HKSAR v. HO YUNG YIN

CACC 417/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 417 OF 2012

(ON APPEAL FROM DCCC NO. 424 OF 2012)

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JUDGMENT

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Hon McWalters J (giving the judgment of the court):

Introduction

1.  The appellant, who was D3 at trial, faced trial in the District Court in respect of a Charge Sheet containing twelve charges against four defendants.  The appellant was charged only with three charges and in respect of all of those three charges he was jointly charged with D1.  The charges he faced were the fourth, fifth and sixth charges on the Charge Sheet and all three charges were for the offence of fraud, contrary to section 16A of the Theft Ordinance, Cap 210 and were committed by him on 8, 13 and 18 October 2010 respectively.  He pleaded guilty to these offences on 12 September 2012 before Deputy District Judge A Tse and on 25 September 2012 was sentenced by her to a total period of 32 months’ imprisonment.

2.  He applied for leave to appeal against his sentences and leave was granted by Lunn JA on 24 May 2013.

The Charges

3.  Of the twelve charges on the Charge Sheet, eleven of them were against D1.  They all involved fraudulent applications for loans from various financial institutions.  In charge 1 D2 was charged alone in respect of a fraudulent loan application and in charges 2 and 3 D1 and D2 were jointly charged in respect of fraudulent loan applications; in charges 4, 5 and 6 D1 and the appellant were involved in fraudulent loan applications and in charges 7 to 11 D1 and D4 were involved in fraudulent loan applications.  In charge 12 D1 faced a charge of fraud on his own.

4.  The fraudulent scheme involved in this case by D1 and his different accessories was the same.  D1 would assist them to present fraudulent documentation to various financial institutions in order to persuade them that each of D2 - D4 were in bona fide employment and in receipt of a fixed income which would qualify them as suitable persons to whom loans could be advanced.

5.  In respect of this appellant loans of $70,000 from Public Finance Limited (fourth charge), $20,000 from Dah Sing Bank Limited (fifth charge) and $36,000 from DBS Bank (Hong Kong) Limited (sixth charge) were obtained.

6.  In respect of all three applications for loans the appellant employed the same false documentation.  This documentation purported to evidence that the appellant was employed by FAD Design Workshop (“FAD”) with a monthly salary of $12,000.  The documents included an employment contract between FAD and the appellant, three salary statements purportedly issued by FAD and a copy of the appellant’s bank passbook showing a deposit of $12,000 on 6 October 2010.  The loan application to Dah Sing Bank Limited relied upon the same documents but in addition there was a certificate of employment dated 7 October 2010 purportedly issued by FAD and stating that the appellant had been employed by the company since the 6 January 2010.

7.  In his cautioned interview the appellant said that he had come to know D1 in March 2009 at a bar and D1 had solicited his assistance in borrowing money from financial institutions.  D1 gave him some employment documents in order to borrow the money.  The appellant said that he gave his bank card to D1 so that he could deposit money into the appellant’s bank account to show that the appellant was in receipt of salary.  The appellant always understood that this money would be withdrawn later by D1.  The appellant maintained that he did not retain any of the monies that he obtained from the financial institutions and he handed them all over to D1.

The Reasons for Sentence

8.  The deputy judge’s Reasons for Sentence are a composite one covering D2, D4 and the appellant.  D1 did not appear for trial.  D2 and the appellant pleaded guilty to their charges and D4 to three of his five charges.  The deputy judge had to sentence three persons all of whom had been involved in similar criminal conduct and all of whom had been the willing accessories of the mastermind, D1.[1]

9.  D2 was only 23 years old, had a clear record and his offences involved total loans of $95,000 but, because he did not draw down all the loan monies and because he repaid some of the monies, the net loss was only $50,000.  He admitted to receiving about $2,000 - $3,000 for his role in the scheme.  D4 was 33 years old at the time of sentence and had two previous convictions, none of which were for offences of dishonesty.  His loans totalled $100,000 but one for $30,000 had been totally repaid.  The net loss from D4’s loans was $70,000.  On 26 July 2012 D4 had been sentenced to 10 years and 8 months’ imprisonment for trafficking in dangerous drugs.

