HKSAR v. WONG TUNG HIU

[English Translation - 英譯本]
HCMA 488/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO.488 OF 2012

(ON APPEAL FROM FLCC 1006 OF 2012)

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J U D G M E N T

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1.  The Appellant pleaded guilty before the Fanling Magistrates’ Courts to one count of fraud contrary to section 16A(1)(a) of the Theft Ordinance, Cap 210 of the Laws of Hong Kong. He was sentenced by the Principle Magistrate (hereinafter “the Magistrate”) to 16 months’ imprisonment. He felt aggrieved with the sentence, against which he appeals.

Facts of the Case

2.  This is a case of defrauding the Social Welfare Department (hereinafter “SWD”) in application for Comprehensive Social Security Assistance (hereinafter “CSSA”).

3.  In February 2002, the Appellant made an application for CSSA which was granted and he received standard rates payment in the sum of $2,030 per month.

4.  From 2004 to 2009, the Appellant took part in 29 reviews, during which he told the SWD officer who reviewed his case that he neither had any jobs nor any financial assistance without disclosing the fact that he held three accounts, one in the Hang Seng Bank, one in the Citic Ka Wah Bank and one in the Bank of China.

5.  The Appellant admitted that he held the said three bank accounts only when he was under investigation in April 2010.  The Citic Ka Wah Bank account, which was opened on 6 July 2004, had been used for the purpose of being the payroll account for four jobs, while the Bank of China account, which was opened on 2 September 2008, was the payroll account for another job.  The amount of deposit in the Hang Seng Bank account was not substantial and there was nothing special.

6.  Between 2004 and 2010, the Appellant had been working for five security guard companies earning the total sum of $479,000 odd.

7.  As a result of the Appellant’s failure to disclose the above situations, the SWD from 6 July 2004 to 23 November 2010 overpaid him CSSA payment by $268,000 odd.

Mitigation at the first instance hearing

8.  At the first instance hearing, the Appellant was legally represented.

9.  The court was told by his legal representative that the Appellant, a divorced man aged 62, had been unemployed for almost three years and he was in poor health suffering from diabetes.

10.  He committed the offence only because of his gambling problem.  Fortunately, he has kicked off the habit.

11.  Although he is currently receiving CSSA payment in the sum of $3,300 per month and living with financial hardship, he still makes repayment to the SWD in the sum of $1,300 per month.

12.  The Appellant is a first offender without any previous conviction records.

The Magistrate’s Reasons for Sentence

13.  The Magistrate called for a background report for the Appellant before sentencing.  He noted that the Appellant was fond of gambling on horses.  Although he earned the total sum of $470,000 by working as a security guard and over-received CSSA payment by $260,000 odd by deception, currently the balance in his account only consisted of a few thousand dollars.

14.  The Magistrate stated that the facts of the case were serious.  Although the Appellant did not defraud the authority right at the beginning of his application, he subsequently defrauded the SWD deliberately and continuously, and the amount of CSSA payment obtained by deception was substantial.

15.  By reference to HKSAR and Leung Wai Kei[1] and having considered the overall circumstances, including the Appellant’s health conditions and the repayments he had been making to the SWD, the Magistrate was of the view that custodial sentence was warranted.

16.  He took the view that the starting point should be 30 months.  However, since this is a magistrates’ court case, he adopted the maximum of a magistrate’s jurisdiction, which is two years, as the starting point.  He gave the Appellant 1/3 discount for his plea of guilty and sentenced him to 16 months’ imprisonment.

17.  In the Magistrate’s view, suspended sentence was not appropriate and he ordered the Appellant to serve the sentence immediately.

Grounds of Appeal

18.  On appeal, the Appellant is unrepresented. He points out in the Notice of Appeal that the sentence is excessive.  However, no specific grounds are set out.

19.  At the hearing, the Appellant puts forward the following matters:

(1) His mother passed away in 2009, and she had been suffering from illness for more than ten years when she was still alive.  He worked as a watchman earning only $4,000 to $5,000 per month.  It is indeed necessary for him to apply for CSSA;

(2) Most of the money he obtained from CSSA is for normal expenses, including his mother’s medical expenses, and not much was spent on gambling;

(3) He is in poor health suffering from hypertension and diabetes.  Recently, he has been diagnosed with having nasopharyngeal cancer as well;

(4) He is a singletonelderly without anyone looking after him, and he asks for the court’s leniency.

Discussion  

20.  Cheung JA made the following observations in HKSAR and Leung Wai Kei[2]:

“27. … the CSSA Scheme is intended to help those in genuine need of assistance. Our society does not tolerate any act of defrauding public funds by dishonest means.

28. … … in appropriate cases, the court is under a duty to impose a deterrent sentence in order to curb the offence. However, a regime of draconian penalties and severe laws is neither a panacea nor the only solution for evils in our society.

45. … … for this type of offence, which is usually committed by disadvantaged members of our society, a non-custodial sentence or a suspended sentence is more appropriate for the defendants, their families and our society as a whole.”  

21.  Cheung JA pointed out that the following considerations are appropriate when determining what sentence is to be imposed:

“(1) The court should first consider whether a custodial sentence is necessary;

(2) If a custodial sentence is appropriate, the court may consider imposing a community service order in lieu of imprisonment or suspending the sentence;

(3)        In cases involving some intentional and persistent fraud, an immediate custodial sentence is justified.”

