HKSAR v. HO HON CHUNG DANEL AND OTHERS

CACC 350/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 350 OF 2002

(ON APPEAL FROM DCCC NO. 626 OF 1999)

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REASONS FOR JUDGMENT ON SENTENCE

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Hon Woo VP (giving the reasons for judgment of the Court):

Background

1. By our judgment handed down on 17 June 2004, we allowed the appeal against conviction on Charge 1 that relates to A1 and A2. As a result, it was necessary for us to deal with the appropriate sentence for these two applicants. On 17 June 2004, the applicants through their counsel made known to the Court that they wished to apply for leave to appeal against sentence out of time, and their counsel addressed us on sentence generally without limiting their submissions to the consequence of our partially allowing the appeal against conviction mentioned above. We made directions for the further conduct of the hearing. In accordance with our directions, the applicants subsequently filed their applications for leave to appeal against sentence out of time. They also filed their submissions in writing. The respondent responded with its written submissions.

2. On 29 June 2004, after hearing counsel for the applicants further and counsel for the respondent, we granted leave to the applicants to appeal against sentence out of time, and we allowed their appeal by ordering that each of the three applicants serve a sentence of 18 months' imprisonment, in the following manner. The sentence of 21 months' imprisonment imposed by the trial judge, Deputy District Judge Mackintosh ("the Judge"), on Charge 3 was substituted by a sentence of 18 months' imprisonment. For each of Charges 2, 4 and 5, the sentence of 18 months' imprisonment imposed by the Judge was substituted by a sentence of 15 months' imprisonment. All the sentences were to run concurrently. Our orders for sentence applied to each of the applicants. We announced that we would give our reasons later. They appear below.

The effect of our judgment of 17 June 2004

3. The three applicants jointly faced a total of 5 charges, on which they were convicted by the Judge after trial. Charge 1 was against A1 and A2 only, Charges 2, 3 and 4 were against all three applicants, whilst Charge 5 was against A2 and A3 only. Only the conviction in respect of Charge 1 was quashed by our judgment of 17 June 2004. The inevitable result will be that the sentences imposed by the Judge on A1 and A2 for Charge 1 have to be set aside.

The trial judge's reasons for sentence

4. In the Reasons for Sentence delivered by the Judge on 9 July 2002, he took into account the clear records of each of the applicants, their particular personal circumstances, and the fact that they had admitted a significant part of the prosecution's case that had, doubtless, shortened the trial. He continued:

"19. The most serious of these charges is Charge 1 because it involves the production lines themselves used for the making of these infringing copies. Charge 3, the stampers charge, is also serious because these stampers are the means by which the infringing material is put onto the discs. The other charges of making and processing [possessing ?] the infringing discs are consequential upon that. I can see no reason to distinguish D1 and D2. There is a basis for distinguishing you, D3, because you do not appear on the 1st charge and you appear to have played a somewhat more limited role in the enterprise.

20. The sentences I impose will all be concurrent. I have of course had regard to the totality of those sentences. They are these:

21. On Charge 1, D1 and D2, the sentence is one of 21/2 years' imprisonment.

22. On Charge 3, the stampers charge, in respect of each defendant the charge (sentence?) is 21 months' imprisonment.

23. On Charges 2, 4 and 5, the sentence in respect of each defendant will be one of 18 months' imprisonment.

24. All those sentences are concurrent, therefore making sentences of 21/2 years for D1 and D2 and 21 months for D3."

5. We agree with the Judge that for the reasons that he gave, the most serious of the charges is Charge 1. Since the conviction on that charge against A1 and A2 has been quashed, we consider it fair and just to follow the approach adopted by the Judge.

6. While the Judge intimated that A3's role was a somewhat more limited one than that played by A1 and A2, we consider that the comment was mainly caused by A3 not being involved in Charge 1. Since we have allowed the appeal against the conviction on Charge 1, we do not see any justification to distinguish between the criminality of A1 and A2 on the one hand and A3 on the other. Upon this basis, we proceed with the rest of these reasons.

The reasons for the delay in applying

7. In respect of the delay in the applicants' applications for leave to appeal against sentence, Mr Tse, for the respondent, refers us to HKSAR v Leung Yiu Ming & Anr [2000] 1 HKLRD 247, where Nazareth VP stated at pp 249G-250B as follows:

"... in R v Wong Kai Kong [1990] 1 HKC 279, ... Silke VP, having addressed certain authorities, said this at p. 281B-D:

The proposition emerges from those authorities that it is open to this Court to take that which Hunter JA in Ip Chung Hang described as an "unusual course", that the court look at the grounds of appeal to see if they seem to its members to be impressive and to check:

That by refusing leave to appeal, we were not shutting out a substantial and plainly arguable ground of appeal.

