SECRETARY FOR JUSTICE v. SIU YUN YEE

CAAR 6/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

APPLICATION FOR REVIEW NO. 6 OF 2016

(On Appeal From DCCC NO. 378 OF 2014)

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REASONS FOR JUDGMENT

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Hon Lunn VP (giving the Reasons for Judgment of the Court) :

1.  With the leave of Cheung CJHC, granted on 23 December 2016, pursuant to section 81A of the Criminal Procedure Ordinance, Cap. 221, the Secretary for Justice appealed against the sentence of 7 months’ imprisonment, suspended for two years, imposed on the respondent on 1 December 2016 by Deputy District Judge Bina Chainrai, following the respondent’s conviction on her plea of guilty to a charge (Charge 5) of dealing with property known or believed to represent the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455. We allowed the appeal, quashed the sentence imposed by the judge and, in its place, imposed a sentence of 8 months’ imprisonment. We said that we would give our reasons in due course. That, we do now.

2.  Charge 5 averred that, on and between 16 November 2009 and 18 August 2011, the respondent dealt with $630,000 in cash, knowing or having reasonable grounds to believe that it, in whole or in part, and directly or indirectly, represented the proceeds of an indictable offence.

The facts

3.  On 16 January 2013, police officers arrested the respondent for gambling in an unlicensed gambling establishment at the Cockloft, Shop No. 2, Nos. 2-8A Yi Pei Square, Tsuen Wan (“the premises”), which premises were then being operated as an unlicensed gambling establishment by Lam Hing Wan, the 1^st defendant.  The respondent, together with the 1^st defendant and Lee Ming, the 2^nd defendant, were together with 17 other persons who were playing mahjong at electronic mahjong tables.  $2,550, 12 sets of mahjong tiles, gambling chips and 10 business logbooks were found on the premises.  Also, there were 10 CCTV cameras, two of which provided surveillance of the entrances, and three LCD display screens located in the premises.  Numerous bank books in the name of the 1^st defendant were found in a drawer in a bed in the bedroom of the premises.  One of the bank books related to an account in the name of the 1^st defendant with HSBC into which the respondent had made a total of five deposits in cash on and between 16 November 2009 and 18 August 2011 to a total of $630,000.

4.  Having been re-arrested on 23 January 2013 for the offence of dealing in property, namely $630,000 deposited into the bank account of the 1^st defendant, knowing or having reasonable grounds to believe that it was the proceeds of an indictable offence, under caution the respondent said “Ah sir, I don’t know what the money was.” 

5.  In the course of two subsequent video-recorded interviews conducted of her that day and on 26 February 2013, having been confronted with the deposit receipts made out in her name and bearing her identity card number evidencing the payment into the 1^st defendant’s bank account of the total of $630,000, the respondent admitted, inter alia, that:

(a)  she was unemployed and dependent on CSSA;

(b)  she had known the 1^st defendant for 3 or 4 years;

(c)  she played mahjong in the 1^st defendant’s gambling establishment, which she knew was unlicensed, around once a month;

(d)  at the request of the 1^st defendant, she deposited into his HSBC bank account a total of $630,000 in cash on five separate occasions: namely,

$100,000 on 16 November 2009;

$120,000 on 11 June 2010;

$100,000 on 12 June 2010;

$110,000 on 1 December 2010; and

$200,000 on 18 August 2011; 

(e)  in order to make those deposits, the 1^st defendant had provided her with a piece of paper on which was written the details of his bank account; after making each deposit, she gave the receipt to the 1^st defendant;

(f)  she “guessed” that the cash which she had deposited into that account came from commissions from playing mahjong or his winnings from the playing mahjong in his gambling establishment and said “maybe” the 1^st defendant was the “boss” of the gambling establishment because he was always “sitting there”; and

(g)  she received no monetary gain for making those deposits.

6.  In pleading guilty to the charge, the respondent accepted that, in dealing with the monies the subject of Charge 5, she knew or had reasonable grounds to believe that she was dealing with the proceeds of an indictable offence.

7.  The respondent and the 2^nd defendant having pleaded guilty to Charge 5 and Charge 4 respectively on 17 October 2016, the judge adjourned sentencing pending the trial of the 1^st defendant on three other counts of dealing with property knowing or having reasonable grounds to believe that it was the proceeds of an indictable offence, namely Charges 1, 2 and 3.  In doing so, the judge extended the bail of the respondent  On 15 November 2016, having convicted the 1^st defendant and delivered her reasons for verdict, the judge received mitigation on behalf of the respondent.  Then, the judge ordered the preparation of a background report on the respondent, remanded the respondent in custody and adjourned sentence.  Having considered that report and having received further mitigation on behalf of the respondent on 29 November 2016, the judge imposed sentence on the respondent on 1 December 2016.

