HKSAR v. Chan Wai Ching

DCCC 1005/2021

[2023] HKDC 1114

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1005 OF 2021

________________________

________________________

REASONS FOR SENTENCE

The defendant faces 13 charges of "Theft". She pleaded guilty to Charges 1 to 4 and 7 to 13. I granted the prosecution's application to leave Charges 5 and 6 in the court file; not to be proceeded against the defendant without leave of court.

2.In gist, the defendant stole a total sum of $839,110 from her employer within a period of 8 months.

Summary of Facts

Background

3.PC Enterprises (HK)  Limited ("PCE")  operated a business of veterinary clinics/hospitals/pet-related products retail under the name "Pets Central".  PCE was the major corporate shareholder of Pets Central Sai Kung (HK)  Limited ("PCSK")  and was responsible for the administration, finance and personnel affairs of PCSK.

4.The defendant was employed by PCE as its Finance and Administration Manager from 23 April 2012 to 15 January 2014.  Her duties included handling the finance and administration of both PCE and PCSK.  She reported to Madam Taylor (PW1), a founder of Pets Central, Group Manager cum Chief Operating Officer of PCE and a director of PCSK.

5.Starting on 1 April 2013, the defendant's salary was $41,250 per month.

6.PCE held a bank account with Hang Seng Bank (Account 1); whereas PCSK, with HSBC (Account 2).  PW1 was issued a primary level security token each for Accounts 1 and 2, which would allow her to execute transfers and payments online.  The defendant was issued a secondary level security token for Account 1, which would only allow her to input, change and store the information regarding transfers/payments to be made, but not to execute any online transfer or payment.

7.Around mid-2013, the defendant claimed that her secondary level security token for Account 1 malfunctioned but was not given a replacement.  Thus, PW1 allowed the defendant to have custody of her 2 primary level security tokens for Accounts 1 and 2 in order to enable the defendant to do her job.

8.On 15 January 2014, the defendant tendered her resignation.

Discovery of the offences

9.On 20 January 2014, PCE engaged an accountant to prepare the financial statements for PCE and PCSK.

10.Bank records revealed that between 20 May 2013 and 15 January 2014, 11 suspicious online transfers from Accounts 1 or 2 were made to 4 bank accounts held (or jointly held)  by the defendant.  Those 11 transfers involved a total sum of $839,110.  Details of each transfer are set out at paragraph 9 of the Summary of Facts[1].

11.In respect of the 11 transfers, the names of the payees stated in the ledger/voucher of PCE/PCSK or online transfer report were found to be PCE or the suppliers of PCE/PCSK or their employees/ex-employees.  The purported payees (or their staff members)  all confirmed that they were not acquainted with the defendant and had never received the respective sums from Accounts 1 or 2.  They also had nothing to do with the 4 recipient bank accounts held (or jointly held)  by the defendant.  The company/persons named as payees in relation to Charges 4, 9, 10, 12 and 13 confirmed that that there were no outstanding payments due from PCE or PCSK.

12.PW1 did not authorize the 11 transfers in question.  All 11 sums transferred to the defendant's bank accounts were carried out without PW1's knowledge or consent.

13.Since the discovery of the offences, PW1 tried to contact the defendant but without success.  PW1 also found some company documents missing.  The matter was reported to the Police.

14.The defendant was arrested for "Theft" on 12 September 2014.  In her 1^st video recorded interview conducted on 13 September 2014, in the presence of her legal representative, the defendant admitted that PW1 was her former employer and that she was an accountant at Pets Central.

15.The defendant now admits that during the offence period, she had stolen a total sum of $243,469 from PCE (i.e. Charges 1, 2 and 8 to 13)  and a total sum of $595,641 from PCSK (i.e. Charges 3, 4 and 7).

Mitigation & Sentence

16.The defendant is 58 and has a clear record. Defence counsel Mr. Ng informed me that the defendant is single. She grew up in a grassroots family with 5 children. The defendant ranks 3^rd amongst her siblings and started working at the age of 18 notwithstanding her good academic performance. The defendant's father passed away in 1986 when she was 21. The defendant became a major income source for her family. In 1990, the defendant's elder sister immigrated to Germany. The defendant became the only income source for her family. Mr. Ng stressed that the defendant had on 2 occasions (1993 and 2008)  given up her personal savings which were intended for purchasing her own flat and spent them on her 2 younger siblings instead. Furthermore, the defendant has all along been the sole care provider of her mother (aged 84)  who is not in good health.