10.  The appellant was 21 years old at sentence and had one previous conviction involving three charges relating to dishonesty and fraudulent instruments for which he had been sentenced to a Rehabilitation Centre in 2010.  He was released from the centre on 9 September 2010 and he committed the current offences about one month after his release.  The amount of the loss involved in his offences is $126,000, none of which has been repaid.

11.  In sentencing the three defendants the deputy judge distinguished between D2 and the others.  She was right to do so.  D2 was deeply remorseful after his commission of these offences and caused them to be reported to the police. It was this report which led to the police investigation.  His post-offence conduct motivated the deputy judge to call for a Detention Centre Report, but we are now helpfully informed by Miss Lai, counsel for the respondent, that D2 was not regarded as suitable for Detention Centre.  In respect of D2 the deputy judge adopted a starting point of 3½ years’ imprisonment which she then reduced to 18 months to allow for his actions which led to the initiation of the police investigation and the fact that he had repaid one of his three loans.

12.  As for D4 she concluded that he could not be described as a recidivist in respect of fraud offences and, therefore, likewise adopted a starting point of 3½ years’ imprisonment as appropriate to reflect his criminality.  She reduced the starting point to 3 years’ imprisonment in order to give him credit for his promise to assist the prosecution.  She then discounted this amount to allow for his guilty plea and imposed on him a sentence of 2 years’ imprisonment. However, having regard to the fact that he was then serving a sentence of 10 years and 8 months for drug trafficking, which had been imposed on him only two months before, she further ordered that 1 year of his 2 years sentence be served concurrently with his existing 10 years and 8 months sentence. This meant that he had to serve only 1 year of his 2 year sentence.

13.  In respect of the appellant the deputy judge clearly thought that he was in a different position from his co-accused.  The amount he stole was greater, he had a previous criminal record for dishonesty offences and he had already been given the benefit of a rehabilitative sentence which apparently had had no effect upon him.  She concluded that, notwithstanding his age of only 21 years, a Detention Centre order for him would be manifestly inadequate.  She reached the view that an overall starting point of 4½ years would reflect his criminality in the present case and that was the sentence which she adopted as her starting point.  She, likewise, gave credit to him for his promised assistance to the prosecution and reduced her starting point to 4 years.  Giving him full credit for his guilty plea she reduced that sentence by one-third to a final sentence of 32 months in respect of each offence which she ordered to be served concurrently.

Grounds of Appeal

14.  The appellant is unrepresented and in his letter to the court has simply complained that the sentence imposed by the deputy judge was “overly heavy”.  At the hearing before us he has supplemented this complaint by referring us to the way D4 was treated by the deputy judge in ordering part of his sentence to be served concurrently with his drug trafficking sentence.  This contrasted with the way he, the appellant, was treated in the High Court when he was sentenced for his drug trafficking offence.  He said the High Court judge was aware that this deputy judge had ordered one year of D4’s fraud sentence to be served concurrently with his trafficking sentence but declined to adopt a similar course in respect of this appellant’s drug trafficking sentence and ordered the appellant’s drug trafficking sentence to be served wholly consecutively to his existing sentences that are the subject of this appeal.

The Respondent’s Submission

15.  Counsel for the respondent, Miss Lai, had alerted us in her written submission to the post-sentence developments in respect of the appellant; that is, since being dealt with for these fraud offences the appellant had been sentenced on 5 November 2012 to 9 years and 3 months’ imprisonment for trafficking in dangerous drugs.  Miss Lai provided us with the judge’s sentencing remarks in that case.

16.  Miss Lai also provided us with documents relating to the appellant’s previous conviction for which he had been sentenced to Rehabilitation Centre. These show that he had been convicted on his own plea of possessing false instruments, being six counterfeit credit cards, and two offences of using false instruments, being two occasions on the same day when he unsuccessfully sought to purchase goods with four of these counterfeit credit cards.

