HKSAR v. CHANG YAU HUNG, ALEXANDER

CACC 98/2022, [2024] HKCA 480

On Appeal From [2022] HKCFI 1860

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 98 OF 2022

(ON APPEAL FROM HCCC NO 350 OF 2020)

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J U D G M E N T

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Hon Macrae VP (giving the Judgment of the Court):

1.  On 10 June 2022, the appellant pleaded guilty before Yau J (“the judge”) to a single count alleging the theft of a chose in action in the appellant’s account at The Hong Kong and Shanghai Banking Corporation Limited (“HSBC”), namely a debt owed by HSBC to the appellant in the sum of US$10 million, which belonged to the victim “X”, contrary to section 9 of the Theft Ordinance, Cap 210[1]. The plea was entered following the appellant’s committal to the High Court on 28 December 2020, and after trial dates had been set down by the listing judge on 24 January 2022.

2.  The appellant was granted leave by the Single Judge[2] to appeal against his sentence of 7 years and 3 months’ imprisonment on two original grounds of appeal, which correspond to Grounds 2 and 4 below. Since the Court noted that four issues might be engaged in the sentence, the appellant subsequently amended his perfected grounds of appeal, on 12 July 2023, to five grounds of appeal, as follows:

(i)  The judge erred in adopting the maximum sentence for Theft as the starting point for the offence (Ground 1);

(ii)  The judge failed to given any, or any sufficient, discount for the appellant’s genuine and useful assistance to the authorities (Ground 2);

(iii)  The judge failed to give any, or any sufficient, discount for the appellant’s clear record and good character in light of his advanced age of 70 at the time of sentence (Ground 3);

(iv)  There was a material irregularity in the sentencing process when the judge rejected certain aspects of the appellant’s mitigation, without first informing the appellant’s counsel that he was not prepared to accept them (Ground 4);

(v)  The judge erred in applying the reduced discount guidelines set out in HKSAR v Ngo Van Nam[3], an authority which was decided nearly two years after the present offence was committed (Ground 5).

3.  When the appeal came before this Court on 6 March 2024, we were concerned to know the latest position in respect of the appellant’s assistance to the authorities in the United States; and also, specifically, whether X had received any restitution from any source, as a result of any proceedings taken out in Hong Kong or elsewhere. On 16 April 2024, we were informed by letter from the appellant’s solicitors, Messrs Morley Chow Seto, that no answer to their enquiries as to the current status of proceedings in the United States had been forthcoming from the relevant authorities in that jurisdiction and, accordingly, there was no further information to present to the Court concerning these matters. Meanwhile, the respondent informed the Court, by letter dated 17 April 2024, that although lawyers in the United Kingdom had been instructed by X, no proceedings have yet been commenced and no money has been recovered.

4.  Out of an abundance of caution, we reserved our decision in this appeal until 20 May 2024, in order to allow further time for the appellant’s solicitors to obtain an answer to their enquiries from the United States, and indicated that if there was any change in circumstances, the parties were at liberty to inform each other and advise the Court as to the latest position. The Court has received no further information from either party and has proceeded on the basis of its understanding as conveyed in the hearings of 6 March and 19 April 2024.

The prosecution case

5.  The particulars of the offence against the appellant averred that between 15 and 20 October 2014, both dates inclusive, the appellant stole a chose in action owed by HSBC to the appellant, namely a sum of US$10 million, which was the property of X.

6.  The appellant became a solicitor in Hong Kong in 1985, and, at the time of the commission of the offence, was working as a consultant with Messrs Gary Mak, Dennis Wong & Chang Solicitors (“MWC”). He resigned as a consultant with the firm on 23 October 2014.

7.  X had been introduced by one Catherine Tsui Kwan-kwan (“Catherine Tsui”) to a high-yield investment programme, known as Cities Upliftment Program (“CUP”). After a series of application procedures, on 15 October 2014, X transferred the relevant investment capital of US$10 million to the appellant’s personal bank account, which amount the appellant said would be kept on trust for X and returned to X at the conclusion of the said programme, or within two weeks after X’s termination of the investment. The appellant, on 20 October 2014, in breach of trust, transferred the said funds to another person, and the money has never been returned or recovered.

