HKSAR v. LUK YIU KWONG, JOHN

CACC122/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 122 OF 2009

(ON APPEAL FROM DCCC NO. 577 OF 2008)

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JUDGMENT

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Hon Saw J (giving the judgment of the Court):

1. On 25 March 2009 the applicant pleaded guilty to two charges of furnishing false information, contrary to section 19(1)(b) of the Theft Ordinance, Cap.210 and two charges of fraud, contrary to section 16A of the same Ordinance.  Two other charges of furnishing false information and one other charge of fraud were ordered to be left on the court file and not to be proceeded with without the leave of the court. 

2. The judge sentenced him to be imprisoned for 1 year and 8 months on each charge from a starting point of two years and 6 months and ordered that those sentences be concurrent one to the other.

3. This is his application for leave to appeal sentences.

The background

4. In March 2005, the applicant obtained employment with a travel agency, Vigor Travel Company Limited (“Vigor”).  He was the assistant manager.  His duties included not only dealing with customers but also the issuing of invoices and the collection of payments from customers.  The method of payment by Vigor’s customers included direct transfers into Vigor’s bank account.

5. When Vigor’s customers made payments to the applicant, he was required to hand to the proprietor of Vigor, a Miss Lo Fong (“PW1”) any cash payments received on Vigor’s behalf and in the case of direct transfers the pay-in or transfer slip together with in each case the relevant invoice.

6. At the same time as the applicant was employed by Vigor, he was also running, unbeknown to the Directors of Vigor his own travel agency IHC. 

7. On or about 5 August 2005, the applicant handed to PW1 a faxed copy of an ATM customer advice and a copy of Hang Seng Bank account deposit slip which purported to show a transfer of $39,422 and a deposit of $19,398 into Vigor’s Hang Seng Bank account being payment for two invoices in the sums of $32,160 and $31,960 in the name of Woon Tsz Man and Woon Tsz Chung respectively.

8. As it transpired a Mr Woon Wayne Guy had purchased from the applicant’s company IHC six return tickets from Hong Kong to Manchester in the names of his two children, Woon Tsz Chung and Woon Tsz Man.  He had paid IHC by cheque and received a receipt in the post.

9. It was subsequently determined that those six tickets had been in fact ordered on Vigor’s account from the airline agent and the documents produced by the applicant to PW1 were false.  This was Charge 1.

10. On or about 2 November 2005, the applicant handed to PW1 a faxed copy of an ATM customer advice which purported to show that $12,066 had been transferred to Vigor’s Bank account as payment in respect of three invoices issued to a company named Compass Business Solutions Limited (“Compass”).  Vigor’s Bank statement revealed that no such transfers had been made. 

11. The proprietor of Compass had purchased air tickets from time to time through the applicant.  On some occasions he was invoiced by Vigor and on others IHC.  In September 2005 he purchased two tickets for staff members and was invoiced by IHC.  He paid the amount of the invoice by a cheque payable to IHC (one ticket was subsequently cancelled and the amount duly refunded by IHC).  Both of these tickets had been ordered on Vigor’s account with the airline agent.  This was Charge 3.

12. Charge 4 was a charge of fraud, contrary to section 16A of the Theft Ordinance, Cap.210.  What happened was that one of Vigor’s customers sent a cheque in payment of an invoice for an air ticket for one of its senior executives.  The amount of the cheque was $33,950.  Instead of being given to PW1 in payment of the relevant invoice, the applicant misrepresented to her that it was for the payment of five other unrelated invoices.  In consequence of which the invoice which the cheque was provided to settle therefore remained unpaid.

13. Insofar as Charge 7 was concerned, the particulars were similar to those in Charge 4.  The applicant handed to PW1 a Bank of China customer’s advice in respect of the deposits of a cheque for $5,441 (amongst other deposits) to settle a Vigor’s invoice.  As with Charge 4 the invoice settled was not in fact that of the person who wrote the cheque.  That invoice remained as a consequence unpaid.