17.  In respect of this deputy judge’s approach to sentencing the appellant, Miss Lai acknowledges that there are errors by the deputy judge in reaching an overall view of totality of the appellant and imposing a sentence reflecting that view and making that sentence applicable to every offence.  As Miss Lai has quite rightly pointed out the correct approach is to assess the culpability for each offence, identify an appropriate punishment for that offence and only after that has been done to stand back and consider the overall culpability of the defendant and the appropriate totality for that culpability and then, by recourse to the power to order sentences to be served consecutively, to achieve a final sentence that reflects that appropriate totality.

18.  Acknowledging that the prosecution cannot dispute the claim by the appellant that he did not receive any financial benefit from his criminal conduct and acknowledging that the instigator and beneficiary of the crime was D1, the respondent concedes that the overall starting point of 4½ years is manifestly excessive and that the judge further erred in reducing her starting point to allow for the appellant’s promise to assist the authorities.  The respondent submits that an overall starting point of less than 4 years is appropriate.  The respondent has very helpfully referred us to a number of cases to assist us in identifying appropriate starting points for each of the three offences of which this appellant was convicted.

Discussion

19.  As we have indicated the deputy judge adopted a starting point of 4½ years which she then reduced by 6 months to allow for the promised assistance made by the appellant to the prosecution.  In treating a mere promise of assistance, as opposed to actual assistance, as a mitigating factor the deputy judge has erred.  There is ample authority to the effect that a promise of assistance carries no weight and should not be given any credit in the assessment of sentence.  Nevertheless, the issue remains whether even a 4 years starting point would have been excessive in the circumstances of this appellant’s criminality.

20.  Essentially, all three offences involved the same documents and the only distinguishing feature between them is the amounts of money obtained.  These were $70,000 for charge 4, $20,000 for charge 5 and $36,000 for charge 6 making a total value of the fraudulent proceeds of $126,000.

21.  In identifying an appropriate starting point the deputy judge relied on a decision of this Court in HKSAR v Man Kam Fai CACC 309/2009; unreported, 22 April 2010, where the applicant had been convicted of obtaining a pecuniary advantage by deception, namely a loan of $78,000 from a finance company by making fraudulent representations about his employment and supporting those representations by false documents provided by another.  He obtained by this means a loan of $78,000 of which he had repaid $13,000 at the time of sentencing.  He had obtained $30,000 of the loan as his reward and he was a recidivist with twenty eight previous convictions, twelve of which related to offences of dishonesty.  The Court of Appeal acknowledged in that case that there were no guidelines for cases of this kind and imposed a sentence of 28 months’ imprisonment from a starting point of 3½ years’ imprisonment.  That was in substitution of the trial judge’s starting point of 5 years reduced to 40 months.  In arriving at this sentence the Court of Appeal took into the account the fact that the offence was a planned organized crime involving more than one offender, the fact that in addition to giving false information the applicant had used false supporting documents to substantiate his allegations of employment and income and finally that as the applicant for the loan he had played an important role in the commission of the crime.

22.  Whilst some of the factors which the court identified in Man Kam Fai are present in the current case it cannot be said that this appellant is a persistent offender or that he obtained any benefit from his involvement in these offences.  These are important features which distinguish this appellant from the applicant in Man Kam Fai.

23.  In adopting starting points of 3½ years for D2 and D4 the deputy judge appears to have followed the decision of Man Kam Fai and then, for this appellant, adding a further year to her starting point to allow for his previous conviction, the greater amount of his loans and his failure to repay any of them.