8.  When he failed to get back his investment from the appellant, X reported the matter to the police on 2 April 2019. It may be noted (which is relevant to Ground 2) that before receiving the said sum from X, the appellant had made reports to various law enforcement agencies and banks in Hong Kong, the United States and Sri Lanka that he believed certain individuals connected with CUP were involved in fraud. These reports commenced on 25 August 2014 with a letter to the Consul General of the United States in Hong Kong.

9.  The circumstances leading to the commission of the offence were as follows:

(a)  In September 2014, X was referred to a man called Cheng Pak-wo (“Cheng”), from whom he learned about a high yield investment programme.

(b)  In October 2014, Cheng arranged for X to meet Catherine Tsui, who introduced herself as the China and Asia-Pacific executive representative of CUP.

(i)  According to Catherine Tsui, the investment scheme was for the development of Alamo in New Mexico in the United States, and was being overseen by the Federal Reserve Bank of New York (“FRB”). The minimum investment capital for the scheme was US$10 million.

(ii)  Upon the final approval of FRB, the capital would be held in a trust account for the programme by an appointed solicitor in Hong Kong for 100 days, during which the capital would not be mobilised.

(iii)  After the 100-day trust period, the investor would receive a return of 40% of the capital per day for a period of 75 days.

(iv)  The investor and his family members would be eligible for permanent residency (commonly known as a ‘green card’) in the US.

(c)  Catherine Tsui provided the relevant documents to X, whereupon X signed the investment application document supported by a copy of his identification document and a bank statement.

(d)  On 15 October 2014, Catherine Tsui informed X that his application was approved, and showed him a “Final Approval Notice”[4] allegedly issued by FRB and signed by one Rienze Edwards (“Edwards”), the purported organiser of CUP, together with a “Sovereign Guarantee”[5]. The Final Approval Notice stated that:

(i)  the return on the US$10 million would be “US$20 million within 75 banking days in every day” (sic);

(ii)  FRB had nominated an FRB legal affiliate to receive the funds on its behalf; the FRB lawyer account for Hong Kong was stated to be that of the appellant and was to be paid into his personal account;

(iii)  the paperwork was to be processed at MWC; and

(iv)  the appellant would hold the fund and return it to X, if X terminated the investment.

(e)  X signed the Final Approval Notice, while Catherine Tsui signed on behalf of Edwards; on the same day, X transferred US$10 million to the appellant’s personal bank account with HSBC.

(f)  On the same day, at MWC’s offices, Catherine Tsui introduced X to the appellant. The appellant said he was an appointed solicitor for the CUP investment program; he showed X the official investment receipt and told him that the US$10 million would be kept in his personal account on trust and would be returned to X upon conclusion of the investment programme. If X wished to terminate the investment at any time, the whole sum of money would be returned to him within two weeks.

(g)  Confident that the investment programme was being managed professionally, X signed the official receipt as requested, as well as a letter to the effect that the appellant was acting as the escrow agent of X in holding the funds.

(h)  On 20 October 2014, the appellant, in breach of the trust agreement, and without giving notice to X or obtaining his approval, transferred the US$10 million to one Su Xuan (“Su”)[6], a Singaporean woman, who also happened to be an investor in CUP.

(i)  On 3 March 2015, having been notified that there would be a delay in the issuing of profits, and having come to discover that the appellant was allegedly involved in a separate criminal case involving false bank documents, X demanded that the appellant return his investment funds.

(j)  X subsequently discovered that the appellant no longer worked at MWC. Between 2015 and 2018, X pursued the appellant for the return of his investment; however, the appellant refused to meet X in person and gave various excuses in order to avoid repayment.

10.  On 2 April 2019, X made a report to the police. The appellant was arrested on 18 June 2019; however, he remained silent under caution.