In this exercise, this Court should bear in mind that substantial grounds must be shown for the delay before the granting of the indulgence. The longer the delay, the more onerous is the duty of the person making application ...

As to the delay in making their applications, as we have already noted, the applicants had good reason. We turn then to whether their grounds appear to us to be impressive and to check whether by refusing leave to appeal we may be shutting out a substantial and plainly arguable ground of appeal."

8. The reasons given by all the applicants for the delay of their applications are more or less the same. We will consider that anything that is raised by one as applicable to the others so that each of their cases is seen in the light most favourable to him. They were all advised by their respective legal advisers that they had merits in their defence at the first trial and at their retrial, and later after they were convicted by the Judge, they were advised that they had very strong grounds of appeal against conviction. Their belief in that advice was reinforced either by their success in obtaining an acquittal at the first trial or by their success in obtaining bail pending appeal after the second trial. They therefore did not make any application for leave to appeal against sentence. They did not specify the logical connection between the strong grounds against conviction and their not applying for leave against sentence. The utmost that can be said on their behalf is that the strength of the application relating to conviction or their belief in that strength made it unnecessary for them to make any application against sentence. This is not the same as saying that there was merit in an application against sentence, but only that they were lulled into a sense of security that no matter how they were dissatisfied with the sentences imposed on them, they needed not act further than merely relying on their application to appeal against their convictions which they firmly believed was most likely to be successful. However, the affirmations of the applicants in support of the applications against sentence did not state this specifically or clearly as the reason for their delay in making their applications. More probably than not, the applicants had not made any application against sentence because it never occurred to them or their legal advisers that they should do so. There was nothing to indicate that they were dissatisfied with the sentence up to 17 June 2004 when this Court sought to deal with sentence as a consequence of allowing the appeal against the conviction on Charge 1.

9. Be that as it may, we consider that the determining factor for leave to be granted or otherwise must be whether there is any substantial and plainly arguable ground of appeal against sentence.

The grounds of appeal

10. On behalf of A2 and A3, Mr Macrae SC mainly raises three matters to urge us that the sentences should be reduced to such an extent that the applicants should be released straightaway. Mr Li, for A1, adopts Mr Macrae's submissions, and further raises a ground, which can be conveniently disposed of first.

11. The ground raised by Mr Li is that A1's sentence should be reduced to reflect his lesser culpability in the light of our finding that A1 did not have a copy of Exh P22. This ground is misconceived. We held that the Judge has made a mistake in treating the applicants as having had possession or sight of Exh P22, the licence agreement between Warner Brothers and KPS. See paras 51-55 of our judgment dated 14 June 2004. That was one of the reasons why we held that, without the applicants' knowledge of the contents of Exh P22, the prosecution failed to prove that the applicants had knowingly used the machines under Charge 1 to make infringing copies, despite their admission that the VCDs were infringing copies. Exh P 22 related to mens rea and not culpability and that is why this ground is misconceived.

Good character for lowering the starting point

12. One of the matters raised by Mr Macrae is that the Judge had wrongly taken into account the mitigating factor of previous good character to fix the starting point for sentence. Mr Macrae refers us to the proper and usual practice in sentencing of using a starting point to reflect the proper sentence to be passed before the application of such a mitigating factor to reduce the sentence from the starting point, as can be seen in HKSAR v Wong Lou-tak [1998] 2 HKC 607 at 608-G and 610 F-G, and HKSAR v CHIM Pui-chung, Cr App No. 402/1998 at p 53. In the latter case, this Court, differently constituted, pointed out:

"This court has indicated on a number of occasions that a starting point should be indicated when sentencing so that it can be seen on appeal whether credit given for mitigating factors was properly assessed."

13. In the present case, when the Judge said that he had taken into account the clear records of the applicants as a factor in fixing the starting point for sentence it would have the effect of concealing at least two matters, namely, the starting point adopted for the offence and the precise effect that the mitigating factor had on sentence.

