HKSAR v. HO KA FUNG

CACC 286/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 286 OF 1999

(ON APPEAL FROM DCCC 318 OF 1999)

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J U D G M E N T

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

1. The applicant Ho Ka-fung pleaded guilty to one charge of theft before H.H. Judge Hawkes in the District Court and was sentenced on 11th May 1999 to a prison term of 18 months. She now seeks leave to appeal against sentence.

2. According to the admitted summary of facts, the applicant was first employed by the Gold Fai Marble Engineering Company as a book-keeper in 1990, but in 1991 she also became a partner of 1/6 of the company share. She was the only person responsible for the accounts of the company and for depositing cash and cheques of the company into the company's bank account.

3. Over a period of forty months from April 1995 to August 1998, the Applicant stole cash totalling not less than $1,292,304 from the company by not depositing all the cash received by the company into the company's account and instead deposited the balance into her own account. She spent most of the money for her own personal purpose. When the shortfall of the money was discovered by the company's partners, the Applicant signed an IOU of $1.76 million to the company, and in January and February 1998 her parents had repaid the company $1.46 million which was more than the total sum she had taken from the company because this included the interest on that sum. The balance of the IOU was not repaid because that was considered by the Applicant to be her dividend from the company. The company somehow wanted her to pay more but she refused and left the company's employ.

4. The matter was first reported to the police on 17th March 1998. When she was interviewed by the police, she gave a statement that she had borrowed money from the company. She mentioned that the sum borrowed had fully been repaid and she also told the police that she did not embezzle money from the company. By that time it is a fact that repayment had already been made to the company and the company suffered no loss. The applicant was not arrested until 27th September 1998. After her arrest she made an inculpatory statement but she was not brought to Court until ten months later.

5. The Judge in sentencing the applicant considered the offence a serious breach of trust and having regard to the amount taken and the period of time over which the theft had been going on, took a starting point of 4 years as the appropriate sentence. But he did not consider a non-custodial sentence was proper although he accepted that there were mitigating circumstances such as her plea of guilty, her parents had made more than full restitution to the company and she had made a full confession on her arrest and there was a delay in bringing the matter to Court. The Judge also accepted that she was remorseful but the Judge nevertheless imposed a sentence of 18 months imprisonment.

6. The ground of appeal is that the sentence is manifestly excessive and/or wrong in principle in all the circumstances of the case since there was full restitution and the company had continued to employ the Applicant after the offence was disclosed. Further, the Applicant was not brought to Court until some time after her full disclosure and admission of the theft and after the applicant had secured employment giving her the opportunity to repay her parents and to rehabilitate herself.

7. Mr. Cotsen for the applicant refers to R. v. Barrick [1985] 81 Cr. App. R. 78 and he submits that this case cannot be compared with Barrick where there was no admission or remorse. In Barrick, the Court of Appeal in England set out the matters including delay in prosecution which a Court in determining the sentence in breach of trust cases should be considered. Suffice to say, the Judge had considered all these matters as he stated in his Reasons for Sentence and there is no question that he did not consider matters he ought to consider. However in that case the Court of Appeal in England suggested immediate custodial sentence in cases of this kind:

"In general a term of immediate imprisonment is inevitable, save in very exceptional circumstances or where the amount of money obtained is small. Despite the great punishment that offenders of this sort bring upon themselves, the Court should nevertheless pass a sufficiently substantial term of imprisonment to mark publicly the gravity of the offence."

8. Mr. Costen refers to the case of Secretary for Justice v. Hui Siu-man, Ricky Application for Review 1998 No. 10 where this Court differently constituted, refused an application by the Secretary for Justice to review a suspended sentence of 21 months for 6 charges of theft and deception involving a total of $631,663.53. He submits that the circumstances of that case are so similar to the present one in that there are special circumstances, that the Judge in the present case should do the same to suspend the sentence.

9. It should be noted that the defendant in the case of Hui was an employee in the imports department of a bank. He produced forged authorization letter to procure payment into his own account money which should be credited into the account of a bank customer. This went on over a period of about 5 months involving the sum of $631,663.53. He made a full admission to his employer when the matter was discovered and within two weeks after that he made full restitution of the money taken by him. He was arrested two months afterwards and he again made a full admission of the offences but he was not charged until 12 months after he admitted the offences to his employer. The Court of Appeal considered the question whether there were exceptional circumstances in that case which would justify the Judge suspending the sentence. The conclusion was there were such exceptional circumstances and the Judge's decision was not wrong.

