HKSAR v. Annells Deborah
Read the full judgment text of DCCC 148/2015 on BabelCite. This District Court judgment.
1. The Defendant is convicted after trial of the following charges:
Cited by 3 cases · Cites 2 cases
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DCCC 148/2015 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NO 148 OF 2015 -----------------------------------
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---------------------------- Reasons for Sentence ---------------------------- Charges 1.The Defendant is convicted after trial of the following charges:
Crux of the prosecution case 2.On 10/4/2014, the Defendant attempted to use the copy of a forged document to misrepresent her company’s financial situation with a view to obtaining a lease of a set of office units from the landlord (1st Charge). On 11/4/2014, she produced to the Magistrate, through her counsel, a copy of the same forged document in her application to vary her bail conditions in a criminal case (2nd Charge). On 14/4/2014, in execution of a search warrant, the police seized the forged document from her office (3rd Charge). Facts established in the verdict Reference to the instrument in question 3.The document pivotal to all 3 charges is a Memorandum of Understanding passed off as signed by the Defendant and a potential purchaser of her business for a consideration of US$1,000,000. This was confirmed by the government chemist as a forged document. The Defendant had used or possessed it, as the Charge may be, to exaggerate her financial soundness. I shall refer to this forged document as “the US$ MOU” because the major difference between this one and the genuine one was that the genuine one had a consideration of only “HK$1,000,000”. The genuine one remains to be called “the MOU”. AzureTax and AzureTrustees 4.At all material times, the Defendant was the director, proprietor, and person-in-charge of AzureTrustees Limited (“AzureTrustees”), a Hong Kong registered trustee company. She was also the director and person-in-charge of AzureTax Limited (“AzureTax”), a Hong Kong company providing tax consultancy services. Lease of Lippo Office 5.On 15/5/2012, AzureTax commenced a two-year lease for a set of office units comprising Nos. 1001, 1009, and 1010 of 10th Floor, Lippo Centre, Tower 2, Hong Kong (“the Lippo Office”) with the landlord, Sinka Limited (“Sinka”) to expire on 14/5/2014. AzureTax had to pay a rent of HK$229,467 as well as management and air-conditioning charges of HK$23,884 per month, ie HK$253,351 in total per month. 6.As a result of non-payment of rent, Sinka terminated the lease on 25/11/2013 and commenced legal proceedings on 22/1/2014 for the outstanding rent. On 26/3/2014, Sinka obtained judgment for vacant possession. At all material times, apart from interest, AzureTax still owed Sinka at least HK$392,501.75. Her bail conditions in committal court 7.On 5/11/2013, the Defendant was charged with 25 charges of theft of choses in action, 3 charges of fraud, and 1 charge of possessing a false instrument. On 8/1/2014, she was granted bail in the Eastern Magistracy. One of her bail conditions was that she was not to leave Hong Kong. On 26/2/2014, she was brought up in the Eastern Magistracy. She was further charged with 26 charges of theft of choses in action and 1 charge of fraud. Her bail was extended on the same previous terms. The return date was appointed for 4/4/2014 in the committal court as all her charges would be dealt with in the High Court. Negotiations of take-over of her business 8.In 10/2013, she and a businessman James SUTHERLAND (PW7) had begun a course of negotiations with a view for SUTHERLAND to take over her business interest in AzureTax and to engage her as a consultant overseeing AzureTax with the option for her to buy it back in future. The negotiations also involved the sale of the trust portfolio held by AzureTrustees. SUTHERLAND owned a batch of companies held by a company Zetland Fiduciary Group Limited (“Zetland”), which would make arrangements for the take-over, if any. Loan of HK$800,000 from SUTHERLAND 9.In 11/2013, she approached SUTHERLAND for a loan of HK$800,000 to pay Sinka, which was the landlord of her Lippo Office. SUTHERLAND was prepared to lend her the money on the condition, among others, that the money be paid to her landlord directly, that she pledge all her shares in AzureTax Group, AzureTrustees and subsidiary companies to the order of Zetland to cover the loan made to her by SUTHERLAND. Meanwhile they were negotiating over the sale of her companies to Zetland to take place in 2014. SUTHERLAND through his company, HKIC, paid HK$800,000 to Sinka. The Share Pledge Agreement was signed in 12/2013 to cover 90% of her shares in AzureTax as security for the loan. Loan of HK$600,000 from SUTHERLAND 10.On 30/1/2014 and 4/2/2014, as requested by her, HKIC lent her 2 further sums, HK$600,000 in total. So far she owed HKIC HK$1,400,000. The pledge would cover all such loans. Need for variation of her bail condition 11.On 21/2/2014, she informed Christopher MORLEY (PW15), who was a solicitor in private practice in the solicitors’ firm of Haldanes, of her intention to visit her parents in U.K. for a week during the Easter holidays. This necessitated an application to the committal court to vary her existing bail conditions. Zetland’s view of her business 12.On 8/3/2014, SUTHERLAND emailed a purchase offer of HK$1,000,000 maximum for AzureTax subject to a satisfactory sale and purchase agreement being signed. He would soon have a Memorandum of Understanding to the same effect prepared. Working under him were James LEE (PW8), lawyer Francis CHEW (PW9), and accountant Liza KO (PW10). They were not keen on the negotiations as her business was not worth the price and the risk. Loan of HK$200,000 from SUTHERLAND 13.On 27/3/2014, HKIC made out another loan to her in the sum of HK$200,000 as her legal fees. SUTHERLAND so far had lent her HK$1,600,000 in total. Signing of the MOU 14.On 24/3/2014, Francis CHEW on behalf of Zetland signed each of the 2 originals of the MOU with her. The consideration would be HK$1,000,000, to be offset against her pre-existing loan of HK$1,600,000. SUTHERLAND says in court that he was adamant that it was to be final. The MOU’s layout 15.There were 5 pages in all in the MOU. Pages 1 – 4 each had the initials of her and Francis CHEW at the right-hand bottom corner. Page 5 had the full signatures of her, Francis CHEW, and James LEE. Subsequent to their signing of the MOU, she and Francis CHEW each kept one of the 2 originals they signed. Provisional Tenancy Agreement and the cheque as deposit 16.On 27/3/2014, she viewed 5/F of Seabird House, Nos. 22 – 28 Wyndham Street, Hong Kong (“the Seabird Office”). Apart from herself, also present were her estate agent May FAN (PW4), the landlord’s estate agent Manson NG (PW3), Noel SUNG (PW1), who was the secretary of the landlord Winchell WONG (PW2). On 31/3/2014, she (the Defendant) signed the Provisional Tenancy Agreement (“PTA”) and drew a cheque in favour of the landlord for the deposit of HK$65,000. That was equivalent to one month’s rent. It was drawn on AzureTax’s Bank of East Asia account. Noel SUNG deposited it into Winchell WONG’s HSBC account. Cheque was bounced 17.On 2/4/2014, HSBC informed Winchell WONG by letter that the cheque for HK$65,000 drawn by the Defendant was bounced for the reason that the account was closed. The account had been closed on 26/9/2013. Winchell WONG instructed Noel SUNG to follow it up with the relevant estate agents. Noel SUNG did as instructed. Winchell WONG also engaged the solicitors’ firm Bernard Wong & Co. to act for him. The solicitor in charge of the matter was Kenneth NG (PW6). Defendant attending committal court 18.On 4/4/2014, the Defendant attended the Eastern Magistracy to vary her bail condition so as to allow her to go to U.K. for a week during the Easter holidays commencing on 16/4/2014. Kevin EGAN (PW16) instructed by MORLEY, applied on her behalf. EGAN took the view that the application should be made on an occasion where the Magistrate was not so busily occupied with other cases. In the meantime, she could acquire all relevant documents in support of her application. EGAN asked the court to set down another date. The Magistrate, Mr. David CHUM, adjourned the case to 2:30 p.m. of 11/4/2014 for the application. Loan of HK$75,000 from SUTHERLAND 19.On the same date, she requested SUTHERLAND for, and was granted, a loan of HK$75,000 for her legal fees. They signed the Share Purchase Agreement for AzureTax. Putting up HK$55,000 to make up for HK$65,000 bounced cheque 20.On the same date, as informed by her estate agent May FAN, she had to deposit HK$65,000 into Winchell WONG’s bank account to cover the amount of the bounced cheque forthwith. Only HK$55,000 turned out to be so deposited. The deposit was still HK$10,000 short. Full deposit made out but landlord asking for bank guarantee 21.On 7/4/2014, she deposited the outstanding HK$10,000 in cash by ATM. Bernard Wong & Co. wrote to ask her for a written bank guarantee within 7 days for her payment of rent in the light of her cheque being bounced and insufficient amounts being deposited initially. Bernard Wong & Co. informed her that without the bank guarantee, the landlord would not grant her the lease. Providing MORLEY with the US$ MOU 22.On 10/4/2014, she received from MORLEY a copy of the prosecution’s grounds of objection to her application. The prosecution focused on her being a flight-risk due to her lack of local ties. MORLEY asked her for information to counter the prosecution’s objection. She provided him with the PTA, the US$ MOU, and a letter sent to Sinka. Providing Seabird landlord with the US$ MOU 23.On the same date, she sent a letter enclosing a copy of the US$ MOU to Bernard Wong & Co. and counter-proposed having Zetland as her guarantee as it had a subsidiary operating as a licensed money-lender. Submitting US$ MOU to court 24.On 11/4/2014, EGAN took instructions from her together with MORLEY and MORLEY’s trainee solicitor Karen CHOI in the conference room before addressing the Magistrate in court. He regarded the US$ MOU as the most important document in her set to suggest to the Magistrate a solid financial position and business tie in Hong Kong. 25.EGAN contended on her behalf that she was not a flight-risk. She had a thriving business in Hong Kong. The MOU was an arrangement by Zetland to finance her High Court trial by granting her an option to buy back her business within the next 5 years at a price by a formula to be negotiated on further. This would preserve her profitable business in the meantime. EGAN then submitted the US$ MOU[1], the PTA, and AzureTax’s notice to deliver up the Lippo Office to Sinka by 14/5/2014, among other documents, to the Magistrate. 