HKSAR v. Ho Chi Wai and Another

CACC000311/1999

CACC 311/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 311 OF 1999

(ON APPEAL FROM DCCC 335 OF 1999)

---------------------------

Coram: Hon Nazareth V-P, Stuart Moore V-P and Keith JA in Court

Date of Hearing: 27 August 1999

Date of Judgment: 10 September 1999

----------------------

J U D G M E N T

----------------------

Nazareth V-P (giving the judgment of the Court) :

1. The 2nd applicant, Kan Sai-ho ("D2"), appeared before Deputy Judge Thomas in the District Court on 25 May 1999 on the second charge, i.e. theft, contrary to s.9 of the Theft Ordinance (Cap. 210), the particulars being that between May 1997 and January 1998 he stole in cash HK$1,294,321, the property of Centennial Electronics Limited. The 1st applicant, Ho Chi-wai ("D1"), was also charged at the same time before Deputy Judge Thomas on the first charge which was also theft contrary to s.9, the particulars being that between October 1997 and January 1998 he stole in cash HK$1,455,630.33, the property of Centennial Electronics Limited. Both pleaded guilty. D2 was sentenced to imprisonment for 4 years and D1 to imprisonment for 3 years. Both now seek leave to appeal against sentence.

2. Centennial Electronics Limited ("Centennial") was a supplier of electronic products to local buyers. Centennial employed the services of Hop Lik Transportation Company ("Hop Lik") for the purposes of delivering goods to and collecting payments from its buyers. The payments were made in cash or by cheque. D1 was employed by Hop Lik and was solely responsible for keeping its accounts. He personally arranged for the delivery of goods and collection of payments from the buyers. Within a day or two after delivery of goods, he was required to hand over to Centennial the cash or cheques collected.

3. D2, on the other hand, was employed by Centennial as an accounts clerk. He was responsible for depositing into Centennial's bank accounts the cash or cheques which were handed to him by D1 and making corresponding entries in Centennial's invoice ledger books. If payment was not made on delivery, D2 had to prepare a list of accounts receivable as a reminder that the same were outstanding.

4. D1 married at the beginning of 1997. He was not able to afford separate accommodation for himself and his wife. As he earned only some $15,000 per month as a partner in Hop Lik, he turned to gambling to try to make large sums of money quickly. He lost heavily, ran up debts and began taking the money paid by customers of Centennial for the goods delivered by Hop Lik. His dishonesty should have come to light very quickly, but unfortunately for Centennial, its accounting assistant was D2. Before D1 started stealing from Centennial, D2 had already embarked upon a series of thefts from Centennial. He had begun trading on the stock market and having lost there resorted to gambling in Macao. The collapse of the Asian stock market added to his problems and he began stealing from Centennial. He was aware of D1's activities but dared not report them to Centennial for fear his own dishonesty would be discovered.

5. Eventually, in January 1998, Centennial discovered a payment which had been made was still listed as due. D1's dishonesty came to light. He was not able to repay the amount he had stolen and the matter was reported to the police. He cooperated fully with Centennial and then the police.

6. D2 had been dismissed by Centennial before discovery of D1's dishonesty. D2 subsequently confessed to Centennial that he too had been dishonest and also cooperated with the police and surrendered certain share certificates which had remained in his possession after his unsuccessful trading.

7. Both defendants were aged 26 and had clear records. But, as the judge observed, both charges involve breach of trust. The judge considered rightly, in our view, that the only appropriate sentence in the case of each defendant was an immediate custodial sentence. In sentencing D1, he said this:

"Whilst he is guilty of a breach of trust of those who contracted [with] his firm, the dishonesty has at the same time an element of theft outside the relationship he had with the victim company. Accordingly, I take a starting point of 41/2 years' imprisonment. I give D1 full credit for his plea of guilty and accordingly reduce the sentence to one of 3 years' imprisonment.

It was inevitable that the thefts would have been discovered and D1 only made a full confession when the victim company had already discovered the losses. In my judgment, therefore, there are no further mitigating factors and that is the sentence I pass upon D1."

8. Turning to D2, the judge said this:

"In my judgment, his culpability is greater than that of D1. The offence is one of breach of trust by an employee against his employer. Not only was he stealing from his employer, but he was thereby unable to fulfil his role in the company of ensuring that no dishonesty was committed by an outside contractor. Accordingly, I take a starting point of 6 years' imprisonment in his case. I give D2 full credit for his plea of guilty and reduce that sentence therefore to one of 4 years' imprisonment.

