HKSAR v. LIU WAI KOON AND ANOTHER

CACC 213/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 213 OF 2014

(ON APPEAL FROM DCCC 1014 OF 2013)

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REASONS FOR JUDGMENT

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Introduction

1.  The applicants were charged with one charge of fraud, contrary to section 16A of the Theft Ordinance, Cap 210.  The Particulars of Offence alleged that between December 2010 and January 2011 they falsely represented to two prospective purchasers that a two-third share of five lots of land (“the land”) was for sale and that the 1^st applicant was authorized by the owner of this land “to deal with matters in relation to the sale and purchase of the land.”

2.  The applicants were tried in the District Court before Judge Dufton (“the judge”) and on 27 May 2014 they were convicted of this charge.  On 13 June 2014 they were both sentenced to 3 years’ imprisonment.

3.  The 1st applicant (“the applicant”) applied for leave to appeal against both conviction and sentence though he has different legal representation in respect of each application. At the hearing of the applications I refused the application for leave to appeal conviction and allowed the application for leave to appeal sentence.  I said I would give my reasons for so doing at a later date.  These are my reasons.  

Background to the offence

4.  It was an admitted fact that the owner of this land was a person by the name of Mr Suen Kwai Lin who had passed away intestate on 24 June 1967.  Letters of Administration were granted by the High Court to his son Suen Fu Wai (“Mr Suen”) on 3 December 2010.    

5.  Wong Hon Sun (“Mr Wong”) and Ho Yuet Ming (“Mr Ho”) were the persons who were interested in purchasing Mr Suen’s land.  Mr Wong and Mr Ho never met Mr Suen. All dealings in respect of the sale were conducted by Mr Wong and Mr Ho with the applicant and his co-accused.  Mr Wong had earlier met the applicant’s co-accused who was a licensed sales person with a real estate agency known as Uni-Power Property Consultants Limited (“Uni-Power”).  At a meeting around December 2010 the co-accused introduced Mr Wong to the applicant, describing the applicant to Mr Wong as someone who knew the landowner and was able to act as agent of the landowner in the sale of the land.  

6.  On 17 January 2011 Mr Wong and Mr Ho, through their company Power Place Development Limited (“Power Place”), entered into a Provisional Agreement for Sale and Purchase of the land described in the charge.  Mr Wong and Mr Ho relied on an authorisation produced by the applicant which represented that he was authorised by Mr Suen to deal with the sale of the land.  The co‑accused signed the Provisional Agreement for Sale and Purchase on behalf of Uni-Power who acted as agent for both the vendor and purchaser.  A forged signature of Mr Suen was appended to various parts of the agreement.

7.  Pursuant to the Agreement a deposit of $500,000 was paid by cheque and the cheque was drawn payable to the applicant.  When Mr Wong queried why the cheque was not made payable to the landowner the applicant replied that he was authorised to collect the money and that he would make arrangements with the landowner.  It was a term of the Agreement that if the vendor could not complete then the deposit would have to be refunded and damages of a like amount would be payable to the purchasers by the vendor.

8.  Completion was set for the 30 April 2011 however it never took place.  Mr Wong contacted the applicant who gave many different excuses for failing to complete.  Subsequently the applicant entered into an agreement dated 30 May 2011 (Exhibit P5) by which he undertook to repay the deposit and damages (a total of $1,000,000) by three instalments.  However, ultimately the deposit and $150,000 compensation were refunded to Mr Wong and Mr Ho.  Mr Ho explained that they were persuaded to accept only $150,000 compensation because the applicant could not afford to pay more.  All payments were made by October 2011.

9.  It was not clear from the evidence led at trial whether the fraud was ever intended to go beyond the dishonest obtaining of the deposit and if it was, how or why the ultimate goal came to be frustrated.  Nevertheless, as charged, the target of the fraud was not the landowner, Mr Suen, and it was never suggested that the goal of the fraudsters was to cause a transfer of ownership of the land to take place.  It was Mr Wong and Mr Ho who were the victims of this fraud and in terms of prejudice to them the charge is confined to the deposit they paid. The means by which the deposit was obtained from them was the Provisional Agreement for Sale and Purchase and the only reason they entered this agreement with the applicant and paid over the deposit to him was because he was able to persuade them, using the forged authorization, that he represented the owner of the land.

10.  Consequently, as important as Mr Wong and Mr Ho were to the prosecution case, it was Mr Suen who became the key witness. 

