HKSAR v. LAM SHIU KUM

DCCC 440/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 440 OF 2008

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BETWEEN

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Reasons for sentence

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1.  The defendant pleads guilty to one count of Misconduct in Public Office contrary to common law. [1]

2.  On 29/8/06, a private patient of the defendant, Mr. Kwok, complained about the charges of $250 demanded by the Hospital Authority (“HA”). This charge was for the endoscopic examination performed by the defendant in July. Mr. Kwok thought that he had already paid $9,500 as per the demand note issued under the name of Gastrointestinal Research (“GR”). HA conducted an internal enquiry and sought clarification from the defendant.

3.  In the interim, in December 2006, the defendant contacted Mr. Kwok. The defendant told Mr. Kwok that there was an adjustment of accounts. The defendant invited Mr. Kwok to treat the sum he paid to GR as a donation to the University of Hong Kong (“HKU”). The defendant also provided cash $10,000 to Mr. Kwok and asked the latter to donate the sum to HKU using the latter’s personal cheque. Mr. Kwok did so accordingly. Mr. Kwok also signed a letter prepared by the defendant (“that letter”). In that letter, Mr. Kwok stated that he had not paid HKU, Queen Mary Hospital (“QMH”) or the defendant. He would now like to donate $10,000 to HKU instead.

4.  In January 2007, the defendant wrote to the HA attaching that letter. The defendant explained that Mr. Kwok had misunderstood the situation. It was also an administrative error on his part. He sent a receipt to Mr. Kwok dated 23/8/06 on Mr. Kwok’s request. It was for Mr. Kwok’s insurance claim.

5.  This incident was eventually referred to the ICAC for investigation. It transpired that during the period from 1/9/03 to 26/1/07, the defendant had waived or reduced the consultation fees of 12 private patients [2]. He however issued demand notes, with the letterheads of HKU and QMH, requesting those patients to pay their fees into the account of GR. Some of these patients received receipts bearing the letterheads of HKU and QMH. The defendant had never informed HKU about these payments.

6.  Further investigation revealed that in June 2003, the defendant invited a private patient, Mr. Li Chi-keung, to make donation to the Faculty of Medicine, HKU (“Faculty”) for research. He asked Mr. Li to make cheques payable to GR. From June 2003 to April 2006, Mr. Li donated a total sum of $3.5 million. The defendant sent gratitude letters to Mr. Li with letterheads of the Faculty.

7.  In September 2004, Mr. Sengjaja, the grandson of a private patient of the defendant, also donated $200,000 to the Faculty for research. The donation cheque was deposited into the account of GR.

8.  Under similar circumstances, Mr. Pong, a private patient of the defendant also donated $100,000 in October 2005. As requested by the defendant, the donation cheque was issued to GR and deposited in its account subsequently.

9.  Bank records revealed that between 1/1/04 to 31/1/07, there were 17 transfers by cheque from the account of GR to the defendant’s personal account totalling about $3.3 million. All but one were used to reduce the defendant’s overdraft.

10.  During the same period, a total of about $780,000 was withdrawn from the account of GR through the defendant’s ATM card. There were three transfers from the account of GR to the account of the defendant’s wife and a friend.

11.   At the material time, the defendant was the Dean of the Faculty. He was permitted to treat private patients admitted to QMH in accordance with the regulations and policies of HKU. The fees charged to a private patient would be split between HKU and HA. The defendant should not bill the patients directly. He was also responsible for raising funds for the Faulty.

12.  At the same time, he was employed by the HA as Chief of Service of the Department of Medicine at QMH. One of his duties was to provide clinical services to patients at QMH in accordance with the policy of HA.

13.  As a clinical teaching staff, the defendant knew that he should not receive any income directly from treating private patients unless he had permission from the ‘Faculty Outside Practice Sub-committee’. The Faculty had issued guidelines on this policy since October 2005. The defendant had never applied for permission.