Mitigation

8.  In mitigation advanced on behalf of the respondent, the judge was invited to note that she was a divorcee aged 58 years who was responsible for the care of her 16-year-old son, who suffered from reading and writing disabilities.  It was submitted that the respondent had derived no monetary gain and played a relatively passive role in the offence. 

9.  In approaching the task of sentencing, Ms Nam invited the judge to have regard to the judgments of this Court in HKSAR v Boma [2012] HKLRD 33 and HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545.  In inviting the judge to impose a suspended sentence of imprisonment, Ms Nam referred to the reasons for sentence in HKSAR v Shum Kin Wing & Others [1], in which District Court Judge Sham imposed a sentence of 20 months’ imprisonment, suspended for 30 months, on a defendant who had pleaded guilty to an offence of dealing with $1,200,000, knowing or having reasonable grounds to believe that it was the proceeds of an indictable offence.  She received the money into her own bank account at the request of her husband.  In suspending the sentence of imprisonment, the judge found that she had played “a minor role in the offence, that she was to a considerable extent under the influence of her husband.”  It is to be noted that District Court Judge Sham stated incorrectly that in the Secretary for Justice v Wan Kwok Keung this Court saidof the offence of “money laundering” that “when the money was between $1,000,000 and $2,000,000, the starting point should be 2 years’ imprisonment.” [2]  Rather, as is noted subsequently, Yeung JA said that in those circumstances the starting point should be “3 years or so” imprisonment.

Reasons for Sentence

10.  In her reasons for sentence, the judge did not refer to the reasons for sentence articulated by District Court Judge Sham in HKSAR v Shum Kin Wing.  On the other hand, she did list the judgments of this Court, relevant to sentencing for this offence, to which her attention had been drawn by the prosecution.[3]  Of the principles relevant to sentencing for the offence of dealing with property, knowing or having reasonable grounds to believe that it was proceeds of an indictable offence, the judge cited a passage from the judgment of this Court delivered by Cheung JA in HKSAR v Hsu Yu Yi:[4]

“ Sentencing Principles

9. There are no sentencing guidelines for the offence of dealing with the proceeds from an indictable offence because the facts vary from case to case. However, the following factors are to be taken into account when determining sentence:

(1) It is the amount of money involved that is a major consideration and not the amount of benefit received by a defendant in the transaction.

(2) The culpability of the offence lies in the assistance, support and encouragement offered to the commission of an indictable offence. So a defendant’s level of participation and the number of occasions on which he is involved in the ‘money laundering’ activities are relevant factors to be considered.

(3) The offence of dealing with the proceeds from an indictable offence does not necessarily have any direct correlation with the indictable offence in question. However, if the relevant indictable offence can be identified, the court may take into account the sentence imposed on the indictable offence per se when determining the sentence of the dealing offence.

(4) If the case has an international element involving activities carried out across different regions, the court may impose a more severe sentence. This is to protect Hong Kong’s reputation as an international finance and banking hub from being tarnished.

(5) The length of time the offence lasted.”

11.  Of the significance of the fact that the defendant derived no benefit from the commission of the offence, the judge noted:[5]

“ In Secretary for Justice v. Ngai Fung Sin Apple [2013] 5 HKLRD 104, the Court of Appeal held that in money laundering cases, the sentence passed was primarily to reflect the amount of the illicit money involved and not the benefit obtained by the defendant or others.”

12.  The judge went on to note that:[6]

“ In the case of HKSAR v Boma [2012] 2 HKLRD 33, it was stressed that deterrence is a paramount objective of the sentence and that the amount of money laundered is a significant feature. The sentencer should also take into account features such as the nature of the predicate offence; the state of the offender’s knowledge; whether there is an international dimension; the sophistication of the offence including the degree of planning; whether the offence was committed by or on behalf of an organised criminal syndicate; whether there was one transaction or many and the length of time over which the offence was committed; whether the offender continued to launder after discovering the nature of the funds; and the role of the offender and the acts performed by him.”

13.  Applying the relevant principles to the circumstances of the respondent, the judge said:[7]

“ [the respondent] did not receive any financial reward for depositing the monies into D1’s bank account... [the respondent] also played a limited role in the money laundering as she simply deposited the monies into D1’s own HSBC bank account as she was asked to do. There was no sophistication on the part of [the respondent]. No planning was involved. The total amount involved in Count 5 is HK$630,000. While the amount is not small, it is by no means a large amount when compared to other money laundering cases. There is no evidence to suggest that there was an international element. The nature of the predicate offence is the operation of the unlicensed gambling establishment. There is no evidence that [the respondent] was part of an organized criminal syndicate. I find that there are no aggravating factors in [the respondent]’s commission of the offence.”

