HKSAR v. CHENG CHI WAI

CACC 94/2011 and
CAAR 2/2011
(Heard Together)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 94 OF 2011

(ON APPEAL FROM DCCC NO. 1174 OF 2009)

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BETWEEN

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J U D G M E N T

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Hon McWalters J (giving the judgment of the court):

Introduction

1.  On 11 February 2011 the applicant was convicted by District Judge J. Yau of five counts of handling stolen goods contrary to section 24 of the Theft Ordinance, Cap 210 and on 2 March 2011 sentenced to a total of 3 years and 6 months imprisonment.  He has applied for leave to appeal his conviction.

2.  On 24 March 2011 the Secretary for Justice was granted leave to apply for a review of the sentences under section 81A of the Criminal Procedure Ordinance, Cap 221 and the application was filed the following day.

3.  At the hearing of the application for leave to appeal against conviction we dismissed the application and said we would give our reasons on a later occasion.  This we now do.

4.  In respect of the application by the Secretary for Justice to review the sentences imposed on the applicant we reserved our decision.  This is our judgment on that application.

The Appeal Against Conviction (CACC 94/2011)

The Prosecution Case at Trial

5.  All the stolen property that is the subject of the charges are motor vehicles.  The applicant is the operator of a motor vehicle workshop located within a large open yard around which was a 6 metre high fence covered in hoardings that has the effect of preventing anyone outside the yard from seeing what is taking place inside the yard.

6.  The police only became aware of the applicant and his yard because a vehicle that had been stolen ended up there.  This vehicle was equipped with a GPS device which enabled the driver of it to locate it quite quickly.  Once it had been located a report was made to police.

7.  The police arrived and when the applicant became aware of their presence he attempted to flee but was intercepted and arrested.  No‑one else was present inside the yard.

8.  A total of six stolen goods vehicles were found inside the yard.  It was subsequently ascertained that they had been stolen between 2001 and 2009. Around the yard and inside the workshop a large number of tools were found. These included spray-painting guns, 10 oxyacetylene cylinders and 8 – 10 electrical metal grinders.  Though this equipment could be used for legitimate purposes it could, of course, also be used for illegitimate purposes.  The spray-painting equipment can be used to disguise a stolen vehicle and the grinders can be used to remove chassis or engine numbers, stamped on the metal.  Indeed it was discovered that this had been done to two of the vehicles that were recovered.

9.  The first charge relates to the GPS equipped vehicle which led to the discovery of the applicant’s premises.  When this vehicle was seen in the applicant’s yard its engine and radiator were exposed and its goods compartment, number plates and vehicle licence already removed.  Its number plates were found in another part of the yard with a number of items that had originally been placed on board of it.

10.  The second charge concerns a vehicle stolen in 2005.  It now had different number plates and was painted in a different colour.  Its chassis and engine numbers had been obliterated.  In its new guise it was registered in the name of the applicant’s company.

11.  The third charge concerned a vehicle that had been stolen in 2001.  It was found in the applicant’s yard and its chassis and engine numbers had been obliterated.  It now had a different number plate and was registered in the name of the applicant’s company.

12.  The fourth charge concerned a vehicle that had been stolen on 27 May 2009.  On 1 June 2009 the police found the cabin of this vehicle, its two vehicle licences and its number plates inside the applicant’s yard.  The cabin of this vehicle had been dismantled into three parts.  The rest of the vehicle could not be found.

13.  The fifth charge concerned two vehicles that had been stolen on 30 and 31 May 2009 respectively.  Both vehicles were found in the applicant’s yard on 1 June 2009.

14.  It was an admitted fact that all of the vehicles that were the subject of the five charges were stolen vehicles.

The Defence Case

15.  The defence case consisted of the evidence of the defendant and of a clinical psychologist and psychiatrist.  The latter two were called to give expert evidence on the fact that the applicant had a low IQ and how that fact might make him more vulnerable to being cheated and exploited.

16.  There is no need to discuss the applicant’s evidence in any detail as it was rejected by the District Judge, and understandably so, and is not relevant to the grounds of appeal.  For present purposes it is only necessary to state that the applicant denied being the thief or handler of the vehicles the subject of the charges.

17.  The psychologist and psychiatrist were able to say little more than that the applicant was not as smart as the general public.  When their evidence traversed issues of how likely he might be to be exploited or cheated by others, such as by the person to whom he claimed he had rented that part of the yard where most of the stolen vehicles had been found, the District Judge found the evidence of little assistance to him.  Again nothing turns on this for the purpose of the appeal.