11.  The applicant had been introduced to Mr Suen by Mr Kong Sin Tit.  Mr Kong, who was also known as “Tit Gor” or “Brother Gor”, was a former police officer who was a good friend of Mr Suen.  Mr Suen placed great trust in him and clearly looked to him for advice.  The introduction took place sometime in 2008 and in late 2011 Mr Kong died.  Mr Kong introduced the applicant to Mr Suen as an indigenous New Territories villager who could assist Mr Suen process an application for Letters of Administration of his deceased father’s estate. Mr Suen authorised the applicant to deal with the inheritance of the estate of his late father and to negotiate with the government for compensation in respect of Lot No 752 which the Government had resumed and which had originally formed part of Mr Suen’s parcel of land.

12.  Mr Suen said he agreed to authorise the applicant to help him in obtaining the Letters of Administration in relation to his deceased father’s estate.  The applicant introduced Mr Suen to a firm of solicitors who subsequently obtained the Letters of Administration for Mr Suen on 3 December 2010.

13.  With the assistance of the applicant Mr Suen then pursued compensation from the Government in respect of Lot No 752.  He said that he signed an authorization, which the applicant had given to him to sign, authorising the applicant to handle Lot No 752.  The authorisation which Mr Suen said he signed and gave to the applicant was Exhibit P6 and was as follows:

“               Authorisation

Land address: San Uk Ling Village, Man Kam To Road, Sheung Shui, New Territories

DD: 90 LOT NO: 751SB, 753, 780, 781, 778, [752]

With respect to the said land: DD:90 LOT NO:752 Land resumed by the Government already

I, being the owner of the said land: SUEN Fu-wai  Identity card no.: B925881 [2]

Hereby authorise: LIU Wai-koon   Identity card no.: C511126 [7]

To handle the above-mentioned land at DD90 LOT NO: 752 which was resumed by the Government already.

Remarks: _________________________________________________

Owner’s signature: (Sgd) Suen Fu-wai

Date: _________________”

14.  The authorisation that the applicant used in his dealings with Mr Wong and Mr Ho was Exhibit P1.  It differed from Exhibit P6 in that it contained after the word “Remarks”: the following words: “And to sell the above DD: 90 Lot No 751SB, 753, 780, 781, 778” and was dated “10-12-2010”.  Mr Suen testified that he had never authorised the sale of the land and never authorised the applicant to represent him in any sale of the land.

15.  Thus the prosecution case was quite a simple one.  In essence it was that the applicant and his co-accused acted together to defraud Mr Wong and Mr Ho of their deposit money and in order to do so falsified a document purporting to have been given by the owner of the land that authorised the applicant to act as his agent in the sale of the land and forged the owner’s signature on the Provisional Agreement for Sale and Purchase. 

16.  The applicant gave evidence at his trial and asserted that the authorisation had been given to him by Mr Kong and he believed the authorisation was genuine.  He said he gave the Provisional Agreement for Sale and Purchase to Mr Kong to procure Mr Suen’s signature to it.  He denied acting dishonestly.  The effect of his evidence was to pass responsibility for much of what happened to Mr Kong.  He also called two witnesses; a solicitor and secretary with the firm of solicitors who were instructed by Mr Suen to obtain the Letters of Administration of his deceased father’s estate.

The Reasons for Verdict

17.  In his Reasons for Verdict the judge directed himself that the key issue for him to determine was whether Mr Suen signed an authorisation to the applicant authorising him to sell the land and if he did not whether the applicant and his co-accused knew that Mr Suen had not authorised the sale of this land. 

18.  The judge said that he accepted the evidence of the prosecution witnesses and rejected the applicant’s evidence whom he found to be not credible.   

19.  Having rejected the evidence of the applicant he then went on to consider whether the prosecution case was sufficient to prove that Mr Suen did not sign an authorisation, authorising the applicant to handle the sale of the land.  He said he carefully considered all the evidence and concluded that he could rely upon Mr Suen as a witness of truth in all matters relating to the sale of the land and of the authorisation.  The judge concluded that he could accept the evidence that he did not authorise the applicant to sell the land and did not authorise the sale to Power Place.  He went on to consider whether the applicant and his co-accused knew Mr Suen had not authorised the sale and he concluded that he could be satisfied beyond reasonable doubt that when entering into agreement with Mr Wong and Mr Ho for sale of the land the applicant knew that Mr Suen had not authorised him to sell it. 

