R. v. LIU SHUN WAH

IN THE COURT OF APPEAL

1995, No. 184
(Criminal)

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J U D G M E N T

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Mayo, J.A. (giving the judgment of the Court):

1. The applicant seeks leave to appeal out of time against the sentence of four years and three months' imprisonment imposed upon him when he pleaded guilty to a conspiracy to blackmail.

2. Prior to the events giving rise to the offence the applicant was employed as an accountant with Pam & Frank International Holdings Limited. This company had paid a deposit of HK$22.6m on signing a sale and purchase agreement of commercial premises. They had also made arrangements with the Hongkong and Shanghai Banking Corporation for a loan of $78m to fund the purchase. The usual provision was included in the agreement that if the purchaser failed to complete the purchase the deposit will be forfeited.

3. The applicant and a man called Lee Chi-kin devised a plan whereby they would threaten the company that if they did not pay them $15m by a stated time they would divulge to the bank and the Commercial Crime Office documents which it was alleged would demonstrate that the company had been guilty of false accounting.

4. The applicant made a demand along these lines to Mr Alan Wong one of the Directors of the company.

5. The time limit expired. The conspirators then sent an anonymous fax to Mr Ho Wai-cheong who is the customer service manager of the bank alleging that the company has made a false transaction on 30 September 1992 and this was followed up by a telephone conversation with Mr Ho informing him that the amount involved was HK$30m.

6. The applicant also telephoned Mr Albert Cheung, a senior manager of Ernst and Young, the company's auditors and informed him that he would be making a complaint to the Commercial Crime Office concerning the company.

7. Both Mr Ho and Mr Cheung informed the directors of the company of the communications they had received.

8. Mr Kris Cheng, another director of the company, spoke to the applicant and purported to negotiate with him as to the amount which should be payable for the alleged incriminating documents. They agreed the figure of HK$10m. This conversation was taped. Mr Cheng made a report to the police who then assisted him in the matter.

9. Arrangements were put in hand by the police for a quantity of counterfeit notes to be made available so that a payment could be made to the applicant in exchange for the said documents. The amount of the counterfeit notes was US$250,000 and HK$55,000.

10. The exchange took place at the appointed time and shortly thereafter Mr Lee was arrested by the police. The counterfeit money was found in his possession with his finger prints on them. The applicant went into hiding but gave himself up to the authorities a year later.

11. The applicant made a cautioned statement to the police which contained admissions. He also assisted the police in inquiries which were on-going concerning the company and at the time of sentencing had stated a willingness to testify against Mr Lee in the proceedings which he was involved in.

12. In his Reasons for Verdict His Honour Judge Gould stated:

" In the present case, there is perhaps not the degree of immediacy which a threat of physical harm brings to an individual. But the company was a public listed company and in that sense may be said to be wealthy and well-known. The indirect threat to shareholders was not of physical harm, but to their economic well-being. For some minor shareholders investing life savings, that threat could be extreme.

The size of the claim in this case is very large: $10M.

I adopt a starting point of 6½ years."

13. Mr Hatton in his grounds of appeal criticises this approach and submits that the starting point of 6½ years was too high.

14. He also contended that an insufficient discount was given for the opportunistic nature of the offence and the fact that no loss was suffered. Also the applicant was given insufficient credit for the assistance he had rendered to the police.

15. The reason given by the applicant for being out of time was that he understood from the trial judge that he would be entitled in some credit if he was to give evidence for the prosecution at the trial of his accomplice. The period for lodging an appeal had expired before he was able to obtain this credit. We thought that this was a sufficiently good explanation to justify us granting leave to apply out of time.

16. We agree that the starting point was at the top of the appropriate range. It can be considered in the context of breach of trust cases. However it has to be regarded as more serious as it did involve blackmail. It also has to be borne in mind that the amount being demanded was very substantial. We note however that a generous discount was given for the plea and for the co-operation which the applicant gave. Taking all factors into account, we are not disposed to interfere with the sentence which was imposed. The application for leave is dismissed.