14. While we agree with Mr Macrae that the Judge erred in this respect, we do not see how this error of the Judge could be of any use to Mr Macrae in support of his contention that the sentence imposed by the Judge was either wrong or excessive. The Judge had expressly stated that he had taken into account the clear records of the applicants in fixing the starting point. Assuming that the credit given for the clear records was a reduction of 3 months' imprisonment from the starting point, and this assumption could not, in our view, be said to be anything but fair, what is important is for us to decide whether the starting point adopted by the Judge, with an addition of 3 months' imprisonment, was either wrong in principle or manifestly excessive.

15. The starting point adopted by the Judge for Charge 1 was 21/2 years' imprisonment. Adding 3 months to the starting point would make the term 2 years 9 months. But we are no longer concerned with Charge 1 as we have allowed the appeal against conviction on this charge.

16. The starting point adopted by the Judge in respect of Charge 3 (the stampers charge) was 21 months' imprisonment, which by adding 3 months would become 24 months. The starting point for each of Charges 2, 4 and 5 adopted by the judge was 18 months' imprisonment. Adding 3 months, this would become 21 months' imprisonment. We will return to the propriety of these increased sentences below.

The sentencing cases decided after the event

17. Mr Macrae argues that the two cases relied on expressly by the Judge when sentencing were cases that had been decided after the events given rise to the charges against the applicants in the present case. Therefore, it is submitted that the cases were inappropriate for assessing the proper sentence to be imposed on the applicants.

18. The two cases referred to by the Judge were Secretary for Justice v Wong Dak-sun & Ors, CAAR 10/1999 (22 August 2000, unreported) and Secretary for Justice v Choi Sai Lok & Anor [1999] 4 HKC 334 which was decided on 8 September 1999. It is true that both of these cases were decided after the events given rise to the charges against the applicants in the present case, ie 1 and 4 August 1998. However, as Mr Tse has submitted, there were older decisions, such as R v Ng Wai Ching, HCMA 1309/1996 (20 December 1996, unreported) and R v Li Wan Kei, Cr App No. 13/1997 (29 May 1997, unreported) where the courts said that for infringement of copyright offences deterrent custodial sentences were called for. Moreover, Wong Dak-sun and Choi Sai Lok respectively dealt with offences committed in 1997 and up to April 1998, which pre-dated the offences that the applicants committed in August 1998.

19. Keith JA in Choi Sai Lok narrated the statutory development on sentence as well as a summary of cases on sentence up to the time of that decision. This can be found at pages 336E-337C and 340E-H as follows:

"The statutory provisions

The section under which the charges were laid was s 118(1)(d) of the Copyright Ordinance (Cap 528). It provides as follows:

A person commits an offence if he, without the licence of the copyright owner ..., ... possesses for the purpose of trade or business with a view to committing any act infringing the copyright ... an infringing copy of a copyright work.

That Ordinance came into force in June 1997, and replaced an earlier Copyright Ordinance (Cap 39) which had been enacted in 1973.

When the original Ordinance had been enacted, the maximum sentence for the offence equivalent to s 118(1)(d) of the new Copyright Ordinance was a fine of $1,000 in respect of each infringing copy and imprisonment for 12 months. In those days, the imposition of fines tended to be the norm. The maximum was increased in May 1995 when the old Copyright Ordinance was amended. From then on, the maximum sentence for the offence equivalent to s 118(1)(d) of the new Copyright Ordinance was:

(a)	in the case of a first conviction for such an offence, a fine at level 4, ie $25,000, for each infringing copy and imprisonment for 2 years, and
(b)	in the case of a second or subsequent conviction for such an offence, a fine at level 5, ie $50,000, in respect of each infringing copy and imprisonment for four years.

The maximum sentence was again increased in June 1997 when the offence created by s 118(1)(d) of the new Copyright Ordinance was enacted. The distinction between first and subsequent offences has disappeared, and by s 119(1), a person who commits an offence under s 118(1)(d) is liable to a fine at level 5, ie $50,000, in respect of each infringing copy and to imprisonment for four years. Offences relating to the manufacture of equipment for making infringing copies are punishable with a fine up to $500,000 and imprisonment for eight years.

These increases in the maximum sentences reflect the escalating gravity with which offences under s 118(1)(d) have come to be viewed. The message is a clear one. ..."

