sentence was required. The mitigations advanced on the Appellant's behalf, though gave an outline of the background of the Appellant and of the case, was probably too brief and did not sufficiently set out the Appellant's background. A full background is both relevant and useful in determining the length of imprisonment, especially in the case of a first offender. Indeed the report now before this Court does provide useful information on the Appellant's background and the circumstances leading to the commission of the crime. While these matters do not, for reasons stated above, affect the propriety of the Magistrate's decision to impose an immediate custodial sentence, they certainly reveal that the term of imprisonment passed is too severe.

13. In this case, the starting point of 18 months is, in my view, too high. The circumstances of this case and the criminality of the Appellant are clearly less serious than those in the cases of HKSAR v. Lok Kai Win [1999] 4 HKC 783, HKSAR v. Lee Yu-to CA 582/1999 and R. v. Chung Kin-wah CA 700/1996. I consider that a starting point of 15 months is both just and proper. Allowing a 1/3 discount for the guilty plea and further reductions to reflect the Appellant's clear record, strong family support and the fact that she was made use of by her brother and she derived no personal gain from the offence, the appropriate sentence is one of 6 months imprisonment.

14. Accordingly, the appeal is allowed. The original sentence is substituted by one of 6 months imprisonment.