HKSAR v. SAM WAI KEUNG

CACC 226/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 226 OF 1999

(ON APPEAL FROM DCCC 329 OF 1998)

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J U D G M E N T

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Nazareth V-P (giving the judgment of the Court) :

1. The applicant, Sam Wai-keung ("D1"), and one Tsoa Wing-keung ("D2"), pleaded guilty before His Honour Judge Christie in the District Court and were convicted of an offence of conspiracy to defraud. D1 was sentenced to imprisonment for 4 years and 2 months, and D2 to imprisonment for 2 years and 10 months. D1 now seeks leave to appeal against sentence. He relies upon the sole perfected ground which is framed in the following terms:

"The starting point of 5 years imprisonment imposed on the Appellant (D1) based on a role which is not apparently distinguishable from that of D2 where the starting point was 4 years imprisonment ... shows a disparity giving rise to a justifiable sense of grievance so that the sentence imposed on the Appellant [D1] was wrong in principle and/or manifestly excessive."

2. The facts are as follows. On the fifteenth day of a trial expected to take 30 days, the two defendants pleaded guilty and received the sentences mentioned. They admitted to being part of a large team of conspirators who ostensibly operated as traders in contracts for the sale and purchase of gold under the name of a company called Ace Glory Enterprises Limited. In fact the intention was to defraud a vulnerable group of people by inducing them to enter contracts, and then manipulating their transactions to cause losses. The group of intended victims were all women, usually housewives with little or no previous commercial experience. They were enticed to the company by advertisements for employment of clerical assistants at attractive salaries. On the day they were finally recruited, they were also instructed to make calculations concerning orders for the sale and purchase of gold, by way of job training. This instruction was invariably given by D2. Once a victim attended the company for duty, she was put in a room with at least one other colleague. This "colleague" was, however, a member of the scheme. The victim was also under the supervision of a "manager". There were three managers and D1 was one of these. The victims' movement about the office was restricted.

3. The victims were all enticed to open trading accounts with the company and to make deposits into their accounts. The method by which this was done was to provide them with an example of a transaction which showed a client making a profit on gold trading. The "colleague" would then demonstrate how he or she had made profits on his or her own account. There would be an initial transaction in the name of the victim, usually without any obligation on her part, which would produce a profit of a few thousand dollars. At this point, usually the victim would enter into the formalities for opening the account and then produce the money, usually from $30,000 to $90,000, to fund her account. Some trading would then take place in the victim's account, at the instigation of the "colleague", but it was not genuine trading insofar as the transactions were all manipulated by the "colleague" and the "manager". A bad decision or a mistake would be made, resulting in the loss of the whole of the capital and, usually, a further debt to the company as well. What normally then happened was that the victim would pay the debt and, on the advice of the "manager", make a further deposit to her account in the hope of trading more successfully and recovering her previous loss. Invariably, however, these further deposits were also lost in trading.

4. The conspiracy was a large one. Many persons were involved, not only the "managers" but also the "colleagues" of whom there were even more who worked with the "manager". Then there were "recruiters", and the judge having heard evidence referred to D2 as such. There may have been others. The scheme was a clever one, involving much planning and organisation. A lease of the office premises was obtained and decorated to appear to be a legitimate office, the confidence of each victim was obtained and maintained over a period of several days by constant deceptions on the part of both "colleagues" and "managers". The losses of the nine victims who gave evidence totalled $1,825,000.

5. Having outlined the facts, the judge at p.3Q-4H of his reasons for sentence turned to the assessment of the sentences. He said this:

"Taking these matters into account, I have come to the view that the sentences for this conspiracy should range from 4 to 6 years' imprisonment depending on the roles of the individuals. So far as the roles of these two defendants are concerned, they both claim not to have known, originally, the true purpose of the scheme. Neither of them had a background in gold trading, that makes their assertion reasonably plausible and I am prepared to accept it. But, of course, they very quickly came to know what was going on and they do acknowledge this. Their own roles in the affair from that point on were essential to the achievement of the scheme. It follows from what I have said that neither defendant was likely to be the original mastermind of this plot. They also assert that their reward for their respective parts was $200,000. This may or may not be so. The scheme obviously involved some heavy establishment costs and there were many members to divide the gain.

Having said this, for D1's role in this conspiracy, I start with a sentencing point of 5 years' imprisonment and, for D2, 4 years."

After referring to a couple of other matters, the judge went on to impose the sentences mentioned, discounting the 5-year starting point by 10 months for the plea of guilty in the case of D1; and the starting point of 4 years in the case of D2 by 8 months for his plea and 6 months "for previous good character".

