HKSAR v. MAHBOOBANI KAMAL MOHANDAS

DCCC 1079/2018

[2019] HKDC 1419

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1079 OF 2018

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REASONS FOR SENTENCE

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Charges

1.  The defendant is charged with 11 counts of “Evasion of liability by deception”.  He pleads guilty to Charges 1, 3, 5, 6, 8 and 10.  The other 5 counts (Charges 2, 4, 7, 9 and 11) are left in the court file with parties’ consent.

Facts

2.  The defendant was a merchant in Hong Kong in 1999.  He operated a company called Nu-Mark Exports (“Nu-Mark”).

3.  Nu-Mark had ordered 11 lots of shoes from different suppliers. The six lots relating to Charges 1, 3, 5, 6, 8 and 10 were ordered by the defendant between mid-April and early June 1999.

4.  After the shoes had been delivered to Nu-Mark, the defendant issued personal cheques to the suppliers for payment. The cheques were postdated as follows: -

Charge	Supplier	Shoes	Value	Delivered on	Cheques issued on	Cheques due on
1	Cheong Shun	9,408 pairs	$353,920	10/6/1999	11/6/1999	27/6/1999
3	Hau Tai	4,704 pairs	$186,278.4	12/6/1999	14/6/1999	27/6/1999
5	Hua Tai	9,408 pairs	$319,872	5/6/1999	19/6/1999 (re-issued)	23/6/1999
6	Hua Tai	9,408 pairs	$319,872	5/6/1999	19/6/1999 (re-issued)	23/6/1999
8	Grander	5,484 pairs	$149,804	10/6/1999 17/6/1999	25/6/1999 (re-issued)	28/6/1999
10	Grander	11,976 pairs	$322,116	10/6/1999 17/6/1999	25/6/1999 (re-issued)	29/6/1999

5.  The four suppliers banked in the cheques when they were due. The six cheques were all bounced due to insufficient funds in the defendant’s bank account.

6.  The total sum of the six dishonoured cheques in Charges 1, 3, 5, 6, 8, and 10 was HK$1,651,862.4.

7.  The defendant was dishonest when he issued those cheques to the suppliers. He knew his bank account had no sufficient funds to honour the cheques.

8.  The defendant’s bank account was closed by the bank on 3 July 1999. 

9.  The defendant left Hong Kong on 3 July 1999.  The suppliers could not contact him anymore.

10.  The police raided the defendant’s warehouse.  17,316 pairs of shoes were found.  Among them, only 180 pairs were related to Charge 6 (valued at $6,120).  The other 17,136 pairs were related to Charges 2, 7 and 11.

11.  The defendant returned to Hong Kong nineteen years later on 13 August 2018.  He was arrested.

Record

12.  The defendant is now aged 44.  When he committed the six offences in June 1999, he was aged 23.

13.  The defendant had one conviction in 1998 which was not related to dishonesty.

Mitigation

14.  Defence Counsel says the defendant was born and raised in Hong Kong.  He was educated here and had studied abroad.  The defendant’s father (now deceased) had a shoes trading company.  The defendant learnt the trade from his father.  In 1997, the defendant set up Nu-Mark.  The business was good until a client in Egypt breached contract and owed NU-Mark about HK$3.2 M in late April 1999.

15.  The defendant hoped that client in Egypt would soon pay him. He carried on Nu-Mark’s business. The payment did not come.

16.  The defendant issued the six postdated cheques to pay the four suppliers in Charges 1, 3, 5, 6, 8 and 10.  When he issued those cheques, he well knew there would be no money coming to his bank account to meet the cheques.  He nevertheless issued the six cheques to the suppliers.

17.  The fact was the Egyptian client had rejected the defendant’s goods, which were later seized and sold by the Egypt authorities.  No money went to the defendant. 

18.  The six postdated cheques which the defendant had issued to the suppliers bounced one by one in late June 1999.  The bank closed his account on 3 July 1999.  The defendant realized he was in grave financial difficulty.  He did not know what to do.  Out of panic, he left Hong Kong for India and then went to England.

19.  The defendant got married in India.  He worked hard and had a son in 2014.  As time went by, he decided to return to Hong Kong to face the consequence. He came back in August 2018 and surrendered to the authority.

20.  The defendant had been on bail since then.  Counsel says the defendant and his wife had been working hard.  The defendant estimated he could pay compensation of $3,000 in total to the victims each month.

