HKSAR v. LUK CHUNG YEE JIMMY

HCMA1170/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.1170 OF 2002

(ON APPEAL FROM ESCC 2269 OF 2002)

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J U D G M E N T

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1. This is an appeal against sentence only.

2. The appellant was convicted on his own plea of 11 offences of procuring an entry in a bank record by deception, contrary to section 18D of the Theft Ordinance, Cap.210 (being charges 3 to 13), and of one offence of using a false receipt, contrary to section 73 of the Crimes Ordinance, Cap.200 (being charge 14). The offences occurred over a period of 13 months from August 1998 to August 1999 inclusive.

3. The facts of the case were that each offence represented a monthly payment by the Government of Hong Kong Special Administrative Region to the appellant, a civil servant, of a housing allowance to which each civil servant of a certain rank is entitled given certain conditions. Those conditions include a requirement that the actual residential rent paid by the civil servant is at least of a certain level, about half, of the allowance paid. If the actual rent paid falls below that level, then the housing allowance is required to be reduced.

4. In the present case, after joining the housing allowance scheme and initially correctly complying with the conditions of the scheme, the actual rental payments of the appellant fell on two occasions as a result of the appellant's landlord reducing the rent in respect of the rented premises and on a further occasion when he moved to new premises at a cheaper rent. The appellant did not report his reductions in rent payments to the Government, and as a result, continued to wrongly receive the full amount of his original housing allowance each month.

5. Each charged occasion involved amounts ranging between $5,000 and $15,000 of monthly overpayments of housing allowances to the appellant with the exception of the 14th charged offence which concerned the production by the appellant of a false rental certification by his original landlady with which he attempted to cover up his offences. A total overpayment of $104,000 was obtained by the appellant.

6. In respect of all the offences, the appellant was sentenced to eight months' imprisonment after the magistrate had taken a starting point of 12 months' imprisonment and discounted each offence for his pleas of guilty. So far as the sentences relating to the offences the subject of charges 10 to 12 were concerned, the magistrate ordered four months only of those sentences to be served consecutively. All other sentences were ordered to be served concurrently. That resulted in a totality of sentence of 12 months' imprisonment.

7. Miss Draycott on behalf of the appellant argues these sentences were too severe. She has two complaints in that regard. Firstly, she says each sentence was itself too severe and secondly that all sentences in any event should have been ordered to run wholly concurrently.

8. So far as the severity of the individual sentences is concerned, as I understand Miss Draycott's argument it is two-fold. She says the starting point of 12 months' imprisonment taken in respect of each offence is too high and that the magistrate additionally failed to give sufficient credit to the mitigation available to the appellant.

9. In respect of the starting point of sentence, the magistrate said this :

"These are very serious offences. Not only was the Appellant in breach of the general trust reposed in him by his employers, he was in fact defrauding all the taxpayers. The normal sentence for these offences is between 12 to 15 months. I took into consideration the Appellant's remorse, his promise to make restitution, the fact that he was originally unaware of the terms of the HFS, I adopted the lower starting point of 12 months for each charge. I gave him full credit for his guilty plea. His sentence was reduced to 8 months on each charge."

10. I am not sure what the magistrate had in mind by the use of the word "normal", but I take it she meant that a starting point of 12 months' imprisonment was appropriate given the overall facts of the scheme of fraud she was dealing with.

11. As I say, the effective overpayment to the appellant each month varied between $5,000 and $15,000. By adopting a uniform starting point of sentence of 12 months' imprisonment in respect of each charged offence, although the actual amount dishonestly gained by the appellant varied during the period of the offences, the magistrate obviously took a starting point of sentence in respect of each offence with a global eye on the overall culpability of the appellant. This must be so because a starting point of sentence of 12 months' imprisonment for the theft of an individual amount of, say, $5,000, would in the circumstances of this case be too severe. The magistrate obviously took into account in determining that the starting point of each sentence should be 12 months' imprisonment, the fact that each offence represented a continuing fraudulent scheme and involved, when taken together, a significant breach of trust involving the dishonest obtaining of some $104,000.

12. In other words, the magistrate must have looked at the overall culpability involved in the scheme of offending in selecting identical starting points of sentence for each offence including the last charged offence relating to the falsified receipt.

13. I do not think any complaint can be made of that approach where, in a case such as the present, each offence forms part of a continuing and repeated scheme of offending. Indeed, in such cases where numerous similar charges are laid with perhaps arbitrary differences as to amounts of money obtained or other particulars, it is the only realistic way of proceeding.

