HKSAR v. CHOI KONG

CACC 545/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO.545 OF 2003

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REASONS FOR JUDGMENT

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Hon Hartmann J (giving the reasons of the Court)

Introduction

1. On 30 October 2003, the applicant (D6 at trial) pleaded guilty to 10 counts of conspiracy to keep a vice establishment, contrary to sections 139(1)(a), 159A and 159C of the Crimes Ordinance, Cap.200, and one count of conspiracy to deal with property representing the proceeds of an indictable offence, contrary to sections 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap.455 and sections 159A and 159C of the Crimes Ordinance.  The applicant was sentenced by Lunn J to a total of five years imprisonment.

2. The applicant sought leave to appeal against sentence.  Although he had been represented at trial, the applicant sought leave in person.

3. In his original notice of application dated 24 December 2003, the applicant listed nine grounds of appeal.  Later, in a letter dated 30 May 2004, he added another four grounds.  A number of the grounds are subsumed into each other, essentially a repetition of the same complaints.  When analysed, only four grounds of appeal emerge.

4. On 8 October 2004, we dismissed the applicant’s application for leave to appeal.  In our judgment, the application was so devoid of merit that, pursuant to section 83W of the Criminal Procedure Ordinance, Cap.221, we ordered that four months of the time spent in custody pending determination of his application should not be reckoned as part of his sentence.  We said we would give our reasons later.  This we now do.

Background

5. The 10 counts of conspiracy to keep a vice establishment to which the applicant pleaded guilty related to 10 different establishments.  The agreed facts reveal that they had been opened at different times, the first being opened in or about April 1998, the last in or about November 2000.  All 10 establishments had been closed by the police in May 2002.  The first premises had therefore been in operation for some four years, the last for some 18 months.  At the time of their closure, the establishments contained a total of approximately 140 rooms.  These rooms, as a matter of course, provided a double bed, television and bathroom.

6. The agreed facts reveal that between May 1998 and April 2002, a net profit in excess of $42 million was earned.  The applicant, one of a number of conspirators, received in excess of $12 million as his share.

7. As for the prostitutes employed in the establishments, they were from Thailand, Vietnam and the Mainland.  While many were in Hong Kong on two-way permits, others were illegal immigrants.  During the course of operation of the establishments, undercover police officers were able to infiltrate the conspiracy and were employed as keepers.  They were instructed how to deal with the moneys paid by customers.  The standard charge was apparently $420.  The individual prostitute, however, would only receive $100 of this amount and would receive no share at all until she had worked for 150 hours, her notional earnings in this period being used to cover the expense of bringing her to Hong Kong.  As Lunn J observed :

“clearly, those operating the premises were exploiting vulnerable non-Hong Kong residents.  Most vulnerable of all, of course, were the illegal immigrants.”

8. Despite his protestations to the contrary, it is evident that the applicant played an active role in the keeping of the establishments.  He collected the daily earnings and met regularly with his co-conspirators to deal with business matters.  Among other things, the agreed facts reveal that he interviewed an undercover police officer who applied for a job as a keeper and thereafter paid his salary.  When the applicant was arrested, accounting records and rental agreements were found in his possession.

9. It is to be noted that the individual vice establishments kept by the applicant and his co-conspirators occupied at least two sites.  In this regard, the agreed facts state the following :

“      … each of these vice establishments occupied two or more sites.  One site was more open whilst the other site was more hidden.  The more open site was the first stop for all customers and the screening of customers took place there.  For new customers, they would be served in this site.  For known customers, they would be served in the more hidden site as well.  As for the prostitutes, if they were 2-way permit holders, they would serve customers in both sites.  However, if they were illegal immigrant prostitutes, they would only serve customers in the more hidden premises.”

The agreed facts also speak of secret passages in some establishments designed to enable prostitutes to escape apprehension.  The agreed facts continue :

“Other than building the secret passages and arranging the vice establishments into different sites, the syndicate of these accused also installed CCTV devices in most of the above-mentioned vice establishments so as to monitor the situation outside.”

10. During the course of their operation, all of the establishments were the subject of police raids.  This led to all of them at one time or another being made the subject of warning notices issued in terms of section 145A of the Crimes Ordinance and/or closure orders issued in terms of section 153B of that Ordinance.  The establishments, however, continued in operation.  As Lunn J observed :

“It is apparent that the conspirators were able to ignore the authorities and the law, and they did so in a breathtaking display of brazen arrogance for year upon year.  All the while their illegal business grew and they prospered.”