21.  Counsel points out that when the defendant fled from Hong Kong in July 1999, he left behind 17,316 pairs of shoes (worth about HK$900,000) in his warehouse. Of the 17,316 pairs, only 180 pairs were related to Charge 6.  The others were related to three of the five charges left in the court file (Charges 2, 7 and 11).

22.  Counsel submits that the defendant had not removed the 17,316 pairs of shoes from his warehouse shows he was not a totally dishonest person.  He just left Hong Kong in 1999 due to panic.

23.   Counsel say the defendant’s wife has been suffering from a serious kidney problem.  She is receiving haemodialysis five times every two weeks currently. The son also need to be looked after.

24.  Counsel asks the court to consider putting the defendant on a community service order or to give him a suspended sentence.  If immediate imprisonment is inevitable, part of the sentences for the six charges should run at least partly concurrently.

25.  Counsel points out the total amount of the six bounced cheques was about HK$1.6 M and the cheques were issued within a span of two weeks only. That was twenty years ago.

Sentence

26.  The defendant had only one minor conviction in 1998, which was not related to dishonesty. 

27.  I accept the defendant was not dishonest when he ordered the shoes from the suppliers.  However, he was dishonest later when he well knew there would be no funds coming to his bank account to honour the cheques but he still issued the cheques to the suppliers.

28.  The six dishonoured cheques amounted to a total of about HK$1.65 M.  The relevant goods were all gone.  The suppliers in Charges 1, 3, 5, 6, 8 and 10 could not recover anything except for 180 pairs in Charge 6 (worth $6,120), which remained in the warehouse with another 17,136 pairs of shoes related to Charges 2, 7 and 11.

29.  I accept the defendant has been remorseful.  He wants to compensate the four victims a total of $3,000 per month. That is however not meaningful as it would take the defendant more than 45 years to pay up the whole sum of about HK$1.65M.

30.  Defence Counsel asks me to consider the defendant’s family including his seriously sick wife and young son. Counsel asks me to grant the defendant community service order or suspended sentence. 

31.  A sentence of community service order does not match the seriousness of the six charges. 

32.  There are no exceptional circumstances to justify suspension of imprisonment. Immediate imprisonment is inevitable.

33.  Defence Counsel refers to several cases (see List of Authorities). 

34.  R v Brown (1981) 3 Cr App R (s) 294 and HKSAR v Chow Chak Man & another (1999) 3 HKLRD 37 are about community service order. 

35.  Barrick v R (1985) 81 CR App R 78, HKSAR v Cheung Mee Kiu CACC 99/2006 and HKSAR v Ng Kwok Wing and another CACC 398/2007 are about breach of trust. 

36.  HKSAR v Liu Ying Fai CACC 451/1998 is on evasion of liability by deception. However, it is a case decided on its own facts and is not a guideline case.

37.  Each case has to be decided on its own facts.

38.  The defendant did not set out to deceive the suppliers when he ordered the goods at the outset.  He wished to pay if there were incoming funds. However, that did not happen.  The defendant was only dishonest when he issued the six cheques within two weeks in June 1999. By then, he well knew there would be no funds coming but he still issued those cheques to the suppliers.

39.  The defendant had a minor conviction in 1998 which was not related to dishonesty.  Before he left Hong Kong in July 1999, he did not sell off or remove the remaining stocks (17316 pairs of shoes worth about $900,000) in his warehouse.  That shows the defendant was not a totally dishonest person.

40.  The defendant fled from Hong Kong out of panic. That irresponsible act was counterbalanced by his voluntary return to Hong Kong to surrender to the authority, albeit 19 years later.

41.  Having considered counsel’s mitigation and the facts of the case, I would impose the following sentences after giving the defendant one-third discount for his plea of guilt: -

Charge 1 12 months’ imprisonment

Charge 3 8 months’ imprisonment

Charge 5 12 months’ imprisonment

Charge 6 12 months’ imprisonment

Charge 8 8 months’ imprisonment

Charge 10 12 months’ imprisonment

42.  The offences took place 20 years ago. The defendant has been leading a reformed life for years since he fled Hong Kong in 1999. He now has a sick wife and a young son to look after. The total sentence for the six charges, after one-third discount for guilty plea, should be one of 20 months’ imprisonment.

43.  I order two months’ imprisonment of each of Charges 5, 6 and 10, and one month’s imprisonment of each of Charge 3 and Charge 8 to run consecutively to one another, and to run consecutively to the 12 months’ imprisonment for Charge 1. The total sentence of the six charges upon the defendant’s plea of guilt is then 20 months’ imprisonment.