For reasons similar to those in the case of D1, there are, in my judgment, no further mitigating factors. The fact that D2 was [of] good character presumably enabled him to obtain the job with Centennial in the first place and his voluntary confession to the company came only after the company had discovered that money was missing and had begun to investigate. Therefore, that is the sentence that I pass upon D2. "

9. Before us several matters were raised in D2's perfected grounds of appeal under two heads. First, that the judge erred in principle. It is claimed that the judge erred in principle in several respects. First of all, that no recognition was given to the youth of D2, who was 25 years of age at the time he was convicted. We do not think that someone of that age is entitled to a discount on the ground of youth. Next, it is suggested that the fact that D2's offence disabled him from preventing the fraud by D1 was not an aggravating factor for the purposes of sentence because such conduct is a common feature in these types of offences. We think the judge was entitled to take this factor into account. D2's duties included the prompt deposit into Centennial's bank account of the sums he received and to bring to attention payments that were not made on delivery. His criminal disregard of that duty was in the nature of a further breach of trust which aggravated his offence. We do not accept that there was any error of principle. Finally, it is complained that no recognition was given to the fact that Centennial was apparently prepared to compound the offence if D2 agreed to and did repay the total outstanding amount by instalments. We are not persuaded that the judge overlooked this matter even though he did not mention it in his reasons for sentence when addressing the culpability of D2, but the fact that Centennial may have been willing to settle the matter if D2 returned the money he had stolen does not in our opinion, mitigate what D2 had done.

10. We accordingly reject the submission that the judge erred in principle.

11. Finally, coming to the second head of grounds, that was principally relied upon, it was submitted that the starting point of 6 years adopted by the judge was manifestly excessive. First, it was said that the aggravating factors did not justify a premium of 1 1/2 years over the starting point adopted in respect of D1. This point was associated with the next, which was that the type of theft to which D2 pleaded guilty was similar to that of D1. In our view, although the general nature of the offences, i.e. theft, was similar, the judge was entitled to come to the conclusion that the culpability of D2 was greater than that of D1, particularly in the context of the first reason that he gave. This was that D2's offence was one of breach of trust by an employee against his employer. That aggravating feature was absent in the case of D1. Moreover, there was also the element already referred to of D2 disabling himself from discharging his duty of ensuring that no dishonesty was committed by outside contractors.

12. It was sought also to rely upon the unreported judgment of this Court in R v Lee Kam-wah CrimApp No 5 of 1995 as authority for the contention that the starting point here should have been in the region of 4 years, simply upon the analogy of somewhat similar facts and a starting point of 4 years applied there. A similar general submission was made in respect of a review of some 20 cases relied upon by Mr Spicer. However, it is not suggested that any tariff or guidelines are provided by any of those decisions. Significantly, among them were starting points of 6, 7, and 8 1/2 years. Plainly, the starting point here cannot be said to have been manifestly excessive upon that basis. Indeed, we have not discerned any other basis on which it could properly be said that a starting point of 6 years was manifestly excessive.

13. There being no good grounds upon which to interfere with the sentence imposed upon him, we refuse D2 leave to appeal against sentence.

14. Turning to D1's application, what he relied upon in his written notice amounted to this. As to the issue of trust, that Hop Lik did not have any form of contract with one of Hop Lik's customers to whom a delivery was made; and that the judge may therefore have given him a heavier sentence because of possibly an erroneous assumption as to that. He relies also upon his personal and family circumstances which have already been outlined. In June, he had read in a newspaper that an employee of Hong Kong Telecom had embezzled $3.3m but was sentenced to only 3 1/2 years; likewise a broker who stole $12m had received only a 5-year sentence. Further that he was attempting to repay the bank and friends and relatives to the limit of $100,000.

15. Before us, apart from some repetition of the foregoing, he referred to the fact that he had surrendered to the police, he had no criminal record, and he hoped all of that would be taken into consideration in his sentence being lightened.

16. It can readily be seen that there is nothing in these grounds, which the judge could not have overlooked. If there were anything of possible assistance in his appeal, it would have to be the starting point of 4 1/2 years adopted by the judge. But for the reasons we have given in rejecting Mr Spicer's submissions on the similar point in relation to D2, there can be no criticism of that.

17. We are, accordingly, satisfied that there is no good reason to interfere with the sentence imposed upon D1. His application for leave to appeal against sentence is also refused.

Representation:

Mr P.K. Madigan SGC for Director of Public Prosecutions

Mr Rupert Spicer (DLA) for D2

D1 in person