14.  Stating that she had regard to “all the above factors”, the judge stipulated a starting point for sentence of 12 months’ imprisonment.  Then, she stated that she afforded the respondent a one-third discount to reflect her guilty plea.[8] Next, she said that she reduced the sentence by an additional one month, to reflect the fact “of the time taken for this matter to be brought to court”.  Whilst she said that she was satisfied that there had been no delay by the prosecution, the judge said that delay had been necessitated by the need “…to await the outcome of a decision from the Court of Final Appeal”.  

15.  It is to be noted that, having appeared in the District Court for the first time on 27 May 2014, the respondent had indicated that she intended to plead not guilty, in consequence of which a trial date was fixed for 10 November 2014.  On 10 November 2014, the trial was adjourned at the request of the 1^st defendant so that his counsel could consider the trial documentation.  On 11 November 2014, counsel for the respondent supported the application by counsel for the 2^nd defendant that the trial be adjourned, so that consideration could be given to the judgment of the Court of Final Appeal in HKSAR v Pang Hung Fai [9] which had been handed down on 10 November 2014.  That judgment addressed the ingredients of the offence of “money laundering”.  On 10 February 2015, the Appeal Committee of the Court of Final Appeal granted leave to appeal in respect of the issue of duplicity in the prosecution of money laundering charges in HKSAR v Salim Majed [10] and fixed the hearing of the appeal for 9 June 2015.  The trial of the respondent was adjourned at the joint request of the parties on 2 March 2015.  Then, on 14 August 2015 the Appeal Committee of the Court of Final Appeal granted leave to appeal in HKSAR v Yeung Ka Sing Carson.[11]  Subsequently, the Court of Final Appeal ordered that the two appeals be heard together on 31 May - 2 June 2016.  The trial of the respondent was adjourned from 7 August 2015 to 29 January 2016.  On 29 January 2016, the respondent’s trial was fixed for hearing on 17 October 2016.  On 11 July 2016, the Court of Final appeal handed down their judgments in Salim Majed and HKSAR v Yeung Ka Sing, Carson.[12]  At a Mention hearing on 26 August 2016, the respondent repeated her earlier indication that she intended to plead not guilty.  However, by letter dated 13 October 2016, solicitors representing the respondent indicated to the court that she now intended to plead guilty.

16.  Of the submission made on behalf of the respondent that any sentence of imprisonment imposed on her be suspended, the judge said:[13]

“ I have considered [the respondent’s] role in the offence. She has also been in custody since 15 November, 2016. I have considered her family circumstances as well. I am satisfied that there are exceptional circumstances to warrant my suspending this sentence of imprisonment.”

Grounds of application for review

17.  Ms Vinci Lam, counsel for the applicant, submitted that the sentence passed on the respondent was manifestly inadequate, and/or wrong in principle.  She took issue with both the starting point of 12 months’ imprisonment stipulated by the judge and the imposition of a suspended sentence of imprisonment.

The starting point

18.  Whilst accepting that there were no sentencing guidelines for the offence of money laundering, Ms Lam submitted the starting point stipulated for sentence by the judge of 12 months’ imprisonment was unduly lenient and fell outside the range of sentences that should have been reasonably imposed in the circumstances.

19.  Having noted that in the judgment of this Court, in Secretary for Justice v Wan Kwok Keung, Yeung JA said “the sentencing starting point is 3 years or so where the “black money” involved was between $1 million and $2 million”, Ms Lam contended that a purely arithmetic approach to dealing in $630,000 of the proceeds of an indictable offence would call for a starting point for sentence between 11 months’ and 22 months’ imprisonment.

20.  Then, Ms Lam submitted that the appropriate starting point for sentence was to be increased to reflect the aggravating factors in the commission of the offence, namely:

(a)  the respondent dealt with the money with actual knowledge of, or at least by turning a ‘blind eye’ to, the fact that it represented the proceeds derived from the illegal gambling establishment;

(b)  there were five impugned transactions spanning some 21 months, which involved a not insubstantial total amount of money;

(c)  contrary to the judge’s finding, that the respondent played a “limited” role in the commission of the offence, she was personally involved in the deposit of the cash into the bank account and provided the 1^st defendant with receipts for those deposits;

(d)  the circumstances in which the respondent came to commit the offence arose from her commission of another criminal offence, namely gambling in an unlicensed gambling establishment.