14. The amount involved in the 4 charges to which the applicant pleaded guilty was $91,533.  By the date the applicant was sentenced almost the whole of this had been repaid to Vigor.

This application

15. On behalf of the applicant Mr Jackson Poon advances two grounds of appeal, namely :

(1)     that the judge was in error when he adopted a starting point for sentence of 2 years and 6 months’ imprisonment; and

(2)     the judge failed to give any sufficient credit for the fact that the applicant had made substantial restitution to his former employer.

Ground 1

16. Insofar as Ground 1 is concerned, Mr Poon submits that the starting point for sentence was not in accordance with the guidelines that this court has laid down in HKSAR v. Cheung Mee Kiu [2006] 4 HKLRD 776, 781 where the suggested sentences in R. v. Clark [1998] 2 Cr.App.R. 137 were modified to reflect the nature and circumstances of this type of offence in Hong Kong.

17. The instant case is a typical breach of trust case where the applicant took advantage of the trust placed in him to defraud his employers.  The Court of Appeal in Cheung Mee Kiu said this :

“22.   The principles laid down in R. v. Clark [(1998) 2 Cr. App. R. 137] remain applicable in Hong Kong.  However in order to avoid the unsatisfactory result of the bands changing with fluctuating exchange rates, we take this opportunity to convert the Clark bands into Hong Kong dollar bands to be adopted in future cases of a similar nature.  We set the following guidelines :

18. The loss in the instant case was slightly in excess of $90,000.  The starting point for sentence of 2 years and 6 months exceeds that which is recommended by those guidelines.

19. Mr Beney Wong of the Department of Justice accepts that in this regard the judge has fallen into error.  We agree.  The appropriate starting point for sentence, in all of the circumstances, should have been 21 months, and allowing a one-third discount for the applicant’s plea of guilty the appropriate sentence on each charge should have been 14 months’ imprisonment, leaving aside the question of restitution.

Ground 2

20. Mr Poon submits that the judge was in error in not increasing the discount from the starting point for sentence to reflect the fact that there has been substantial restitution by the applicant.  He submits, in reliance upon the decision in HKSAR v. Leung Shuk Man [2002] 3 HKC 424, that an increase in the discount is required in all cases where there has been substantial restitution.

21. Mr Poon refers us to the following passages in the judgment in Leung Shuk Man :

“13.   However, there is, as Mr McGowan indicated, one other factor which has to be taken into consideration.  Even before the Appellant was charged, she repaid the whole of the sum she had stolen as the judge recognized in his sentencing remarks.  But despite this, the judge unfortunately, perhaps because of oversight, made no reference to this as a powerful factor in mitigation which justified a reduction in sentence beyond the usual one-third in order to reflect the compensation the Appellant had paid to her victim.  If the situation were otherwise, and a specific discount was not given for the payment of compensation or restitution, there would be no advantage to an offender who has repaid some or all of the ill-gotten gains to the victim, over and above the one-third discount the offender could necessarily expect to receive for a timely plea of guilty.

14.     There are, of course, no guidelines as to precisely what discount should be given where compensation for a victim’s losses has been paid or partially paid.  The circumstances of each case will obviously vary.  A sensible use of the sentencer’s discretion will normally enable the offender to receive an appropriate discount.  In a case such as the present one, particularly where full repayment has been made, a significant discount, above and beyond the usual one third for plea, should plainly be given.”

22. What is immediately apparent is that when the degree of criminality of an accused is significant as it is in this case and the amount of loss suffered by the victim is relatively low as it is in this case, to significantly increase the discount from a starting point recommended in Cheung Mee Kiu may result in a sentence which is manifestly inadequate.

23. This is such a case.

24. Nevertheless, there must be some recognition for the restitution and we will allow a further discount of 2 months from the 14 months’ sentence which we have indicated would be appropriate.  

25. In the circumstances we allow the appeal to the extent that the sentence on each charge is reduced from 20 months’ imprisonment to 12 months’ imprisonment.