26.After hearing from EGAN, the Magistrate changed the bail condition to enable her to depart Hong Kong on 16/4/2014. Police investigated the US$ MOU 27.On the same date, the police interviewed James LEE and Francis CHEW in relation to the copy of the US$ MOU submitted to the Magistrate. Landlord still requested for bank guarantee 28.On the same date, Bernard Wong & Co. wrote to her to insist on a written guarantee from only a bank. Sinka terminated the lease 29.On the same date, solicitors for Sinka wrote to her to the effect that the lease had been terminated and a judgment obtained from court against AzureTax for both unpaid and occupying rent, and costs. Her last efforts to acquire Seabird Office 30.On 14/4/2014, she wrote 2 letters in turn to Bernard Wong & Co. The first one asked for a meeting to discuss the lease. The second one threatened to charge the landlord with two times the deposit and the estate agent’s fee for wrongfully requiring a bank guarantee as a precondition for granting the lease. Police searching Defendant’s office 31.On 14/4/2014, the police executed a search warrant on her Lippo Office and seized various documents, including the US$ MOU. The MOU was found in her safe. Arrest by police for US$ MOU 32.On 14/4/2014, the police arrested her in connection with the US$ MOU. She was detained with no further bail by the police or the court. Net asset value contained in her Stamp Duty submission 33.On 5/5/2014, whilst in custody she signed the Instrument of Transfer of Shares in favour of HKIC. This document, together with AzureTax’s profit and loss statement for 7/2013 to 3/2014 also signed by her, which recorded a loss of HK$1,377,273, was for submission to the Stamp Duty Office for stamping. The balance sheet as of 3/2014 also signed by her showed net assets of HK$611,318.02 in total. The US$ MOU forensically examined 34.Dr NG Po-king (PW17) of the Questioned Documents Section in the Government Laboratory conducted forensic examinations on the various exhibits seized. She made use of the MOU (P35) which was seized by the police from the Defendant’s safe in the Lippo Office as the control sample. She concluded that the US$MOU was a forged document. Prosecution’s problem under original 3rd Charge 35.The original 3rd Charge is based on section 75(1) of the Crimes Ordinance (Cap. 200). The prosecution requested me to consider convicting the Defendant based on section 75(2) of the Crimes Ordinance (Cap. 200) which provides that “a person who without lawful authority or excuse has in his custody or under his control an instrument which is, and which he knows or believes to be false, commits an offence and is liable on conviction on indictment to imprisonment for 3 years.” There is no excuse made out by the defence in answer to the charge under section 75(2) of the Crimes Ordinance. Matters proved by the prosecution beyond reasonable doubt 1st Charge 36.On 10/4/2014, the Defendant sent Bernard Wong & Co. a letter enclosing the US$ MOU. It was the copy of a false document as it was forged by her. By way of the forgery, the consideration for the purchase of 90% of AzureTax’s issued and fully paid up capital had been altered to “US$1,000,000” whereas the genuine document had it stated as only “HK$1,000,000”. The document was also forged to bear the purported initials of Francis CHEW’s to imitate the genuine document. The Defendant did the said acts with the intention to induce the landlord Winchell WONG to give out a property (in the form of a lease) to her company AzureTax (by misleading Winchell WONG into believing that AzureTax was a valuable business venture that was financially sound and possibly worth the equivalent of HK$6,400,000 so that it would not default in the payment of rent) and to result in prejudice or substantial risk of prejudice to Winchell WONG (in granting a lease to a tenant of questionable financial capability). 37.Her acts did not achieve her purpose but were far beyond preparatory in committing the offence. They sufficed as an attempt to commit the offence. 2nd Charge 38.On 11/4/2014, acting upon the Defendant’s instructions, EGAN submitted the false document and explained on her behalf to the Magistrate that it reflected her financial strength for facing the High Court trial and strong local ties established by her business. Such acts were instrumental in seeking to persuade the Magistrate that she was not a flight-risk so as to vary her bail condition so that she could depart Hong Kong on 16/4/2014. She had provided MORLEY the document so that EGAN could use it in her application to so persuade the Magistrate. 