"The appropriate sentences

... A total of eight cases have been referred to us by Mr Kevin Zervos for the Secretary for Justice in his helpful skeleton argument. All of them resulted in custodial sentences of immediate effect being imposed, though that does not mean that there have not been other cases in which non-custodial sentences or suspended terms of imprisonment have been imposed. Half of the cases cited by Mr Zervos related to offences committed before the enactment of the new Copyright Ordinance, and the other half related to offences committed since then. Some of them concerned the proprietors of retail outlets of varying sizes, while others concerned young men who worked at such outlets as salesmen. One of the defendants ran a warehouse at which the proprietors of various retail outlets kept their stocks so that they did not have to have pirated compact discs in their shops. None of these cases concerned storemen, packers or delivery men. In almost all the cases, the defendants had pleaded guilty, and apart from two young offenders who were ordered to be detained in a detention centre, the sentences of imprisonment ranged from six months' to 16 months'."

20. It can therefore be seen that even for cases prior to Choi Sai Lok, the sentences imposed by the courts for copyright offences ranged from 6 months to 16 months of imprisonment. But this range of sentences related to persons playing a less significant role in the offences.

21. In Choi Sai Lok, the 1st respondent was charged with possession of 719 infringing copies and the 2nd respondent was charged with possessing a total of 23,607 infringing copies. Both respondents pleaded guilty. The Court of Appeal considered that the correct starting point in respect of the 1st respondent would have been 12 months' imprisonment and that in the case of the 2nd Respondent would have been 18 months' imprisonment (see p 341F). It has also to be noted that the prosecution in that case did not challenge the allegations of the respondents that they were working for another person at the wage of $350 per day for delivering the infringing copies.

22. In Wong Dak-sun, the defendants did not plead guilty. They were found to be in possession of 24,330 infringing copies. The review involved D3, D5 and D6 in that case. The Court of Appeal considered that in relation to the possession charges alone, a sentence of 18 months' imprisonment for D3, 9 months' imprisonment for D5 and 13 months' imprisonment for D6 were appropriate. In this regard, the Court of Appeal took into account that

"D3 was a director and shareholder of D1 and he was effectively the man in charge. D5 was the general manager and D6 was a manager with a 'hands-on' role to play." (p 12 of the judgment)

23. While Wong Dak-sun and Choi Sai Lok were decided after the applicants in our present case had been arrested in August 1998, the sentences in those two cases considered to be appropriate by the Court of Appeal were in line with the sentences in the previous cases referred to in Choi Sai Lok.

24. Both Wong Dak-sun and Choi Sai Lok involved less than 30,000 infringing copies whereas the instant case before us involved the possession of over 92,000 infringing copies and 5 stampers.

25. In all the circumstances of the present case, we consider that the starting point of 24 months for Charge 3 (relating to the 5 stampers) and that of 21 months relating to other possession charges cannot be said to be inappropriate or in any way excessive.

26. Mr Macrae relies on what is stated at p 3 of Wong Dak-sun that "an even greater significance lay in 'the diversity of the titles involved'." He relies on the fact that by our judgment of 14 June 2004, we have struck out the two New Line titles from the particulars of Charge 4 to say that some reduction in sentence should be accorded to this reduction of two titles from a total of 12 titles involved in the present case, although the number of diminution in infringing copy was only 120 out of 92,000. Due to the small proportion of their effect, we are not persuaded that the deletion of the New Line titles should be reflected in the sentences in this case.

27. We are not persuaded that the sentences should be altered on the basis of the above matters raised by Mr Macrae.

Long and chequered history of this case

28. The last ground raised by Mr Macrae is a complaint against para 17 of the Judge's Reasons for Sentence, which stated:

"17. The fact that these are old offences is, I have to say, no mitigation at all. The reality is that you have denied your guilt but you are now convicted. The fact that your case has been to the Court of Appeal after an earlier acquittal does not, in my judgment, amount to any mitigation of your position. At all times you have had the opportunity, but not the inclination, to plead guilty."

29. Mr Macrae submits that the long and chequered history of this case merits a lenient view to be taken by this Court and justifies a reduction of sentence. He refers us to R v Davis (20 December 2000, unreported) where the Court of Appeal in England stated as follows:

"48. There is one point which was possibly not so apparent to Judge Pitchers as it has been to us, to which we have given anxious consideration. Just as delay in a trial can lead to a reduction in sentence, should the circumstances in which this appellant was subjected to four retrials be matters which should be taken into account when considering his sentence?

49. We have ultimately concluded that the answer is that it should be. It is true that the case against the appellant was very powerful indeed. He could have pleaded guilty right from the outset and saved himself from all the problems that were encountered and received credit for that plea. But we do not think that all said the ordeal of four re-trials in his circumstances in which they occurred should [not] be reflected in a reduction in sentence."

