HKSAR v. Wan Hin Chung, Mike and Others

Read the full judgment text of CACC 163/2004 on BabelCite. This Court of Appeal judgment was delivered on 1 December 2005.

1. On 29 September 2003, the applicants (D1, D4 and D7 on the original indictment preferred against them) were arraigned with others in the Court of First Instance before V Bokhary J on 3 counts relating to a loan-sharking operation covering a period of just under 3 years.

Case No.CACC 163/2004
Court
Court of Appeal
Date01 Dec 2005
Judge
Case Document
100%Judiciary

CACC 163/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

criminal APPEAL NO. 163 OF 2004

(ON APPEAL FROM HCCC NO. 233 of 2001)

____________________

BETWEEN

  HKSAR Respondent
  and  
  WAN HIN CHUNG, MIKE (D1) (溫衍宗) 1st Applicant
   LEE CHI YIU, BANK (D4) (李志堯) 2nd Applicant
  YAM HO KEUNG (D7) (任浩强) 3rd Applicant

____________________

Before:   Hon Stuart-Moore VP, Stock JA and McMahon J

Date of Hearing: 29 September 2005

Date of Judgment: 1 December 2005

__________________

J U D G M E N T

__________________

Stuart-Moore, VP:

Background

1.On 29 September 2003, the applicants (D1, D4 and D7 on the original indictment preferred against them) were arraigned with others in the Court of First Instance before V Bokhary J on 3 counts relating to a loan-sharking operation covering a period of just under 3 years.

2.D1 pleaded guilty to all the counts on the indictment and was sentenced on 31 March 2004 to a total of 7½ years’ imprisonment whereas D4, who played a lesser role in the loan-sharking activities than D1 and had pleaded guilty only to counts 1 and 3, was sentenced to a total of 4 years’ imprisonment.  They each seek leave to appeal against sentence.  In both cases, the judge ordered that their sentences should run consecutively to the 5-year sentence which each of them was then serving.  The earlier sentences had been imposed on 27 May 2003 and arose from charges of a similar nature to which D1 and D4 had pleaded not guilty in the District Court.

3.On 29 September 2003, D7 pleaded not guilty to counts 1 to 3 on the indictment.  Following a series of amendments to the indictment, on 2 March 2004, when the trial had been under way for a number of months, D7 was re-arraigned on the sole remaining count against him which, in substance was the same as count 1 of the original indictment.  D7 maintained his earlier plea of not guilty to this.  On this newly amended indictment, he was named as the 4th defendant but, for ease of reference, we shall continue to refer to him as D7.  He was convicted on 26 March 2004, following a trial which occupied a total of 110 days before V Bokhary J and a jury.  He now seeks leave to appeal against his conviction.

4.The count on which D7 was convicted alleged a conspiracy to lend money at an excessive interest rate, contrary to section 24(1) of the Money Lenders Ordinance, Cap. 163 and section 159A(1) of the Crimes Ordinance, Cap. 200 and punishable under section 24(4) of the Money Lenders Ordinance, Cap. 163 and section 159C of the Crimes Ordinance, Cap. 200.  The particulars amounted to an allegation that D7 conspired with others, between June 1997 and 17 April 2000, to lend money at an annual interest rate in excess of 60 per cent.

Prosecution’s case against D7

5.The essence of the case presented against D7 was not complex.  In summary, it came down to an allegation that whilst Asia (Hong Kong) Finance Company (“Asia”) was engaged in legitimate business making loans to the public, some of the information it acquired in the course of its business was utilised by a loan-sharking syndicate, which included D7, who offered loans at excessive rates of interest to those who had applied to Asia for loans and had been refused them. 

6.Asia was owned by Worldbar Investment Limited (“Worldbar”) whose registered office was at Room 1102A on the 11th floor in Kowloon Plaza, 485 Castle Peak Road, Lai Chi Kok.  Next door, Room 1102 was the registered office of Homwise International Company Limited (“Homwise”).  These two offices were referred to at trial as the “Kowloon Plaza premises” inside which, it was alleged, the loan-sharking syndicate operated from a “Secure Room” by getting in touch at night with loan applicants who had been unsuccessful.  The Secure Room had been constructed in such a way as to be hidden from view.  Those who were granted short-term loans at rates of interest which were usually above 60 per cent, were told to make the repayments of their debts into one of 4 company accounts, namely, Tung Wing, Nam Wah, Sai Shing or But Hoi.  These companies were under the control of certain syndicate members.