The Grounds of Appeal

18.  There are two grounds of appeal but they both relate to the same matter, namely that part of the handling offence which requires that the actus reus relied on, here receiving, is “otherwise than in the course of stealing”.  It is said that the evidence against the applicant allows equally of the possibility that he was the thief.  Yet this part of the offence and the legal principle that the thief cannot, except in special circumstances, be a handler by receiving, was not adverted to by the parties at trial and not considered by the District Judge.

19.  Mr Haynes for the applicant argues that the requirement that the handling be otherwise than in the course of stealing is an important safeguard because, he claims, handling is a more serious offence than theft as evidenced by the fact that it attracts a heavier punishment.

20.  He submits that here the evidence in respect at least of some of the vehicles allowed equally of the possibility that the applicant was the thief of the vehicles.  The evidence he refers to is the close temporal proximity of the theft of the vehicle to their discovery in the applicant’s yard thus giving rise to the operation of the so-called doctrine of recent possession.  The other evidence were the facts that:

(i)  the applicant was physically able to drive these types of vehicles (ie goods vehicles);

(ii)  when interviewing the applicant the police cautioned him for theft;

(iii)  uncut key blanks were found in the yard; and

(iv)  the conclusions of the trial judge that the applicant acted alone at his yard and that the defendant was “a party to the crime” of theft of the vehicles.

Discussion

21.  It is true that in respect of some of the vehicles there is only a short lapse of time between the stealing of the vehicles and the discovery of them. It is also true that such a close proximity of time between stealing and being found in possession of stolen goods would normally give rise to the operation of the doctrine of recent possession.  But even if the doctrine comes into play it does not necessarily mean that as a consequence the only conclusion a court could reach is that the applicant was the thief of these motor vehicles.  The doctrine of recent possession is essentially just an inference that can be drawn from suspicious facts that call for an explanation.

22.  The inference that may be drawn will depend upon not just the nature of the suspicious facts (ie the recent possession of the stolen property) but the whole of the evidence in the case.  The drawing of any inference is always a fact sensitive matter and this is no less so than when drawing an inference from recent possession of stolen property.  The facts may point to an inference that the person in possession of the stolen property was the thief of it or they may point to him being only a handler of it.

23.  In HKSAR v Ho Sik-kuen & anor CACC 92/1999 Leong JA in giving the judgment of the Court of Appeal said:

“  The following passage from Cross on Evidence 5^thed, p 49 which had been adopted in R v Smythe, 72 Cr App R 8 CA and cited in this para 21 – 125 of Archbold explains the doctrine of “recent possession” clearly:

“If someone is found in possession of goods soon after they have been missed, and he fails to give a credible explanation of the manner in which he came by them, the jury are justified in inferring that he was either the thief or else guilty of dishonestly handling the goods, knowing or believing them to have been stolen…. The absence of an explanation is equally significant whether the case is being considered as one of theft or handling, but it has come into particular prominence in connection with the latter because persons found in possession of stolen goods are apt to say that they acquired them innocently from someone else. Where the only evidence is that the defendant on a charge of handling was in possession of stolen goods, a jury may infer guilty knowledge or belief (a) if he offers no explanation to account for his possession, or (b) if the jury are satisfied that the explanation he does offer is untrue.”

In R v Raviraj [1987] 85 Cr App R 93 referred to in Archbold para 21 – 319, the doctrine was further explained by Stocker, L.J. in the following terms:

“The doctrine is only a particular aspect of the general proposition that where suspicious circumstances appear to demand an explanation, and no explanation or an entirely incredible explanation is given, the lack of explanation may warrant an inference of guilty knowledge in the defendant. This again is only part of a wider proposition that guilt may be inferred from unreasonable behaviour of a defendant when confronted with facts.”

24.  The use of the word “doctrine” has tended to elevate the importance of recent possession as a legal principle where in truth it is simply an example of the drawing of inferences.  This was emphasised by Chan CJHC in HKSAR v Choi Heung Yee [1995 – 2000] HKCLRT when he said at page 253, paragraph 12:

“The doctrine of “recent possession” is merely a principle concerning how a judge or jury makes inferences from facts.  It means that, where there are reasons for casting doubt or where there is a need for an explanation, if a defendant has not provided an explanation or has provided an explanation which is wholly unbelievable, the judge or jury may infer from the lack of a credible explanation that the defendant had knowledge of the offence in question and may then infer from this that he is guilty.”

25.  It was even more pithily put by Yeung JA in HKSAR v Wong Wai Ping CACC 478/2002 when he described it at paragraph 15 of his judgment, saying:

“It is just an inference that can be drawn as a matter of common sense.”

and by Lugar-Mawson J in giving the judgment of the Court of Appeal in HKSAR v Shing Tak Shun CACC 170/2004 when he said at paragraph 43:

“…. the doctrine of recent possession is no more than a specific, common-sense, instance of the application of circumstantial or inferential evidence.”

