HKSAR v. Ma Kim Hung
Read the full judgment text of CACC 33/2002 on BabelCite. This Court of Appeal judgment was delivered on 10 May 2002 before Stuart-Moore VP, Stock JA, and Lugar-Mawson J.
Criminal law – sentencing – welfare fraud – Comprehensive Social Security Assistance – procuring entries in bank records by deception – Theft Ordinance (Cap 210) s.18D(1) – starting point of 2½ years – one-third discount for guilty plea – discount for restitution – delay in prosecution as mitigating factor – District Court Ordinance s.81 Taking into Consideration procedure – Criminal Procedure Order s.83I(3) – whether starting point of 2½ years manifestly excessive for sustained fraud on public welfare scheme – whether sentencing judge gave sufficient discount for full restitution made nearly a year before prosecution recommended and over two years before sentence – court held restitution in such circumstances bears hallmarks of genuine remorse and warrants substantially greater discount than 2 months – whether inexcusable delay between admission and sentence should be reflected in discount – per AG v. Lo Ching-fai [1997] 2 HKC 651 and R v. William Hung [1994] 1 HKCLR 47, delay caused by authorities can amount to mitigation – appeal allowed to extent each of 25 concurrent 18-month sentences reduced to 9 months – immediate custodial sentences otherwise justified – Court of Appeal urges Department of Justice to use TIC procedure in s.81 District Court Ordinance in future welfare fraud cases to reflect whole fraudulent obtaining.
Legal issues: Whether starting point of 2½ years' imprisonment for welfare fraud was manifestly excessive · Whether judge gave sufficient discount for full restitution made long before prosecution · Whether delay between admission/restitution and sentence should have been reflected as mitigation · Whether a suspended sentence or community service order should be substituted for immediate custody
Outcome: Appeal allowed to the extent that each of the appellant's 25 concurrent sentences of 18 months' imprisonment was reduced by 9 months to 9 months' imprisonment.
Cited by 36 cases · Cites 1 case
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CACC000033/2002 CACC 33/2002 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CRIMINAL APPEAL NO. 33 OF 2002 (ON APPEAL FROM DCCC 1058 OF 2001) ____________
_____________ Coram: Hon Stuart-Moore VP, Stock JA, and Lugar-Mawson J. Date of Hearing: 26 March 2002 Date of Decision: 26 March 2002 Date of Handing Down of Judgment: 10 May 2002 ________________ J U D G M E N T ________________ Hon Lugar-Mawson J: (giving the judgment of the Court) 1.On 26 March 2002, we granted leave to appeal and, treating the hearing as the appeal, allowed the appeal to the extent that we reduced each of the Appellant's 25 concurrent sentences of 18 months' imprisonment by 9 months to concurrent terms of 9 months' imprisonment. We now set out the reasons for our decision. Background 2.On 2 January 2002, the Appellant, Ma Kim Hung a man of 67, was convicted on his own pleas of guilty by Maggie Poon J in the District Court of 25 charges of procuring the making of an entry in a bank record by deception, contrary to s.18D(1) of the Theft Ordinance, Cap. 210. The judge, after hearing mitigation, sentenced him to serve concurrent terms of 18 months' imprisonment in respect of each offence. Facts 3.This case relates to a fraud upon Hong Kong's social welfare system. The Appellant first applied for Comprehensive Social Security Assistance (Assistance) from the Social Welfare Department in late 1995. On 3 December 1995 he attended an initial interview with a social security officer. At this interview his wife and he were told that he had to fill in all the details on the application form truthfully, and that if he didn't he might face prosecution. On the form the Appellant was required to declare all the capital assets of all members of his household. The Appellant falsely declared that the value of his family's assets was $25,805; in truth they were $288,317; he had concealed the existence of two bank accounts in his name. Assistance was granted to him as a result of his false claim. The first payment was backdated to 18 October 1995. Had he declared that his family's assets were over $71,000 he would have been ineligible for assistance. 4.The Appellant had to re-confirm his means every 6 months at an interview at the Social Welfare Department's offices. There he was required to fill in a review form stating the current value of his family's assets. From 12 December 1995 to 12 August 1999 - a period of 3 years and 8 months - at each of those twice-yearly interviews, the Appellant deliberately misstated the true value of his family's assets. By 1999 the Appellant's family's assets had grown from $288,317, to around $442,000. 5.His fraud came to light when, in early August 1999, his daughter applied for Student Financial Assistance when she entered university. The Social Welfare Department then came to know of the existence of the two bank accounts, which the Appellant had concealed from them. When questioned about this by an investigating Social Welfare Officer on 26 August 1999, the Appellant admitted that he had deliberately made false declarations. He repaid the whole amount of Assistance that he had fraudulently obtained since October 1995 on 3 December 1999; this amounted to $425,244. 6.The Social Welfare Department have a review procedure for dealing with fraudulent claims for Assistance and it was not until 28 November 2000, nearly 12 months after he had made full repayment, that the Department's Internal Review Committee recommended that the Appellant should be prosecuted. The Department referred the matter to the police and it was not until 2 April 2001, 5 months later, that the Appellant was arrested. After caution, he made a full confession in which he said that he had deliberately made the false claims in order to fund his daughter's education, and out of greed. 7.Originally, the decision was to proceed against the Appellant in the Magistrates Court. He was charged with one count under s.18D(1) of the Theft Ordinance on 2 October 2001 and first appeared in Tsuen Wan Magistrates Court on 10 October 2001. There the Principal Magistrate directed that legal advice be sought on the venue of trial and the matter was referred to the Department of Justice. The Department of Justice directed that proceedings be taken against him in the District Court on 25 specimen charges relating to a total amount of $258,892. 