HKSAR v. WONG YIU KUEN

CACC 463/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 463 OF 2000

(ON APPEAL FROM DCCC 1017 OF 1999)

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J U D G M E N T

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Hon Mayo VP (giving the judgment of the Court):

1. The applicant seeks leave to appeal against the sentence of 2 years imprisonment which was imposed upon him after he pleaded guilty to one count of conspiracy to defraud in the District Court before H H Judge Wright.

2. Particulars of the offence were that:

"CHAN Chun-man, Philip and WONG Yiu-kuen, between the 1st day of April 1997 and the 31st day of May 1997, in Hong Kong, conspired together and with CHU Wai-shing to defraud the Mandarin Oriental, Hong Kong Limited by dishonestly :-

(a) falsely inflating by $100,000.00 Hong Kong currency a quotation of $375,000 from Wong Choy Decoration & Painting to the Mandarin Oriental Hotel Hong Kong for renovation and installation works performed on the Roof Top Handrail at the said Hotel; and

(b) thereby inducing the said Mandarin Oriental, Hong Kong Limited to make payment thereof."

3. The applicant changed his plea during the currency of the proceedings which embraced a number of charges against him and his co-conspirator Mr Chan. There is not amongst the papers before us any agreed summary of facts. However from a perusal of the grounds of appeal which have been lodged there does not appear to be any significant disagreement on the facts.

4. The applicant was the sole proprietor of a contracting firm which undertook decorating work. The firm had undertaken work for Mandarin Oriental Hotel over a considerable period of time. In his reasons for sentence the Judge clearly stated that he sentenced the applicant only in relation to this offence.

5. The applicant agreed to a proposal made to him by Mr Chan to inflate the price of a contract to carry out work at the roof top of the Mandarin Oriental Hotel. It is perhaps pertinent to add that for extraneous reasons the applicant did not get the job.

6. The person who took over Mr Chan's job made a report to ICAC.

7. The case was set down for hearing on 11 September 2000 for 12 days and the applicant pleaded not guilty. On 19 September the applicant indicated his intention to plead guilty to this count and a plea of guilty was taken by the Judge and he ordered that the other charges laid against him were not to be proceeded with without the prior leave of the court.

8. The Judge deferred sentencing the applicant to the conclusion of the trial. When he did so he adopted a starting point of 2 1/2 years. As the plea of guilty had not been entered at an early stage the Judge considered that the applicant should only be entitled to a discount of 15%. However taking into account other mitigating factors particularly his hitherto good character the Judge gave him a total discount of 6 months thus arriving at the sentence of 2 years imprisonment.

9. There are four perfected grounds of appeal against sentence. The first is that the staring point of 2 1/2 years was manifestly excessive.

10. It appears from p. 10 of the appeal bundle in his reasons for sentence that the Judge placed considerable reliance upon Secretary for Justice v Kwan Chi Cheong & Others being Application for Review 1/1999.

11. Mr Martin Lee, SC submitted that a point of law arose in this case. He argued that the Judge had been in error in equating the present case with a corruption case simply on the basis that it had "a flavour of corruption attaching to it". We are satisfied that there was a distinct flavour of corruption in the present case.

12. We consider that the circumstances of the present case are sufficiently similar to fully justify the Judge in adopting a similar approach. In that case Kwan Chi Cheong & Others the Court of Appeal said at p.6 of their judgment:

"The Prevention of Bribery Ordinance provides the sanctions necessary to deal with breaches of this kind. The Ordinance was intended to be draconian in its effect. Bribery, whether in its acceptance or by the offering of an advantage, is an evil which can strike at the heart of commercial and public life if it is left unchecked. A punishment that fails to deter will produce all the wrong signals just as sentences which act as a deterrent will reinforce this community's efforts to rid itself of corruption.

For these reasons, even the first offender charged with an offence of corruption under the Ordinance, unless it is merely a technical breach, must usually expect a deterrent sentence. This will almost invariably involve a sentence of immediate imprisonment.

Taking Lawton L.J.'s four classic principles of sentencing, [See R v Sargeant, (1970) 60 Cr.App.R. 74 at 77], these are retribution, deterrence, prevention and rehabilitation. It may well be that in many cases, the balancing act which the sentencer must perform will be a difficult one. All factors need to be taken into account but, depending on the circumstances, it may be that greater significance has to be given to one factor rather than another. In cases of corruption, where an advantage is offered or accepted, it is difficult to envisage a situation where public interest does not require deterrence to predominate. The personal circumstances of the offender will carry less weight. This, it seems to this Court, should apply whether the corruption is in the public sector or in the private sector. It may be that in some cases of public sector corruption the offences will be more serious but that is a matter which can be reflected in the length of sentence rather than the mode of sentence.

This case is a prime example of the sad results which are occasioned when otherwise honest and hardworking people, succumb to temptation and fall prey to corruption. The probation reports are, as the magistrate has said, eloquent as to the Respondents' capabilities in the past and as to their potential for the future. However, from all the reports before us, it is clear that they agreed out of weakness to be exploited in a way which they knew was unlawful. In an illuminating passage from D4's Community Service Suitability Report, it says:

'He committed the present offence out of greediness and his underestimation of the legal consequences.'