11.  Upon a search of the appellant’s home, several documents were found, which revealed that the appellant had made reports to various law enforcement agencies prior to the theft of the funds in the instant case. The police also found that the appellant had communicated with Catherine Tsui via WeChat messages on his smartphone, which was duly seized. The relevant records, in chronological order, revealed the following matters:

Date	Nature	Content
25 Aug 2014	Appellant’s Letter to the US Consulate of Hong Kong (Exhibit P38)	The appellant said that he had been invited by purported FRB officers Michale Alix (“Alix”) and FK Ho (“FK Ho”) to join CUP in November 2013 but later suspected CUP to be an international fraud operation; accordingly, he reported the case to the US Consulate for urgent investigation.
9 Sep 2014	Appellant made a complaint to the Hong Kong Police, and provided a witness statement (Exhibit P39)	The appellant stated that, on 10 November 2013, he accepted the invitation from Edwards to invest US$40 million in CUP; Between 20 December 2013 and 18 January 2014, he deposited US$13.5 million into a bank account in Sri Lanka. After July 2014, he asked for a refund because he found false document(s) were involved, but he received no reply. He therefore reported the matter to the police.
11 Oct 2014	“Statutory Declaration” made in the presence of a notary public in New Jersey, USA (Exhibit P29)	The appellant declared that Alix, FK Ho and Edwards had supplied him with letters and documents, which he discovered were untrue. He had made reports to the United States Consulate in Hong Kong, the Fraud Unit of FRB, legal counsel for FRB, the Security Exchange Commission in New York (“SEC”), the New York State offices of the Attorney General and the Federal Bureau of Investigation (“FBI”). He went to the office of the FBI in person on 24 September 2014 to report the case and a special agent of the FBI had since then contacted him and said the case was under consideration.
12 Oct 2014	WeChat messages with Catherine Tsui (Exhibit P20)	Catherine Tsui told the appellant that she had two customers: one would transfer US$5 (million) and the other would transfer US$10 (million).
15 Oct 2014		(Remark: the appellant received US$10 million from X on 15 October 2014; and US$5 million from another man on 16 October 2014)
18 Oct 2014	WeChat messages with Catherine Tsui	The appellant told Catherine Tsui that he did not trust Edwards anymore. He had recently discovered that FK Ho and Edwards were fraudsters.
20 Oct 2014		(Remark: the appellant transferred US$10 million to Su)
31 Oct 2014	WeChat messages with Catherine Tsui	The appellant said he knew someone was committing fraud in the name of FRB.
4 Nov 2014	WeChat messages with Catherine Tsui	Catherine Tsui advised the appellant to make a refund of the US$5 (million) and the US$10 (million). The appellant said he would return the US$5 (million) as soon as possible but was having a problem with the US$10 (million).
5 Nov 2014		The appellant returned US$5 million to the man who had deposited the same sum on 16 October 2014.
5 Nov 2014	WeChat messages with Catherine Tsui	The appellant told Catherine Tsui that the US$10 (million) had been taken away from him; Catherine Tsui criticised the appellant for transferring the money to Su.
10 Mar 2015	Email from “S Herrera”, the alleged President of the City of Alamo[7]	S Herrera accused the appellant of misappropriating US$15 million he had received from CUP investors, given that he had claimed in September 2014 that he did not believe in CUP.

12.  The police confirmed that the appellant did submit Exhibit P39 to them; however, the investigation was curtailed after being classified as a criminal matter occurring outside the jurisdiction. It was nevertheless confirmed, from his travel movement records, that the appellant was out of Hong Kong between 23 September and 13 October 2014.

13.  According to the analysis of a treasury accountant, the yield of CUP was 200 percent, which was 263 times higher than the highest interest yield of US treasury bills with a maturity of 52 weeks in the years 2014 and 2015.

14.  The appellant admitted and accepted that he had received US$10 million from X on 15 October 2014, after he had already reported his belief to the Hong Kong Police and other authorities that CUP was a fraudulent investment scheme. Despite his belief that any investor in CUP could become a victim of that fraud, he nevertheless accepted X’s money and transferred it to Su on 20 October 2014, in breach of the trust agreement with, as well as his verbal assurances to, X.

