HKSAR v. LEUNG NGA SZE

DCCC 275/2017

[2018] HKDC 1177

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 275 OF 2017

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Reasons for Sentence

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1.  The defendant was convicted after trial of three offences of fraud. I have already given details of those offences in my reasons for verdict. I do not propose to rehearse them again.

2.  The actual sums involved totally in the frauds is in the region of one and a half million dollars, and the amount the defendant actually benefited is in the region of about $1 million, of which the defendant repaid some $920,000 when she was initially challenged.  The offences are offences practised on her employer.  So, inevitably, they involve a breach of trust and will have to be sentenced on that, will be sentenced on that basis.   

3.  The defendant is of clear record.  She is aged 44.  She has a Bachelor Degree in Journalism, and at the time of her offence was employed as a general manager with China 3D.  

4.  Now, for offences involving a breach of trust such as theft or fraud where the sum exceeds $1 million, then a starting point of 3 years’ imprisonment after trial for a person of clear record is appropriate.  Now, the frauds practised in this case are sufficiently similar works of theft that I consider that the guideline in respect of breach of trust and thefts is appropriate for this case.

5.  Despite the defendant’s conviction after trial, the defence urges that the court can discount the sentence or even suspend the sentence, having regard to a number of factors.  Firstly, it is what is described as her restitution.  There is also what is described as delay in bringing the proceedings.  In earlier mitigation, reference is made to her good character, has been a positive factor, and then also following a report from the Social Welfare Department, there is what I will describe as unique personal and family considerations. 

6.  As far as the restitution is concerned, the defendant we know from trial repaid $920,000, and these relate to being the moneys obtained in respect of the 1st charge.  That is what is described as the Ogawa contract.  The money was paid to PW2 and then remitted back to the victim company.  

7.  There is support for the proposition that voluntary restitution should be encouraged and given real weight as a mitigating factor, and we can see that from the case of Secretary of State for Justice v Hui Siu Man [1992] HKLRD 236.  It has been said that full restitution is a factor of real weight.  

8.  I note that in the cases, a discussion of restitution as a mitigating factor occurs where there is a plea of guilty, where it can be considered as an additional mitigating factor beyond the one-third discount for a plea of guilty.  Even in these circumstances, there are no guidelines used for multiplicity of factors that can be involved in such repayments.  In HKSAR v Chiu Peng [2002] 1 HKLRD 185, there was full restitution of $60 million, and a further discount of 12 months was given beyond the one-third discount for plea in that case. 

9.  But in this case, what occurred is not restitution as normally envisaged or described.  The defendant returned this money before charges were contemplated.  It is a means by which the defendant did not profit from her crime and enabled the victims not to suffer loss. However, it was not accompanied by remorse or an admission when interviewed, and in this case did not free the victim of the crime from having to give evidence in court and face accusations himself.

10.  I consider it has some weight as a mitigating factor, but it is not the same as where a plea of guilty has been offered and remorse is shown.  However, it was not an insubstantial payment.  It was full repayment to the Ogawa losses, and the sum was paid to PW2 at a very early stage, and I consider that some credit should be given to the defendant about payment.  I believe I can envisage a reduction of 4 months from what otherwise would be the sentence for this particular factor.

11.  It is also argued in this case that the defendant has been subject to delay.  Mr Fenton for the prosecution has in his customary fashion vigorously asserted that is not the case.  We know the offences occurred in around September of -- between September of 2014 or it was detected in that period, and the defendant being arrested in December of 2014. However, I am informed that on 9 October 2015, the defendant’s bail money was returned to her and she was not re-arrested until February of 2017.  So there would seem to be some delay between October 2015 and February 2017. What happened between 2017 and 2018 of course is not particularly a long period considering the nature of the charges that have been preferred.

12.  It is not necessary where there is alleged to be a case of delay to say that the prosecution have been at fault.  It is not a factor that prevented there being any acknowledgement of delay.  One is more concerned about the effect on the defendant, and the defendant did use the period of time to radically change her life and create for herself a new career where she can be of service to the public in the area of nursing.  I believe there should be some acknowledgement of the period from 2015 to 2017 which she did not face when she was not under police bail, and I would allocate a further 2 months’ reduction in sentence for that factor.