22.  Cheung JA also pointed out that the following factors should be considered by the court:

“(1) whether the defendant pleaded guilty;

(2) the amount involved and the length of time over which the offence was committed. It should be noted that, even where a huge total amount is involved, this may be an accumulation of small amounts received by the applicant per week/per month;

(3) the circumstances leading to the offence. There is an obvious difference between a legitimate claim which became false due to a change of circumstances and a claim which was false from its inception;

(4) the purpose for which the money has been used: using the money for providing household necessities will more readily attract the court’s sympathy than spending the money on luxuries;

(5) the defendant’s character and previous records;

(6) circumstances specific to the defendant, such as illness, disability, family difficulties, etc; and

  (7) whether the defendant has voluntarily repaid, in whole or in part, the amount that has been overpaid to him.”

23.  When considering sentencing, the Magistrate noted that the Appellant had a clear record and was cooperative under investigation.  However, his fraudulent conduct lasted as long as 7 years. Although he did not make any misrepresentation in his initial application, there was deliberate concealment on his part when he faced numerous application reviews after the fraudulent conduct had taken place, and at the end the amount of money obtained by deception was substantial.  The Magistrate also took into account the fact that most of the money so obtained by the Appellant was spent on gambling.  Although he was repaying the overpaid amount, up to now only a small part had been repaid.

24.  Under such circumstances, the Magistrate took the view that custodial sentence was warranted.  In my judgment, this is consistent with legal principles reflecting properly the nature and the facts of the case and giving sufficient regard to the Appellant’s background.

25.  I also agree that in the case there is no good reason which justifies an order for the sentence to be suspended.

26.  The Magistrate took the view that only a starting point of 30 months could reflect the facts of the case.  I totally agree with his judgment.

27.  However, as pointed out by the Magistrate, this starting point is higher than the maximum of a magistrate’s jurisdiction. The Magistrate adopted the approach of using 2 years as the starting point, giving the Appellant 1/3 discount for his plea of guilty and sentencing him to 16 months’ imprisonment.

28.  In my judgment, such an approach is very generous to the Appellant already.

29.  In HKSAR v Li Yan[3], Mortimer V-P, having discussed the Court of Appeal cases in this regard, laid down the proper approach to be adopted by a District Judge when facing a situation where a starting point higher than the maximum of his jurisdiction should be adopted:

(1) It is permissible for the judge to adopt as a starting point a sentence of more than 7 years if it is appropriate;

(2) However, in any event, the judge may not impose a final sentence of more than 7 years;

(3) If the final sentence for a plea of guilty after appropriate discount is more than 7 years, this means that the defendant will be deprived of any benefit for his plea of guilty;

(4) Under such circumstances, if the final sentence is more than 7 years, the judge should give the defendant a meaningful discount from the maximum of 7 years;

(5) If the final sentence is less than but still near 7 years, the same situation applies as this means that the defendant will be deprived of a meaningful discount;

(6) As to what is meaningful in the particular circumstances, this is left to the judge to decide;

(7) Under the above circumstances, the judge is not required to give 1/3 discount from the maximum of 7 years;

(8) Starting point higher than the maximum of jurisdiction includes the notional overall starting point where the defendant is sentenced for more than one offence.

30.  In HKSAR v BUI VAN TRUNG[4], Lunn J pointed out that the above approach was also applicable to the magistrates’ court cases.  If a magistrate took the view that a sentence higher than the maximum of his jurisdiction[5] should be adopted, the approach, in principle, should be the same.

31.  I totally agree with these views.

32.  Therefore, the Magistrate may, based on his judgment, take 30 months as the starting point and then give the Appellant a meaningful discount from the maximum of 2 years.  Had the Magistrate adopted this approach, the term of sentence certainly would have been longer than the present one of 16 months.

33.  The Magistrate now imposed 16 months’ imprisonment on the Appellant.  He only gave him 1/3 discount which he deserved for a plea of guilty without anything further for the repayments being made by him.  From the Reasons for Sentence by the Magistrate, it appears that it is because in the Magistrate’s view, the Appellant only repays about $1,300 per month, and it will need 237 instalments (that is almost 20 years) before full repayment can be made.

34.  In my judgment, after all, the Appellant is repaying what he has obtained by deception.  Although he is rather passive, this does not mean that no recognition should be given and reflected in the sentence.  However, the most important consideration in an appeal against sentence is whether the sentence is inconsistent with legal principles or manifestly excessive.  In my judgment, in this case, had the Magistrate adopted the said proper approach for sentencing taking into account the repayments made by the Appellant, there would have been a small room for downward adjustment of the 16 months’ sentence.

35.  As far as how the Appellant spent the money obtained by deception is concerned, in my judgment, the findings made by the Magistrate are justifiable.  It is difficult to accept the facts raised by the Appellant now which are totally different from what was submitted through his legal representative and what he told the report compiling officer.  

36.  The Appellant submits that he has just been diagnosed with having nasopharyngeal cancer.  So I have called for a medical report.

37.  The report states that the Appellant indeed suffers from nasopharyngeal cancer which shows sign of metastasis.  However, further examination is required before the actual seriousness can be determined.

38.  Generally speaking, poor health, in principle, is not a mitigating factor.  The Appellant should be able to receive proper treatment and care while serving his sentence.  However, the Appellant’s medical condition may enable the court, as an act of mercy in the exceptional circumstances, to impose a lesser sentence than would otherwise be appropriate [6].

39.  The Magistrate had no knowledge of the Appellant’s current health conditions when passing the sentence.

40.  Having considered all the circumstances, in my judgment, for the above reasons and humanitarian grounds, I exercise my discretion to reduce the sentence by 4 months.  Therefore, I allow the appeal and substitute the sentence with 12 months’ imprisonment.

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. P. Y. Lo, Barrister-at-law.

[1] [2007] HKCLRT 193

[2] [2007] HKCLRT 193

[3] [1998] 4 HKC 12

[4] HCMA 596/2004

[5] Generally speaking, the maximum of a magistrate’s jurisdiction is two years.

[6] See R v CHAN Kui-sheung [1996] 3 HKC 279