The reasons for sentence

20.  The judge noted the facts behind the fraud involved the forgery of Mr Suen’s signature on a Provisional Agreement for Sale and Purchase and the alteration of the authorisation so that the applicant could falsely represent that Mr Suen had authorised the applicant to sell the land.  Notwithstanding that Mr Wong and Mr Ho ultimately suffered no loss and had in fact received compensation the judge characterised the offence as a very serious fraud. 

21.  The judge said that in order to reflect the seriousness of the fraud a starting point after trial of 3 years 6 months’ was appropriate.  He reduced that by 6 months to allow for the fact that no loss has been suffered by the victims to bring the sentence down to 3 years’ imprisonment.  The judge said that there was no exceptional circumstance that warranted suspension of the sentence.  He thereupon sentenced the applicant and his co-accused to 3 years’ imprisonment.  

The grounds of appeal against conviction

22.  The first ground of appeal is that the judge failed to sufficiently consider the evidence which supported the case of the applicant.  The second ground of appeal against conviction complains that the judge erred when he found when entering into the agreement with Mr Wong and Mr Ho for the sale of the land, the applicant knew that Mr Suen did not authorise him to sell the land. 

23.  The third of ground of appeal is simply that by reasons of the first two grounds of appeal the conviction is unsafe and/or unsatisfactory.

The grounds of appeal against sentence

24.  There are four grounds of appeal against sentence.  The first ground of appeal complains that the judge adopted too high a starting point in view of the fact that the amount of money was small, the role of the applicant in carrying out the fraud was not so culpable, the fraud was not a sophisticated one and was not practiced in the course of the applicant’s business and it did not produce a prejudicial effect upon the marketplace.

25.  The second ground of appeal complains that the judge failed to give sufficient weight to the restitution and compensation. The third ground of appeal asserts that the sentence is manifestly excessive when compared to other cases and the fourth ground of appeal complains that the judge failed to give sufficient weight to the personal circumstances of the applicant. 

Discussion

26.  The applicant’s two grounds of appeal against conviction attack the judge’s findings of fact and analysis of the evidence.  Mr Luk for the applicant says that the judge failed to properly take into account the evidence of Mr Suen on the involvement of Mr Kong in the whole affair.  Had the judge properly factored in this evidence he would not have rejected the evidence of the applicant.  In fact, the judge specifically adverted to the fact that Mr Suen trusted Mr Kong and turned to him for advice but that fact, the judge said, did not cause him to doubt the findings he had made.  It must be remembered that it was Mr Kong who informed Mr Suen of the fraud at a time that Mr Suen was unaware of it; this was hardly the action of a person complicit in it.  I can see no merit in either ground and do not grant leave to appeal against conviction.

27.  The applicant’s grounds of appeal against sentence emphasise the limited scale of this fraud.  As is clear from the charge the fraud was aimed at the prospective purchasers of the land, not the landowner.  The goal of the fraudsters was to obtain the deposit and so the culpability of the applicant is limited to a fraud of only $500,000. Furthermore, the judge’s portrayal of the fraud as a breach of trust case was not strictly true as there was no breach of trust vis-à-vis the victims, albeit there was one in respect of Mr Suen.

28.  Ms Chong argues that an appropriate starting point for a fraud of this scale and level of seriousness was 30-36 months’ imprisonment and refers to numerous cases to suggest that a starting point of 42 months’ imprisonment was outside the range of sentences for offences of a similar level of seriousness.   

29.  She also argues that insufficient credit was given for the post‑offence events that led to full restitution being made and also compensation being paid to Mr Wong and Mr Ho.  The applicant signed an undertaking to refund the deposit and pay compensation on 30 May 2011 and all monies were paid in October 2011.  All this was done well before there was any prospect of a prosecution. 

30.  Ms Chong also argues that no regard was had to the fact that some considerable period of time elapsed between when compensation was paid in October 2011 and when the applicant was arrested in January 2013.  Ms Chong submits that prosecution so long after the event, when the applicant would have been assuming that no further consequences would flow from his actions, would have brought additional hardship to him.

31.  Ms Lo for the respondent accepts that the starting point was on the high side but argues it was not manifestly excessive.  The sentence, she says, was within the judge’s sentencing discretion and arrived at by him after taking into account all relevant matters. 

32.  There are unusual features to this offence that persuade me that I should grant leave to the applicant to appeal the sentence on the grounds advanced by Ms Chong.  Accordingly I grant the applicant leave to appeal his sentence on those grounds.

Conclusion

33.  For the reasons set out in this judgment I refused the application for leave to appeal against conviction and allowed the application for leave to appeal sentence.