HKSAR v. HUI TSZ-HANG

DCCC 804/2021

[2022] HKDC 381

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 804 OF 2021

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REASONS FOR SENTENCE

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Charges

1.  The defendant pleaded guilty to two charges of fraud and admitted the following facts.

Facts

2.  Konew Capital International Limited (Konew)  provided first and second mortgage loan services to property owners.  Mr Li (PW1)  was the manager of Konew.

3.  Between 2010 and 2017, Ms Ho (PW2), mother of the defendant, purchased 3 properties in the defendant’s name: Property 1 as described in charge 1, Property 2 and Property 3 as described in charge 2.

4.  On 27 March 2019, upon the request of PW2, the defendant made a declaration in the Home Affairs Department (“HAD”)  confirming that Properties 1 to 3 belonged to PW2. The purchase monies came from PW2, and the defendant only held the 3 properties on trust for her.  The defendant did not have any right to sell or mortgage the properties (“Declaration”).  The Declaration was kept by PW2 and it was delivered to the Land Registry for registration by the legal representative of PW2 on 8 October 2020.

Charge 1

5.  On 17 January 2020, the defendant applied to take out a second mortgage loan of Property 1 from Konew. PW1 explained the loan documents to the defendant. The defendant signed, inter alia, the loan agreement and a declaration form which confirmed that the down payment and mortgage repayments of Property 1 were paid by him and he was the sole and absolute owner of Property 1.  He was then granted a mortgage loan of HK$3 million. The money was used to settle the previous mortgage loan owed to Everfaith Capital Group Limited, and the balance of HK$992,936 was deposited into the personal account of the defendant.

Charge 2

6.  On 21 September 2020, the defendant went to Konew again to apply for second mortgage loans of Properties 2 and 3 in the amount of HK$7 million.  Ms Law (PW3)  explained the loan documents to the defendant.  The defendant signed, inter alia, the loan agreement and a declaration form which confirmed that the down payment and mortgage repayments of Properties 2 & 3 were paid by him and he was the sole and absolute owner of these two properties.  He also confirmed that PW2 had no title to Properties 2 and 3.  He was later granted a loan of HK$4 million. The money was used to settle the previous mortgage loan owed to Zero Finance Hong Kong Limited and the balance of HK$1,398,016 was deposited into the personal account of the defendant.

7.  On 12 January 2021, Konew received a letter from the legal representative of PW2 claiming that Properties 1 to 3 belonged to PW2 and she had instituted civil proceedings against the defendant.

8.  On 7 May 2021, the defendant was arrested and he remained silent under caution.  In the subsequent video recorded interview, he stated, inter alia, that:

a. the down payments of Properties 1 to 3 were paid by PW2 and the mortgage payments were offset by the rental income; he made the Declaration at the HAD and the Declaration was kept by PW2;

b. he had received a cold call promoting the mortgage refinance; he therefore took out the loans without PW2’s knowledge; the loan agreements and declarations were signed by him; he knowingly made a false declaration to Konew;

c. he had lost all the money on gambling.

9.  PW1 confirmed that had Konew known that the defendant was not the sole and absolute owner of Properties 1 to 3, they would not have approved the loan applications.

Criminal Record

10.  The defendant is of clear record.

Mitigation

11.  Mr Lai, Counsel for the defendant, submits in mitigation that the defendant being single is now aged 34. Prior to the offences, he resided with his mother.  Upon discovery of the subject offences, he was evicted by his family.

12.  In respect of his work, the defendant attained a higher diploma in mechanical engineering and was employed as an engineering foreman.  As he was unable to repay the loans taken out in the offences, he began receiving calls at his office urging him to repay his debts.  His supervisor became aware of this, and the defendant was forced to resign.

13.  Both the defendant and his elder brother have written letters to the court.  In his letter, the defendant said that he regretted for what he had done and offered his sincere apologies to the victims involved in this case.  He said he had lost his career and his girlfriend.  He has decided to turn a new leaf after release from prison and to take good care of his mother whose health is deteriorating. His elder brother described the defendant as a kind man who grew up in a broken family.   