10. The final observation of the Court of Appeal on restitution is worth noting:

"We think it proper to make this final observation. In cases of commercial fraud it is uncommon to find an immediate acknowledgement of complicity and full restitution. Usually, the offender pleads that no money is left either because of business or, very commonly, gambling losses. The unfortunate victims simply have to bear their loss. We are fully mindful of the duty of the courts to pass sentences which will protect the community by deterring persons who might be like-minded from committing similar offences. Indeed, in the past that has been the overwhelming consideration. However, in modern times, more emphasis has been placed on factors such as rehabilitation of offenders and the interests of the victims of crime. There is no encouragement to make restitution if the offender knows that it will have little effect on sentence. We are satisfied that full restitution, particularly in commercial crimes, must be encouraged and that this can only be done if real weight is given to it as a factor mitigating sentences. We repeat, however, that, of itself, is not a 'very exceptional circumstance' which would warrant a suspension of sentence."

11. Mr. Costen has listed a number of matters in this case which he says constitute exceptional circumstances:

"1. immediate remorse and restitution;

2. continued employment by the employer after discovery of the offence;

3. the company had forgiven her, but later had a change of heart to demand more;

4. the applicant had left the company of her own volition and she was not dismissed by the company;

5. the applicant's arrest was in connection with the further demand by the company;

6. there was no question of prosecution in respect of the further demand made by the company;

7. the applicant had embarked herself on self rehabilitation;

8. she spent some of the money for the benefit of her family; and

9. she was a respectable woman and she had by reason of the present offence lost her career."

12. Mr. Costen submits that these are similar to the case of Hui.

13. Mr. Blanchflower for the government asks us to draw a distinction between this case and the case of Hui in terms of the amount stolen, the duration of the thefts and there was in fact no delay in bringing the applicant to Court because the Applicant's statement in her first interview by the police was really exculpatory. He submits that the case of Hui is no authority for suspending a sentence in breach of trust cases even where there has been restitution and delay in prosecution. He refers to the case of HKSAR. v. YEUNG Wing-shun, Wilson CACC No. 312 of 1999, where the case of Hui was considered by the Court not to be a guideline for similar cases.

14. The question in this case is whether the Judge was wrong in not suspending the sentence and whether the sentence of 18 months imprisonment is manifestly excessive.

15. The applicant is 27 years old and married and has a clear record. She has been working since April 1998 and after she left the company in Wong Wai Kee Garment Factory as a clerical assistant until she was incarcerated as a result of her conviction. During that time she earned money and that helped her to repay her parents. Her former employer has now expressed his willingness to re-employ the Applicant should she be released. There are certainly circumstances in this case similar to the case of Hui.

16. On the other hand, the present case is not significantly different from the case of YEUNG Wing-Shun where $1.8 million was stolen in offences of forgery and theft committed over a period of 5 months and a reduction of one-third for plea and a further reduction of 8 months for restitution and delay from a starting point of 3 years was considered appropriate. This resulted in a sentence of 16 months imprisonment.

17. We note that the parents had repaid the company more than that the applicant had stolen and after they did so, the company demanded more payment and upon the applicant's refusal to pay, the matter was reported to the police. It could be that the company was indeed taking an advantage of the Applicant who was at that time in a vulnerable position but there was no evidence as to that. In any case, this cannot be regarded as exceptional circumstances by reason of which sentence should be suspended.

18. We do not think in the circumstances of this case that a custodial sentence was wrong or inappropriate. It appeared that the Applicant was until her escapade was discovered in fact treating the company's money as her own and spending it at will. The fact that she had access to cash and she was a 1/6 partner is no excuse. This was an on going exercise. Although there are strong mitigating circumstances and we accept restitution is to be encouraged by reflecting it in terms of reduction in sentence but these are not such that there should not be a custodial sentence in the present case.

19. The Judge had indeed fully taken into consideration all the relevant mitigating factors and especially the Applicant's immediate restitution and plea and he had reflected this in giving a reduction of almost 2/3 from the starting point. This generous reduction resulted in a 18-months imprisonment which is comparable with the sentences in other similar cases. In our opinion, in all the circumstances this is not manifestly excessive. We therefore refuse the application for leave to appeal against sentence.