R. v. WONG TAK LAM

IN THE COURT OF APPEAL

1995, No. 737
(Criminal)

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J U D G M E N T

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Hon Yang, C.J.:

1. This is the judgment of the court.

2. The applicant was convicted on his own plea to five charges of using a copy of a false instrument. He was sentenced to three years' imprisonment on the first charge and one year each on the second to the fifth charges. The sentences are to run concurrently. This is his application for leave to appeal against those sentences.

3. Two grounds have been advanced on his behalf today. Firstly, it is said that the judge did not consider adequately or at all that (a) the applicant had a clear record and pleaded guilty, and (b) that there was no evidence that the bank which offered the applicant a further credit facility on the basis of his forged documents suffered any loss at all as a result of the deception.

4. The second ground is that although the forged documents showed falsely that the applicant's company was HK$37.4 million better off then it really was, the judge did not consider at all the potential loss to the bank. It is further argued under this ground that the amount of HK$37.4 million only represents the amount of the deception and not the amount that the bank was prepared to offer as a credit facility.

5. Briefly the facts of the case are these. The applicant was a director and shareholder of a company called the Mainland Metals & Minerals Limited ("Mainland"). At about the end of 1991, Mainland was in financial difficulties, and by early 1992, Mainland owed the ING Bank about US$9 million. The applicant requested the bank to grant Mainland a further credit facility. Before the bank could decide whether to grant the facility asked for, they needed the applicant to supply them with the financial report of his company for consideration.

6. The applicant, on 31 March 1992, submitted his company's financial report to the ING Bank and a number of other creditors of his company. The bank noted that there was a discrepancy of about HK$37.4 million in the accounting records which were unexplained.

7. During a meeting on 11 November 1992 between the applicant, a representative of the ING Bank and also representatives of other creditors, the applicant explained that the discrepancy was attributable to three remittances made to the Hainan Province Foreign Trade (Group) Corporation ("Hainan") and these remittances were not recorded. He further explained that these remittances were for purchasing tin ore.

8. In support of his claim, the applicant produced five documents which he later admitted to have been forged by him. Firstly, there was a copy of a Letter of Reconciliation dated 20 July 1991 purportedly issued by Hainan stating that US$560,000 was remitted by Mainland to Hainan. Secondly, there was a further copy of Letter of Reconciliation dated 6 August 1991 purportedly issued by Hainan stating that the sum of US$3,108,832.43 was remitted by a subsidiary company of Mainland called the Leong Shing Hong for the purpose of purchasing ore. The third document was also a copy of a Letter of Reconciliation dated 4 November 1991 purportedly issued by Hainan stating that the sum of US$1,130,868 was remitted by Leong Shing Hong to repay a loan. The fourth document was a copy of Notification of Receipt of Payment dated 4 November 1991 purportedly issued by Hainan stating that the above remittances had been received. Finally, there was a copy letter from Mainland dated 13 June 1992 purportedly issued by a Wong Tak Lee stating his result of investigation in these remittances. The letter was in fact not issued by Wong Tak Lee but by the applicant himself.

9. The truth of the matter was that Hainan did not receive any remittances from Mainland, nor did Mainland purchased any ore material, and the loan did not exist.

10. Mr Fenton, acting on behalf of the applicant this morning, stresses that the judge in adopting a starting point of four to five years erred in not indicating more precisely what her starting point was, and he argues that for the purpose of this case, this court ought to interpret the judge's starting point as one of four years rather than a longer period.

11. He referred us to a document entitled "Mainland Group Restructuring Agreement" made on 24 February 1993 by all the parties concerned. It is not disputed that this is a genuine document. But shortly after the date of the agreement, the deception perpetrated by the applicant was discovered, so the agreement collapsed as a result.

12. Mr Fenton's main argument in respect of the Restructuring Agreement is that the applicant's creditors were to take over Mainland entirely and that the applicant was to retain no shares in that company. Furthermore, the applicant was not to benefit from the loan restructure as a result of the agreement. His only benefits were limited to three aspects. First, that in this so called "rescue" operation of Mainland he would not have to be declared a bankrupt. Secondly, he would continue to be employed by the new owners, and thirdly, 120 employees of Mainland would continue to be employed by the new owners. In short, the new owners would simply take over the debts which the applicant had owed them.

13. Another argument advanced on behalf of the applicant was that the judge in her Reasons for Sentence did not indicate what the amount of money was which was related to the deception perpetrated by the applicant. However, it is not disputed that it must have been a very substantial amount indeed.

14. Clearly, the judge, in her Reasons for Sentence, referred to the offences committed by the applicant as an attempt to bolster his application for loan restructuring. Clearly too, she took into consideration the restructuring agreement. She said -

"Here the business was already in debt to the victim bank - a restructuring was planned and at that stage you decided to make the bank believe your business was in better financial health than it actually was, hence these offences."

15. In our view, the judge in her consideration of the appropriate sentences to be passed took into account all the relevant matters and came to the view that a sentence of three years' imprisonment was appropriate.

16. Having been referred to some of the authorities, we are of the view that three years is somewhat on the high side though still within the acceptable range of sentences. For these reasons, the application is refused.