21.  Finally, Ms Lam stressed that the fact that the respondent did not gain any benefit was not a valid mitigating factor.[14]

A suspended sentence of imprisonment

22.  Ms Lam submitted that the judge erred in ordering that the sentence of 7 months’ imprisonment imposed on the respondent be suspended.  She said that it was well-recognised that the offence of money laundering attracts an immediate custodial sentence, even for a first offender.[15] There existed no exceptional circumstances to justify the suspension of the imprisonment term.

The respondent’s submissions

23.  For the respondent, Mr Joseph Lee took issue with the applicant’s decision to review the sentence imposed on the respondent, but not that imposed on the 2^nd defendant. That was unfair to the respondent.  The 2^nd defendant had been convicted on his plea of guilty to dealing in $1,030,000, knowing or having reasonable grounds to believe that it was the proceeds of an indictable offence, which monies he deposited in cash on a total of nine occasions in a period of 15 months.  He had been sentenced to 9 months’ imprisonment suspended for two years.

24.  Mr Lee submitted that the starting point taken by the judge was not manifestly inadequate.  The respondent had received no benefit for assisting the 1^st defendant in depositing the monies into his bank account.  She only “guessed” that the money came from commissions paid by the mahjong players in the gambling establishment.  There were no aggravating features in the commission of the offence.  Although she had been arrested in January 2013, through no fault of her own, the respondent was not sentenced until 1 December 2016, more than five years since her involvement in the final deposit of cash into the 1^st defendant’s bank account in August 2011.

25.  Mr Lee acknowledged that it was “well-recognised” that the offence of money laundering attracted an immediate custodial sentence even for a first offender.  Nevertheless, he submitted that the imposition of a suspended sentence, albeit lenient in the circumstances, was a sentence reasonably open to the judge.  In any event, even if this Court was to determine that the judge fell into error in suspending the sentence of imprisonment imposed on the respondent, nevertheless this Court retained a discretion not to interfere with the sentence if, having regard to all the circumstances, it was satisfied that it would be unconscionably harsh to substitute a term of imprisonment now.[16]  In that context, he invited the Court to note that this hearing was held more than five months since sentence had been imposed.

A consideration of the submissions

The 2^nd defendant

26.  In sentencing the 2^nd defendant, the judge noted that he had been convicted and fined $7,000, on his plea of guilty, in Tsuen Wan Magistracy on 13 September 2013 to the offence of assisting in the management of a gambling establishment, contrary to section 5(c) of the Gambling Ordinance, Cap. 148.  The judge said that the 2^nd defendant admitted in his out-of-court statements to having known the 1^st defendant since the 1970s and having worked with him, assisting him in the operation of the illegal gambling establishment, since 2010.  The 2^nd defendant acknowledged that in dealing with the depositing cash that he made to the 1^st defendant’s bank account he knew or had reasonable grounds to believe that they were the proceeds of an indictable offence.

27.  The judge noted that the 2^nd defendant was aged 82 years at the time of sentencing and acknowledged that he had a criminal record which dated back to 1988.  All of his convictions were in respect of gambling, two of which were for operating a gambling establishment in 2000.

28.  Having said that the 2^nd defendant played a limited role in the commission of the offence, that no planning was involved, that although the total amount of money was more than $1 million it was by no means a large amount of money in comparison to other such cases, that there was no international element, that the predicate offence was the operation of an unlicensed gambling establishment, that there was no evidence that the establishment was part of an organised criminal syndicate and that there were no aggravating circumstances, the judge stipulated a starting point for sentence of 15 months’ imprisonment.  Having afforded the 2^nd defendant a discount of one-third for his plea of guilty, the judge said that she afforded the 2^nd defendant a further discount of one month to reflect the time that it had taken for the matter to be dealt with by the courts.  Then, the judge imposed a sentence of 9 months’ imprisonment.

29.  Of the 2^nd defendant’s age of 82 years, the judge said “…this is a ‘considerable’ age.”  Having said that she had considered “his role in the offence” and the fact that he had been in custody for about two weeks prior to sentence, the judge said “I am satisfied that there are exceptional circumstances to warrant my suspending this sentence of imprisonment.”  In the result, the judge suspended the sentence of 9 months’ imprisonment for two years.

