The Secretary for Justice v. Lin Min Ying and Another

CAAR000007/2001

CAAR 7/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

APPLICATION FOR REVIEW NO. 7 OF 2001

(ON APPEAL FROM DCCC 971 OF 2000)

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Coram: Hon Stuart-Moore VP, Woo and Stock JJA

Dates of Hearing: 16 October 2001

Date of Judgment: 16 October 2001

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J U D G M E N T

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Stuart-Moore VP (giving the judgment of the Court):

Introduction

1.On 22 February 2001, following a trial in the District Court before Judge Sweeney, the Respondents (D1 and D2 respectively) were convicted of the two charges which each of them jointly faced of furnishing false information, contrary to section 19(1)(b) of the Theft Ordinance, Cap. 210. They were both sentenced on 8 March 2001 to undertake 240 hours community service.

2.The Secretary for Justice (the Applicant) sought leave to apply to the Court of Appeal for a review of the Respondents' sentences. On 29 March 2001, the Chief Judge of the High Court granted leave for this purpose, pursuant to section 81A of the Criminal Procedure Ordinance, Cap. 221.

Prosecution's case

3.D1 is the wife of D2. The two joint charges against them were in precisely the same terms save for the date. It is therefore only necessary to set out the particulars of the first charge. This in effect summarises the prosecution's whole allegation against the Respondents and it reads that they:

"on the 24th day of July, 1992, in Hong Kong, in furnishing information for the application form for Private Tenancy Allowance of the Hong Kong Polytechnic dated 24th day of July, 1992, dishonestly and with a view to gain for themselves or another or with intent to cause loss to another, named one Yau Koon-ting as the landlord of the property at Flat C, 3rd Floor, Nos. 5-11, Rhondda Road, Kowloon and declared that the said Lin Min-ying (D1) and Chow Chun-fai (D2) did not own and had no financial interest in the said property, which to their knowledge was misleading, false or deceptive in a material particular."

4.The second charge related to 6 June 1994 when the same false information was again supplied.

5.The judge summarised with accuracy and great care the salient features of the case presented against the Respondents. Drawing on what was said by the judge during the sentencing process, the offences related to fraudulent claims over a four-year period between 1992 and 1996. As a lecturer in the Department of Accountancy at Hong Kong Polytechnic University, D1 was entitled to claim a housing benefit. Amongst those from which she could choose, she could have either Home Purchase Finance or a Private Tenancy Allowance. The former, whilst eventually providing a tangible asset, provided less in the way of a monthly benefit than the Private Tenancy Allowance. D1 and D2 hatched a dishonest scheme to provide themselves, as the judge very aptly put it, with "the best of both worlds".

6.They purchased premises through a shelf company they owned and then attempted, as it were, to hide behind the veil of incorporation which this provided. They transferred the directorships of that company to two friends, Mr Yau Koon-ting and his wife. They then submitted fictitious leases to the University naming Mr Yau as the landlord. Not surprisingly, in view of the high esteem with which the Respondents were regarded, this dishonest scheme succeeded as a means of deceiving the University. D1 was paid a monthly Private Tenancy Allowance which, as it happened, was more or less the same as the mortgage repayments on the property which had been purchased.

7.Eventually, the Respondents received about HK$1 million which they would not have received if truthful information had been submitted to the University when applying for the Private Tenancy Allowance rather than the false declaration that they neither owned nor had any interest in the address at Rhondda Road.

Mitigation and sentencing

8.The judge accepted three aspects of the mitigation as having particular weight.

9.In the first place, if the Respondents had sought Home Purchase Finance instead of the higher sums paid under the Private Tenancy Allowance, they would have committed no offence. The actual difference, leaving aside interest, was approximately $280,000. The judge described this as, and indeed sentenced on the basis of this being, the "true gain from this deception".

10.Secondly, the Respondents were both of "positive good character" as opposed merely to being persons without a past history of criminal offences to their names. By positive good character, we note that both Respondents, and in particular D2, have dedicated themselves in a quite exceptional way to service in the community. Having said this, the judge stressed that he had not lost sight of the fact that these offences extended over four years and were ongoing in the sense that their unlawfully claimed tenancy allowances were received by them monthly.

11.Thirdly, the Respondents had, following their remand in custody for two weeks for the purposes of the preparation of probation reports, shown remorse for the first time. This was apparent from the reports themselves. In furtherance of this, they had repaid the whole of the amounts paid to them as tenancy allowances, including the interest on those payments. In fact, the sum repaid was, we understand, a total of $1,409,722, which the judge described as a "multiple of their true gain from this enterprise".

12.This distillation of some of the matters which were raised in mitigation before the sentencing judge is not to be viewed in isolation. A matter of smaller consequence, for reasons we shall return to later, was that this investigation (together with the unwelcome glare of media publicity) had been hanging over the Respondents' heads by the time of sentencing for about two and a half years. The judge also took into account the fact that the Respondents had spent two weeks in custody prior to the community service orders being made.