14.  Mr Lai further submits that the present case involves a breach of trust reposed in the defendant by his mother.  The total amount in these 2 charges was HK$7 million. Adopting the sentencing guideline for breach of trust cases, the starting point for sentence for this amount should be 6 years and 8 months.

15.  Mr Lai refers this court to a number of authorities namely HKSAR v Ho Ka Keung (unreported CACC 196/2007), HKSAR v Ng Kwok Wing [20087] 4 HKLRD 1017, HKSAR v Lam Wing On (unreported, CACC 108/2018), HKSAR v Ling Veronica (unreported, CAAR 1/1998), HKSAR v Kong Hon Yui Kevin (unreported, CACC 473/2009)  and HKSAR v Chau Kar Ho Bernard (unreported DCCC 1166/2013).

16.  Mr Lai has helpfully prepared a table summarizing the salient features of the authorities mentioned. He then proceeds to compare those cases with the present case:

a. the defendant acted alone whereas accomplices were involved in cases Ling Veronica and Kong Ho Yui Kevin;

b. the deception scheme here was not carefully planned and not sophisticated than those in cases Ling Veronica, Kong Hon Yui Kevin and Chau Kar Ho Bernard;

c. no forged documents or identities were used in the perpetration of the frauds but forged identity cards and/or powers of attorney and/or company seal and company minutes were used in those 3 cases aforementioned;

d. the amount fraudulently deceived here was HK$7m which is less than that in Ling Veronica (HK$8.2m), Kong Hon Yui Kevin (HK$11m)  and significantly less than that in Chau Kar Ho Bernard (HK$17m).

17.  Having stressed that the facts of the case are less serious than the others, Mr Lai draws to the court’s attention to two mitigating factors namely:

a. the guilty pleas of the defendant; and

b. the defendant voluntarily surrendered to the police after being informed that he was sought by them regarding the present case.

18.  In respect of the defendant’s voluntary surrender, Mr Lai relies on para 59 of HKSAR v Lam Hoi (unreported, CACC 105/2016)  in which the Court of Appeal said:

“A further discount must then be awarded to the appellant to reflect his surrender to the police. Surrender to the authorities can take a number of different forms, each of which may be of a different mitigating value…At the lowest level is an offender who is within the jurisdiction and who is being actively sought by the police but who the police have not been able to apprehend. Somewhere with this range is the offender who, liked this appellant, returns to the jurisdiction to surrender to the police who are seeking him for an offence they can prove he has committed. In our view the mitigating value of this form of surrender falls towards the lower end of the range and we would allow only a further discount of 4 months for this mitigating factor.”

Reasons for Sentence

19.  In sentencing, I have carefully considered what was said on behalf of the defendant by Mr Lai including the authorities referred to. I have also considered other authorities including SJ v Buk Chui Ying [2008] 5 HKLRD 185 and HKSAR v Irene Lee [2012] 4 HKLRD 212 and the relevant paragraphs of Sentencing in Hong Kong 9^th Edition, Cross & Cheung.

20.  In contrast with the three cases cited in the said table, Mr Lai considers that the fact of the present case was less serious than those mentioned. Therefore, he urges this court to adopt a starting point lower than 6 years. 

21.  This is clearly a breach of trust case. The defendant made the declaration that he held the 3 properties on trust for her mother.  He however represented to Konew that the down payment and mortgage repayments were funded by him and that he was the sole and absolute owner of the properties in order to obtain two loans for his own benefit.  The breach of trust was one placed in him by his mother. 

22.  Obviously, he committed the offences out of greed. He committed these offences during a period of 9 months and the amount of the loans fraudulently obtained amounted to $7 million which is substantial.

23.  The Court of Appeal has laid down sentencing guidelines for cases involving breach of trust: HKSAR v Cheung Mee Kiu [2006] 4 HKLRD 776, such guidelines were revised in HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017.  Where the amount stolen is between $3 million and $15 million, the sentencing range is from 5 to 10 years.  By way of a strict arithmetical calculation, the amount involved here, $7 million, will attract a starting point of 6 years and 8 months’ imprisonment.  However, I consider that the court may adjust the starting point upwards or downwards according to the circumstances.

