Read the full judgment text of CAAR 000006/1992 on BabelCite. This Court of Appeal judgment was delivered on 24 February 1993 before Silke, V.-P., Power, V.-P. & Macdougall, J.A..
Criminal law – sentencing – conspiracy to defraud – cheque kiting – breach of trust – banking fraud – Court of Appeal review of sentence – manifestly inadequate sentence – whether Barrick factors apply in Hong Kong – whether suspended sentence appropriate – sentencing discounts for guilty plea and personal circumstances – Wong Kwok Wai discount for time not spent in custody. The two respondents pleaded guilty in the District Court to a charge of common law conspiracy to defraud by operating a cheque kiting scheme between May and November 1990 using six accounts at the Banking Business Department of Ka Wah Bank Limited. The first respondent, an 'A' class officer heading the current accounts section, abused his position of trust to assist the second respondent, a marine products businessman, by approving drawings against uncleared effects and unauthorised overdrafts far exceeding his authority limits, and concealing the operation from the Branches Division. The bank's exposure grew from HK$80,000 to HK$4.8 million, with an eventual loss of approximately HK$4.5 million, of which only HK$270,000 was repaid. The sentencing judge imposed a suspended sentence of 6 months' imprisonment on the first respondent and 12 months' imprisonment suspended for two years on the second respondent. The Court of Appeal granted the Attorney General's application to review the sentences as manifestly inadequate and/or wrong in principle, holding that the sentencing judge had erred by failing to first determine the proper custodial sentence before considering suspension, by treating the lack of supervision in the bank and the absence of certain aggravating factors as substantial mitigation, and by treating the second respondent's case as more serious than the first respondent's when the position of both was virtually equal in criminality. The court reaffirmed that the Barrick factors (per R v Barrick (1985) 81 Cr App R 78), as adopted in The Queen v Ying Lai Chan [1991] 1 HKLR 48, are relevant considerations in Hong Kong fraud sentencing, although the English sentencing levels suggested in Barrick are tied to English social and economic conditions and have no direct application to Hong Kong. The court further held that, except in the most exceptional cases, immediate custodial imprisonment should be the norm for dishonesty in Hong Kong as a business city, in order to emphasise societal expectations of honesty and to punish the individual fraudster. A starting point of 3 years' imprisonment was appropriate for each respondent. Allowing for discount for the guilty pleas, personal circumstances of the respondents, and the delay between arrest and plea, the proper sentence would have been 2 years and 3 months; a further one-third discount under Attorney General v Wong Kwok Wai [1991] 2 HKLR 384 was applied because neither respondent had been in custody, yielding a final substituted sentence of 18 months' immediate imprisonment for each respondent. The original sentences were set aside and 18 months' imprisonment substituted for each respondent.
Legal issues: Whether the original sentences for conspiracy to defraud by cheque kiting were manifestly inadequate · Applicability of Barrick factors in Hong Kong fraud sentencing · Whether suspended sentences were appropriate for the respondents' fraud · Determination of the proper sentence to be substituted
Outcome: Review of sentence granted; original suspended sentences set aside and substituted with 18 months' immediate imprisonment for each respondent.