26.  As an inference that can be drawn adverse to an accused it can be employed in theft cases, burglary cases and handling, at least in respect of handling under the first limb ie receiving stolen property.  It is still undecided whether it can apply to handling under the second limb ie undertaking or assisting in the retention, removal, disposal or realization of stolen property (see HKSAR v Tai Kwok Hei [1998] 3 HKC 241).

27.  When the inference is employed in a handling case it is used by the court to assist it to be satisfied beyond reasonable doubt, together usually with other evidence, that the defendant knew or believed the property he was receiving was stolen property.

28.  Thus the inference is as much available to prove handling as it is to prove theft and whether the inference points towards one offence or the other may well, as it certainly does here, depend on the other evidence in the case.

29.  Mr Haynes accepts that the evidence indicates the applicant to be a second limb handler and argues that the prosecution have charged the wrong offence.  The prosecution charged the applicant with handling stolen property by receiving it and, he argues, the applicant cannot be both the thief and the handler (in the form of receiver) of it.  In support of this argument he relies on the pre-Theft Act case of Seymour (1954) 38 Cr App R 68.  At page 72 of the report the Lord Chief Justice said:

“ The court desires to lay this down: In cases where the evidence is as consistent with stealing as with receiving, the indictment ought to contain a count for stealing and a count for receiving. The jury should then be directed that it is for them to come to the conclusion whether the prisoner was the thief or whether he received the property from the thief, and should be reminded that a man cannot receive from himself. Then, to prevent other difficulties which have sometimes arisen, if the jury come to the conclusion that it is a case of receiving, they should be discharged from giving a verdict on the count for stealing. Equally, if they come to the conclusion that it is a case of stealing, they should be discharged from giving a verdict on the count for receiving.”

30.  However Seymour can no longer be read without qualification for in certain circumstances a thief may also be a handler by receiving ‑ see Dolan (1976) 62 Cr App R 36, Fernandez [1977] Cr App R 123  and Smith’s Law of Theft 9^th edition at 13.90 – 13.91 inclusive.  Nor is there any need for the indictment to contain alternatively pleaded counts when a charge of theft is laid as handling is an alternative conviction to theft under section 32 and the Schedule of the Theft Ordinance, Cap 210.  A problem for the prosecutor only arises if the charge that is laid is solely handling; for if the evidence adduced does not prove that charge but does prove theft, then the only verdict is an acquittal as theft is not a statutory alternative conviction to handling.  Ultimately it will be a question for the prosecutor to assess the evidence available to him and to decide accordingly on what charge or charges he will proceed.

31.  But it is not necessary to consider the extent to which Seymour may now represent the law because it is clear from what is said in Seymour that this judgment simply has no application to the present case.  The passage in Seymour commences with the words:

“In cases where the evidence is as consistent with stealing as with receiving ….” (Emphasis added)

Was it the position in the present case that the evidence was as consistent with stealing as with receiving?

32.  The pieces of evidence that Mr Haynes relies upon to show that the evidence overall was as consistent with the applicant being the thief as with him being the receiver is essentially only the temporal proximity of the stealing of some of the vehicles and their subsequent discovery at the applicant’s yard.  But that does not necessarily mean that the applicant was the thief.  In the absence of any other evidence it would be an inference available but when the other evidence reveals the applicant to be a fence then the more likely inference is that the thief and applicant knew each other and that when the thief stole the vehicle he knew precisely to whom he was going to take it for disposal.

33.  As to the other pieces of evidence on which Mr Haynes relies to support his contention that there was evidence that the applicant was the thief, there is nothing in them.  The fact that the defendant was physically able to drive the vehicles adds very little to prove him being the thief of them.  The fact that the police when interviewing the applicant in the early stages of their investigation, cautioned him for stealing the vehicles is not evidence and is simply irrelevant.  The fact that uncut key blanks were found in the yard is as consistent with the applicant being the handler as the thief.  The fact that the judge found the applicant lied in relation to other workers being present in the yard does not mean that he found as a fact that the applicant was a one-man operation; but even if the applicant was operating the yard on his own that does not point to him being the thief.  Finally the judge’s comment that the applicant was “a party to the crime” has been misunderstood.  What the judge said in paragraph 110 was:

“ It follows that the person who had stolen these 4 vehicles took the vehicles to the yards which were under the control of the defendant for storage or dismantling. If the defendant was really an innocent outsider the person would be taking a grave risk because if the defendant should come to know about the illegal deeds and made a report to the authorities the crime of the person would be exposed. The defendant virtually worked in the yards everyday and it was very likely that he would discover illegal activities going on in the yards if there were such activities. It was impossible that anybody would take such a risk. Such risk would of course not exist if the defendant was a party to the crime.”