13.Judge Sweeney's even-handed approach to a number of other factors he bore in mind in his approach to sentence also covered a range of distasteful aspects in the case. One passage we should refer to was this:

"A number of instances of this type of offence have come to light in recent years and Mr Lok on their behalf on the last day intimated that there are potentially many more out there, both in the Civil Service and in subvented non-government organisations that follow Civil Service employment practices. Those are cases which have yet to feel the full glare of the investigative spotlight.

If there are such people out there they can expect 'the greatest clemency' (to borrow a phrase I have read a lot of recently) if they immediately put their hands up and admit their guilt and offer to repay all monies improperly obtained as soon as possible. In that way they will not only be showing remorse, but also saving the prosecution authorities a great deal of time and effort as these can be complicated and troublesome cases to prosecute. That is what I would term 'the honourable approach'.

By stark contrast, what we have had in this case is 'the dishonourable approach'. This is where a defendant hopes to brazen it out by not only forcing the prosecution to prove its case, but also allowing evidence to be called to try to support the original deceit. Then, and only then, if that fails, come forward with page after page of good character reference and offer to pay back all monies improperly obtained in order to avoid full punishment for their crime.

Just as (D1 and D2) chose the best of both worlds when deciding what finance to apply for, so also they have chosen the best of both worlds in deciding how to approach this prosecution. They have allowed Mr Yau Koon-ting to go through the agony of spending three days in the witness-box telling lies on their behalf." (Tr. pp. 23-24)

14.The judge also referred to the extraordinary and, we have to say, misplaced tactic of leading counsel then instructed for the Respondents (not, we should emphasise, Mr Macrae S.C. who now represents them) to put no less than 4,239 letters of good character in front of the judge. In the words of the judge:

".... as if the sheer volume of the letters is sufficient to wipe away the shame of their guilt. This has clearly been a highly organised campaign and is perhaps another facet of (D1's) organisational ability which is referred to in many of the letters. Most of the letters I have read on her behalf come without letterhead and contain identical format and wording, all ending with a request for 'the greatest clemency'." (Tr p. 24)

15.It quickly became plain, when the judge suggested that the Respondents would have to be remanded in custody for a third week if he was expected to read all the letters, that he was not being invited to read more than a very small proportion of them.

16.Finally, before imposing the community service orders, the judge observed that the University employed D1 to lecture in the Accountancy Department and was entitled to place a degree of trust in its staff, especially bearing in mind her professional status. As for D2, he was a Justice of the Peace.

The application

17.Mr Zervos, on behalf of the Applicant, submitted that the sentences imposed by the judge were wrong in principle or manifestly inadequate.

18.He argued, in particular, that these sentences failed to have regard to the intention of the Legislature bearing in mind the maximum penalty of ten years which was provided for the kind of offences before the court. Mr Zervos invited us to find that D1 and D2, who had been fortunate enough to have many advantages in life, had made a dishonest gain, looked at in one sense, of a gross figure of $1 million over a lengthy period of time. We prefer the far more realistic way the judge had looked at it, when he referred to a dishonest gain of about $280,000. Mr Zervos, however, contended that the offences, on either view, were so serious that only a prison sentence was appropriate and that there were no "exceptional circumstances" in existence to take these offences out of the category where a prison sentence would normally follow the event. In short, he submitted that the judge, on the material in front of him, had by making community service orders sentenced both Respondents in a way which failed to punish them adequately.

19.In this context, he submitted that judges in Hong Kong were frequently to be found saying that if the six criteria for suitability for community service, which happened to have been mentioned in R v Brown [1981] 3 Cr App R (S) 294, were all satisfied, this should, almost as an automatic result, lead to a community service order being made even though the offences for which a sentence had to be imposed were too serious for such an order.

20.The six criteria in Brown were erroneously referred to in R v Chow Chak-man & Anor [1999] 2 HKC 659 at 663 as "characterisations (which were) alternatives" [See also: HKSAR v Wong Yiu-kuen CACC 463/2000 (unreported) at page 7]. In the present case, the judge was clearly aware of this error, no doubt from a reading of the subsequent decision in Wong Yiu-kuen. He said, in passing sentence:

"... the Community Service Order Scheme was extended to the District Court a few years ago and is now commonly used, even for serious offences such as these as an alternative to a custodial sentence in the right circumstances. Such an order is intended as a substantial punitive measure requiring offenders to incur a significant reduction of their personal liberty for a part of each week, without the community bearing the financial cost of their imprisonment and its consequential disruption of social, financial and employment obligations. As was noted in the Hong Kong case of HKSAR v Chow Chak-man [1999] 2 HKC 659, the six criteria which should be in place before a CSO is made are as follows:

The defendant should be (1) either a first offender or one with a light criminal record; (2) come from a stable home background, perhaps with a family; (3) have a good work record, orders are not designed to encourage the lazy or to show the idle the error or their ways; (4) be in employment or have a realistic prospect of such; (5) have shown genuine remorse (even if late in the day as here); and (6) present no more than a slight risk of reoffending.