7.With specific reference to D7, who was an employee of Homwise, it was alleged that he extended his legitimate activities as a salaried employee to join the conspiracy entered into by other syndicate members.  He did not, however, work at night when loan offers at excessive interest rates were made to potential borrowers.  The principal evidence against D7 was provided by documentary exhibits found in a number of folders and the testimony of two accomplice witnesses, PW1 and PW2, both of whom stated that he worked in the Secure Room.  In largely self-serving answers given to the police in interview, D7 admitted that he had worked in that room.

8.PW1 and PW2 described D7’s responsibilities as being to check the information about clients to ensure that it was correct and also, where necessary, to remind them to make repayment.  This evidence, by itself, gave no indication as to whether the clients with whom D7 dealt included those who were paying excessive interest rates. 

9.The documents in folders 11 to 13, 25 and 27, as they were labelled at trial, contained the material on which the prosecution relied to show that D7 was more than a mere employee of Homwise.  These documents referred to D7 by name.  In her summing up, the judge, having dealt with some of the evidence given by PW1 and PW2, went on to refer to the documentary material which on the face of it was relevant to D7, saying:

“What was [D7’s] position?  Here, I am referring to whether he was more than a mere employee at the Kowloon Plaza Premises without any other relationship with any person having anything to do with those premises.  For the purpose of what light you consider that they shed on that question, you are entitled to bear in mind the ‘folder 11’ transfers totalling $322,000 from Homwise to [D7].  You are also entitled to take into account the folder(s) 12, 13, 25 and 27 transfers for what light you consider that they shed on this question if you feel sure that the Yam Ho-keung under the folder[s] 12, 13, 25 and 27 transfers is [D7].  If that Yam Ho-keung is [D7], then the ‘folder 12’ transfers totalling $3,939,000 are from [D7] to Homwise which had its registered office at the Kowloon Plaza Premises; the ‘folder 13’ transfers totalling $27,333 are from Homwise to [D7]; the ‘folder 25’ transfers totalling $2,390,000 are from [D7] to Worldbar which owned Asia and which had its registered office at the Kowloon Plaza Premises; and the ‘folder 27’ transfers totalling $2.4 million are from [D7] to Wan Hin-chung who, if PW1 and PW2 are right, worked from the Secure Room at the Kowloon Plaza Premises at night offering short-term loans at a rate of interest of 720 per cent per annum.”  (Appeal bundle pp. 121-122)

All of the transfers to which the judge referred fell within the dates of the two conspiracy  counts in D7’s case although some of them fell outside the period covered by debtor-witnesses who had taken out loans.  The prosecution was unable to prove that any of the monetary transfers set out in these folders were directly related to the conspiracies in the indictment.

10.Elsewhere in her summing up, the judge had emphasised that unlike PW1 and PW2 who worked in the Secure Room at night, D7 had not done so.

Defence case

11.D7 did not give evidence.  Reliance was placed by Mr Egan, who also represented D7 in the court below, on the contents of D7’s statements to the police and the fact that PW1 and PW2’s evidence that D7 had not been involved in offering short-term loans during the evening hours, after the cessation of legitimate business dealings, effectively “exonerated” D7.  These witnesses did not, however, go so far as to say that D7 was not involved in the conspiracy which, as the judge correctly directed the jury, involved “more than just telephoning potential borrowers” offering short-term loans during the evenings after normal business hours.  So far as the evidence contained in folders 11, 12, 13, 25 and 27 was concerned, D7’s case at trial involved an acceptance that he was the person referred to in folder 11 but, although a name which was the same as his appeared in the four other folders, his case was presented on the footing that he was not connected to those transactions.