34.  The point the judge was making is that it is unlikely that the applicant is an innocent taken advantage of by persons who steal motor vehicles.  The reason why he says this is because it is unlikely that given the period he would have been “innocently” dealing with stolen motor vehicles it is inevitable that at some stage he would have come to realize that he was buying stolen vehicles.  Thieves would only keep dealing with him if they knew there was no risk of him reporting them to the authorities.  The judge then comments that there would be no such risk “if the defendant was a party to the crime”.  By this comment the judge is not referring to the applicant being engaged in a joint enterprise to steal, merely that he would have known that the goods were stolen.  Knowledge or belief that the goods were stolen is, of course, an essential element of the offence and the judge is doing no more by this comment than addressing this element and rejecting the possibility that the applicant may have been a legitimate businessman innocently caught up in the activities of thieves who came to him to dispose of their stolen property.

35.  The judge in fact employed the same phrase when stating his finding in respect of the element of “receiving” the stolen vehicles.  He said at paragraph 115 of his Reasons for Verdict:

“ It is the finding of the court that the defendant worked and lived in the yards. It is of no doubt that he ran and was in control of the yards. He was no doubt a party to the crime and his role was to take care of and kept in safe custody the stolen vehicles of the 5 charges which were taken to the yards for storage or dismantling. He had the custody and control of these vehicles. He no doubt received them.”

36.  Again it is clear from the judge’s reference to the role of the applicant that he is making a finding that the applicant was a handler of stolen property rather than the thief of it but that as a handler he had to know that the motor vehicles were stolen property and therefore had awareness of the crimes and in his role as handler was providing assistance to the thieves.

37.  Mr Haynes also argues that in a case of handling by receiving where there is some evidence of theft the prosecution have to prove that the receipt was otherwise than in the course of stealing.  This issue was dealt with by the English Court of Appeal in R v Cash [1985] 1 Q B 801, which was also a recent possession case and also a case where the appellant was charged only with handling offences.  The appellant argued that the words “otherwise than in the course of the stealing”, “constitute an essential ingredient of the offence of handling and that a burden is placed upon the prosecution to prove this negative averment”.[1]

38.  In responding to this argument Lord Chief Justice Lane said at pages 804N – 805B:

“Indeed, if there were to be placed upon the prosecution the burden which he suggests, the object of the doctrine of recent possession would be defeated. The inference which the jury are in a proper case entitled to draw, namely, that a defendant was the guilty handler, includes the inference that he was not the actual thief.

There is in our judgment, at least so far as “recent possession” cases are concerned no further burden on the prosecution to prove that the defendant was not party to the thief or burglary as the case may be”

This decision was followed and applied by the Privy Council in Attorney General v Yip Kai-foon [1988] 1 HKLR 544 and represents the law of Hong Kong.

39.  In respect of non-recent possession cases the court looked to the issues that arose at trial.  Lord Chief Justice Lane said at page 805F of the report:

“ There was no issue as to whether the receipt of the stolen goods was in the course of the stealing. It was not suggested to or by any witness that the appellant was the thief or that the property came into this possession in the course of the stealing; there was no evidence that the appellant was the burglar. Furthermore, when he went into the dock, there was a presumption that he was innocent of any charge of burglary as well as of handling. There was no evidence to displace that presumption so far as burglary was concerned. The presumption was displaced by evidence so far as dishonest handling was concerned. If, therefore, there was no evidence that the appellant was the burglar or had taken part in the burglary, the jury, as a matter of logic and common sense, were entitled to find that his handling which was not in dispute was a handling otherwise than in the course of the stealing.”

40.  That is precisely the position in the present case.  There was overwhelming evidence that the applicant was a fence of stolen motor vehicles. He would receive them, break them up and re-package them and there can be no doubt that when he did this it was not in the course of stealing them.  On the evidence before the court the issue of whether the receiving of the motor vehicles was in the course of stealing them simply did not arise.  There was no need, therefore, for the judge to consider whether the applicant was the thief.  That he did not so regard the applicant is abundantly clear from his reasons for verdict.

41.  An examination of how the parties ran their cases at trial and what the issues were is certainly the starting point for a consideration of this issue; but notwithstanding how the case was run at trial by the prosecution or the defence, it will always be the evidence that came out at trial which will determine the content of the judge’s summing up or, in the case of a District Judge, what issues he will have to address. (See Ho Hoi Shing v HKSAR (2008) 11 HKCFAR 354.)