24.  In Ng Kwok Wing, the Court of Appeal said at paragraphs 20 to 23[1] that the sentencing guidelines of Cheung Mee Kiu are not strait-jacket.

25.  Besides, the Court of Appeal in Lam Wing On said at paragraphs 114 and 115[2], and I summarize, that in determining the sentence the following matters are to be considered: (i)  the quality and degree of trust reposed in the offender including his rank; (ii)  the period over which the theft was perpetrated; (iii)  the use to which the money dishonestly taken was put; (iv)  the effect upon the victim; (v)  the impact of the offences on the public and public confidence; (vi)  the effect upon fellow-employees or partners; (vii)  the effect on the offender; (viii)  the offender’s own history and (ix)  those matters of mitigation special to the offender such as illness; being placed under great strain or where has been a long delay.

26.  As shown in the facts, I am satisfied that the defendant acted alone in committing the offences. Although the two offences were committed within a period of 9 months, the degree of premeditation and the modus operandi employed in the offending was less elaborated and sophisticated when compared to the above mentioned cases. Having considered all the circumstances of the case, I adopt a starting point of 54 months for charge 1 and 59 months for charge 2. 

27.  Giving the defendant full credit for his pleas of guilty reduces the sentence on charge 1 to 36 months and on charge 2 (and I round up)  to 39 months.

28.  In respect of his voluntary surrender, both Mr Hui, Counsel for the prosecution, and Mr Lai submit to the court the following chronology of events:

(i)  Knoew reported the matter to the police on 3 February 2021 and the police started investigating into it;

(ii)  the police carried out an arrest operation on 17 March 2021 but the defendant could not be located at the address he gave to Konew;

(iii)  the defendant had moved out before the arrest operation;

(iv)  on 7 May 2021, the defendant made a report to Sham Shui Po Police Station as he considered himself a victim of a telephone fraud;

(v)  20 minutes after he left the police station, he received a call from Sham Shui Po Police Station that he was told about the general nature of the matter of this case and asked to return to the police station;

(vi)  he returned to the police station and was arrested;

(vii)  on 8 May 2021, he attended a video recorded interview and he made frank and full admissions to the offences as he now admits in the summary of facts (see para 8).

29.  I understand from the prosecution that the form of voluntary surrender, if the court so accepts, falls into the lowest end described in Lam Hoi.   Mr Lai states that perhaps the discount given to the defendant should be less than the quantum given in Lam Hoi (i.e. less than 4 months).

30.  When the defendant received the call asking him to return to Sham Shui Po police station, he was fully aware of the nature of the investigation taken against him.  Needless to say, he knew full well what he had done to Konew and to his mother.  He chose to return to the station on the same day after receiving the call and made full admissions to the offences.  I am satisfied that it is a form of voluntary surrender albeit, as rightly submitted, it falls into the lowest end of the scale for discount.

31.  As such I further reduce the sentence for each charge by 2 months.  The sentence for charge 1 is 34 months and that for charge 2 is 37 months.  

Totality

32.  As each offence represents additional culpability of the defendant, the sentences could in principle be made consecutive.  However, the totality principle comes into play.  Taking into account all the circumstances of the case including the total amount of money involved which was substantial and the overall culpability of the defendant, I consider that a global starting point for the 2 charges should be 72 months’ imprisonment which is reduced to 48 months for his guilty pleas and further reduced to 46 months for his voluntary surrender. 

Conclusion

33.  In order to achieve the resulting sentence of 46 months, I make the following orders:

a. the sentence of charge 1 is 34 months;

b. the sentence of charge 2 is 37 months, 12 months of which should run consecutively to that of charge 1 (25 months concurrent), making a total of 46 months’ imprisonment.

34.  The defendant has to serve a prison sentence of 46 months’ imprisonment.