8.We were told by Mr Simon Tam, for the Respondent, that the reason why the Appellant was not charged with fraudulently obtaining the whole amount of $425,244 Assistance paid to him was because the prosecution did not wish to overload the District Court charge sheet. Whilst we can appreciate the rationale behind this reasoning, it was open to the prosecution to have dealt with the fraudulent obtaining of the remaining amounts of Assistance by way of the Taking into Consideration (TIC) procedure, which is expressly provided for in s.81 of the District Court Ordinance. We urge the Department of Justice to use this procedure in future cases where it is appropriate to do so. The result of the prosecution's decision to proceed on only 25 specimen counts is that both the judge and this Court could only deal with the Appellant on the basis of the total amount in those charges, $258,892 and not the whole $425,422 of Assistance which he fraudulently obtained. 9.The combined effect of the time that it took the Social Welfare Department to decide that the Appellant should be prosecuted, and the time it took the police and the Department of Justice to bring that prosecution to trial in the District Court, was that over 2 years passed between the time the Appellant made full restitution to the Social Welfare Department and the day he was sentenced for his offences. And nearly 2½ years passed between the day his frauds were discovered, and he admitted committing them, and the day he was sentenced for his offences. 10.As we have said, the Appellant is now 67. He has little education and no trade. Formerly he was a factory worker, he was made redundant before he made his first false claim for Assistance in 1995, when the factory he worked in was relocated to the Mainland. He is married, his wife is younger than he; she cannot work because of illness. His wife and he have one child, a daughter. This young lady is academically gifted and graduated from the Chinese University of Hong Kong in September 2001 after a 3-year degree course. He has assumed responsibility for the care of his wife's mother, who is 83 and in poor health. The grounds of appeal 11.The Appellant applied for leave to appeal against the sentences imposed on him on 18 January 2002. Mr Shahmim Khattak represented him in the application. In the grounds of appeal it was said that the sentences were manifestly excessive and that the judge erred in passing a deterrent sentence without having regard to the Appellant's mitigating circumstances. The correct level of the starting-point sentence 12.In her Reasons for Sentence the judge said that she took an overall starting point of 2 1/2 years and reduced that by one-third to reflect the Appellant's guilty pleas, and then by a further 2 months to acknowledge the fact that he had made restitution. We deal first with the question of whether or not the starting point sentence of 2 1/2 years taken by the judge was too high. 13.After speaking of the matters she took into account in mitigation of the Appellant's sentences, she continued:
14.There are no Hong Kong authorities on the sentencing principles a judge should apply, and the approach to be taken, when sentencing for offences involving frauds upon the public welfare system. Mr Tam, although he had no statistics to place before us, informed us that cases of welfare fraud fall to be dealt with in the Magistrates Courts on a daily basis. Most relate to obtainings of relatively small amounts of money and are dealt with by way of relatively modest penalties. It was because this case involved such a large amount of money that the Principal Magistrate at Tsuen Wan Magistrates Court questioned the venue of trial and the Department of Justice, on its referral to them for advice on venue, directed that the prosecution be brought in the District Court. It was in Mr Tam's experience the first time that such a case had been transferred to the District Court, and, so far as we are aware, this is the first time that a case of this type has fallen for consideration by the Court of Appeal. 15.Given the length of time over which these offences were committed - over 3 1/2 years; the amount of money involved in the 25 charges laid against the Appellant and the fact that it was a deliberate deception from the very beginning, a starting point of 2 1/2 years' imprisonment was, in our view, not manifestly excessive. The matters taken in mitigation 16.We now turn to the claim that the judge failed to have sufficient regard to the matters that went to the Appellant's favour in mitigation. Mr Khattak argued that the judge paid insufficient regard to the Appellant's genuine remorse, the fact that he made full restitution and the fact that there was a gap of nearly 2 1/2 years between the Appellant's admission of wrongdoing to the Social Welfare Department and the date of his sentence, and a gap of just over 2 years between the date he made full restitution to that Department and the date of his sentence. 17.The Judge said this, in her Reasons for Sentence, in addition to the passage quoted earlier:
18.It appears clear that the judge had specifically considered all the mitigating factors apart, possibly, from the delay, about which counsel then appearing for the Appellant never apparently addressed her. The Appellant was given a full one-third discount for his early plea; this is in accordance with well-established principle. The judge acknowledged the principle that restitution should be appreciated and encouraged, but took the view that it did not necessarily follow that by making restitution the Appellant could buy himself out of prison. She was aware of his previous good character, background and family circumstances. The question we have to consider is whether or not she gave a sufficient discount to reflect the restitution and the very long delay between the discovery of his offences, the date of payment of the restitution and the date of his sentence. Restitution 19.For our part, we accept that restitution should be encouraged and that it should be acknowledged with a discount in sentence. The size of that