42.  As we have indicated this was not just a recent possession case.  There was a wealth of evidence which pointed to the applicant being a handler.  Consequently, in the circumstances of this case, the judge cannot be faulted for not addressing the question of whether the applicant was the thief of the stolen motor vehicles.

43.  For these reasons we dismissed the application for leave to appeal conviction.

The Application to Review the Sentences (CAAR 2/2011)

Introduction

44.  The judge adopted a global approach to sentencing for the five offences and adopted a starting point of 3½ years imprisonment for each charge.  The judge said that nothing advanced in mitigation entitled the respondent to a discount.  The starting point remained therefore at 3½ years imprisonment and the only issue remaining was totality.  On this the judge said:

“Taking into account the nature of the case and the totality principle, the court orders all the sentences to run concurrently.”

The Mitigation

45.  The respondent is 40 years of age, is married and has two children, a daughter, aged 5 and a son aged 2½ years.  The wife is from the Mainland and does not live permanently in Hong Kong.  The respondent was a poor student and only completed Form 1 education.  When he was 16 years old he was convicted of burglary and sent to a Detention Centre.  In 1995 he was convicted of a number of driving offences for which he ultimately served short prison sentences.  He has not been in trouble with the law since that time.

46.  After discharge from the Detention Centre the respondent engaged in a number of different types of work – garage worker, delivery driver and decoration worker – before setting up his business as a recycler of scrap metal.

47.  He was examined by a psychiatrist for the purposes of his trial.  The psychiatrist confirmed that the respondent has no past psychiatric history and is not suffering from any psychiatric disorder.  But he is of only limited intelligence.  He has an IQ of 80 which puts him in the range of Limited to Low Average level of intelligence which causes him to approach matters superficially and take them at face value without being able to critically analyse them.

The Grounds for Review

48.  Leave was granted to the applicant to review the sentences imposed on the respondent on three grounds.  They are:

(1)    the judge erred in adopting a starting point that failed to reflect the gravity of these offences and the aggravating factors that were present;

(2)    the judge erred in ordering all the sentences to be served concurrently; and

(3)    as a consequence of the errors referred to in (1) and (2) above the judge imposed a sentence which was unduly lenient.

Starting point

49.  The applicant relies upon the decision of the English Court of Appeal in R v Bernard Webbe & Ors [2002] 1 Cr App R (S) 22 at 82.  In its judgment the Court of Appeal identified nine aggravating factors for handling cases.  The applicant argues that three of the nine aggravating factors for handling offences were present in this case.  They are:

(i)  the closeness of the handler to the primary offence;

(ii)  the sophistication of the handling conduct; and

(iii)  the provision by the handler of a regular outlet for stolen goods.

50.  By reference to appellate cases the applicant also submits that sentences for the handling of stolen motor vehicles are usually close to or in excess of 4 years imprisonment.

51.  Finally the applicant says that given the sophisticated nature of the respondent’s handling conduct and the syndicated nature of the theft and handling offences the starting point was manifestly inadequate.

Concurrency

52.  The applicant argues that the five offences were not part of a single transaction and so should not have been made concurrent.  Further as a matter of principle multiple offences warrant the imposition of a higher sentence than if there had only been one offence.  After taking into account the totality principle the judge should have ordered partly concurrent and partly consecutive sentences.

Discussion

53.  We should say at the outset that we agree with the trial judge that there is nothing of particular significance in the mitigation which would entitle the respondent to a discount from the appropriate starting point. However the matters advanced in mitigation are relevant to the determination of the proper starting point.

R v Webbe & Ors [2002] 1 Cr App R (S) 22 at 82

54.  As previously mentioned the applicant relies upon the English Court of Appeal decision of R v Bernard Webbe & Ors [2002] 1 Cr App R (S) 22 at 82.  The Court of Appeal in Webbe was responding to the English Sentencing Advisory Panel’s request for guidelines and in doing so was commenting upon the advice of the Panel.  In this decision the Court of Appeal recognized that as an offence handling covered a wide range of criminality.  At paragraph four of the judgment Rose LJ said:

“The particular feature of handling which marks it out from most other offences is that it is, by definition, ancillary to another offence in a way which can conveniently be described as secondary to a primary offence. Because the primary offence may be, for example, shoplifting or armed robbery, the degree of gravity of the secondary offence can vary accordingly.”

55.  Subject to this qualification the court went on to express its views for the guidance of trial courts.[2] At paragraph 20 of the judgment it said that the following nine factors may be regarded as aggravating the offence of handling:

(1) The closeness of the handler to the primary offence (We add that closeness may be geographical, arising from presence at or near the primary offence when it was committed, or temporal, where the handler instigated or encouraged the primary offence beforehand, or, soon after, provided a safe haven or route for disposal).