D7’s grounds of appeal against conviction

(1) to (4)   Whether inadmissible or prejudicial evidence was put before the jury

12.Grounds 1 to 4 are closely related and we can deal with them together.  Mr Egan firstly submitted that the judge had wrongly admitted the evidence of “5 financial transactions” where “virtually all of the money involved was transferred outside the period covered by the evidence, as evidence of ‘background and full picture’ in breach of the well-known rule in Makin v AG (NSW) [1894] AC 57”.  In the alternative, Mr Egan contended in his 2nd ground that even if the evidence was technically admissible, it should have been excluded because its prejudicial effect outweighed its probative value.  The 3rd ground alleged that the judge had directed the jury that they could use this material when deciding their verdicts which changed the basis, he suggested, on which the evidence had been admitted in the first place.  The 4th ground amounted to a submission that the judge’s directions to the jury were “so confused and contradictory” that the jury could have been left with the impression that they could use the financial material to convict D7.

13.The manner in which the grounds, as drafted, were set out was wholly unacceptable and even with the benefit of what he described as his “skeleton” argument, Mr Egan had failed to put into any sensible context the relevance of the points he was making.  The grounds were virtually meaningless as they stood and neither Mr Egan nor, for that matter, Mr Cahill for the respondent made any real attempt in their written arguments to shed light on the issues at which criticism was directed.  The contents of folders 11, 12, 13, 25 and 27 were never made part of the appeal bundle although, as it transpired in argument, a photocopied diagram which was illegible in parts had been included in the bundle (at page 57) which summarised the contents of the folders.  This diagram was virtually incomprehensible without the benefit of a full explanation in a written argument for which directions had been given and was not even referred to in Mr Egan’s so-called ‘skeleton’, let alone explained by him.

14.Equally inexplicably, the judge’s ruling on admissibility had been omitted from the bundle and we had to call for it ourselves.  This ruling, as we would have expected, set into context the whole of the argument about admissibility and it is quite remarkable that Mr Cahill did not, at the very least, seek to have this highly relevant transcript included in the bundle in order to answer Mr Egan’s criticisms.  It provides the whole background and basis for admitting the evidence about the monetary transfers revealed in four of the five folders, concluding (in paragraph 18 of the ruling) with these words:

“In the foregoing circumstances, I think that there is evidence on which the jury would be entitled to find that the Yam Ho-keung mentioned in the documents relating to the transfers involving Mr Wan, Homwise and Worldbar is the Yam Ho-keung in the dock i.e. [D7], and that he was a knowing party to the transfers.  Having regard to all the circumstances, I think that the jury can properly be invited to conclude that the Yam Ho-keung mentioned in these documents is indeed [D7].  If they so conclude, the evidence of these transfers between Mr Wan and Yam Ho-keung and between these two companies and Yam Ho-keung could, in my view, be relevant matters to put before they jury.  They would form part of the background and the full picture which the jury are entitled to have before them.  In the result, I rule that the prosecution may lead evidence of the transfers involving Mr Wan, Homwise and Worldbar.  The potential weight of this evidence, after it has been given, may have to be considered upon a submission of no case to answer.  At the present stage, however, the prosecution cannot properly be shut out from leading this evidence.”

The judge’s references to ‘Mr Wan’ related to D1, who was the mastermind behind the conspiracy.

15.The monetary transfers which Mr Egan was eventually able to identify as being the subject of the judge’s ruling, contained in folders 12, 13, 25 and 27, mostly referred to occasions outside the dates covered by the evidence given by prosecution witnesses, albeit they were mainly inside the dates covered by the indictment.  In saying that they should not have been admitted in evidence, Mr Egan relied on a passage in Makin’s case (above) at page 65 which reads as follows:

“It is undoubtedly not competent for the prosecution to adduce evidence tending to shew that the accused has been guilty of criminal acts other than those covered by the indictment, for the purpose of leading to the conclusion that the accused is a person likely from his criminal conduct or character to have committed the offence for which he is being tried.  On the other hand, the mere fact that the evidence adduced tends to shew the commission of other crimes does not render it inadmissible if it be relevant to an issue before the jury, and it may be so relevant if it bears upon the question whether the acts alleged to constitute the crime charged in the indictment were designed or accidental, or to rebut a defence which would otherwise be open to the accused.  The statement of these general principles is easy, but it is obvious that it may often be very difficult to draw the line and to decide whether a particular piece of evidence is on the one side or the other.” (Emphasis added)