14. Having regard to the overall culpability of the appellant in this case, I do not think the individual starting point of sentence can be said to be too high.

15. For one thing, the scheme of offending continued for more than a year. The fact of there being such a scheme was without doubt an aggravating factor. A further aggravating factor was the breach of trust involved. A civil servant defrauding the Government of Hong Kong Special Administrative Region by abusing the financial benefits provided to him by his conditions of employment as a civil servant represents a significant breach of trust. In this regard, Miss Draycott referred me to two review cases : Secretary for Justice v. Leung Yat Ming and Another, CAAR9/1998 and Secretary for Justice v. Lin Min Ying and Another, CAAR7/2001, where senior university and polytechnic staff who had perpetrated the same fraud as the present appellant, and indeed on a view of their facts, worse frauds, had escaped custodial sentences. The magistrate in the present case considered those cases in her Reasons for Sentence but, at the end of the day, did not regard them as persuading her that either non-custodial sentences should be applied in the present case, or as persuading her a lower starting point of sentence should be adopted.

16. I do not think she misunderstood the judgments in those cases as alleged before me in any material respect. She was right to regard the non-custodial sentences imposed in those cases as "lenient" and "merciful", to use the words of the Court of Appeal. She was in no way bound to impose non-custodial sentences in the present case on the basis of anything said in those judgments. I think she was entirely right to take the view, given the breach of trust and amount involved in the present scheme of fraud, that in the present case a custodial sentence was appropriate and that a 12 months starting point was also appropriate in respect of each individual offence.

17. Indeed, given the aggravating factors in the present case, that starting point of sentence could have been somewhat more. But as the magistrate said, by adopting a slightly lower starting point than she would otherwise have done, she took into account the fact that the appellant initially had not set out to abuse the housing allowance scheme, but by his inertia had not brought his rental reductions to the attention of the Government and had continued, albeit knowingly, to reap the benefits of the full allowance paid to him. The magistrate's starting point of sentence of 12 months' imprisonment taken in respect of each offence, as I say, cannot be criticized.

18. The second complaint of Miss Draycott in respect of each individual sentence is that insufficient consideration was given by the magistrate to the appellant's personal circumstances advanced on his behalf in mitigation. Those matters were fully ventilated before the magistrate. They concerned essentially his family difficulties and problems in settling back into Hong Kong after spending many years in Canada. There was nothing exceptional in the appellant's difficulties. Many people in Hong Kong have undergone similar experiences. The magistrate was entitled to, and in my view was right to give them no weight as mitigation.

19. The final complaint of the appellant is that the sentences in respect of the offences subject to charges 10 to 12 should not have been made partly consecutive to the other sentences imposed.

20. Miss Draycott says there was no good reason for the magistrate not to have ordered these sentences to run wholly concurrently with all other sentences imposed. In this regard, the magistrate said that :

"The sentences for charges 10 to 12 should technically be consecutive."

She did not explain why that was so. Nor did she explain what she meant by "technically". But it appears the magistrate took this view because in February 1999, the appellant terminated his lease with his existing landlady and moved into new and cheaper premises as of March 1999 (which related to the commencement of the period covered by charges 10 to 12). In the magistrate's view, this was an opportunity to terminate his scheme of fraud but the appellant did not do so. That meant, according to the magistrate, that some part of the sentences of the following three offences (i.e. charges 10 to 12) should be served consecutively to the other sentences.

21. I do not see the logic of this with respect. The appellant could have terminated his scheme of fraud at any time. The fact that he did not do so on the occasion when he moved flats but allowed the scheme to continue does not, in my view, mean that consecutive sentences would be more appropriate than otherwise. He made no further misrepresentation at that time. The scheme of fraud simply continued as before.

22. Further in my view, no consecutive sentences should have been imposed at all if I have understood correctly the magistrate's reasoning in adopting the starting point of sentence that she did. That is because if the magistrate has taken into account the overall criminality of the scheme of fraud in adopting the starting point of sentence for each offence that she did, then no further consideration of totality was required. It had already been incorporated into the sentences imposed.

23. Accordingly, unless there is good reason not to do so, all sentences in this case should run concurrently.

24. In my view as I say, the fact that on the occasions of the 10 to 12 charged offences, the appellant could have terminated the scheme of fraud but did not do so is not such good reason. That means that, in the absence of any such good reason, all sentences should have been ordered to run concurrently.

25. For these reasons, the appeal against sentence is allowed to this extent; that all sentences imposed by the magistrate in respect of the offences are ordered to be served concurrently. That is a totality of eight months' imprisonment.