SECRETARY FOR JUSTICE v. LI CHE HING AND OTHERS

CAAR 6/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

APPLICATION FOR REVIEW NO 6 OF 2000

(ON APPEAL FROM DCCC 1090/1999)

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J U D G M E N T

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Hon Mayo Ag. CJHC (giving the judgment of the Court):

1. This is an application by the Secretary for Justice to review sentences which were passed by H H Judge Davies in the District Court in DCCC 1090/99 pursuant to section 81A of the Criminal Procedure Ordinance, Cap. 221.

2. The three respondents were charged with a conspiracy to defraud contrary to Common Law. Particulars of the conspiracy were that:

"LI Che-hing, KO Chi-kwong and YU Chun-man, between the 1st day of July 1997 and the 30th day of April 1998, in Hong Kong, conspired together and with David Hendy, Carl VOIGT and other persons unknown to defraud the Buildings Department and the developer of the Tung Chung Station Development Project Package II (Site 4), namely Tung Chung Station Development Company Limited, by dishonestly:

1) constructing the bored piles for the foundation works of Tung Chung Station Development Project Package II (Site 4) (the project) otherwise than in accordance with the approved site plans under Buildings Department reference number 3/7337/96 and the 'Agreed Founding Levels';

2) falsely representing that the bored piles were constructed in accordance with the said approved plans under Buildings Department reference number 3/7337/96;

3) causing and permitting the said Buildings Department to consent to the commencement of pile cap construction for Block H1, H2, H3 & H4;

4) causing and permitting the said Tung Chung Station Development Company Limited to pay for work done otherwise than in accordance with the said approved site plans under Buildings Department reference number 3/7337/96 in relation to the project; and

5) causing and permitting the said Tung Chung Station Development Company Limited to pay for work which has not been done."

3. R3 pleaded guilty and R1 and R2 pleaded not guilty. After a trial lasting twenty days R1 and R2 were convicted as charged. R1 was sentenced to 1 year 9 months imprisonment, R2 to 6 months imprisonment and R3 to 1 year 9 months imprisonment. It also has to be added that R3 gave evidence at the trial for the prosecution. The Judge had taken starting points of 2 years 6 months; 12 months; and 3 years 6 months respectively.

4. It was accepted by the Judge that the main instigators of the conspiracy namely two of the senior members of the management of I-P Foundations Limited had absconded. They had given instructions to R1 to drill bored holes to a level which was less than the prescribed length stated in the approved site plans and that he had passed on these instructions to R2 and R3.

5. In his reasons for sentence the Judge indicated having regard to the seriousness of the conspiracy that a sentence of approximately 5 to 6 years imprisonment was appropriate for those "mainly responsible for making the decision to engage in this unlawful and dangerous enterprise, and who thereby compromise subordinates".

6. R1 was the project manager, R2 the site agent and R3 the site engineer.

7. What these men had been involved in was:

"(1) rigging measurement tapes;

(2) constructing steel cages for inspection to lengths for approved founding levels before having them cut following inspection to fit the actual depths of the piles constructed;

(3) hiding the quantity of cut steel over and above normal excess so that the RE would not become suspicious;

(4) drilling out prior to inspections core samples of sufficient length to make the RE and BD inspectors believe the piles were of the approved depths;

(5) drilling core holes deeper than the actual depths of the piles with the same intention;

(6) ordering concrete sufficient to meet the approved volume of the piles and then entering into an agreement with representatives of the cement company whereby deliveries of cement would stop once the volume of the actual pile had been filled;

(7) knowingly signing and submitting to the RE documentation which contained false information in particular relating to founding levels of the piles and the grade of rock stratum into which the piles were embedded."

8. Understandably the Judge took a serious view of this matter and at p. 1 of his reasons for sentence he stated:

"This matter has been a quite shocking insight into working practices of some members of Hong Kong's construction industry. I am given to understand that this is not an isolated case, but one which reflects a malpractice which has become common within the industry in Hong Kong. Such practices throw doubt upon the safety of Hong Kong's high-rise buildings, and what took place here was not only deceitful but quite frightening, in that substantial remedial work was necessary to ensure that the buildings were safe for occupation. What occurred not only undermines the tendering system, but sullies Hong Kong's reputation for well-built and safe high-rise buildings."

and then at p. 2 of the reasons for sentence which reads:

"All along the line, too much trust was placed in persons who plainly did not warrant it. That said, the culpability of these defendants and of those who joined with them in this dishonest enterprise cannot be understated, because of the potential serious danger to other human beings as a result of their actions. Everyone has a personal obligation to ensure that he or she avoids implication in crime, and what happened in this case was without doubt a criminal activity.