16.This was not, in our view, one of those cases which presented any real difficulty in knowing where the line referred to in Makin’s case should be drawn.  D7’s defence, set out at length in his replies given in interview, was that he was a mere salaried employee of a legitimate loan-making company.  The evidence of the monetary transfers recovered from the folders was, as the judge had effectively indicated in the course of her ruling, capable of rebutting the defence and in such circumstances was admissible as “part of the background and the full picture which the jury [were] entitled to have before them”.  We have already set out (in paragraph 9 above) how the matter was left to the jury in summing up.  This was entirely fair and neither from the fact of its admission nor in the way the evidence was ultimately left with the jury, could the content of this evidence be regarded as more prejudicial than probative.

17.Turning lastly, on these particular grounds, to Mr Egan’s dual contention that the judge’s directions effectively left the way open for the jury to use the evidence of the monetary transfers shown in the folders as evidence of D7’s guilt and that the directions which were given were too confusing to be understood by the jury, the judge made it plain to the jury that:

“The evidence of the transfers is not before you to establish guilt by association”.  (Appeal bundle p. 105)

Later, she said:

“You are not – I repeat not – entitled to regard any of the money transferred as the proceeds of any offence.  Are you sure, without taking any transfer into account, that the loan-sharking conspiracy charged under count 1 existed?”  (Appeal bundle p. 106)

The judge then said:

“If you are, then, in relation to each accused charged with that conspiracy, you come to the question of whether you are sure that he was a party to that conspiracy.  In deciding that question, you may have regard to the transfers to and from him as part of the background and full picture in the form of matters that shed light on his position.  When you decide whether the only reasonable inference in all the circumstances is that he was a party to that conspiracy, you may have regard to the transfers to and from him as part of the background and full picture in the form of matters that shed light on his position.

By his position as light may be shed on it by the transfers to and from him, what I am referring to is as follows.” (Appeal bundle p. 106)      

18.Then, turning to the relevance of the transfers of money in relation to each of the defendants who remained in the trial in turn, the judge dealt with D7 in the following way:

“In relation to [D7], I am also referring to whether he was more than a mere employee at the Kowloon Plaza Premises without any other relationship with any other person having anything to do with those premises.”  (Appeal bundle p. 107)

19.There was in our opinion no confusion caused by the way the judge had expressed the effect of this evidence and, as to the approach which the jury should take to it, we are satisfied that this was entirely proper.

(5)  Inconsistency in the verdicts

20.The last ground of appeal which Mr Egan advanced was that the guilty verdict returned by the jury on count 1 against D7 was inconsistent with their failure to reach any verdict in respect of three of the defendants who (unlike D7) were alleged, in Mr Egan’s phraseology, to be “bosses” of the loan-sharking syndicate.  The short answer to this submission is that the evidence against D7 differed from the evidence against the others about whom the jury was unable to agree on verdicts.  The principal difference was that D7 was the only defendant who was shown at trial to have secured monies directly from Wan Hin-chung (D1) who was described by PW1 and PW2 as the organizer of the loan-sharking syndicate.  D7 was also, as Mr Cahill put it, directly or indirectly linked to all the entities implicated in the illegal lending activities.

21.Whilst, strictly, “inconsistent verdicts” cannot be said to arise in a situation where a jury has been unable to agree on verdicts concerning other co-defendants, plainly if there was no material difference in the evidence against them on the one hand and D7 on the other, the guilty verdict in D7’s case could not be allowed to stand.  However, this was not the situation here.  There were, of course, similarities in the evidence adduced against each of D7’s co-defendants including, most notably, that each of them had worked in the Secure Room, but Mr Egan has failed to persuade us, applying the test (adopted from a judgment of Devlin J) cited in R v Durante [1972] 1 WLR 1612 at 1617 “that the jury had returned a repugnant or inconsistent verdict”.

