THE QUEEN v. CHAN KING YEE

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J U D G M E N T

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Clough, J.A. (delivering the judgment of the court):

1. The applicant pleaded guilty on the 16th October 1987 before His Honour Judge Cameron in the District Court to 9 counts of furnishing false information contrary to section 19(1)(b) of the Theft Ordinance (Cap. 210), He was sentenced on each count to concurrent terms of 3 years' imprisonment. He now applies for leave to appeal against that sentence on the ground that in all the circumstances it is manifestly excessive.

2. The applicant was 40 years of age at the date of his conviction. The offences were committed between the 14th May and the 1st September 1983. At the material time the applicant was the managing director of a knitwear manufacturing company which was in financial difficulty and faced with cash flow problems from which it never recovered. It was the subject of a compulsory winding-up order on the 18th April 1985.

3. The victims of the offences were Wayfoong Finance Limited (whom I refer to as "Wayfoong Finance") and its subsidiary Wayfoong Credit Limited (whom I refer to as "Wayfoong Credit"). The applicant had obtained for his company letter of credit facilities to the extent of & 1.8 million from Wayfoong Finance and cheque discounting facilities up to the same limit from Wayfoong Credit. These facilities were secured by a time deposit of $1.55 million. That security was subsequently enforced and exhausted.

4. The applicant procured his company to obtain the benefit of the facilities during the above-mentioned period to the extent of about $1.65 million by dishonestly furnishing false information to the Wayfoong Companies. I should mention that there were additional facilities obtained but the facilities which were the subject of the 9 courts related to $1.65 million.,

5. In the case of Wayfoong Finance the applicant's company obtained the benefit of a letter of credit in the sum of $460,110 on the strength of an application which falsely purported to .relate to a genuine purchase of goods by his company. No purchase had in fact taken place. The balance of the facilities in question were obtained from Wayfoong Credit in cheque discounting transactions with the applicant's company resulting from applications supported by bogus invoices purporting to relate to genuine sales of goods by his company to the drawers of post-dated cheques which were dishonoured. In each case there was no genuine sale of goods. There has been re-imbursement in respect of only one of the cheques.

6. Before passing sentence the judge obtained a very full background report from the probation service. In his Reasons for Sentence he recorded fully the matters which had been raised in mitigation on behalf of the applicant by his counsel. I mean no injustice to the able argument advanced by Mr. Plowman on the applicant's behalf when I say that the substance of the grounds of appeal before this court to-day is that the judge did not give sufficient weight to the mitigating factors when deciding on sentence.

7. Those factors were as follows:-

(1)    There was a long delay between the beginning of the investigation of the offences against the defendant in August 1984 by the I. C. A. C. and the trial at least 3 years later in 1987.

(2)    The applicant had co-operated fully at all material times with the I. C. A. C. since the investigation began.

(3)    He had pleaded guilty at the earliest possible time and saved the public expense of what would otherwise have been a lengthy trial.

(4)    The applicant had a clear record.

(5)    He had made real efforts to repay what he had obtained dishonestly. He had sold the family flag for want of other assets and had succeeded in re-paying or causing the repayment of about $650,000 of the money obtained dishonestly. thereby reducing the victims loss, we are told to-day, to about $994,747.00. He was at the time of his trial earning $9,000 a month and was prepared, perhaps over optimistically, if allowed his liberty to go on making monthly repayments of $15,000, We were shown a letter to-day, signed by an employment consultant who estimates his earning capacity at $13,000 - $25,000 if he were employed.

(6)    The offences had been committed in a misguided attempt to solve the cash flow problems of the applicant's company which was heavily indebted at the time. They did not result in any direct enrichment of the applicant himself but merely enabled the commercial life of his company to be prolonged until its eventual demise in 1985.

8. It was contended, as a further ground, that the judge erred in holding that the background report obtained from the Probation Services was not favourable to the applicant. Mr. Plowman referred to the account in the report of the admirable way in which the applicant had built himself up from humble origins to a directorship in his own company. He also referred to the applicant's belief that when committing the offences he was following the then current fashion in the business world. There was reference to a business colleague and also to a former employee who spoke well of the applicant.

9. The report in question was of the usual high standard that the courts in Hong Kong are fortunate to receive whenever they call for the assistance of the Probation Services. It gave a detailed account of the personal and commercial background of the applicant. It gives the impression of the applicant as a hardworking self-made knitwear manufacturer who has been unsuccessful in conducting under-capitalised businesses in difficult market conditions. He appears to have been stubborn and over--confident and this had led him to incur liabilities which have been his undoing, although he does not admit it. His insolvent company has unpaid debts of $6.4 million and at the date of the report he had failed to submit a statement of his company's affairs to the official Receiver.

10. We agree with the judge that the report as a whole is not favourable to the applicant in the context of his business activities and the offences with which he was charged.

11. Regrettably the judge did not indicate what sentence he would have imposed had there been no mitigating factors and then go on to indicate what discount he was making in respect of those factors. It has frequently been stated in this court that it is helpful, and the proper course, to start with an appropriate sentence without regard to the relevant mitigating factors and then indicate what discount, if any, is being made on account of those factors.

12. The offences themselves were serious. They were numerous and they involved the dishonest giving of information resulting in the initial loss of $1.65 million to the Wayfoong companies who are still almost $1 million out of pocket. Such conduct on such a scale cannot be dressed up to appear honest or excusable and it calls for a substantial deterrent sentence. We consider that a suspended sentence would be wholly inappropriate in this case notwithstanding the delay in bringing the proceedings. If there had been no mitigating factors we would have considered that a sentence of 4 years imprisonment would have been appropriate.

13. The applicant's clear record, his co-operation with the I. C. A. C. and his immediate plea of guilty should result in a discount of about a year in the totality of the sentence. The substantial delay in bringing proceedings, the repayment of $650,000, the attitude of the applicant towards further repayment, and to a lesser extent the absence of personal enrichment, are all mitigating factors which in our judgment should reduce the sentence to one of 2 years' imprisonment concurrent on all the charges.

14. In arriving at this conclusion we are satisfied that the judge did not make sufficient allowance for all the mitigating factors in this case We are fortified in our decision by the approach adopted by another division of this court in The Queen v. TAM Siu-lun⁽1) where the facts were broadly comparable to the present case.

15. Accordingly we allow the application and the appeal to the extent of reducing the concurrent sentences in this case to 2 years' imprisonment on all counts.

(1) Cr. App. No. 42 of 1986, unreported