The Queen v. Fung Kai Dick

CACC000343/1986

IN THE COURT OF APPEAL

BETWEEN

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Coram: Li, V-P, Yang, J.A. & Penlington, J.

Date of Hearing: 8th October 1986

Date of Delivery of Judgment: 8th October 1986

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JUDGMENT

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Penlington, J. :

1. The application was Chairman and Principal shareholder of a company called Gloves Industrial Alliance ("GIA") which he had founded in 1974. Some other shareholders had joined in 1978 and various smaller subsidiary companies were formed involved in the glove and textile business. Business, however, became bad in the early 1980s and the group unfortunately began to speculate in the property market, as did so many other sound industrial concerns, and this gave rise to a series of bribes being offered to one AU-YEUNG Yee, a senior officer of Lloyds Bank International, so that Lloyds Bank would grant credit facilities to GIA, not for use in trade but in speculation. This was done by the preparation of false documents purporting to show the sale of goods from one member of the group to another and the issue of letters of credit on the basis of these false documents. Other employees of the group were involved as was the then local manager of Lloyds Bank, one Victor Folch-Vernet. Both AU-YEUNG and Folch-Vernet fled Hong Kong when the dishonesty was discovered and investigations were made by the Independent Commission Against Corruption. Other directors of the GIA group were also involved, one of them, a Mr. Lau, very substantially involved indeed. These other principals were, however, granted immunity and they gave evidence for the Crown against the applicant.

2. The applicant originally faced some eleven charges but the indictment was severed and he was tried on only the three counts of conspiracy. There was one general conspiracy charge of conspiring to offer bribes, one of conspiracy to defraud Lloyds Bank by the use of commercial documents, and one of conspiracy, with Tam, Folch-Vernet, Au-Yeung, Lau and others to defraud the bank in relation to another subsidiary company, Brandfax. That was in connection with the purchase of a floor in a building known as the Join-In Building.

3. The applicant was found guilty on the three charges after trial before a jury; he was sentenced to 18 months imprisonment on the first conspiracy charge to offer bribes and to 5 years' imprisonment on the other conspiracies to defraud, the last two sentences to be concurrent but consecutive to the first one, giving a total 6½  years' imprisonment. The trial occupied some 18 working days, approximately a month in all, which was considerably shorter than at first thought due to the considerable amount of documentary evidence which was agreed.

4. The applicant originally applied for leave to appeal against both conviction and sentence but was to be represented only on sentence. Today he indicated that he wished to abandon his application for leave to appeal against conviction and that application was therefore dismissed. We are then concerned only with the question of sentence.

5. Mr. Loughran, who appeared in the trial, has pointed out that most of the matters which he now brings forward were in fact put before the trial judge and were considered by him. However some matters he suggests were perhaps not fully considered and there are others which the judge in his reasons given in Court did not mention.

6. The first main ground for appeal against sentence is that the offences were instigated, or at any rate substantially assisted, by senior officers of Lloyds Bank, Folch-Vernetand Au-Yeung, who were clearly acting in breach of their position of trust and they were the main culprits although it is conceded the applicant was happy to go along with these schemes. Secondly the applicant alone faced trial for these offences. Folch-Vernet and Au-Yeung have fled Hong Kong and we understand cannot be extradited. There were four. other executive directors of GIA who were involved. One was Tam Tin-shik who apparently is ill and has not been charged and there were the other three, Lau Wai-chun, Shea Wan-chee and Chung Oi-yin who were given immunity. Mr. Loughran says that the applicant had a deep sense of grievance because he alone faced these charges and these other people who clearly were also guilty were given immunity. It was because of the sense of grievance that the applicant did not plead guilty, despite what clearly was a very strong case against him.

7. The decision on whether to grant immunity to a guilty person in exchange for his giving evidence is often a very difficult one for the Crown and much criticism, often ill-informed, is directed at the prosecuting' authorities for what is regarded as something repugnant to generally accepted standards. Clearly it is a course which should only be used if there is no real prospect of bringing a prosecution without it and the Crown with its knowledge of what evidence is available is in the best position to make that decision. Having read the papers here we do, however, have some unease as to why Lau Wai-chun in particular was granted immunity as the Crown seemed to have a strong case without him, including a great deal of documentary evidence. That the applicant did have a sense of grievance to be facing charges alone was understandable.

8. It is also submitted that these offences were committed to try and rescue bona fide companies; there was no suggestion that the applicant had secreted funds and it was not a case of a man deliberately going out to defraud a bank to put money away for his own use. He and his family have not benefitted from these offences and are now penniless.

9. It is also submitted that the applicant and his wife had spent some 56 days in prison as civil debtors and that should be taken into account. The offences were hanging over the applicant before trial for some 3½ years and certainly that must indeed have been a very great strain on him. The trial judge has himself indicated that, if he had power to do so, he would have suspended part of these sentences.

10. Finally it was argued that the charges all arose out of the same series of events, which took place in order to obtain money to salvage the GIA group, and that the sentences should all have been concurrent.

11. We are quite satisfied that the trial judge had listened to the very able and careful factors in mitigation put forward by counsel at the trial, and if he did not specifically mention any of them in his reasons for sentence, he did take them into account.

12. It was the applicant's argument that sentences for serious frauds range from 4 to 7 years imprisonment and the mitigating factors here indicated a sentence at the lower end of that scale. At the time these offences were committed the maximum sentence for a common-law conspiracy was 7 years though for conspiracy to bribe an agent it was, and is, 10 years. On that basis, taking into account that these were a series of very much inter-linked offences, that this was a large scale fraud committed by bribing bank officers in which some $14,000,000 has been lost, and all the factors submitted in mitigation, we consider that a total sentence of 5 years' imprisonment would be proper. We therefore grant the application for leave, treat this as the hearing of the appeal and allow the appeal to the extent that all sentences will be concurrent.

Representation:

Paul Loughran (D.L.A.) for Applicant

J. Pathes & Mrs. Harris, Counsel for Respondent/Crown Prosecutor