13.  In the early mitigation, it was suggested that she had a positive good character.  She clearly has a good character.  These offences are out of character for her, and it is surprising that persons such as her would commit offences in this period of her life.  I have seen examples of her charitable work and letters of commendation, but I do not believe they go beyond what one would normally allow for simple good character.

14.  And there is a final factor that is to be considered, and that is the content of the social welfare report.  The defendant has a child, a daughter currently aged 5, and so she would have been born in and around and shortly before the period in which these offences were committed, about a year before.  So she has been affected throughout.

15.  It is clear from the social welfare report that the child has difficulties in her life relating to her health, and this is a unique circumstance.  The uniqueness of her problems is set out very clearly and in great detail and commendable detail by the Social Welfare Department in their report by Mr Lam.  He clearly sets out for me the issues involved. I do not propose to rehearse it in detail but there are many problems to be faced in the continuing management of this child if the defendant is not present.

16.  The child has a disease or illness which affects the heart, and it is known as Kawasaki’s disease.  This will create a number of problems for her and requires that her health be closely monitored at all times. The report points out that this young girl’s life has always been managed by the accused instead of her father.  The father’s work involves travel, and he has his own health problems.  He is not as well-equipped as the mother is for the care of the child. 

17.  The family is fortunate in that it has a domestic helper who relates well to the child.  There are some communication difficulties, and the report points out the continued employment of domestic helpers can never been guaranteed.  They are not family but employees.  It would appear that close family such as mother and sisters are not well-equipped to fill the gap that the mother’s absence would create.

18.  More recently, since the mother’s incarceration, the child has exhibited some anxieties, and there has also been concern about recent echocardiograms or so echocardiograms conducted on the child’s heart in 2013.  And the assessment I have in the report is that the girl’s mental and emotional well‑being is of grave concern.  It is said that if the defendant is not at home, it will be impossible to ensure this child’s normal life, and it is said the child’s development would be harmed and that any harm caused would be irreversible.  

19.  The defendant is described as a selfless, loving mother.  Her physical, emotional care of the child is indispensable and said to be irreplaceable.  I am told that if the worst occurs, the Integrated Family Service Centre would be giving assistance to the husband if welfare assistance is required.  From this, it can be seen that the absence of the mother goes somewhat beyond what one would normally envisage in the absence of the mother as a result of her incarceration.

20.  At this stage, I believe that the condition of the child in the absence of the mother can be described as troubling, and I believe, as I have expressed in argument, that with a plea of guilty, a radically different approach can be taken.  However, the defendant has been convicted after trial of a substantial breach-of-trust fraud, and I consider that an immediate custodial sentence is inevitable in those circumstances.  

21.  However, the imprisonment of a mother will inevitably have adverse effects on a young child.  In this case, those adverse effects are magnified by the child’s condition.  In the case of HKSAR v Chan Kin Chung [2002] 4 HKC 314, it was said such effects can be taken into account where they are exceptional.

22.  I do not consider that at present, the condition of the child and the effect of her illness is sufficient to be considered as a matter that would in this case suspend the sentence.  I have considered that at this time and with the information I have, the circumstances here are unique, and given the child’s history of illness and need for close supervision do afford me a basis for a further deduction from the sentence to lessen the length of time that the child will be damaged by the absence of her mother but do not at present provide me with the grounds to suspend the sentence, for this factor, I will add a further discount of 6 months.  That would give a total deduction from the starting point for sentence I will adopt of 12 months.  

23.  I said earlier that I considered that the overall total sentence for these three offences should lie within the one-to-three-million range for a breach-of-trust sentencing of fraud and theft which should really by overall total sentence would be one of 24 months’ imprisonment after the total deduction of 12 months for the factors that I have indicated is taken into account. 

24.  I will pass sentence as follows on the three charges.  On the 1st charge, it will be a sentence of 24 months’ imprisonment; on the 2nd charge, a sentence of 15 months’ imprisonment; on the 3rd charge, a sentence of 12 months’ imprisonment.  Having regard to overall totality, all sentences will be served concurrently.