14.  The defendant was the sole proprietor of GR and sole authorized signatory of its account.

15.  As a staff of the Faculty, the defendant should not open bank accounts under the name of any research fund to receive donations. The defendant had never declared his interest in GR throughout his employment with HKU. This was a potential conflict of interest and the defendant was under a duty to declare.

16.  The defendant is 66. He has a clear record. He is married with three children who are all professionals. After graduating from the Faculty in 1967, the defendant worked his way up to become the last elected Dean and the first appointed Dean of the Faculty from 2001 to 2007. In his 6 years as the Dean, he raised a total of about $1.4 billion for the Faculty.

17.  I am grateful for the detailed mitigation by counsel, Mr. Plowman, S.C. and Mr. Yeung, S.C.  I have no doubt that the defendant is a man of exceptional good character. Throughout his professional life, the defendant has performed various public services in boards and committees. The defendant is an academic of great international acclaim. He is the doyen in gastroenterology. His research in the field of gastroenterology and hepatology has profound effect on the treatment and prevention of duodenal ulcer and gastric cancer. He is also a conscientious and caring doctor. I would give due recognition of all this in the sentence.

18.  The defendant has repaid the full sum he embezzled in this offence on 31/8/09. Although it was only paid on the first day of the trial, I would give credit none the less.

19.   I accept that despite the offence, the well being of the patients was not compromised, nor was there any financial loss to any of them. Counsel further asked me to consider the massive fall from grace and the inevitable disciplinary proceedings that would follow. I do bear this in mind in sentencing.

20.  In HKSAR v Shum Kwok Sher, (2002) 5 HKCFAR 381，Mason NPJ agreed that the object of this offence as follows,

“Official misconduct is not concerned primarily with the abuse of official position for pecuniary gain, with corruption in the popular sense. Its object is simply to ensure that an official does not, by any willful act or omission, act contrary to the duties of his office, does not abuse intentionally the trust reposed in him.”

21.  Given the defendant’s position, this court expects the highest standard of integrity. Regrettably, the conduct of the defendant is a serious breach of trust owed to his patients, the Faculty, and the HA.

22.  The summary of facts reveals that the offence continued for a period of over three years. Not only that the defendant took the money for his personal use, he used the letterheads of the Faculty and QMH to mislead the patients and the donors repeatedly.  When the matter was under internal enquiry, he even attempted to cover up his misconduct by persuading Mr. Kwok to change his complaint. I take a serious view about this.

23.  Further, the defendant claimed that part of the embezzled sum was used to maintain the network in his position. He bent the rule to create flexibilities. I do not find this convincing in view of the large sum involved. Disappointingly, the defendant gives no further explanation whatsoever.

24.  Misconduct in public office is a serious offence. There is no tariff for sentencing. In my view, each case depends on the individual facts. The norm is immediate custodial sentence.

25.  I am grateful to counsel in drawing my attention to several authorities. The sentencing principles set down in these authorities are helpful. However, the facts of these authorities were not comparable with the instant case.

26.  In assessing the starting point, I also bear in mind the tariff case in breach of trust, HKSAR v Cheung Mee Kiu, [2006] 4 HKLRD 776 [3]. The penalty in a case of breach of trust, involving 3 to 15 million dollars, should be 5 to 10 years imprisonment. In the instant case, the total sum embezzled was about $4 million.

27.  Having considered all the above, I take five years as the starting point. I deduct 20 months for his plea. I also deduct 6 months for the full restitution. To acknowledge his positive good character, I give 9 months further reduction. In total, the defendant has to serve 25 months imprisonment.

28.  I have considered the criminality of this case and the personal background of the defendant, there is no exceptional circumstances which justify suspending the sentence.

[1] This is the amended 31^st charge. The other charges are left on file.

[2] See Annex to the Summary of Facts.

[3] As revised in HKSAR v Ng Kwok Wing, CACC 398/2007.