discount, however, very much depends upon the facts and circumstances of each case. In this case the additional discount to reflect the restitution was 2 months, which represents no more than a reduction of 6.6% from the starting point. In arriving at the appropriate figure the sentencing principle that an accused should not be allowed to keep his ill-gotten gains has to be borne in mind, as should the question of whether or not he has suffered financial hardship in making restitution. In his skeleton argument, Mr Khattak described the funds the Appellant used to make his restitution to the Social Welfare Department as his 'life savings'. With respect, this is not entirely true; to a very large extent they were the proceeds of over 3½ years of thieving from the Social Welfare Department. The fact that over the 3½ year period of his offences, in which he received $425,422 in Assistance payments, the Appellant had, by 1999, been able to save around $153,683 over his family's initial assets, in 1995, of $288,317, indicates that he may not have genuinely been in need of Assistance either to meet his family's daily necessities, or fund his daughter's education. We accept however that as an elderly unemployed man and the sole breadwinner of his family, with his daughter's university education to fund, and no realistic hope of finding remunerative work, his concern was to accumulate funds to meet future expenses. 20.What, however, is very much in the Appellant's favour - and it is a matter that we feel the judge failed to give sufficient consideration to - is the timing and circumstances under which the Appellant made his restitution. As we have said, his fraud was discovered in early August 1999. He unequivocally admitted his wrongdoing on 28 August 1999. He made full restitution of the entire amount of assistance paid to him since October 1995 on 3 December 1999. This was 11 (nearly 12) months before the Social Welfare Department decided to prosecute him, 16 months before his arrest, 23 months before he faced any criminal charge and nearly 25 months before he fell to be sentenced. We have not been told what representations were made to the Appellant in 1999 about the possibility of his facing a prosecution, though we have no doubt that he was aware that it was a possibility. It was not, however, an immediate threat. This was not a case where the Appellant made restitution as a tactical move only days, or hours, before his sentencing. We do not think that it can be fairly said, as the judge put it, that he attempted to '... buy himself out of a prison sentence'. Rather his making of restitution has the hallmarks of being the act of a man who had realistically accepted that the game was up and that he had been found out, and who genuinely wished to make amends with the authorities he had cheated. In short, it appears to us be an act motivated more by genuine remorse than self-interest, though we are not so naive to think that self-interest played no part in his action. We consider that the restitution should have been rewarded by a much greater discount than two months. Delay 21.We turn now to the question of the delay. It appears that the delay in bringing the prosecution was not relied on as a mitigating factor by the Appellant's counsel in the District Court. We agree with Mr Tam that a delay in bringing a prosecution (whether justifiable or not) does not in itself entitle an accused to a discount in sentence; the seriousness of a crime does not diminish with the passage of time. 22.The principles in which delay may be a factor in an accused's mitigation appear clear. In AG v. Lo Ching-fai [1997] 2 HKC 651, it was said that if an accused has faced many years of strain since his arrest, this may have an impact on his sentence. Delay on which an accused may be able to place reliance includes the delay between the beginning of the investigation and the trial, see: R v. William Hung [1994] 1 HKCLR 47. However, if the accused is at fault for the delay occasioned by the length of the investigation, then he cannot rely on it, see: R v. Hui Hing-kong CA 722 of 1995 (unreported). 23.The delay of over 2 1/2 years between the Appellant's admission of the offences and the date of his sentence was inexcusable. This was a potentially complicated investigation, which had been made very simple by the Appellant's cooperation. From the minutes of the Social Welfare Department that Mr Khattak placed before us, we can see that lengthy and protracted discussions took place within that Department, right up to the highest level, on the question of whether or not the Appellant should be prosecuted. The fact, however, remains that this process took far too long, as did the subsequent police investigation. This must have had a debilitating effect upon the Appellant. He would not have known whether the Department considered the matter concluded with his payment of restitution, or whether they were to take it further. We believe that some discount for that should have been given to him. Alternative disposals 24.Mr Khattak urged upon us to consider substituting either a suspended sentence or a Community Service Order in place of the 18 months' sentences of imprisonment. Under s.83I(3) of the Criminal Procedure Order we have power to do either. We do not consider the circumstances of this case warranted either course. Decision 25.For our part, we were satisfied that the Appellant's offences were so serious that they amply justified him being ordered to serve immediate custodial sentences for each one. There can be no escaping from the fact that for over 3½ years he deliberately and methodically embezzled a very large sum of money from the Social Welfare Department. Our sole concern was whether or not the judge had given sufficient consideration to the quite exceptional mitigating factors that existed in this case. Our view was that she had not; accordingly, for the reasons we have now given, we reduced each of the Appellant's 25 sentences of 18 months' imprisonment by 9 months. As these sentences are concurrent the overall period of his imprisonment will be 9 months.
Representation: Mr Simon Tam, S G C Department of Justice, for the HKSAR Mr Shamin Khattak, instructed by Messrs Poon & Cheung, for the Appellant |
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