HKSAR v. SO WING YIU

DCCC 166/2021

[2021] HKDC 968

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 166 OF 2021

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REASONS FOR SENTENCE

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1.  The defendant pledged guilty of a charge of knowingly deals in realisable property in contravention of a restraint order, contrary to section 15(16)  of the Organized and Serious Crimes Ordinance, Cap 455.

Particulars of Offence

2. “SO Wing-yiu, between the 27^th day of July 2018 and the 2^nd day of July 2020, both dates inclusive, in Hong Kong, knowingly dealt in realisable property in contravention of the Restraint Order made by the Honourable Mr Justice Andrew Chan dated the 27^th day of April 2018 which was extended and continued until a further order of the court by the order of the Honourable Madam Justice Pang dated the 23^rd day of July 2018 under the Court of First Instance Miscellaneous Proceedings (Criminal)  No 220 of 2018, namely a total of $442,270.47 Hong Kong currency in the bank account numbered 041-247-20-607109-4 held in the name of the said SO Wing-yiu with Chong Hing Bank Limited.”

Summary of Facts

3.  Defendant is a retired police sergeant.  In February 2018, the defendant was charged with one count of “engaging in bookmaking” and seven counts of “money laundering” (DCCC 275/2018 refers).

4.  After the charges were laid against the defendant, the Secretary for Justice applied for an ex parte Restraint Order against the defendant. On 27 April 2018 pursuant to section 15 of the Organized and Serious Crimes Ordinance, Cap 455 to prohibit him from dealing with any of his realisable property in Hong Kong or elsewhere (“Restraint Order”).  The application was granted by the Honourable Mr Justice Andrew Chan on the same day.  The realisable property of the defendant known to the police at that time was the bank balances of four HSBC accounts under his name.  The Restraint Order was duly served to the defendant in person on 8 May 2018.

5.  On 20 July 2018, the Secretary for Justice and the then solicitors for the defendant filed a consent summons to seek an order by consent to extend and continue the effects of the Restraint Order until a further order of the Court.  The application was granted by the Honourable Madam Justice Pang on 23 July 2018 (“Continuation Order”).  An ICBC account held in the name of the defendant (“A/C 1”)  which was opened in July 2011 and used by the defendant to receive his pension and old aged allowance was explicitly included in the Continuation Order.

6.  On 8 April 2019, the defendant pleaded guilty to all the charges in DCCC 275/2018.  He was sentenced to a total of 45 months’ imprisonment.

7.  Subsequent to defendant’s conviction, the prosecution applied for a Confiscation Order against the defendant pursuant to section 8 of OSCO.  During the preparation of the confiscation proceedings, the police discovered that the updated balance of A/C 1 was only HK$410.85. 

8.  Investigation revealed that on 31 July 2018, the defendant attended the Pensions Enquiry Office and Social Security Field Unit in person and requested to change the receiving account for his pension and old aged allowance from A/C 1 to A/C 2. 

9.  Fund flow analysis on A/C 2 revealed that:-

(a)  it was opened on 27 July 2018, 4 days after the Continuation Order was granted;

(b)  Between 27 July 2018 and 2 July 2020, there were deposits totalling HK$518,821.30 (consisted mainly of pensions and old aged allowance);

(c)  During the same period, there were withdrawals totalling HK$442,270.47 that consist of:-

(i)  84 ATM cash withdrawals totalling HK$377,500;

(ii)  72 autopay withdrawals totalling HK$63,385.47 for payment of insurance policies in the name of D and his wife; and

(iii)  a transfer withdrawal of HK$ 1,385;

(d)  ATM cash withdrawals from A/C 2 were being observed even when D was serving sentence:-

(i)  a transfer withdrawal of HK$1,385 on 4 October 2019; and

(ii)  16 cash withdrawals totaling HK$112,000.

10.  On 31 July 2020, a Confiscation Order was granted against the defendant in DCCC 275/2018 ordering him to pay HK$1,585,129.84 to the Hong Kong Government.  Since the whereabouts of the HK$442,270.47 remains unknown, such sum had not been included in the amount of the Confiscation Order.   The Confiscation Order has been duly paid.

11.  On 20 August 2020, the police arrested the defendant for the present offence.  Under caution, the defendant had nothing to say.

Criminal Record

12.  The defendant had one previous court appearance in August 2019 and he was convicted for 7 counts of money laundering, 1 count of engaging in bookmaking, severing a total sentence of 45 months.

Mitigation

13.  The defendant is now 74 year old.  He is married, with 4 adult children. He also has grandchildren.  He retired as a police sergeant in 1994.  He then operated a restaurant in mainland China with his business partners.

14.  There are a number of mitigating letters from his relatives and family members.  They all said that the defendant is now remorseful for what he did before.

15.  At home, the defendant is a responsible family man and a loving grandfather.  They all miss him and look forward to be reunited with him as he is expected to be released from prison in this coming December.

16.  On his health issues, the defendant suffered from heart disease, diabetes, hypertension, gout and high cholesterol problems.  He requires regular medical follow ups and medications.  He had been admitted into hospital prior to the last hearing on 8 July 2021. 