15.  The material seized from the appellant’s home, which are relevant to Ground 2, included:

(a)  A letter, dated 25 August 2014, from the appellant to the US Consulate in Hong Kong, stating that he was invited by persons claiming to be FRB officers (namely, Alix and FK Ho) to join CUP in November 2013, after which tens of millions of dollars from investors were then transferred from the appellant’s account to the purported officers; later he began to suspect it was an international investment fraud, when he discovered that certain documents involved in the scheme were false. He requested an urgent investigation into the matter, since he was informed by Edwards that Catherine Tsui was about to deposit a further US$20 million belonging to various clients into his bank account;

(b)  Documents showing that the appellant had made a complaint and provided a witness statement, dated 9 September 2014, to the Hong Kong Police: the contents disclosed that the appellant had received an email from Edwards on 10 November 2013, inviting him to invest US$40 million in CUP (which he accepted). In that month, he went to the US to receive a “guarantee letter of title” from Edwards, and was referred to FK Ho for follow-up dealings. Between 20 December 2013 and 18 January 2014, at their request, the appellant deposited the sum of US$13.5 million into a bank account in Sri Lanka, allegedly a lawyer’s account. In July 2014, Edwards and FK Ho requested the appellant to deposit the remaining US$26.5 million. Having heard that the appellant did not have enough money, FK Ho sent the appellant by email a letter purportedly sign by one Rizo of the Royal Bank of Canada (“RBC”), saying that the bank would lend the money to the appellant. However, the appellant never received the sum. The appellant then discovered that the letter was a forgery. He requested Edwards and FK Ho to refund the US$13.5 million but to no avail. Accordingly, he reported the matter to the police.

(c)  A Statutory Declaration by the appellant, dated 10 October 2014, made in the presence of a notary public in New Jersey, in the United States, declaring that he had recently discovered that letters and documents supplied to him by Alix, Edwards and FK Ho were all untrue, as a result of which he had reported the matters to the United States Consulate in Hong Kong, the Fraud Unit of FRB, legal counsel for the FRB, the SEC of New York, the New York State offices of the Attorney General, and the FBI. A special agent of the FBI had subsequently contacted him and the case was under consideration.

(d)  An email, dated 10 March 2015, from S Herrera, allegedly the President of the City of Alamo, accusing the appellant of misappropriating US$15 million he had received from CUP investors.

(e)  Other email correspondence between the appellant and personnel of CUP, including Edwards and FK Ho, regarding the investments of other clients in CUP.

Mitigation

16.  During mitigation, it was submitted that the appellant was a 70-year-old married man, who was a devout Christian with a clear record. He had himself been persuaded by fraudsters to invest in CUP: the motive for his investment was to make money in order to create a “Jerusalem of the East” in China, where the gospel could be preached. The appellant had invested HK$4-5 million in CUP made up of his own savings and loans from other people.

17.  When he suspected that the scheme was a scam, he reported the matter to various authorities, including the United States Consulate in Hong Kong, the Hong Kong Police, the Fraud Report Unit of FRB, Legal Counsel of FRB, the Consulate General of the Republic of Singapore, the Hatton National Bank of Sri Lanka, the National Development Bank of Sri Lanka, and the FBI.

18.  It was said that the appellant was himself one of CUP’s victims. At the time of the present incident, he held a “glimmer of hope”[8] that CUP might still be genuine. He maintained that he accepted the funds, the subject-matter of the present charge, because he did not want the fraudsters to be alerted and disappear. He did not transfer the money as instructed by the fraudsters, who then accused him of stealing money from CUP. Instead, he transferred the money to Su for investment purposes, so that he could mitigate the loss suffered by the victims. He believed in Su, since she represented herself as a fellow-Christian and someone with wide and powerful connections. However, Su had disappeared after receiving the money.

19.  The appellant had previously reported his belief about CUP to the police and the authorities in the United States in August and September 2014, in order to try and protect the funds of other investors. WeChat messages between the appellant and Catherine Tsui were adduced to support his account.

20.  It was submitted that the appellant’s judgment was clouded by his religious zeal. He had committed the offence out of his obligation to return money to the CUP victims, who had invested through him, and not for his own personal gain.

21.  As for the lateness of his plea, it was said that the appellant had not been able to afford legal fees; he was initially convinced that he was himself a victim, believing that none of his actions were motivated by greed. Only after being granted legal aid did he finally accept that he had been dishonest and resolve to plead guilty before the 2^nd case management hearing. The court was urged by counsel to accord the appellant a 25% discount in respect of his late guilty plea.