This precisely highlights what may happen when the courts dilute the strength of many years' firm resolve when dealing with cases of corruption, and instead impose sentences that fail to deter. It would be most unfortunate if it was not generally understood in the community that dire consequences will ensue where corruption is established.

This was not, in our judgment, a case where community service was appropriate however suitable for community service the candidates themselves may have been. The circumstances would have to be wholly exceptional. It follows that the personal backgrounds of the Respondents, their pleas of guilty and the risk to them of economic loss if they did not accede to D1's exploitation of themselves are not factors, even in combination, which could justify a non-custodial sentence."

13. These observations appear to be particularly apposite to the present case. It has been and is the policy of the court to adopt a most stringent approach to offences of this nature and we are unable to say that a starting point of 2 1/2 years imprisonment was either excessive or wrong in principle.

14. The 2nd ground of appeal is that the Judge found nothing to choose between the respective roles played by Mr Chan and the applicant.

15. The point is made that Mr Chan was an employee of the Mandarin Group and thus was in breach of the trust he owed to them. However balanced against this is the fact that the applicant had enjoyed an ongoing business relationship for a considerable period of time with the Mandarin and this would give rise to the applicant at least being in a position of some trust in relation to the Hotel. What however is of greater significance is that the applicant entered into this conspiracy with his eyes wide open. He was an experienced person and must have been fully aware of the consequences of what he was doing. This ground is without merit.

16. The 3rd ground of appeal is that:

"3. The Learned Judge failed to attach sufficient weight to the following mitigating factors in the case:-

(a) the unexplained delay (through no fault of this Applicant) in bringing criminal proceedings in this case and the same being determined;

(b) the fact that, of the six contractors allegedly involved with Philip CHAN Chun-man, this Applicant was the only one to be prosecuted and was not as culpable as others allegedly involved;

(c) that there was no actual benefit to anyone nor loss to the Mandarin Hotel in relation to the charge for which this Applicant was sentenced;

(d) the plea of guilty albeit belated;

(e) the Applicant's good character and the devastating impact of a substantial prison sentence upon the Applicant and his family."

17. In his reasons the Judge explained why he was unable to grant to the applicant the usual 1/3 discount. He considered that in all the circumstances a 15% discount was appropriate. This was not unreasonable. A discount of 15% would mean a reduction of 4 1/2 months. It is therefore apparent that the Judge did give 1 1/2 months further discount.

18. Having regard to the court's approach to these type of offences it would not appear that the Judge could have given much more discount than he did.

19. So far as the applicant's good character is concerned it is almost always the case with this type of offence that the perpetrator will have hitherto been of good character and that the personal consequences of the conviction will be disastrous.

20. In commenting on the delay complained of there is nothing to indicate that any criticism can be made of the prosecution. The Judge referred to some of the procedural matters which had arisen. While it is true that this matter was outstanding for a considerable period of time this will almost inevitably be the case when the litigation is complex and requires much preparation. The fact that this case was hanging over the applicant's head for a protracted period in all probability would have been one of the main reasons for the additional discount which was given.

21. Ground 4 was to the effect that the Judge should have made a community service order. In this connection much reliance was placed on HKSAR v. Chow Chak Man & Another [1999] 2 HKC 659. That was a rather exceptional case. One of the factors which appears to have been weighed by the Court of Appeal was that the Judge himself requested that a suitability report be obtained. Having received a report which was undoubtedly favourable to the defendant he then proceeded to impose a custodial sentence without giving any reasons why he had changed what must presumably have been his view that this might be a viable sentencing option. In the instant case the Judge did not of his own volition request such a report. He simply acceded to the applicant's legal representative's request that a report be obtained. In other words the Judge never indicated that community service might be a possibility in the present case.

22. There is a further problem regarding Chow Chak Man & Another. It is referred to in the third edition of Cross & Cheung's "Sentencing in Hong Kong" at page 75. There is an error. It is that according to the commentary an ideal candidate for community service requires any one of six factors to be present before an offender can be said to be suitable for such an order. This is of course quite wrong. All the factors must be satisfied.

23. This guidance is derived from R v. Brown [1981] 3 Cr. App. R(S) 294 at 295. Unfortunately, it seems that the same error was made when this court adopted the guidance from Brown by referring to the six factors as requiring individual consideration as opposed to requiring cumulative consideration. In any event, the court in Chow Chak Man appears to have overlooked the fact that while the offender may have been an appropriate candidate for community service, the offence was, on its facts, too serious for this option to have been utilised.

24. Having said this it is clear from Secretary for Justice v Li Cheuk Ming [1999] 1 HKLRD 63 and from the passage earlier cited in Kwan Chi Cheong & Others that it is only in the most exceptional cases that anything other than an immediate custodial sentence is appropriate in cases involving an element of corruption. There was nothing exceptional in the present case. This ground must also fail.

25. Ground 5 also refers to the contention that the Judge should have made a community service order. For the reasons we have already given we do not consider this to have been a suitable case for this.

26. The sentence was in no way either excessive or wrong in principle and this application is dismissed.