30.  In referring to the 2^nd defendant as a man of “considerable age”, it may or not be that the judge had in mind the observation of Cons VP giving the judgment of this Court in The Queen v Chan Tak Sang [17], where he used that description to refer to an applicant of 72 years of age, to whom, for humanitarian reasons, “a slight discount” in the sentence of imprisonment was afforded by the Court for that fact.  This Court does not know why the judge addressed the matter in that way.  Much of the material that was before the judge is not before this Court.  The judge had the benefit of medical reports and a background report on the 2^nd defendant.  Also, she received the mitigation of counsel, together with three letters in mitigation.  This being an application for the review of the sentence imposed on the respondent only, and there having been no application to include other material, none of that material is available to this Court.  Nevertheless, having regard to the submission of unfairness to the respondent, it is to state the obvious to observe that the circumstances relevant to sentencing of an 82-year-old man and a 58-year-old woman are likely to be quite different.  The issue for this Court to determine is whether or not the sentence imposed on the respondent was wrong in principle and/or manifestly inadequate.

The 1^st defendant

31.  For completeness, we note that the 1^st defendant, having been convicted of two charges of dealing with monies, knowing or having reasonable grounds to believe that they were the proceeds of an indictable offence, was sentenced to 4 years and 11 months’ imprisonment (Charge 2) and 2 years and 11 months’ imprisonment (Charge 3). The judge ordered that one year of the sentence of imprisonment imposed in respect of Charge 3 was to be served consecutively to the sentence imposed in respect of Charge 2.  Accordingly, the total sentence of imprisonment imposed on the 1^st defendant was 5 years and 11 months’ imprisonment.

32.  Charge 2 concerned the bank account into which the respondent deposited the monies the subject of the charge to which she pleaded guilty.  It averred that the 1^st defendant had dealt with $15,453,626 in that bank account in the period 1 October 2009 to 17 January 2013.  Count 3 concerned another bank account in the name of the 1^st defendant in which the 1^st defendant dealt with $4,773,353 in the period 3 September 2011 to 17 January 2013.  For purposes of sentencing the 1^st defendant, the judge treated lesser amounts of money as having their provenance in the proceeds of the 1^st defendant’s unlawful gambling establishment, namely about $10.8 million and $3.34 million respectively.

33.  As the judge noted, in her review of the judgments of this Court in respect of the factors relevant to sentencing for this offence, this Court has said repeatedly that “deterrent sentences are required”.[18]  She noted that this Court had said as much in its judgment in HKSAR v Boma. [19]  There, Stock VP said:[20]

“ The second matter to which the sentencing court must have regard is the fact that in this category of offence, deterrence is paramount. It is to be remembered that the “criminality in laundering arises from the encouragement and nourishment it gives to crime in general. Without any crimes would be rendered much less fruitful and perhaps more difficult to perpetrate”: R v Basra [2002] 2 Cr App r (S) 469, 472.”

34.  The judge went on to enumerate the litany of factors identified in the judgment of Stock VP as relevant to sentence for the offence.  In doing so she noted, inter-alia, that the relevant factors included “the length of time over which the offence was committed” and “the role of the offender and the acts performed by him.” [21]  Of a consideration of the role of the defendant, Stock VP said:[22]

“ ...the director of a laundering operation or scheme should attract a greater sentence than a person engaged by him although sentences should be sufficient to deter those who might be prevailed upon by directing minds.  In the case of a person down the chain, the court will wish to have regard to whether a benefit has been received and if so the nature and size of the benefit.  But within the category of persons down the chain there will be gradations of culpability.  So for example the drug addict or petty crook was paid a small sum to open an account in hand over its operation to another with no more participation and no more knowledge than that it is going to be used for some sort of crime is much less culpable than an offender of a different sort not “used” in that way.”

35.  Also, the judge observed of the judgment of this Court in Secretary for Justice vNgai Fung Sin Apple that “…the sentence passed was primarily to reflect the amount of the illicit money involved and not the benefit obtained by the defendant or others.  In the judgment of this Court, Yeung VP said:[23]

“ Generally speaking, the sentence passed in a “money laundering” case is primarily to reflect the amount of the “illicit/black money” involved. Neither the fact that the “illicit/black money” was actually not derived from an indictable offence nor the defendant’s ignorance of the actual source of the “illicit/black money” is necessarily a valid mitigating factor. On the other hand, if there is evidence which can prove from what serious crime the “illicit/black money” was derived and if the defendant was aware of the origin of the “illicit/black money”, that would be an aggravating factor (see HKSAR v Xu Xia Lu [2004] 4 HKC 16). Based on the same rationale, the fact that the defendant of a “money laundering” case has not obtained any financial benefit was not a mitigating factor.”