Conclusion on D7’s application

22.Each of the grounds advanced on D7’s behalf fails.  Accordingly, his application is dismissed.

Sentence

D1’s application

23.It was submitted by Mr Marash SC on D1’s behalf that the sentence of 7½ years’ imprisonment imposed by V Bokhary J was manifestly excessive particularly bearing in mind that Judge Sweeney, following a trial in the District Court on similar charges, had imposed a sentence of 5 years’ imprisonment in DCCC 1181/2002 and the two sentences were to run consecutively.  The three charges of conspiracy in DCCC 1181/2002 related to blackmail, causing criminal damage to property and dealing with property known or believed to represent the proceeds of an indictable offence.  These offences were between November 2001 and August 2002 whilst D1 (and D4) were on bail for the crimes with which we are presently concerned.  However, as the commencement of the present case was delayed, the District Court trial took precedence.

24.In the present case, D1 pleaded guilty to conspiracies to lend money at an excessive interest rate (count 1), to commit criminal damage to property (count 2) and to deal with property known or believed to represent the proceeds of an indictable offence (count 3).  The Summary of Facts identified D1 as the person in charge of the loan-sharking syndicate whose activities extended to the Mainland and Macau.  The operation had four distinct parts to it, namely:

“a)  recruiting potential debtors;

b)  making out payments and keeping records of payment;

c)  enforcement of repayment by paint splashing or blackmail; and

d)  laundering proceeds.” (Appeal bundle p. 4)

25.The syndicate operated behind the legitimate front provided by two finance companies, “Homwise” of which D1 was a director, and “Asia”.  Both companies were on the 11th Floor of Kowloon Plaza, in Castle Peak Road, Lai Chi Kok.  Many applicants who were looking for loans would be turned down but their written application forms contained personal data which would then be forwarded to the syndicate whose office was hidden inside the Kowloon Plaza premises.  It was in effect a secret room which D1 had instructed someone to design and construct.

26.Syndicate members recruited people to take out loans with them by sending promotional leaflets to rejected loan applicants using finance companies called ‘Yau Ko’ and ‘Lok Man’.  Pager and mobile telephone numbers of syndicate members were provided in this literature.  Annual interest rates ranged from 600 to 2,400 per cent and, for those given loans, money was deposited into their accounts by syndicate members.  There was an alternative method of operation through a company called ‘Shen Gang’ in Mongkok, adjacent to a branch of Asia which, in the Summary of Facts, was described thus:

“… A syndicate member would bring along a potential borrower to [Asia] but that member would be recorded as the borrower whilst the true borrower accompanying him would be recorded as the guarantor of the loan.  The ‘guarantors’ would repay the loan to the syndicate’s bank accounts.

5. The syndicate instructed debtors to repay into more than twenty different accounts of four companies named Tung Wing, Nam Wah, Sai Shing and But Hoi (the “Directional Companies”).  After the debtors deposited money into these accounts, they would inform the syndicate of the relevant bank reference number for the syndicate’s records.  The debtor’s repayment performance would be faxed to a ‘command centre’ in Shenzhen.”  (Appeal bundle p. 5)

27.Defaulting debtors, on the instructions of the command centre in Shenzhen, would have paint splashed outside their flats or have their door-locks glued, and mobile telephone numbers were written in prominent places to remind the debtors how to get in touch with the syndicate.  None of the debtors (PW4 and PWs 36 to 96) was subjected to violence.  In due course, Public Security Bureau officers seized the relevant pagers and mobile telephones, together with computers and documentary records, from the command office.

28.The laundering of the proceeds was itself a sophisticated operation with monies being routed through a variety of “directional company accounts” and through accounts in Macau.  The majority of the cash was later transferred to the accounts of Homwise which D1 controlled.  The funds processed through the directional company accounts amounted to $31,545,607.  It was estimated that D1 had personally benefited by not more than $3 million.