22.  It was further contended that the appellant had given full and frank information to the authorities. His assistance to the United States authorities had been helpful in unravelling the complexities of the scam, resulting in a number of arrests and two accused pleading guilty in proceedings in that jurisdiction; and causing Edwards’s bank account to be frozen. The appellant had gone to the United States in person in order to provide information, and would be willing to testify against the perpetrators of the fraud, if and when necessary. For his plea, as well as his cooperation with the authorities, the appellant urged the court to give him an overall discount of 45%.

Reasons for sentence

23.  The judge, however, considered that the appellant only had himself to blame for what had happened. He did not accept that there was any reason for the appellant to hold out the hope that CUP was genuine at the time he accepted the US$10 million from X.

24.  Of the appellant’s alleged motive for reporting to various authorities, the judge observed that what was done was for his own benefit, in an attempt to get his money back, rather than to offer assistance to the law enforcement agencies involved. Yet, despite reporting the matter to various authorities, he nevertheless helped X to complete the investment application for CUP and accepted his money, knowing full well that CUP was a scam; and then went further to misappropriate the money in breach of the trust placed in him.

25.  The judge considered that the appellant should not be entitled to any discount since his assistance was self-serving, yet he had still gone on to commit a serious offence through the CUP programme. Nevertheless, he gave the appellant a small discount on the basis that his actions had resulted in the scam being stopped and some of the fraudsters arrested.

26.  The judge further rejected the submission that the appellant had accepted X’s investment because he was afraid that the fraudsters would be alerted and disappear. He found that he had made the transfer to Su for his own personal ends, noting that there was no mention of the alleged purpose for which the money was transferred in the messages passing between the appellant and Catherine Tsui.

27.  The judge considered that the appellant must have been fully aware of his duties and obligations as a trustee; yet his offence had had a serious impact on public confidence in Hong Kong’s legal profession.

28.  The judge adopted a starting point of 10 years’ imprisonment. He accorded the appellant a discount of 25% for his late plea, in accordance with the directions in Ngo Van Nam, and a further discount of 3 months for the assistance the appellant had given to various authorities. The result was a sentence of 7 years and 3 months’ imprisonment.

Grounds of appeal

29.  Mr Franco Kuan, together with Mr Schweitzer Wong, on behalf of the appellant, submitted, in respect of Ground 1, that the maximum sentence should be reserved for the most serious offence of its type. He relied upon the general statement of principle set out in HKSAR v Yau Wai Hang[9]that:

“It is a basic premise that for an offence to attract the maximum sentence laid down by law, the criminal conduct which is involved should fall into the top end of the range for this form of disposal even to be considered as an option”.

30.  It was pointed out that the present offence was not pre-meditated, nor was it committed over a long period of time. The appellant initially received X’s money so as not to alert the fraudsters, whom he had already reported to the authorities. At that stage, he had had no intention of misappropriating any money. However, he was then offered a seemingly genuine investment opportunity from Su and committed the present offence, hoping to recover money and repay the other victims of CUP. Mr Kuan complained that the judge was wrong to have rejected this explanation, which the prosecution had never challenged, and which was said to be supported by the WeChat records. Accordingly, it was argued that the appellant should be sentenced on the factual basis that he did not commit the offence out of greed.

31.  Given the appellant’s age and clear record and background, as well as the fact that he did not gain personally from the offence in question, it was submitted that his conduct did not fall into “the top end of the range” for the offence. Mr Kuan pointed out that even in HKSAR v Lee Chun Wai[10], which involved more than HK$100 million, the judge at first instance had not imposed the maximum sentence.

32.  Moreover, the judge never alerted the defence to the fact that he would be adopting the maximum sentence, thereby leaving counsel no opportunity to address the issue. It was complained that this unfair to the appellant.

33.  In respect of Ground 2, it was argued that the judge had placed too much emphasis on the appellant’s supposed self-serving motive, and not enough on the assistance he actually gave. Accordingly, the discount for his assistance should have been greater. The appellant’s actions had, as the judge himself acknowledged, effectively put a stop to the scam and led to the arrest of the fraudsters.

34.  He submitted that legal authorities from other jurisdictions supported the proposition that a discount could be given for assistance, even where the motive was self-serving; and where the one providing the information was himself the victim of the crime reported by him: see R v Campbell[11]; and RJY v The Queen[12]. To reduce the discount simply because of a self-serving motive would run counter to public policy.