36.  In this case, the respondent admitted that she had known the 1^st defendant for 3 or 4 years and attended his gambling establishment, which she knew to be unlicensed, about once a month.  The context in which she admitted that she “guessed” that the monies that she deposited in cash for the 1^st defendant came from commissions earned from the mahjong players or from his winnings playing in his gambling establishment was her statement in respect of the 1^st defendant that “may be… (he) was the “boss” of the gambling establishment because he was always “sitting there”.”  It is to be remembered that the amounts of money that the respondent deposited in cash into the account of the 1^st defendant were all amounts of $100,000 or more.  She did so on five separate occasions in a period of 21 months.  Clearly, the respondent knew or had reasonable grounds to believe that she was dealing with property that had its provenance in the 1^st defendant’s operation of the unlawful gambling establishment.  The respondent dealt with the property directly and personally, obviously aware the documentation was created which identified her, not the 1^st defendant, as the depositor of the monies into the account of the 1^st defendant.  There being no dispute that she received no benefit for conducting herself in that way, it appears that the respondent was made use of by the 1^st defendant, perhaps for no other reason than that she was a long-standing, regular customer of his gambling establishment.

37.  In the gamut of crime, the predicate offence of operating an unlawful gambling establishment falls to be regarded as much less serious than a range of other offences which also give rise to offences of “money laundering”, including unlawful trafficking in dangerous drugs, robbery, kidnap and fraud.  The maximum penalty on conviction on indictment for the offence of operating a gambling establishment is 7 years’ imprisonment and a fine of $5 million.  In HKSAR v Lui Kwan Ki [24], this Court refused applications for leave to appeal against sentences imposed following convictions after trial in the District Court for conspiring to operate a gambling establishment in Ap Lei Chau in a three-month period in 2005.  The gambling establishment was operated on a daily basis at different locations, at which equipment was provided and at which as many as 40 gamblers at a time participated.  In the judgment of the Court, Beeson J noted that the judge found that “… a high degree of planning and organization existed” and went on to observe that “the judge did not attempt to estimate the turnover or the commission earned, but was willing to draw the inference that it was substantial.” [25]  Reflecting the different culpability of the defendants, the judge sentenced the 1^st and 2^nd defendants to 18 months’ imprisonment and took a range of starting points for sentence from 15 months’ to 12 months’ imprisonment for the applicants.[26]

38.  In HKSAR v Javid Kamran [27], this Court acknowledged that the offence of dealing with property knowing or having reasonable grounds to believe that it was the proceeds of an indictable offence encompasses “a very wide range of culpability.” [28]  In that case, the appellant was sentenced, on his pleas of guilty to two counts of unlawful trafficking in dangerous drugs, to 12 months’ and 5 years’ imprisonment respectively and to 32 months’ imprisonment for a count of “money laundering”.  The appellant committed the latter offence by allowing his bank accounts to receive about $1,190,000 in the period of about 18 months up to the period of the two acts of unlawful trafficking.  This Court said that the appropriate starting point for the latter offence was 3 years’ imprisonment and quashed the sentence of 32 months’ imprisonment, imposing in its place a sentence of 24 months’ imprisonment for that offence.

39.  In the Secretary for Justice v Wan Kwok Keung [29], Yeung JA noted that in the judgment of this Court in HKSAR v Hsu Yu Yi [30], Cheung JA had set out a schedule of starting points taken for sentence for a range of offences of dealing in the proceeds of an indictable offence.  Yeung JA said:[31]

“ The sentencing starting point is 3 years or so where the “black money” involved is between $1 million and $ 2 million.”

40.  Finally, we turn to consideration of the application of those principles to a determination of the appropriate sentence to be visited on the respondent for this offence.  The predicate offence was the operating of an unlawful gambling establishment.  The respondent knew or had reasonable grounds to believe that was the provenance of the monies that she deposited in cash into the 1^st defendant’s bank account.  The size and rounded figures of the deposits, together with the fact they were all in cash, spoke eloquently to the provenance of the monies.  The respondent deposited the monies on five occasions over a period of 21 months to a total value of $630,000.  The respondent was made use of by the 1^st defendant. Nevertheless, having regard to all of those factors we are satisfied that the starting point stipulated for sentence by the judge of 12 months’ imprisonment was manifestly inadequate.  In our judgment, in all the circumstances the appropriate starting point for sentence for the respondent is 18 months’ imprisonment.

Discount

41.  Clearly, the respondent is entitled to a discount of one-third from the starting point taken for sentence to reflect her plea of guilty.  So, the resulting sentence is 12 months’ imprisonment.

42.  In addition, we are satisfied that the respondent was entitled to the further discount of 1 month’s imprisonment afforded to her by the judge “…for the time it has taken for this matter to be brought to court.”  In doing so, having said that “there has been no delay by the prosecution” the judge said “Time was required to await the decision of the Court of Final Appeal”.  As noted earlier, the issues by raised by the grant of leave by the Appeal Committee of the Court of Final Appeal in HKSAR v Salim Majed on 10 February 2015 and HKSAR v Yeung Ka Sing, Carson on 14 August 2015 were not resolved until the delivery of judgment by the Court of Final Appeal on 11 July 2016.