30. The court reduced the sentence of 7 years' imprisonment to 5 years. However that reduction, we consider, was not merely for the delay in the final disposal of the case before that court, but also related to the reduction of the sentence of the co-defendant by another division of the Court of Appeal (see para 47 of the judgment).

31. Mr Macrae directs our attention to the chronology of the history of this case, set out below:

32. Mr Macrae submits that the length of time between the events given rise to the charges that the applicants faced, ie early August 1998, up to 14 June 2004, when the convictions on Charges 2 to 5 against the applicants were affirmed by this Court, a period spanning almost six years, must have adversely affected the applicants. In the course of these six years, the applicants had been arrested, bailed, tried, acquitted, case stated, retried, convicted, imprisoned, bailed, partially succeeded at their appeals, and re-imprisoned. The applicants' anguish for the matter hanging over their head was particularly accentuated by the fact that they had been acquitted once, and now they also had Charge 1 being dismissed against them, or at least against A1 and A2.

33. On the other hand, Mr Tse argues that the applicants had contributed to a part of the delay and consented to the other part of the delay. Time was given by the Court of Appeal to A1 to look for legal representation for the case stated. It took him eight months to do so after the Director of Legal Aid had refused to grant him legal aid. Counsel for A2 was unable to proceed on the day of the hearing of the case stated, resulting in the case stated being heard six months later. It was the applicants' wish to wait for the decision of the Court of Final Appeal in Tse Mui-Chun, resulting in the hearing of the application for leave to appeal against conviction to be rescheduled seven months later.

34. While A1 was certainly the creator of his own misfortune in delaying to obtain legal representation for 8 months for the case stated, we agree with Mr Macrae that in all fairness, it is not easy to find fault with the applicants for the long delay in the final disposal of this matter since their arrest in August 1998. We consider that unless the fault for all or a substantial part of the delay could squarely lay with the applicants, such lengthy delay in the final disposal of the matter with the resultant anguish hanging over their heads for such a long time does warrant a reduction in their sentence. This is one of those exceptional cases and we consider that an appropriate reduction should be to take away 3 months of imprisonment from the sentence that should properly have been passed by the Judge.

35. We should mention that delay as a mitigating factor would necessarily only warrant a relatively short reduction in sentence, for otherwise, it might give rise to a wrong idea that it would be better for a defendant to unjustifiably drag out a case in which he is eventually convicted rather than to plead guilty or to proceed to trial expeditiously.

36. Mr Tse has asked us to compare the sentences imposed by the Judge with those that were held to be appropriate by the Court of Appeal in Wong Dak-sun and Choi Sai Lok, to support his contention that the sentences in the present case were on the low side. We do not agree, for the Judge had expressly taken account of the fact that the applicants had admitted a significant part of the prosecution's case and ought to be given credit for that.

37. For Charge 3 (the stampers), the appropriate starting point should have been 24 months' imprisonment, and that for the other charges, namely, Charges 2, 4 and 5, 21 months' imprisonment. Each starting point should have been reduced by 3 months for the applicants' clear records, making the starting points 21 months and 18 months of imprisonment respectively. For the chequered history of this case and the long delay, as we said before, a further reduction of 3 months should be accorded. The resulting starting points should therefore be 18 months' imprisonment for Charge 3 and 15 months' imprisonment for the other charges. We do not find any justification to differ from the Judge's view that the sentences on all charges should run concurrently.

Conclusion

38. Since the appeal against the convictions on Charge 1 was allowed, the sentences on Charge 1 imposed on A1 and A2 must be set aside. For the remaining charges, for the reasons given above, we granted leave to the applicants to appeal against sentence out of time, and allowed the appeal by reducing the sentences on each of the applicant on the remaining charges of which he was convicted by 3 months, so that the sentence for Charge 3 is 18 months' imprisonment and the sentence on each of Charges 2, 4 and 5 is 15 months' imprisonment. The Judge's order that the sentences be served concurrently remains intact. Consequently, the sentences for the convictions against A1 on Charges 2, 3 and 4 and those for the convictions against A2 on Charges 2, 3, 4 and 5 as imposed by the Judge shall run concurrently and each of them will serve a total term of 18 months' imprisonment. Similarly, A3 will serve a total term of 18 months' imprisonment for his convictions on Charges 2, 3, 4 and 5.