35.  In the present case, the appellant had offered assistance, which had been recognised to be valuable, even though he was not required to testify in court proceedings; it had led to the arrest of six fraudsters and the pleas of guilty by two of them; and his contribution had been acknowledged by the United States Department of Justice, in a letter signed by the United States Attorney’s Office of the Southern District of New York, to be “extremely helpful to the prosecution and prevented other innocent people to be misled by the defendants”[13].

36.  Mr Kuan pointed out that the appellant had given full and frank disclosure, which had been tendered in writing and in person to the authorities in the United States; his information was of obvious practical use; the crimes reported were extremely serious; and it would appear the authorities did not know about these matters until they were alerted by the appellant.

37.  In relation to Ground 3, Mr Kuan submitted that old age, especially when combined with evidence of good character, was a cogent factor to be considered in mitigation: see Secretary for Justice v Wong Hong Leung[14]; and R v McNamara et al (No 2)[15]. In the present case, the appellant was a 70-year-old man of good character. A solicitor since 1985, he had joined the CUP programme hoping to make money, not for personal profit, but to build a “Jerusalem of the East” and other altruistic projects. It was submitted that some discount, even if only limited, should have be given for the appellant’s advanced age and character.

38.  So far as Ground 4 was concerned, the judge had rejected the appellant’s mitigation as to (a) his genuine assistance to authorities; (b) his transfer of money to Su in order to try to repay other victims; and (c) his commission of the offence otherwise than for personal gain. It was argued that the mitigation could not be said to be so manifestly false or implausible as to warrant its dismissal out of hand. Yet the judge had not alerted counsel to the fact that he did not accept the mitigation, leaving the defence no opportunity of making good its submissions.

39.  In relation to Ground 5, the appellant had committed the offence in 2014. The Ngo Van Nam guidelines were handed down on 2 September 2016. The present case was committed to the High Court in 2020 for trial, and the appellant indicated his plea of guilty at the 2^nd case management meeting. Accepting what had been said in Ngo Van Nam at [236], Mr Kuan argued that the sentence for an offence should be in accordance with the practice prevailing at the time of its commission: see Article 12(1) of the Hong Kong Bill of Rights; and Secretary for Justice v Wong Chi Fung[16]. Accordingly, he urged the Court to depart from the strict application of Ngo Van Nam in the interests of fairness.

Respondent’s submissions

40.  In relation to Ground 1, Ms Sabra Lo, for the respondent, submitted that the judge was correct to adopt the starting point of 10 years’ imprisonment, which had been suggested in HKSAR v Ng Kwok Wing[17]and HKSAR v Cheung Mee Kiu[18]. The facts involved the loss of US$10 million, in circumstances where there had been a clear breach of trust. Moreover, the judge had properly considered the relevant factors discussed in R v Barrick[19], including: the trust reposed in the appellant; the use to which the stolen sum was put; the total actual loss suffered by the victim; the impact of the loss on public confidence in the legal profession in Hong Kong; and the mitigation and personal circumstances of the appellant.

41.  In respect of the appellant’s reliance on the sentence in Lee Chun Wai, Ms Lo pointed out it was a first instance decision, which was in no way binding on this Court; moreover, in that case, the employee who was charged with the theft of a chose in action when he transferred HK$100 million from his company’s account to his own account, was arrested before he could withdraw the proceeds and, accordingly, the victim suffered no loss. Here, the victim lost his entire US$10 million; and has recovered nothing.

42.  As for Ground 2, Ms Lo said that the Hong Kong Police were not in a position to verify the truthfulness of the facts and opinions stated in the documents concerned, although she accepted that the Court could proceed on the basis that the documents were genuine. In any event, the judge had determined that the appellant should receive a discount of 3 months for the information he had given.

43.  In respect of Ground 3, the respondent pointed out that the judge must have accepted, because he referred to, the fact of the appellant’s age and clear record, and that he was apparently a devout Christian. However, this was one of the worst cases of its kind and a clear record was of little or no benefit in such circumstances.