(2) Particular seriousness in the primary offence.

(3) High value of the goods to the loser, including sentimental value.

(4) The fact that the goods were the proceeds of a domestic burglary.

(5) Sophistication in relation to the handling.

(6) A high level of profit made or expected by the handler.

(7) The provision by the handler of a regular outlet for stolen goods.

(8) Threats of violence or abuse of power by the handler over others, for example, an adult commissioning criminal activity by children, or a drug dealer pressurizing addicts to steal in order to pay for their habit.

(9) As is statutorily provided by section 151(2) of the Powers of Criminal Courts (Sentencing) Act 2000, the commissions of an offence while on bail.

We also agree with the mitigating factors identified as being among those relevant by the sentencing panel: namely, low monetary value of the goods, the fact that the offence was a one‑off offence, committed by an otherwise honest defendant, the fact that there is little or no benefit to the defendant, and the fact of voluntary restitution to the victim.

We also agree with the Panel that other factors to be taken into account include personal mitigation, ready cooperation with the police, previous convictions, especially for offences of dishonesty and, as statutorily provided by section 152 of the Powers of Criminal Courts (Sentencing) Act 2000, a timely plea of guilty.”

56.  The court emphasised that the aggravating and mitigating factors came into play when determining the length of a custodial sentence.  In respect of more serious offences it said at paragraph 29 of its judgment that:

“…. the factors to be taken into consideration will include whether an offence is committed in the context of a business, whether the offender is acting as an organizer or distributor of the proceeds of crime and whether the offender has made himself available to other criminals as willing to handle the proceeds of thefts or burglaries.”

and at paragraph 30:

“As we have earlier indicated, sentences significantly higher than four years also may be appropriate where a professional handler, over a substantial period of time, demonstrated by his record or otherwise, has promoted and encouraged, albeit indirectly, criminal activity by others.”

57.  As a statement of general guidance for trial courts we agree with all that is said in these passages that we have quoted from this judgment.  In fact the comments by the English Court of Appeal in Webbe resonate with the comments by this Court in HKSAR v Boma [2012] 2 HKLRD 33 in respect of Hong Kong’s money laundering offence in section 25 of the Organized and Serious Crimes Ordinance, Cap 455 (OSCO).  Section 25 is in fact wider than just money laundering and is more accurately described by its statutory language of “dealing with property known or believed to represent the proceeds of indictable offence”. Both offences require the offender to possess a similar mens rea either in respect of the stolen property or the proceeds of crime, both offences are ancillary to or secondary to a primary offence, the conduct underlying both offences provides encouragement and nourishment to crime and as a consequence the dominant sentencing consideration in respect of both offences is deterrence.

58.  Some of the aggravating factors warrant further consideration.

Closeness to the primary offence

59.  On the subject of closeness to the primary offence the English Court of Appeal in Webbe agreed with the following extract from the Sentencing Panel’s advice:

“One important issue is whether the handler has had advance knowledge of the original offence, or has directly or indirectly made known his willingness to receive the proceeds of the original offence, as compared with a handler who has had no connection with the original offence but who has dishonestly accepted the stolen goods at an undervalue.”

60.  Those comments are equally applicable to our legislation in Hong Kong and just as appropriate to Hong Kong’s own particular circumstances.  This was regarded by Stock VP in the Boma case as likewise adding to the culpability of the money launderer.

Seriousness of the primary offence

61.  The Sentencing Panel, with whom the English Court of Appeal agreed, saw the seriousness of the primary offence as being linked to the seriousness of the handling.  It said:

“Where the handler has had knowledge of the original offence, the seriousness of the handling is inevitably linked to the seriousness of that original offence. The link to the original offence explains the need for the high maximum penalty of 14 years imprisonment for handling, which might otherwise look anomalous. Sentences approaching the maximum should clearly be reserved for the most serious and unusual cases where the handler had previous knowledge of a very serious offence such as an armed robbery, which itself carries life imprisonment as a maximum.”

62.  This also reflects the approach taken in Boma in respect of the offence of money laundering.

63.  Seriousness is not just to be gauged by reference to the offence so that theft, compared to armed robbery, becomes characterized as a less serious offence.  Theft itself has an enormous range of culpability.  It can be nothing more than the shoplifting of a chocolate bar by a teenager to the theft of large amounts of money or property of high value.  Theft, as an offence, can be committed in circumstances which make it a serious offence and theft of motor vehicles is one such example.  This form of theft has long been regarded as a serious offence because of its prevalence, the value of the property involved, the impact upon society and the difficulties of detection.  Consequently the primary offence here should be regarded as a serious offence.