3rd Charge 39.I invoked the power by virtue of section 51(2) of the Criminal Procedure Ordinance and consider the 3rd Charge in terms of section 75(2) of the Crimes Ordinance. On 14/4/2014, the police searched the Defendant’s Lippo Office and found in her custody and under her control the false document. I was satisfied that she knew it was a false document. She had no lawful authority or excuse to have it there. Verdict 40.On the aforesaid basis, I convicted her of the 1st, the 2nd, and the 3rd Charges. Personal background and mitigation 41.I am apprised of the Defendant’s background through her Background Report and Mr. Stephenson’s mitigation. She is now 57 years of age. She was born and brought up in U.K. She is a Hong Kong citizen. She graduated from London School of Economics with a bachelor’s degree in Economics and Accounting. She became a Chartered Accountant in U.K. in 1981. She was registered as a Certified Public Accountant in Hong Kong in 1994. She was an accountant specialising in tax. In 2005, she set up her own business in tax consultancy services in Hong Kong apart from other entities dealing with trust, immigration, company incorporation and management. 42.She enjoys harmonious relationship with her family, all living in U.K. Her young sister is aged 53, a nurse married and living apart. Her mother is aged 79. She cannot visit Hong Kong because she has to look after her husband. He is aged 82, a civil engineer before retirement. He suffers from diabetes and heart problems. He is nearly blind but cannot have an eye operation because of high blood pressure. She has a daughter, now aged 23, in from her previous marriage. She is a student in the University of London studying Mandarin in Year 4. 43.I raise my worry that she would have been most tempted to jump bail so as not to face the multiple charges of fraud and civil claims of her trust clients and their families for over £3,000,000. Mr. Stephenson explains that whilst on police bail she had been in and out of Hong Kong repeatedly from November 2011 to October 2013 as reflected by her travelling records[2] in the bundle submitted by EGAN to the Magistrate on 11 April 2014. She has had strong social and business ties in Hong Kong. Her family is in U.K. but she will not resettle there. There are mitigation letters from her social and business spheres. She was a past president or director, as the case may be, of Rotary Club of Hong Kong. She was a past member or convenor, as the case may be, of various training and working committees in the Hong Kong Institute of Certified Public Accountants. She had written professional books and journals. Some charities work has been alluded to in the letters but with meagre particulars. 44.Mr. Stephenson ends his mitigation by the proposition that serving her time in the Hong Kong prison will be greater hardship than a local prisoner due to her disconnection from her family residing in U.K. Sentencing considerations 45.There are no sentencing guidelines for the offences in question. Owing to the peculiar facts of the present case, not surprisingly there are no authorities submitted to me for comparison of the sentences. 46.The factors relevant to sentencing in a charge of perverting are stated in the English Court of Appeal in R v Reynolds Thomas Tunney [2006] EWCA Crim 2066, applied in HKSAR v Chong Choong-leong [2013] HKCU 1765 (HCMA 258/2013), as follows:
47.I consider the present case in terms of the factors set out in Reynolds Thomas Tunney (above):
Sentencing this Defendant 48.I take 3 years and 6 months as the starting point for the charge of perverting. I do not consider her foreigner status and disconnection from her family whilst in prison a mitigating factor as it was a risk I perceive she would have, and had, contemplated in the decision to commit the offence. The portrait of a positive clear record, such as her post in the Rotary Club, etc., is not sufficiently articulated as a mitigating factor. The sentence is 3 years and 6 months for the 2nd Charge. 49.If the fraud had succeeded with the Seabird landlord, I would have taken a starting point of 2 years. Now I take a starting point of 18 months for this 1st Charge. 50.I take a starting point of 12 months for her possession of the US$MOU during the office search constituting the 3rd Charge. 51.There are no effective mitigating factors for all 3 charges. The fraud practiced on the Seabird landlord (1st Charge) was a separate incident from that of perverting (2nd Charge). The US$MOU she possessed (3rd Charge) was closely connected with the use of it to defraud the Seabird landlord and the Magistrate and would thus warrant a concurrent sentence. 52.I consider the total sentence and make the following adjustment:
53.The overall sentence is 4 years.
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