6. Mr James Kynoch, who appears for D1 before us, but did not appear below, pursues the sole perfected ground of appeal in the following way. He submits that neither in the opening nor in the reasons for sentence does there appear any material difference in the roles played by each defendant. There is, he adds, a substantial difference between the final sentences and whereas no criticism can be made of the discount for the pleas of guilty or D2's additional clear record discount, D1 does have a justifiable sense of grievance at the 1 year difference between the starting points. This sense of grievance is made greater by the feeling, which must arise, he says, that his sentence was enhanced because of his lack of a clear record, which would be incorrect.

7. The judge, having outlined the facts, dealt with the matter in his reasons for sentence at p.3Q-p.4H in the way already set out.

8. It is implicit in the submissions of Mr Kynoch and Mr Edmond Lee for the respondent, and indeed the foregoing passage quoted from the judge's reasons for sentence, that the established legal position in relation to disparity of sentences in circumstances of the present sort, is not in doubt and has not been overlooked. It is conveniently set out in the headnote of R v SO Hung-lee [1986] HKLR 1049:

"Where there was a disparity between sentences passed on the same occasion by the same judge, as in this case, the sentence should be varied only if it could be shown that the judge had not properly apportioned the blame between the accused. If the sentence was otherwise appropriate and the judge was under no misapprehension of the roles of the various accused the sentences should stand." (Emphasis added)

9. We think that the judge did identify the basis on which it would be proper to distinguish between the roles played by the two defendants. In his reasons for sentence, the judge said (at p. 1S of the transcript) that D1 was one of the "managers" of the company. As for D2, the judge said (at pp. 1Q and 2R of the transcript) that he had been involved in "recruiting" and "training" the company's employees. Mr Kynoch did not suggest that the judge was factually incorrect in assigning these roles to the defendants. Indeed, Mr Edmond Lee for the respondent asserted that it was the judge's assignation of these roles to the defendants which warranted the difference in the two sentences. The critical question is whether those roles did indeed justify the different starting points which the judge took.

10. It is important not to lose sight of the fact that the business ostensibly operated by the company did not exist. There was no trading in gold at all. Everything was a charade. The company did not have managers, or persons responsible for recruitment and training. The persons who pretended to perform those roles were like actors playing the parts which had been assigned to them. Thus, some of the members of the conspiracy pretended to be managers of the company, while others purported to recruit and train the company's employees, and yet others pretended to be the company's employees (along with the genuine victims of the conspiracy). But the respective roles which they were assigned in the charade which they were acting out do not, in our opinion, equate in any way with the respective roles which they played in the conspiracy. The roles which they played in the conspiracy related to the roles they played in the planning, financing and execution of the scheme. The mere fact that a conspirator played a character with a more senior part in the charade does not mean that the conspirator played a more important role in the conspiracy.

11. Accordingly, to use the words of Barker JA in So Hung Lee at p. 1052C, it has been shown to our satisfaction that the judge did not properly apportion the blame between the defendants. The distinction which he purported to draw between them was not one which logically made one more blameworthy or culpable than the other. We have not overlooked the fact that the judge heard 15 days of evidence before the defendants pleaded guilty. But if that 15 days of evidence consisted of the victims telling their stories of what had happened to them, that evidence would have related only to the parts which the defendants played in the charade rather than the roles they played in the conspiracy. In any event, if that evidence had revealed different roles being played by the defendants in the conspiracy, it is likely that the judge would have referred to them in his reasons for sentence. Instead, he limited himself to references to the parts played by the defendants in the charade.

12. For these reasons, the judge should not have taken different starting points for the defendants. Since he took a starting point of 4 years imprisonment for D2, he should have taken that starting point for D1. Discounting that starting point by 8 months imprisonment to reflect D1's late plea of guilty, D1's sentence will be reduced to one of 3 years and 4 months imprisonment.

13. Turning to Mr Kynoch's subsidiary submission (relating to D1's lack of a clear record), what the judge said in that regard was this:

"D2 has a clear record, so he will also be entitled to a discount of his sentence for his previous good character."

It seems to us quite plain that the extra discount that D2 received, was in respect of his previous good character. D1 did not qualify for such a discount. His sentence has not been enhanced because of his criminal record. For him to have received any further discount would have been wholly unjustified.

14. Accordingly, for the reasons we have given, we give leave and treating the application as the appeal, allow it and reduce D1's sentence from 4 years and 2 months to 3 years and 4 months.