Provision of a regular outlet for stolen goods

64.  This factor overlaps with a number of others.  A person who provides, and of course is known to provide, a handling service to thieves undoubtedly nourishes in a very real, albeit indirect, way the commission of crime.  It brings the handler closer to the primary offence and significantly adds to the seriousness of his criminal conduct – to his culpability as an offender.

High value of goods to the victim

65.  The Court of Appeal noted that the value of the goods included also their sentimental value.  However the more important point that it made, and with which we agree, is that the seriousness of the offence should not be determined by having regard only to the value of the stolen property.  The value of the property, however that value might be assessed is only one of the factors that go towards a determination of the seriousness of the handling offence.

66.  The other aggravating factors are self-explanatory and need no further elucidation for their understanding.

Starting point

67.  The nine aggravating factors are intended to provide assistance to the court in gauging the level of seriousness of the handler’s activities.  This will assist the court in determining both whether a custodial sentence is necessary and, if so, the appropriate length of that sentence.  As we have mentioned the applicant relies on the presence of three of these aggravating factors to support his assertion that the starting point was too low, namely closeness to the primary offence, the sophistication of the handling and the provision of a regular outlet for stolen goods.

68.  From the fact that cars very recently stolen ended up in the respondent’s yard, the court can infer that the respondent was well known to the thieves of these cars as a person willing to trade in stolen vehicles.  There is no doubt that the evidence in this case reveals the presence of the aggravating factor of closeness to the primary offence.  Within the respondent’s yard there were six vehicles stolen between 2001 and 2009.  More importantly four of the six stolen vehicles turned up at his yard within one to two days of being stolen and one of the vehicles within an hour of being stolen.

69.  In regard to the sophistication of the respondent’s operation great care must be taken.  The prosecutor at trial described it as an Aladdin’s Cave whilst Mr Haynes dismissed it as just a New Territories junk yard.  To describe it as an Aladdin’s Cave may have been a piece of forensic hyperbole but a mere junk yard it undoubtedly was not.  Clearly the respondent was well organised and able to provide a valuable service to the thieves and so well set up so as to be able to quickly and efficiently remove useful parts of vehicles or to disguise them for onward sale.  In this sense it was a sophisticated operation.  However the sophistication of the operation cannot be divorced from the issue of whether, and if so to what extent, the respondent was running a legitimate business.  We say this because some of the evidence on which the applicant relies to prove the sophistication of the respondent’s operation, the respondent himself points to as being just the normal tools of his legitimate business.

70.  The respondent described himself as engaged in the business of scrap metal recycling and there is nothing to suggest that he did not have a legitimate side to his scrap yard activities.  To what extent dealing in stolen vehicles formed part of his business can only be assessed by reference to the evidence.  Mr Haynes suggests that persons working in the scrap metal trade are subject to temptation and this is what has happened with the respondent.  In so saying he implies that the respondent is otherwise a genuine businessman who has been tempted, on occasion, to supplement his legitimate business activities with a sideline of repackaging or breaking up stolen motor vehicles.

71.  It is true that a lot of the equipment the respondent had in the yard and workshop could be used for the legitimate side of his business.  But the following facts:

(i) that so many stolen vehicles or parts of vehicles were found in the respondent’s yard;

(ii) that the chassis and engine numbers of some of the stolen vehicles had been erased;

(iii) that two of the stolen vehicles had been dismantled or partly dismantled;

(iv) that one of the recovered vehicles had been spray painted in a different colour;

(v) that two of the stolen vehicles had false registration and false number plates attached to them;

(vi) that uncut key blanks, which would be needed if the stolen vehicles came without keys, were found in the yard;

(vii) the erection of a high hoarding to ensure secrecy for the activity taking place inside the yard; and

(viii) that the respondent was obviously well known to thieves of motor vehicles,

suggest that dealing in stolen vehicles represented a significant part of the respondent’s business and was not just an occasional sideline activity.

72.  The trial judge characterized the respondent’s handling as a syndicated operation.  He said:

“Judging from such efficiency, it is obvious that it was a syndicated operation of the thefts and the handling of the stolen vehicles and there was a link between the two crimes.”

73.  The point he is making here is that whilst there may be no evidence to show he was part of any organized criminal group the respondent can nevertheless be shown to be closely linked to those involved in the primary offence.