17.Despite all such difficulties and hurdles she has encountered in her life, the defendant was able to maintain a positive attitude. Whilst working full-time, the defendant managed to obtain a diploma (in 2004), a bachelor degree (in 2007), a master degree (in 2013)  and a postgraduate diploma (in 2014), all in the Accounting and Finance fields.

18.In mitigation, Mr. Ng submitted that the defendant has contributed tremendously to the accounting and administration of the PCE group of companies, which was messy and disorganized when she first took over. Many staff members of the accounting department resigned and the defendant had to carry their load and to work overtime. When the defendant had turned the situation around, PW1 and her boyfriend had on different occasions promised to give her a raise, compensate her overtime work and grant her a bonus. Unfortunately, none of these promises materialized, except a raise in April 2013. Mr. Ng explained that under such circumstances, the defendant developed the evil thoughts of getting back what she deserved by illegal means, which led to her commission of the theft offences in the present case.

19.The trial dates of this case (i.e. 24 July to 1 August 2023)  were fixed on 28 June 2022, with a PTR date fixed for 1 June 2023. By a letter dated 21 July 2023, defence solicitors wrote to this court indicating the defendant's intention to plead guilty to some charges and that no trial would be required. On this matter, Mr. Ng elaborated that on 14 July 2023, the defendant first indicated her intention to plead guilty and sought advice from her legal team. The defence team immediately took action and reached an agreement with the prosecution on the plea negotiation on 21 July 2023. Mr. Ng asked for a discount closest to 25% as possible. In my view, an intention to plead guilty which arose only 10 days before a 7-day trial would entitle the defendant to a 20% discount.

20.Mr. Ng has also raised the issue of undue delay. In gist, he pointed out that the defendant was arrested on 12 September 2014, but was not charged until 29 September 2021. Mr. Ng informed me that the Department of Justice ("DoJ")  initially advised no prosecution on 24 November 2017. In April 2018, PW1's legal representative wrote to DoJ requesting review of its decision of no prosecution. On 8 March 2021, DoJ issued legal advice recommending the Police to follow up on the outcome of the civil action brought against the defendant by PCE and PCSK[2]. On 10 August 2021, the District Court ruled in favour of PCE and PCSK in the civil action against the defendant. Mr. Ng complained that the prosecution should not have based its decision to prosecute the defendant on the outcome of a parallel civil action. In reply, Mr. Wong, SADPP informed me that, in gist, the defendant remained silent in the police investigation. But in the Defence she filed for the civil action, she raised certain issues which could amount to her defence in a criminal trial, if she was prosecuted. Therefore, the prosecution has decided to wait and see what the defendant would say in the civil trial.

21.The defendant has the right to remain silent throughout the police investigation. Gathering evidence is a matter for the Police. Based on the case number, I can safely assume that PCE and PCSK brought the civil action against the defendant in 2019 (4 to 5 years after the defendant was arrested by the Police). Once the civil action has commenced, the Police should be able to have access of, through PW1, who must be eager to assist the Police, any document filed by the defendant. It is perhaps easier said than done and I say so with the benefit of hindsight that the Police should not have waited for the outcome of the civil action. The Police should have investigated whatever "defence" raised by the defendant in the civil action simultaneously on its own and let DoJ form its own view on the strength of the evidence against the defendant based on the criminal standard. In my view, at least a year or two could have been spared had the Police conducted its own investigation based on the information disclosed by the defendant in the civil action. I consider that there is some delay on the part of the prosecution.

22.Mr. Ng acknowledged that this case involves the Barrick type of breach of trust. He accepted that the sentencing guidelines laid down by the Court of Appeal in HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017 are applicable. According to Ng Kwok Wing, if the amount stolen is between $250,000 and $1 million, the starting point is 2 to 3 years' imprisonment.

23.The defendant's courage and perseverance in pursuing her academic qualifications and advancing her career in accounting are admirable. I also understand her frustration when her employer had only paid lip service to improving her remuneration package. Yet, having taken many courses in accounting and finance, she must have known better than anyone that stealing money from her employer is a serious crime and an utter breach of her fiduciary duty as an accounting manager.