Suspended sentence

43.  This Court pointed out in Secretary for Justice v Choi Sui Hey [32], in the context of sentencing for offences of dealing with property knowing or having reasonable grounds to believe that they were the proceeds of an indictable offence:[33]

“ It is now well recognised that offences of this nature attract immediate custodial sentences even for a first offender. We regard it as unnecessary to repeat the reasoning for this approach which has been expressed repeatedly by this Court.”

44.  In that case, the respondent had been convicted after trial of a charge of conspiring, in a period of about six months in 2004, to deal with $1,850,000 knowing or having reasonable grounds to believe that it represented the proceeds of drug trafficking.  The respondent had transferred a total of $1.1 million on six separate occasions to Fiji. He was found to be in possession of $750,000 million, which the judge determined he would have transmitted to Fiji.  The Court quashed the sentence imposed by the judge of 18 months’ imprisonment.

45.  In the judgment of the Court, Wright J said “…an appropriate starting point in the circumstances of this case involving these sums of money, after trial, was one of 3 years’ imprisonment.” [34]  In doing so, Wright J observed that there was “an international dimension”. [35]  Affording the respondent a further discount to reflect delay of 13 months in proceeding against him, after he had been arrested but released unconditionally, and the 15 months’ delay from the time of the imposition of the suspended sentence, the Court imposed a sentence of 2 years’ imprisonment.

46.  It appears that the judgment of this Court in Secretary for Justice v Choi Sui Hey was not drawn to the attention of the judge.  Certainly, she made no reference to it in her reasons for sentence.  In light of this Court’s considered statement that it was “well recognised” that offences of dealing with property knowing or having reasonable grounds to believe that they were the proceeds of an indictable offence “attract immediate custodial sentences even for a first offender”, it is clear that it was necessary that the judge be satisfied that there were “exceptional circumstances” to impose a sentence other than an immediate custodial sentence on the respondent.  That is the effect of the judgment of this Court, following its review of the authorities, in Secretary for Justice v Wade.[36]

47.  With respect to the judge, we are satisfied that she fell into error in determining that the requisite “exceptional circumstances” to permit an order suspending the sentence to be imposed on the respondent were made out by the respondent’s:

(i)  role in the offence;

(ii)  being in custody since 15 November 2016; and

(iii)  family circumstances.

48.  It is to be noted that, although the respondent had pleaded guilty on 17 October 2016, her bail had been continued pending the conclusion of the trial of the 1^st defendant.  On 15 November 2016, reasons for verdict in his case were delivered.  Then, having heard mitigation for the respondent, the judge remanded her in custody pending the preparation of a background report.  In all the circumstances, it is not clear why the judge made an order remanding the respondent in custody at that date.  Whatever might have been the reason for that order, it certainly did not lay the foundation for a determination that, having been in custody for a short time, it was appropriate to suspend the sentence of imprisonment to be imposed on the respondent.[37]

49.  As noted earlier, the respondent’s role in the commission of the offence was relatively significant: she deposited large sums in cash personally into the bank account of the 1^st defendant on five occasions over a period of 21 months.  On the other hand, the respondent was made use of by the 1^st defendant.

50.  Of the respondent’s family circumstances, it is to be noted from the background report that, having married her husband in 1982, the respondent gave birth to their son on 14 January 2000.  However, in 2005 the respondent and her husband divorced.  The husband’s whereabouts thereafter were unknown.  The respondent brought up their son alone.  Mother and son enjoyed a good relationship.  They lived in public housing and relied on CSSA for their income.  At the time of sentencing, the son was a Form 5 student of 16 years and 10 months of age who, in December 2015, had been assessed by an educational psychologist as having a ‘medium to low’ intelligence quotient.  In May 2008, he was diagnosed as having dyslexia.  In the period in which the respondent was remanded in custody, from 15 November until 1 December 2016, a female relative of the respondent lived with the son.  Both mother and son were described as being “very worried” about the possible imprisonment of the mother and the welfare of the son.  Of course, the respondent’s son is now 17 years of age.

51.  In our judgment there was nothing in the factors identified by the judge, taken individually or collectively, that constituted exceptional circumstances which justified the imposition of a suspended sentence of imprisonment for the offence.  The offence was serious and the deterrent sentence required was the imposition of an immediate custodial sentence.

