HKSAR v. CHEUNG WING LAM

CACC 32/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 32 OF 2004

(ON APPEAL FROM DCCC NO. 128 OF 2003)

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J U D G M E N T

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Hon Stock JA (giving the judgment of the Court):

1. The applicant was convicted after trial before Deputy Judge Ma in the District Court of twenty charges of lending money at an effective rate of interest which exceeded 60% contrary to section 24(1) of the Money Lenders Ordinance Cap. 163. He was sentenced to a term of twenty-seven months' imprisonment and this is his application for leave to appeal against sentence.

2. The applicant was apprehended as a result of a police operation targeted at loan sharking in the Yaumatei District. The police concentrated at a gathering place for taxi drivers and the applicant was seen on frequent occasions giving money to, or receiving money from, taxi drivers. A number of police officers, in August and September 2002, posed as a friend of a taxi driver and were thus able to secure loans from the applicant. These loans account for five of the twenty charges and the other fifteen charges relate to loans made to three taxi drivers.

3. The time span covered by the charges is from May 2000 to September 2002. The amounts lent on each occasion ranges from $3,000 (Charges 3 and 19) to $10,000 (Charges 1, 4, 5, 7, 8, 9, 10, 11 and 16). The effective rates of interest range from between 360% per annum (at one charge only) to 520%; 547%; 563% and 685% (the rest). The applicant had imposed terms on the borrowers in each case that repayments be made on a daily basis of several hundred dollars per day. It is common ground that the amount of interest in fact received by the applicant in respect of these charges was $35,000 and the loans totalled $142,000.

4. The applicant is aged 45 years and is a used car dealer. He is not a person of previous good character. He has a conviction, albeit a considerable time ago, for possession of triad society documents and possession of drugs; another for possession of an offensive weapon in a public place and for common assault and one for driving whilst disqualified. In his Reasons for Verdict the judge noted the mitigation advanced and in particular that the applicant himself did not solicit customers and that the loans were not in themselves, or indeed cumulatively, of an enormous sum. The judge said that there was no sentencing tariff and referred to the decision in R v. LUI Sau-cheong [1993] 2 HKCLR 298, where Bokhary JA (as he then was) said:

"Such operations are unfortunately all too frequent nowadays. In case after case coming before the criminal courts, one sees a procession of offenders to a large extent driven to the offences - whether involving dangerous drugs, forgery, fraud, theft, robbery, burglary, or any other number of offences - to escape the clutches of loan sharks with whom they had the misfortune to deal. The courts have in recent years seen enough of the evils and ills of loan-sharking to become fixed with a duty to combat the same by penalties heavier than those generally imposed in the past."

The judge said that whilst in the current case the amounts were not large. The applicant was obviously ready to lend to any taxi driver, and that he was clearly conducting a money lending business for over two years. He took the view that a deterrent sentence was warranted.

5. He took a starting point of nine months' imprisonment on each charge and said that having regard to the period of the offences, the scale of the operation and the number of charges, and bearing in mind the totality principle, the global term as he put it should be one of two years and three months' imprisonment. A confiscation order was made in the sum of $133,920 which was the amount which the applicant was shown to have received and that order was made under the provisions of the Organized and Serious Crimes Ordinance, Cap. 455 with a term of nine months' imprisonment in default of payment. No complaint is made in this application about the confiscation order or the term in default.

6. The grounds of appeal are several and have been pursued by Mrs Chan with her usual conscientiousness and vigour, and it is in the result not necessary for us to rehearse them in detail. The main ground is that the judge failed to take into account the very different circumstances between this case and the case of LUI Sau-cheong and should instead have considered the sentences imposed in HKSAR v. LEE Woon-fai [1999] HKLRD 340. We have been taken to these two cases as well as to another which is HKSAR v. WAN Chi-wai (CACC 105 of 1999, unreported). All cases of loan sharking will to one degree or another be different and there are a number of factors that will affect sentence, including the modus operandi of the loan shark, whether threats or violence are used or are implicit, the circumstances of the loans, the relationship between the lender and borrower, the extent and time span of the activity, the interest charged, the size and scale of the operation, the number of persons involved, whether there is a triad connection, whether there are other persons engaged in the operation or behind it, and so on: all matters of that kind.

7. We do not think that there is any thing in the other grounds advanced and having regard to the type of sentences imposed in other cases and having regard to the particular facts of this case, we are of the view that the judge in the court below has imposed an overall sentence that is manifestly excessive and this is conceded, very properly, by the respondent. It is true that this applicant was running a business of lending at excessive rates and that is precisely why there must be an effective term of imprisonment. On the other hand there was absent many of the aggravating features to which some of the cases refer. The facts have emphasized that there were no threats or violence. Where there is such evidence it is of course an aggravating feature yet the actual absence of such threats must be looked at cautiously and realistically for one needs to acknowledge that loan sharking has characteristics which are inherent to the activity itself, and that the loan shark is not in the event of failure to recoup the loans likely to issue a letter before action. It is said also that in this case there is no intent for commercial gain. With respect we think that is unrealistic where the lender is lending at rates of interest of up to 685%. On the other hand, as we say, there were absent many of the aggravating features to which other cases refer and furthermore the amounts received by the applicant have been confiscated, a factor which is absent, so far as we can tell, from any of the other cases. Given the large number of offences and the length of time which are covered by the present offences we are satisfied that a term more substantial is warranted than in LEE Woon-fai, which had its own factors at play on appeal, in particular certain errors made by the judge is required. We are of the view that the correct totality in this case is a term of eighteen months' imprisonment.

8. We shall accordingly grant leave to the applicant to appeal and treat this as the hearing of the appeal. The individual sentences of nine months' imprisonment in relation to each charge will stand undisturbed but the rest of the order, save the confiscation order which also stands, is set aside; and we substitute an order that all sentences of nine months' imprisonment shall run concurrently save for the sentence of nine months in relation to the twentieth charge which shall run consecutively to the rest, making a total of eighteen months' imprisonment.