44.  As for Ground 4, Ms Lo submitted that the alleged motive of the appellant in assisting the authorities was on its face incredible, given the background to the case; accordingly, the judge was not required to voice his doubts about, or rejection of, this matter. Extraordinarily, notwithstanding his own concerns about the scheme, the appellant had not only continued to participate in CUP by accepting X’s funds, but then secretly, and in breach of his undertaking, siphoned them off to Su. The judge had no duty to inform the defence before rejecting the plainly incredible assertion that notwithstanding this conduct, the appellant still harboured good intentions.

45.  In respect of Ground 5, Ms Lo submitted that the practice outlined in Ngo Van Nam applied to any defendant in the magistracy at the time of the judgment (2 September 2016), who would in future be committed to the High Court for trial[20]. The appellant was committed on 28 December 2020, well after the publication of the judgment in Ngo Van Nam, which was concerned with procedural matters and the exercise of judicial discretion, as distinct from the actual sentence prevailing at the time of an offence. The appellant, particularly as a lawyer himself, must be taken to have known full well the new procedures for pleas, when he chose to plead not guilty and have his case committed to the High Court for trial on 28 December 2020.

Discussion

46.  We shall address the grounds of appeal in logical order, dealing first with the maximum sentence as the appropriate starting point (Ground 1), followed by the appropriate discount principles (Ground 5), then the proper approach to the mitigation advanced (Ground 4) and, finally, the mitigating factors themselves (Grounds 2 and 3).

Ground 1

47.  We accept the generality of the principle in Yau Wai Hang, referred to at [29] above, and that the maximum sentence should be reserved for the worst case of its type. The problem with such a general proposition is that it would always be possible to imagine an even worse set of facts than the one before the court. However, as the Court in R v Ambler[21] cautioned:

“…judges should not conjure up unlikely worst possible kinds of case. They should consider the worst type that came before the courts and ask if the instant case came within the broad band of that type”.

Applying that test, it seems to us that the theft from an individual of US$10 million (which is the equivalent of HK$78 million) by a solicitor in breach of trust, resulting in a complete loss of the entire amount to the victim without the prospect of any restitution, comes within the broad band of the worst type of theft case to come before the courts. In our judgment, the starting point of 10 years’ imprisonment, which is the maximum for the offence, was entirely appropriate. There is no merit in Ground 1.

Ground 5

48.  As for the complaint concerning the discount from that starting point, there can be no quarrel with the adoption of a 25% discount for a late plea under the revised practice in Ngo Van Nam. The question is whether the revised practice applied to the appellant’s offence committed before it came into being. The Court in Ngo Van Nam plainly thought that it did, when it stipulated[22]:

“The revised practice of affording discounts of sentence for pleas of guilty is to be applied only to those who, in future, reach the stages in criminal proceedings identified in this judgment at which revised discounts of sentence for pleas of guilty are identified. So, for example, the revised practice applies to a defendant currently in the magistracy who, in the future, is committed to the Court of First Instance for trial.” (Emphasis supplied)

The Court obviously contemplated that the revised practice would apply to those who were already in the court system and had, therefore, already committed a crime before the publication of the judgment. While the appellant had committed the relevant crime some two years before Ngo Van Nam was decided, he was not even in the court system until nearly three years later.

49.  It is suggested by Mr Kuan that this practice may not sit well with the statement of the Court of Final Appeal in Wong Chi Fung[23], namely:

“77. As a reflection of the principle of legal certainty, it is settled law that the sentence for an offence should be in accordance with the practice prevailing at the time of the commission of the offence: see HKSAR v Tsoi Shu [2005] 1 HKC 51 at [99], citing R v Chan Ka Wai (CACC 530/1988, [1989] HKEC 366) at [6]-[7].

78. The principle that an offender is to be sentenced on the existing or prevailing guideline or tariff of sentence existing at the time of the commission of the offence reflects the protection against retroactive criminal penalties conferred by art.12(1) of the Hong Kong Bill of Rights which relevantly provides:

‘…Nor shall a heavier penalty be imposed than the one that was applicable at the time when the criminal offence was committed. If, subsequent to the commission of the offence, provision is made by law for the imposition of a lighter penalty, the offender shall benefit thereby.’ ”

50.  We cannot agree with Mr Kuan’s interpretation of these passages. There is a distinction between sentencing guidelines and so-called “tariffs” on the one hand, and the practices and procedures that govern the application of judicial discretion as to how to approach and apply those guidelines and tariffs on the other. It would be extraordinary if a defendant were to be arrested almost three years after Ngo Van Nam came into being but judges were obliged to ignore its effect on the sentencing exercise merely because the offence occurred two years before the case was decided. As Ms Lo pointed out, the appellant had an unfettered choice whether to plead guilty or not and at which stage, which was the same choice as any other defendant coming before a criminal court, and it was not compromised by the fact that he committed the offence so long ago; nor should it give him an unfair advantage now in circumscribing the judge’s discretion in sentence. We reject Ground 5.