With their recent show of remorse, these two defendants now fit all six criteria." (Tr. pp. 25-26)

21.If the judge was slavishly going down the road of saying that because the six criteria (or 'factors' as we would prefer to call them) were in place, therefore the Respondents must be given community service orders, he would have been wrong to do so. But we do not think the judge was doing anything of the kind.

22.It is apparent that the judge had carefully analysed the matters to be weighed towards sentence and the Respondents' general suitability for community service was merely one aspect to be considered. There was, so far as we can discern, really no matter of any significance, whether for or against the Respondents, which appears to have escaped the judge's attention in his approach to sentence.

23.On a different topic, dealing with the restitution paid by the Respondents, Mr Zervos referred in his written argument to R v Kwok Lai-ling [1989] 1 HKLR 418. He cited a particular passage at 420 which reads:

".... actual restitution made voluntarily before criminal proceedings have commenced, or while they are in their earliest stages, may have some relevance to sentencing as evidence of remorse. On the other hand, where it appears to have been made merely in the hope of obtaining a reduction in sentence, it can no longer be seen in that light. The courts do not make bargains with the convicted which have the effect of allowing them to buy themselves out of the penalty for their crimes."

24.We have cited this passage in the hope of making it plain that we hope not to see the full import of that passage relied upon again. Of course it is much stronger mitigation for counsel to be able to show that a defendant has immediately faced up to his or her responsibilities and made every effort from an early stage to repay any dishonest gains to the victim. However, even when restitution or compensation is paid much later in time, whatever a defendant's motives for making reparation, the mitigation that dishonest gains have been repaid is nonetheless a material factor in mitigation. [See: Secretary for Justice v Hui Siu-man CAAR 10/1998 (unreported)].

25.Dealing with delay, as we said earlier, by the time the Respondents came to be sentenced, the case had been hanging over their heads for about two and a half years. Mr Zervos responsibly accepted that this was too long and that the investigation could have been conducted more efficiently. On the other hand, it also goes almost without saying that if they had pleaded guilty at an early stage, much of that lengthy delay, necessitated by the prolonged nature of the investigation, would have been avoided. Nevertheless, this was an appreciable delay for a relatively straightforward investigation.

26.Mr Zervos also dealt briefly with the judgment in Secretary for Justice v Leung Yat-ming & Anor CAAR 9/1999 (unreported). The judge was well aware of that decision where, albeit the respondents who were also in that case husband and wife, were charged under section 9(3) of the Prevention of Bribery Ordinance, Cap. 201, the facts were closely analogous in all respects to those in the present review. The sentencing judge in that case had passed a suspended prison sentence of nine months. This court observed that the sums obtained over a period of about seven years, amounting to over $1.5 million, had been repaid and that almost a year had passed between sentence being imposed in the District Court and the review being heard. Whilst expressing some sympathy for the prosecution's appeal, the court formed the view that it would be "unduly harsh at (that) late stage (to impose) immediate custodial sentences". The court then declined to accede to the application.

27.The present case comes before this court almost eight months after sentence was passed. Furthermore, the 240 hours of community service which the Respondents were ordered to undergo have now been successfully completed by each of them. The work which was undertaken by the Respondents was, we were informed by Mr Macrae, of a largely manual nature. The manual labour was performed at an old people's home, in schools, at a child-care centre and at a centre for the retarded. Some of their time was also spent teaching English. In effect, however, there is really nothing in this case which warrants a different approach being taken to that which was adopted in Leung Yat-ming and Anor.

Conclusion

28.Although we did not need to call upon Mr Macrae to address us, we would like to express to him our gratitude for his most thorough and realistic written submissions which he was invited to adopt in court. We found his analysis extremely helpful.

29.The offences committed by the Respondents were serious. They were committed out of sheer greed by two people who had every advantage in life. The scheme of deceit was a relatively sophisticated one. They had maintained their innocence in front of the District Court judge, long after their criminal involvement had been exposed, by allowing Mr Yau to persist in the false story they had devised for several days during which the prosecution were treating him as a hostile witness. In such circumstances, it was hardly surprising that the judge described this aspect of the Respondents' conduct as additionally dishonourable. However, the judge was careful not to penalise the Respondents by sentencing them for the conduct of their defence.

30.Having weighed the various factors to which we have already referred, we consider that whilst the sentence imposed on each Respondent by this very experienced judge was undoubtedly a merciful one, and that the Respondents would have had no valid complaint if they had been sentenced to an immediate term of imprisonment, the interests of justice are not such as to require this court to allow this application.

31.Accordingly, we refuse, under the terms of section 81B of the Criminal Procedure Ordinance, to alter the sentences imposed.

Representation:

Mr Kevin P. Zervos, SADPP,, of the Department of Justice, for the Applicant.

Mr Andrew Macrae, SC and Mr Y.C. Yeung, instructed by Messrs Lam and Lau, for the Respondents.