17.  Today I am told that he has an urgent and high risk operation to remove a 7cm tumor from his blood vessel on 15 July 2021.  There are 2 stents implanted into his blood vessel.  The operation was successful and he was discharged from Queen Mary Hospital on 18 July 2021.

18.  He is now taken care of by the medical team in Stanley Prison Hospital. In 4 weeks’ time he will go for a colonoscopy test.  He was informed that his kidney can only perform 1/3 of it’s function.

19.  As to the funds in A/C 2, the Defence also explained that the defendant used the money for his living expenses and for paying his legal fees in DCCC 275/2021.  All the money deposited into A/C 2 came from his monthly pension and old aged allowance.  The incoming funds into A/C 2 were not illegal in nature.

20.  The Defence said that had the defendant applied to the court for a variation order, the application would likely be granted.

21.  Finally, the Defence urged this court to pass a concurrent sentence on the defendant so that he can be released as schedule.  The Defence provided 4 special circumstances in the present case to be considered when passing sentence, of which I will deal with subsequently.

Sentence

22.  According to S.15(17)  of OSCO, the maximum sentence is 5 years.

23.  In a nutshell, it is a blatant breach of a court order.

24.  I paused here to deal with the content of the Restraint order first. The first 3 paragraphs of the order were important notice to the defendant:-

(1)  Restraint order prohibiting disposal of assets in Hong Kong and elsewhere.

(2)  To inform the defendant to read the whole documents carefully and to consult a solicitor as soon as possible. He has the right to discharge, vary the order.

(3)  In the event the defendant disobey the order, he may be found guilty of contempt of court. It is a criminal offence to deal with the property which is subject to a Restraint Order. The consequent was that he may be fined, sent to prison.

25.  There was also a clause of disclosure of information in paragraph 4.  It is clear that the defendant had been explained the full content of the Restraint Order as paragraph 5 said that failure to disclose information amounted to a criminal offence.

26.  Therefore, the defendant complied with the Restraint Order and filed a reply affirmation in June 2018 to disclose the details of A/C 1.

27.  Paragraph 11 of the Restraint Order expressly stated that:-

“ it is a contempt of Court for any person notified of this order knowingly to assist in or permit a breach of this order. Any person doing so may be imprisoned or fined or having his assets seized.”

28.  Paragraph 12 stated the consequences of the criminal offence for breaching this order which effectively is S.15(17)  of OSCO.

29.  Paragraph 16 stipulated that the defendant can apply to the court to vary or discharge the Restraint Order.

30.  The Defence explained that the reasons why the defendant did not apply to vary/discharge the Restraint Order were because of:-

(1)  The huge existing legal fee for DCCC 275/2018. He didn’t want to incur any more expenses.

(2)  He himself didn’t know how/where to apply for the variation of the Court order.

31.  What the Defence told this court was that the defendant was aware of his legal right to discharge/vary the Court Order.  Whether the court would grant his application to vary the order was another matter, the fact remained he chose not to vary the Restraint Order because of the above reasons.

32.  Whatever reason it might be, as soon as he opened A/C 2 to divert the funds from A/C 1 to A/C 2, it amounted to a serious breach of the court order. It was a contempt of court.  It is a serious matter as court order was made for the defendant to observe and obey.  It is also important to note that the defendant was already a subject in a criminal case as he was charged in February 2018.

33.  The content of the Restraint Order had informed the defendant the consequences of breaching the Order.  The consequence was he might face a jail term.

34.  The Defence urged this court to impose a concurrent sentence on the defendant so that he can be released at the end of this year.

35.  The Defence suggested that there are 4 grounds of exceptional circumstances to warrant a concurrent sentence:-

(a)  (i)  The defendant is now aged 74 with deteriating health conditions. Apart from the usual old aged illness, today, I am told that last week, he just had an operation to remove a tumor in Queen Mary Hospital. His recovery is satisfactory. However, whether it is a colonoscopy test or a 1/3 kidney disfunction, whatever his medical condition is, it only shows that he is now in the good hands of a medical team in Queen Mary Hospital and has received proper medical attention and treatment in Stanley Prison Hospital.

(ii)  Although the defence still has not received medical reports from Queen Mary Hospital and Stanley prison, the defendant is now prepared to receive his sentence today without medical reports.

(iii)  Mr Li for the defence has prayed in aid of the medical conditions of the defendant to ask this court for mercy and leniency to pass a generous and/or a reduce sentence on the defendant.

(iv)  On this point of ill-health, I disagree that there is any merit to justify a deduction or a wholly concur sentence.

(v)  As it was pointed out in Yip Kai-foon v HKSAR (2000)  1 HKC 335, Li CJ said that “medical grounds will seldom be a basis for reducing the sentence for crimes of gravity.”