Enhancement of sentence

11. Prior to sentencing, the prosecution made an application pursuant to s.27(4) of the Organized and Serious Crimes Ordinance, Cap.455 requesting the court to determine whether, on the facts, the offences with which the applicant and certain other conspirators were charged were ‘organized crimes’ within the meaning of the Ordinance.

12. At the hearing, the applicant’s counsel, Mr Plowman SC, did not dispute that the offences were organized crimes.  It was instead his submission that, in all the circumstances, no order for enhancement of sentence in terms of section 27(xi) should be made.

13. The judge did not agree.  He determined — in our view, correctly — that the circumstances of the 10 offences of conspiracy to keep a vice establishment merited enhancement of sentence.  In reaching his determination, he took into account in particular the length of time over which the offences had been committed; the exploitation of vulnerable women; the planning and co-ordination involved in running such an extensive operation, the profits involved and what he described as “the open contempt for the law” demonstrated by the manner in which warning notices and closure orders were circumvented allowing the establishments to continue in business.  In respect of each of the 10 counts, the judge determined that a 50% enhancement of sentence was appropriate.

14. In the result, the applicant’s sentence of three years and four months in respect of each offence of conspiracy to keep a vice establishment, a sentence which reflected a standard discount for the applicant’s plea of guilty, was increased to five years.

15. The sentence of two years in respect of the single offence of conspiracy to deal with property representing the proceeds of an indictable offence was not enhanced.

16. It was ordered that all the sentences be served concurrently.

Grounds of appeal

17. We turn now to consider the grounds of appeal advanced by the applicant.

(i) The first ground

18. The applicant asserted that the offences to which he pleaded guilty were, on the facts of his case, incapable of constituting ‘organized crimes’.  He made this assertion on two bases; first, that there was no evidence of triad society involvement in the conspiracy and, second, that, in keeping the establishments, he had only worked in partnership with one other person; that is, Cheng Wai-Keung (D1 at trial).

19. There is nothing in either of these points.  Section 2 of the Organized and Serious Crimes Ordinance, in defining an ‘organized crime’, makes it plain that it is sufficient simply, if ‘2 or more persons’ are associated together.

20. As for the contention that the applicant only had one partner; that is, Cheng Wai-Keung (D1 at trial), this takes the applicant’s case no further.  An organized crime may be committed, as we have said, by ‘2 or more persons’.  In any event, all of the offences of conspiracy to keep a vice establishment to which the applicant pleaded guilty assert that he conspired with four named persons (including D1) and ‘other persons’ who were not named.  At the time he entered his plea, therefore, the applicant could have been under no illusion that he was pleading to participation in a conspiracy involving a large number of persons.

(ii) The second ground

21. The applicant contended that, in his case at least, the judge had been wrong to order an enhancement of his sentence.  He asserted that a number of the matters taken into account by the judge as warranting an enhanced sentence were wrongly applied to him.

22. The applicant asserted that, although the women working in the establishments under his control may have been exploited in the manner described by the judge, he had not personally exploited any of them.  He had made his profit, he said, by renting the rooms.  He had not been responsible for importing the prostitutes nor setting their terms and conditions.  These things had been out of his hands.

23. This, however, ignores the fact that the applicant pleaded guilty to offences of conspiring with other persons — named and not named — to keep the establishments.  As the agreed facts make plain, each of the conspirators played a different role in the overall scheme of keeping the establishments; that is, running them as vice establishments.  The applicant knew that the women in the establishments kept by him and his co-conspirators were the subject of exploitation.  He knew that the prostitutes included illegal immigrants.  Indeed the admitted evidence revealed that special steps were taken within the establishments to try to prevent the illegal immigrants from being discovered.  That being the case, even if the applicant did not personally deal with importation of prostitutes nor set their terms and conditions — this work being carried out by other conspirators — clearly, as a member of the conspiracy, the applicant benefited directly from their exploitation.

24. The applicant asserted that there was no evidence that he had at any time trafficked in women although his sentence had been enhanced because the judge had wrongly concluded that he had done so.  A plain reading of the judge’s reasons makes it apparent that he reached no such conclusion; indeed his conclusion was to the opposite effect.  The applicant’s assertion in this regard arises out of a misreading of the following passage from the judge’s reasons :

“In the case of the 1st, 4th, 5th and 6th defendants, the authorities to which I have averted indicate that cases involving trafficking in women for the purpose of prostitution may justify a court in imposing an enhanced sentence of more than 50 per cent.  However, I do not propose to do that.  I propose to take an enhancement of 50 per cent in respect of the sentences to be passed on those defendants for those offences.”