24.  This, with respect, is an incorrect approach.  Unless the criminal record shows the defendant to be a persistent offender, and here it does not, then his prior conviction does not aggravate the offence; it simply means that the defendant cannot get any mitigating benefit from being a person of good character.  Likewise, with remorse and restitution.  A failure to show remorse or make restitution do not aggravate the offence, they merely mean that they are absent as mitigating features.  The only feature of this appellant’s offences that could make his conduct more culpable is that, arguably, his offences involved a greater amount of money with a resulting greater loss to the victims. However, the difference in the amounts to which each defendant fraudulently obtained access, as opposed to the net loss to the victims, was not great.  D2 obtained access to $95,000, D4 $100,000 and this appellant $126,000.  Such a difference cannot justify an extra year on the starting point.

25.  Undoubtedly, the Court of Appeal was right in Man Kam Fai in saying that there is no sentencing guideline for the offence with which it was dealing and likewise in respect of the offence of fraud.  A reason for this is this offence can be committed in many forms and even in respect of false loan applications the level of culpability can range from the very serious fraud involving large amounts of dishonestly obtained monies to the relatively minor fraud of which this case is an example.  Precisely because every case is different, trial courts must be wary of slavishly following a sentence applied in an appeal, more especially when the Court of Appeal is making it clear that it is not laying down any guideline.  All the Court of Appeal indicated in Man Kam Fai were the factors in that case which were of concern to it and which influenced it in its determination of sentence.  Two of those factors were that the applicant was a persistent offender who had received almost 50% of the proceeds of his fraudulent loan.

26.  Clearly, in this type of offence the value of the loans is an important factor in an assessment of the offender’s culpability.  Here, the only significant loan is the loan the subject of the fourth charge, namely $70,000, with the other two loans being of quite small amounts.  The appellant’s role was crucial to the success of the crime, but he was neither the instigator or beneficiary of it.  His level of culpability is far less than D1 and his sentence should reflect these matters.  As to the appellant’s personal circumstances, we note his youth.  He is, in fact, the youngest of all three offenders and he is significantly younger than D4.  Despite his previous conviction he cannot be characterised as a persistent offender.  If he is to have any chance of rehabilitation he must not be crushed by the criminal justice system or be left with a grievance that he has been unjustly treated by it.

27.  In the particular circumstances of this appellant, we are satisfied that an appropriate sentence for the fourth charge is one of 2½ years’ imprisonment and for the fifth and sixth charges 18 months’ imprisonment.  Reduced for the plea of guilty these become actual sentences of 20 months, 12 months and 12 months respectively.  Standing back and taking a global view of the appellant’s criminality we are of the view that an appropriate total sentence of 24 months would adequately reflect his culpability.  Furthermore, such a sentence is more in line with the sentence imposed on D4 and should lessen the appellant’s grievance at the difference in treatment meted out to himself and D4.

28.  In order to achieve a sentence of 24 months we order that 2 months of the 12 months sentence for the fifth charge be served consecutively to the sentence for the fourth charge and two months of the sentence for the sixth charge be served consecutively to the sentences for the fifth and fourth charges.

Conclusion

29.  We, therefore, allow the appeal, quash the sentences imposed by the deputy judge and in substitution, therefore, impose sentences of 20 months’ imprisonment for the fourth charge, 12 months’ imprisonment for the fifth charge and 12 months’ imprisonment for the sixth charge.  To achieve a total sentence of 24 months’ imprisonment, we order that 2 months of the sentence for fifth charge be served consecutively to the sentence for the fourth charge and 2 months of the sentence for the sixth charge be served consecutively to the sentences for the fifth and fourth charges.

30.  Before we conclude we would like to say how much we have been assisted by the submissions of counsel for the respondent.  In a very thorough submission the respondent acknowledged the difficulties with the deputy judge’s approach to sentencing and her determination of an appropriate starting point and very fairly conceded the appeal.  At the same time she provided us with a very helpful submission on the correct legal principles and information on relevant authorities which have enabled us to determine for ourselves an appropriate sentence in respect of each of the offences.

[1]       In respect of the first charge on the Charge Sheet D2 was charged alone with fraudulently obtaining a loan of $50,000 by means of false representation and forged documents.