(vi)  In R v Chau Kui-sheung (1996)  3 HKC 279, Yang CJ, said that:-

1. A medical condition which might at some unidentified future date affect either life expectancy or the prison authorities ability to treat a prisoner satisfactorily might call into the operation the exercise by the executive of the prerogative of mercy but was not a reason for the Court of Appeal to interfere with an otherwise appropriate sentence.

2. The fact that an offender was HIV positive, or had a reduced life expectancy, was not generally a reason which should affect sentence.

3. A serious medical condition, even when it was difficult to treat in prison, will not automatically entitle an accused to a lesser sentence that would otherwise be appropriated.

4. An accused’s serious medical condition might enable a court, as an act of mercy in the exceptional circumstances of a particular case, rather than by virtue of any general principle, to impose a lesser sentence than would otherwise be appropriated.

(vii)  In HKSAR v Bayanmunkh (2012)  2 HKC 233, 238, McWalters J said that “the court could not appear to endorse the view that ill health was a licence to commit crime or in some way shield an accused from the consequences of his conduct.”

(viii)  It is clear to me that as a general principle, the courts do not reduce sentence because of the defendant’s health condition.

(b)  The defendant’s current sentence will come to an end in this December 2021. He wishes to be reunited with his family. The fact that the defendant is serving DCCC 725/2018 will be taken into account and that will be dealt with according to the principle of totality.

(c)  The defendant is genuinely remorseful and there will be no chance of re-offending in the future. I consider that the 1/3 rule discount will sufficiently be reflected in his sentence.

(d)  The reasons for the defendant to commit the present offence was due to his foolishness and mistaken belief to handle his monthly pension and old aged allowances. I do not consider this as an exceptional circumstance as he was fully aware of the consequences of such a breach.

His Pension/old aged allowance loss

33.  I now come to deal with the loss of his pension. The defence said that since August, 2020, the defendant had stopped receiving his monthly pension and old aged allowance. The total loss amounted to about $180,000.

34.  However, the defendant had already benefited $442,270.47 for a period of 2 years when this money should not have been touched / dealt with in any way. The lost $180,000 was about 40% of the sum of $442,270.47. I therefore do not treat this as mitigatory in the sense that it operated as an extra-curial punishment.

Cases

35.  This is the first time that the defendant is the subject of this type of offence in Hong Kong. As such, there is no authority / sentencing guideline to follow. Be that as it may, both parties tried very hard to assist this court by providing a number of cases:-

(a)  The Prosecution provide the case of DPP v Pratten (No 2)  2017 NSWCCA 42:

This is an Australian case. It involved a game fishing boat. The respondent was arrested for tax offences, one month after serving the Restraint Order, the Respondent moved the boat from Sydney Harbour to Newcastle. During the trial, he travelled with the delivery agent of the boat from Newcastle to Port Stephens where he disembarked from the boat. The ultimate destination was Vanuatu. On appeal, he was re-sentenced to 6 months imprisonment. (paragraph 122 – 131 of the judgment refers)

(b)  The Defence provided a number of cases involving the breach of Marveva injunction. The sentences were between 3 to 6 months imprisonment.

36.  I found that those cases were irrelevant to the present case.  As Mareva Injunction is very civil in nature.  As often said in various judgements that each case is to be judged on it’s own facts.  Nonetheless, the Defence seems to accept that imprisonment term is inevitable. 

37.  In assessing the gravity of the offence of which the defendant had committed, I found that the following sentencing factors are essential to set the starting the point:-

(a)  A/C 2 was opened 4 days after the Continuation Order was granted, the defendant ‘s action was premeditated and well planned. He was fully aware that he had disclosed the detail of A/C 1 to the Department of Justice in his reply affirmation in June 2018. He knew that he could not operate these funds in A/C 1 in that circumstances. He deliberately and consciously opened a new account to facilitate him to manage those monthly pension and old aged allowance.

(b)  It was a clear breach of a court order. As said before, it amounted to contempt of Court.

(c)  The offence covered a period of 2 years. From July 2018 to July 2020. During this period of time, the defendant pleaded guilty to DCCC 275/2018 in July 2019. Bail was revoked as soon as he pleaded guilty to those charges and he was sentenced to 45 months imprisonment in August, 2019.

(d)  That means, for a year when he was serving his terms of imprisonment, there were still 16 cash withdrawals totaling $112,000. This is an aggravating factor.

(e)  The total sum being deposited was $518,821.30. The total withdrawal sum was $442,270.47. I considered that it was a substantial amount.

(f)  This sum of $442,270.47 should have been included in the Continuation Order dated 30 July 2020. That means the HK government suffered a loss of this amount.

(g)  The Restraint Order has informed the defendant of such right to vary the order. He chose not to. He knew the consequence and he now has to bear the consequence. The consequence is a term of imprisonment in order to send a clear message to the public that it is a serious matter to breach a court order.

38.  To this end, I consider that a proper starting point is one of 15 months, given 1/3 discount, it comes down to 10 months.  I also order 2 months to be served concurrently with DCCC 275/2018.  I further reduce 1 month in view of the defendant’s age.  After all the deductions, the defendant is to serve a term of 7 month imprisonment in the present case.