24.Charge 1 involves a sum of $57,250. Applying a strict arithmetical approach, the starting point should be about 5 months. With a 20% discount for the guilty plea, the sentence is reduced to 4 months. I sentence the defendant to 4 months' imprisonment for this charge.

25.Charge 2 involves a sum of $76,000. Applying a strict arithmetical approach, the starting point should be about 7 months. With a 20% discount for the guilty plea, the sentence is reduced to 5 months. I sentence the defendant to 5 months' imprisonment for this charge.

26.Charge 3 involves a sum of $200,000. Applying a strict arithmetical approach, the starting point should be about 19 months. With a 20% discount for the guilty plea, the sentence is reduced to 15 months. I sentence the defendant to 15 months' imprisonment for this charge.

27.Charge 4 involves a sum of $100,000. Applying a strict arithmetical approach, the starting point should be about 10 months. With a 20% discount for the guilty plea, the sentence is reduced to 8 months. I sentence the defendant to 8 months' imprisonment for this charge.

28.Charge 7 involves a sum of $295,641. Applying a strict arithmetical approach, the starting point should be about 26 months. With a 20% discount for the guilty plea, the sentence is reduced to 21 months. I sentence the defendant to 21 months' imprisonment for this charge.

29.Charge 8 involves a sum of $13,429. Applying a strict arithmetical approach, the starting point should be about 5 weeks. With a 20% discount for the guilty plea, the sentence is reduced to 4 weeks. I sentence the defendant to 4 weeks' imprisonment for this charge.

30.Charge 9 involves a sum of $14,575. Applying a strict arithmetical approach, the starting point should be about 5 weeks. With a 20% discount for the guilty plea, the sentence is reduced to 4 weeks. I sentence the defendant to 4 weeks' imprisonment for this charge.

31.Charge 10 involves a sum of $13,200. Applying a strict arithmetical approach, the starting point should be about 5 weeks. With a 20% discount for the guilty plea, the sentence is reduced to 4 weeks. I sentence the defendant to 4 weeks' imprisonment for this charge.

32.Charge 11 involves a sum of $52,000. Applying a strict arithmetical approach, the starting point should be about 5 months. With a 20% discount for the guilty plea, the sentence is reduced to 4 months. I sentence the defendant to 4 months' imprisonment for this charge.

33.Charge 12 involves a sum of $8,948. Applying a strict arithmetical approach, the starting point should be about 4 weeks. With a 20% discount for the guilty plea, the sentence is reduced to 3 weeks. I sentence the defendant to 3 weeks' imprisonment for this charge.

34.Charge 13 involves a sum of $8,067. Applying a strict arithmetical approach, the starting point should be about 4 weeks. With a 20% discount for the guilty plea, the sentence is reduced to 3 weeks. I sentence the defendant to 3 weeks' imprisonment for this charge.

Totality

35.In all 11 charges, the defendant stole a total of $839,110.

36.According to Ng Kwok Wing, the starting point for stealing $839,110 should be about 35 months' imprisonment. I consider a global starting point of 35 months' imprisonment just and appropriate in the present case. With a 20% discount for the guilty plea, the overall sentence is reduced to 28 months. For the delay, I will grant a discount of 2 months, reducing the overall sentence to 26 months. To achieve this, I order the sentences to run in the following manner :-

(i)  Charges 7 to 10 to run concurrently;

(ii)  Charges 1 to 4 to run concurrently; with 3 months to run consecutive to Charges 7 to 10; and

(iii)  Charges 11 to 13 to run concurrently; with 2 months to run consecutive to Charges 1 to 4 and 7 to 10.

37.Mr. Ng has informed me that PCE and PCSK have recovered their losses in relation to Charges 1 to 4 and 7 to 13 through the civil action because the defendant had made payment into court. On the other hand, Mr. Wong informed me that the defendant had fought her case with a full trial and is adjudged to pay the plaintiffs' costs in the sum of about $3.9 million. Mr. Wong submitted that even though PCE and PCSK have won the trial, they are still at a loss, financially.

38.How much legal costs to spend in the civil action against the defendant is a commercial decision for the PCE and PCSK. For the purpose of sentencing, I do not consider it just and appropriate to grant any discount to the defendant for making compensation, if there was any.