Even if one were to ignore the inherent dangers in constructing piles to depths based on time and financial constraints rather than on geo-technical and engineering considerations and solutions, there is the plain fact that the developer was called upon to pay for work which was not done. In this case, the developer paid a substantial amount for works not done."

9. It is the contention of Mr McWalters for the Secretary for Justice that having regard to the seriousness of this offence the sentences which were imposed were either manifestly inadequate or wrong in principle. It is difficult not to agree with this submission.

10. It has to be said immediately that this was a very serious offence which carries a maximum of 14 years imprisonment. What is involved is a major public safety issue. The failure to comply with the necessary requirements almost inevitably will subject any buildings erected on the site to the grave hazard that they might collapse and thus cause loss of life and severe injuries to the occupants of the building. The number of people placed at risk could run into the hundreds. This is to say nothing of the cost of effecting remedial measures to rectify the failure to comply with the necessary requirements.

11. It is our view that the starting point of 5 to 6 years imprisonment for the type of offenders referred to by the Judge is far too low and does not adequately reflect the criminality involved. In a situation where any party is mainly responsible for making the decision to engage in such a scheme, has deliberately failed to comply with the necessary requirements for financial gain and orders subordinates to go along with the deceptions which will inevitably be practised a starting point of somewhere in the region of 10 years imprisonment would be in no way excessive.

12. It is evident from reading the reasons for sentence as a whole that besides adopting too low a starting point the Judge fell into error in two ways.

13. The first was that the Judge attached much too much weight to the submissions which were made to him in mitigation to the effect that these men were simply doing what their superiors ordered them to do. It had been said in mitigation that they had obtained no financial benefit themselves for what they had done. They had only acted in the way they had to avoid being dismissed.

14. Mr McWalters accepted that the culpability of these respondents was less than that of the superior officers in their employers I-P Foundations Limited.

15. However he submitted that in arriving at an appropriate sentence it was essential to have regard to the overall seriousness of the offence. He contended that this was of much greater significance than the actual roles assumed by the individual conspirators which on account of their different duties would vary. They were all endeavouring to achieve the same end.

16. In this connection he placed reliance upon Keith JA's acceptance of the view of the trial judge in HKSAR v KWOK Chi-hung Unreported being CACC 261/99:

"... where he unhesitatingly rejected the suggestion that the defendants' conduct was in any way excused by their vulnerable position as employees whose employment would have been put at risk if they had declined to go along with the scheme."

17. In considering the roles which were exercised by these respondents in this conspiracy it is not on the material which was before the Judge possible to differentiate between the respondents in any significant way their involvement.

18. There were of course some differences. For example R1 ceased being a conspirator at an earlier stage than the other respondents. However as against this he had been the person who had relayed the instructions to R2 and R3. We consider that the most just course to adopt is to find each of these respondents equally culpable and to adopt a similar starting point for them all.

19. As has been indicated earlier in this judgment the respondents were fully aware of what this conspiracy involved and the Judge should have adopted a starting point of 6 years imprisonment.

20. The second error made by the Judge was to attach far too much weight to the personal circumstances of these respondents. This was particularly the case concerning R1 and R2.

21. Notwithstanding the fact that R1 and R2 had chosen to defend the proceedings the Judge gave a 30% discount to R1 and a 50% discount to R2. R3 got a 50% discount. However he had pleaded guilty and he did give evidence for the prosecution.

22. While it is true that all of these respondents had excellent previous characters it was wrong in principle for the Judge to give them the discounts he did.

23. Mr McWalters was quite correct in pointing out that for an offence as serious as this little if any discount can be given for previous good character.

24. It is however possible to give a discount when on an application for review there is a very substantial increase in the sentence imposed. We feel also that in addition to this as R2 is due to be released on 28 September 2000 we are justified in giving him a further discount of 6 months.

25. So far as R3 is concerned we accept that he was entitled to a discount substantially in excess of the usual 1/3 discount for his plea on account of his giving evidence for the prosecution. The 50% discount given by the Judge was appropriate.

26. Having regard to all of this we are satisfied that the sentences which were imposed by the Judge were manifestly inadequate and wrong in principle. The application accordingly is successful.

27. Adopting a starting point of 6 years R1 will receive a discount of 1 year and R2 a discount of 18 months and the sentences they will serve will be sentences of 5 years imprisonment and 4 1/2 years respectively. R3 will receive a discount of 3 years for his plea and for the assistance he rendered and a further 1 year on account of the significant increase in the starting point adopted. He will now serve a sentence of 2 years imprisonment.