25. The applicant further asserted that there was not ‘sufficient evidence’ to show that he had ignored the warning notices or closure orders served on the establishments kept by him.  But there was, of course, ample evidence, that evidence being contained in the agreed facts.  In respect of each of the establishments the agreed facts state that, despite the service of warning notices or closure orders, they continued in business as vice establishments.  For example, in respect of count 2 on the indictment, a count to which the applicant pleaded guilty, the agreed facts state :

“Despite the closure order and the warning notices, ‘Mei Yan Yu’ [the trading name of the establishment] carried on its business as a vice establishment between August 1999 and May 2002.”

26. The applicant did not deny knowledge of the various notices and orders served on the establishments nor that the establishments themselves continued in business.  It was instead his entirely disingenuous argument that, if a notice or order related to one part of an establishment, he would then move the business to another part.  So assertive was he about this that an adjournment was occasioned to check the records of the warning notices and closure orders against the established history of his operations.  As a result, his assertions were shown to be groundless.

27. Furthermore, as the agreed facts make clear, the establishments were specifically designed to incorporate a principal, readily accessible site — often serving as a reception or ‘first stop’ area — together with one or more other sites that were less accessible.  Their specific design therefore enabled the establishments to continue in business despite the service of warning notices and closure orders and that indeed is what happened.  On that basis alone, it is evident that the applicant was able, as Lunn J said, “to ignore the authorities” while the business of the establishments continued to prosper.

(iii) The third ground

28. It was the applicant’s case that, even if we found that an enhancement of sentence of 50 percent was appropriate, as he had pleaded guilty, he was entitled to a one third discount not only of the sentence before enhancement but of the enhanced portion of the sentence too.

29. This ground is misconceived.  In looking to the matter of enhancement, the judge was guided by this court’s judgment in HKSAR v. Tam Wai Pio [1998] 4 HKC 291 in which (at 298B) Stuart-Moore JA (as he then was) said the following :

“… we offer the following guidance in order to minimise the risk of confusion for cases where enhancement of sentence has to be dealt with under the procedure laid down in the Ordinance.  This approach would, of course, have to be adapted as necessary where multiple offences are involved, some of which are not organised crimes.  In such circumstances, a judge should consider, determine and set out in clear terms :

(1)  (a)   the appropriate starting point having regard to the part played by the defendant, and

       (b)   the sentence that the court would have imposed taking into account the defendant’s mitigation and totality;

(2)  whether the specified offence was an organised crime within the meaning of s.2 of the Ordinance;

(3)  whether the crime calls for an enhancement of the sentence under the terms of s.27(11) having regard to the information supplied by the prosecution to the court under ss.27(2)(a) to (3) or s.27(8) or the general nature of the organised crime itself;

(4)  if enhancement is called for, the percentage increase by way of enhancement of the sentence.”

30. In expanding upon this guidance by looking to the facts of the appeal before it, the court in HKSAR v. Tam Wai Pio made it plain that any appropriate discount (for example, for a plea of guilty) was to be calculated at stage (1)(b); that is, in arriving at a sentence that the court would have imposed if no issue of enhancement had arisen.  Any enhancement of that sentence, if found to be appropriate, would not then to be the subject of a further discount.

(iv) The fourth ground

31. The applicant complained that, as he had only acted as an ‘investor’ and was not as morally culpable as a number of his co-accused, his sentence was manifestly excessive when compared with the sentences passed on those co-accused.

32. We reject the applicant’s contention that his culpability was limited.  The agreed facts reveal that the applicant played a far greater role in the keeping of the vice establishments than that simply of an investor.

33. In assessing the appropriate sentences to be imposed upon the applicant and his co-accused, it is evident that the judge carefully assessed their respective roles in the commission of the offences with which they were charged.  He cannot be faulted in the manner in which he did so.  The applicant’s complaint of disparity has no merit.

Conclusion

34. For these reasons we dismissed his appeal.  We also took the view that, given the gravity of these offences and the major role played by this applicant and the entire absence of any merit whatsoever in the application, as well as the conduct of the applicant in seeking to import into the appeal factual assertions which upon investigation proved to be palpably false, this was a case which called for the invocation of our powers under s.83W of the Criminal Procedure Ordinance.