Ground 4

51.  We turn to the complaint that the judge was either obliged to accept the mitigation as to the appellant’s motive in transferring the US$10 million to Su, or to inform counsel if he was minded not to accept it. We have to say we find it extraordinary that notwithstanding the appellant’s concerns and beliefs about the fraudulent nature of the CUP scheme, which seems to have propelled him to report those concerns and beliefs to various authorities in Hong Kong, the United States and elsewhere in August and September 2014, he not only accepted a further US$10 million from X for investment in CUP in October 2014, but then channelled it entirely into Su’s account a mere 5 days later. There has been no sensible or credible explanation why he should have done so and it is remarkable that despite all the reports he made to various authorities about the suspected fraudsters involved in CUP, he never once, between October 2014 and his arrest in June 2019, or even thereafter, saw fit to report Su to the authorities.

52.  We are very dubious about the real relationship between the appellant and Su and we would not have expected any judge to accept the assertions made on his behalf in mitigation that simply because he believed she was a fellow Christian[24] and a “red second generation” with wide connections, who was “working on another project with promising returns”[25], he would have transferred US$10 million of someone else’s investment to her in breach of trust. No further details were given to support these bare assertions and they do not impress us either. There is no merit in Ground 4.

Ground 2

53.  We turn to the complaint that not enough discount was given for mitigation in respect of the appellant’s information. There is no doubt that the appellant did write, in August and September 2014, to various authorities, alerting them to his suspicions that CUP was a vehicle for fraud and giving the names and details of some of those involved. As we have said, that conduct makes his subsequent acceptance of a further US$10 million from X in October 2014 incomprehensible, and his transfer of the money to SU five days later, indefensible.

54.  Nevertheless, we must acknowledge that his actions in alerting the authorities to the people involved has led to the arrest in another jurisdiction of altogether six people, of whom we are informed two have pleaded guilty. Ms Lo does not quarrel with these facts. His actions have, therefore, assisted the authorities to the extent that the fraud has been exposed and brought to a halt with several arrests; unfortunately, not early enough to prevent X from being fleeced of US$10 million by the appellant himself.

55.  This is a peculiar permutation of the mitigating factor concerning assistance to the authorities, inasmuch as the assistance came before the commission of the very crime with which the appellant has been indicted. We do not accept, in those circumstances, that any particular formula or discount range can be applied to such facts, which are highly unusual and case-specific. We think the judge was right to acknowledge the appellant’s assistance as a mitigating factor. However, we consider that the 3 months’ discount was not sufficient and the appellant should have been accorded a slightly greater discount for his assistance in such circumstances. The total overall discount for assistance, which we would have envisaged, is 6 months.

Ground 3

56.  Finally, we should say that we were not impressed by the argument in Ground 3 that the appellant’s age and previous good character should merit any further separate discount. The appellant may have been 70 years of age at the time of sentence but the actual offence had been committed some 8 years previously. To a very limited extent, we have borne his good character in mind when assessing his motive for reporting the matter to the authorities, as well as the level of discount for his late plea. At the end of the day, however, despite his advancing age and previous good character, the appellant has committed one of the worst cases of theft of its kind, in breach of the trust reposed in him as a solicitor, with the consequent loss to X of an enormous sum of money. Moreover, the appellant’s actions have not only ended his own career: they have severely tarnished the profession in Hong Kong of which he was a member.

Conclusion

57.  In all the circumstances, we are not prepared to make anything other than a modest adjustment to the sentence under Ground 2 only. Accordingly, the appeal is allowed to the extent that the appellant’s sentence will be reduced from 7 years and 3 months’ imprisonment to 7 years’ imprisonment.