Discount

52.  Given that the respondent, a 58-year-old woman who has never been subject to an immediate custodial sentence, has been at liberty since sentence was imposed on her on 1 December 2016, in all the circumstances it is appropriate to afford her a discount in the immediate sentence of imprisonment to be imposed on her now.

53.  In the judgment of this Court in the Attorney General v Wong Kwok Wai [38], in reviewing the practice of affording a discount, in circumstances where the Attorney General’s application succeeded in an application for a review of sentence, Silke VP said:[39]

“ …where a person is serving a prison sentence, this court should, generally, impose a sentence it thinks the trial judge should have imposed and without a discount. The discount can, however, be properly considered in cases where the respondent is very close to the end of his sentence or where the sentence imposed by this court is greatly in excess of the original sentence.

  Where the respondent has been at liberty since conviction because of the nature of the sentence imposed, or has already served the original sentence, then a discount would usually be given, the amount depending on the particular circumstances.”

54.  In the judgment of this Court in the Secretary for Justice v Tseung Mang Ka [40] [2001] 2 HKLRD 115, this Court rejected the submission that, in the event of a successful application for review of sentence by the Secretary for Justice, this Court “normally gives a discount of 1 or 2 years to respondent”.  Reliance had been placed by counsel on the judgment of this Court in the Attorney-General v Dominic Cheung Kai Man.[41]

55.  Stuart-Moore Ag CJHC said that the practice had altered since 1987:[42]

“ The token downward adjustment nowadays usually only applies where there has been a substantial increase in the sentence originally imposed or where the prisoner either has been or is about to be released.”

56.  The context of those observations was this Court’s determination that the judge had erred in imposing a total sentence of 5½ years’ imprisonment on the respondent following his pleas of guilty to two counts of rape and two counts of robbery, which offences had occurred on two separate occasions in private premises.  This Court said that the appropriate total sentence after trial was not less than 15 years’ imprisonment.  Having quashed the sentences imposed by the judge, this Court imposed a total sentence of 9½ years’ imprisonment.  In doing so, acknowledging the fact that it was a review of sentence, the Court afforded the respondent a discount of 6 months’ imprisonment.

57.  It appears from the list of the authorities referred to in the reported judgment, that the Court was not referred to the earlier judgment of this Court in the Attorney General v Wong Kwok Wai.  Obviously, the factual circumstances in Secretary for Justice v Tseung Mang Ka did not require the Court to consider the particular circumstances to which Silke VP made reference in the Attorney General v Wong Kwok Wai when he said that a discount “would usually be given” when sentence was increased on a review “…where the respondent has been at liberty since conviction because of the nature of the sentence imposed.”

58.  In the judgment of this Court in the Secretary for Justice v Leung Yuet Hung, Stock VP cited with approval a passage in the judgment of the Court of Appeal of England and Wales in which Lord Phillips CJ addressed the element of double jeopardy in the context of an upward review of sentence on a respondent.[43]  Lord Phillips said:[44]

“ Almost from the start has been the practice of the court, when considering whether to substitute a heavier sentence and, if so, the length of the sentence, to have regard to the fact that the procedure subjects the defendant to anxiety which should normally be reflected by some discount in the sentence which would otherwise be imposed.

…

Where a defendant has had no responsibility for the fact that he has been given a sentence which is unduly lenient, we consider that it accords with justice that, when substituting a weightier sentence, this Court should have some regard to the distress and anxiety experienced by the defendant as a consequence of having a sentence reopened and increased. The degree of distress and anxiety and thus the size of the discount will depend on the facts of the particular case.

 The distress and anxiety is likely to be particularly great when the decision of the court result on a defendant being placed in prison where originally no custodial sentence was employed…”

59.  Mr Lee acknowledged that the respondent’s counsel had invited the judge to impose a suspended sentence of imprisonment.  He submitted that if the Court was against his primary submission, nevertheless, the respondent was entitled to a discount in sentence to reflect the fact that an immediate sentence of imprisonment had been imposed on review.  We are satisfied that in those circumstances the respondent bears some responsibility for the sentence imposed on her.  However, in our judgment that is not a bar to this Court affording her some discount in sentence to reflect her undoubted distress on being sent to prison now.

60.  In our judgment, for that reason the respondent is entitled to a further discount of 3 months’ imprisonment.  So, the final sentence to be imposed on the respondent is 8 months’ imprisonment.

Conclusion

61.  Accordingly, we allowed the application, quashed the sentence of 7 months’ imprisonment, suspended for two years, and in its place imposed a sentence of 8 months’ imprisonment.  

62.  Finally, we asked the respondent to inform the Social Welfare Department of the fact of our orders, so that appropriate enquiries could be made by them as to the welfare of the respondent’s son.