74.  The picture portrayed by the evidence is of a well organized and well set up operation for the receiving, re-packaging, breaking-up and disposal of stolen motor vehicles by a handler whose illegal services are well known to those who steal motor vehicles.  The fact that the respondent may also run a legitimate business is of no avail as it is also clear that his illegal handling activity constitutes a significant part of his day-to-day operations. In fact decisions of this court make it clear that the fact that the handler is legitimately involved in the trade or industry to which the stolen property relates is an aggravating feature.

75.  These facts clearly place the respondent in the range of serious handling offences – a professional handler providing a professional service to professional criminals.  The starting point must reflect this level of culpability.

76.  The cases to which we have been taken by Mr Tam, counsel for the applicant, suggest that a sentence from 4 – 5 years is appropriate for persons involved in an organized way in providing this level of professional service. In HKSAR v Chan Ka Po Joseph CACC 29/2000 a starting point of 5 years imprisonment was upheld for the attempted smuggling by container of two luxury vehicles to the Mainland.  In HKSAR v Wong Kam Tat [2002] 2 HKC 677 the Court of Appeal upheld a starting point of 4 years imprisonment in respect of a motor car dealer disposing of a stolen motor vehicle.  At page 680 B – D it said:

“…. what is a serious aggravating factor in this case is that the applicant was a motor dealer …. This is quite different from the case, say, of someone who is merely employed to deliver a vehicle, which he knows to be stolen, to the buyer or to a middle man. This was a dealer using his know-how in the trade to fool an innocent buyer, and to behave as proactively in the whole affair as a handler could”.[3]

77.  Though operating in a different area of the motor vehicle trade these words are equally applicable to this respondent.

78.  Given the seriousness of this respondent’s conduct we are of the view that an appropriate starting point for each of these offences is 5 years imprisonment.

Concurrency

79.  In HKSAR v Ngai Yiu Ching [2011] 5 HKLRD 690 the Court of Appeal discussed the legal principles to be applied by a court when sentencing for multiple offences.  At paragraph 13 pages 697 – 698 Stock VP, in giving the judgment of the court, said:

“When a judge is faced with the task of sentencing for multiple offences he is required as an initial step to identify the appropriate sentence for each offence and as the final step to achieve a total sentence appropriate to the culpability of the offender.”

80.  In approaching the final step of achieving “a total sentence appropriate to the culpability of the offender” the court must ensure that it does not punish the offender twice for the same conduct.  It does this by examining the various offences and determining “whether the second or other further offences add to the culpability or criminality of the first.”[4] The court will then be in a position to decide whether, as a matter of legal principle it would be entitled to order the sentences to be served consecutively.  If it determines that the second or other further offences do not add to the culpability of the first then it will order that the sentences be served concurrently.  If it decides that the second or further offences do add to the culpability or criminality of the first then it knows that consecutive sentences may be imposed.  In this situation the totality principle comes into play and notwithstanding that the court may be entitled to order the sentences of the later offences to be served consecutively to the earlier, it may choose not to do so in respect of some or to do so only partially.

81.  In the Ngai Yiu Ching case Stock VP explained the role of the totality principle as follows:

“The importance of the totality principle cannot be overstated.  It is there to ensure not only fairness to the offender, in the sense that he is not punished twice for the same offence and further, that the sentence is not an unduly crushing punishment, but it is also a tool by which to ensure that “the overall effect of the sentences is sufficient having regard to the usual principles of deterrence, rehabilitation and denunciation.” R V KM [2004] NSWCCA 65 at para.55.”[5]

82.  Here there can be no doubt that each offence represents a different episode of criminal activity and each offence adds to the overall culpability of the respondent.  Not to increase his sentence to reflect this additional culpability would allow him to escape punishment for his crimes.  We are of the view that a further 1 year imprisonment will provide a sentence which is “sufficient having regard to the usual principles of deterrence, rehabilitation and denunciation” but which will not be unfair to, or crushing on, the respondent.  It will be both a just and fair sentence.

83.  However we note that the respondent has approximately 10 months of his current sentence remaining and that the effect of this judgment is to increase his sentence of 3½ years imprisonment by a further 2½ years imprisonment.  This is a substantial increase in sentence and in the circumstances we are of the view that it is appropriate to discount it by 6 months.  The respondent’s total sentence will therefore be 5 years 6 months.

84.  We therefore allow the Secretary for Justice’s application under section 81A of the Criminal Procedure Ordinance, Cap 221, quash the sentences imposed by the District Judge on all counts and substitute for them a sentence of 5 years imprisonment on each count.  We further order that all of the sentences for all of the counts are to be served concurrently with each other except for 6 months of the sentence for the fifth count which should be served consecutively to the sentences for the other counts.

Representation in CACC 94/2011

Representation in CAAR 2/2011