29.When sentencing, the judge adopted a starting point of 8 years’ imprisonment on the 1st count and 5 years on the two remaining counts.  The judge went on to observe that the pleas of guilty were the principal mitigation but that she would also take into account the delay in dealing with the case and the time D1 had spent in custody in the Mainland.  With these factors in mind, the judge reduced the starting points she had initially taken to 5 years on count 1 and to 3 years on the other counts before considering totality.  Ultimately, the judge arrived at a sentence of 8 years which she considered to be appropriate to reflect the overall criminality covered by the three conspiracies.  However, she then reduced this to 7½ years to take into account the fact that D1 was already serving 5 years’ imprisonment and that she was imposing this as a wholly consecutive sentence.  In the result, D1 received 3½ years’ imprisonment on count 1 and 2 years’ imprisonment on counts 2 and 3, all to be served consecutively and consecutively to the 5 years imposed in DCCC 1181/2002.

30.It was submitted by Mr Marash SC, on D1’s behalf, not only that the starting point on count 2 of 5 years’ imprisonment was too high and that the whole of the sentence on count 3 ought to have been ordered to run concurrently with the sentence on count 2 but also that, having regard to totality, the sentence on D1 was manifestly excessive.

31.We indicate straightaway that whilst there are some shortcomings to the actual sentences imposed, none of these will provide any comfort to D1.  To begin with, D1 has been sentenced to 3½ years’ imprisonment on the 1st count after pleading guilty to involvement in a loan-sharking operation lasting almost 3 years and involving about $31 million in which he was the admitted organiser.  We are unable to accept that such a sentence was appropriate for so grave an offence and, in our opinion, even the 8-year starting point taken by the judge was on the low side.  In fairness to Mr Marash, he accepted that 7 years would have been an appropriate starting point on count 1.  It follows, therefore, that because there was little which distinguished his view from that of the sentencer, he made no complaint about the starting point taken by the judge on this count.

32.It is well established that sentencing judges should impose the proper sentence for an offence having taken into account the mitigating factors which may reduce the starting point and should then to reflect the appropriate totality not by an adjustment in individual sentences but by the use of concurrent or partially concurrent sentences as the circumstances dictate.  In this case, the pleas of guilty, the time spent in custody in the Mainland and the delay were all factors properly taken into account by the judge.  However, it was not, with respect, appropriate to take into account the fact that D1 was already serving a sentence as a factor which reduced any or all of the sentences she imposed, but the judge said this:

“Leaving out all consideration for the moment of the 5-year sentence which you are already serving, I will consider an overall sentence of 8 years to be appropriate for the whole of your criminality as reflected in the three conspiracy counts to which you have pleaded guilty.  This brings me to the further discount which I will give you to take into account the sentence which you are already serving and to which the total sentence which I pass on you today will be consecutive. … a further discount of this nature is necessary to comply with the principle of totality which is there for the purpose of avoiding excessive punishment.  So such discount will be given, but it should not be too large.  For one thing, the courts must not give criminals or would-be criminals generally, the idea that once they have offended, they have relatively little to fear by way of punishment for further offending.

For another thing, one must not give so large a discount of such a nature as would create unfairness to other accused in the same case who have not offended before, so as to be serving another sentence now.  All things considered, I give you a further discount so as to bring the total sentence which I pass on you down to 7½ years’ imprisonment.

I propose to achieve that total by passing consecutive sentences of 3½ years’ imprisonment for the loan-sharking conspiracy; 2 years’ imprisonment for the committing criminal damage conspiracy and 2 years’ imprisonment for the money-laundering conspiracy, making a total of 7½ years’ imprisonment which sentence is, as I have already said, to run consecutively to your existing 5-year sentence.”  (Appeal bundle pp. 202-203)

33.The effect of the approach taken by the judge was, in our opinion, to reduce the sentence on count 1 to one which was unacceptably low for so serious a crime.  The proper course would have been to impose the sentence, after the mitigating circumstances were taken into account, which the crime warranted and to deal with totality by imposing, if necessary, sentences which were partially concurrent with other sentences imposed at the same time or already in operation.  This aspect of sentencing policy is well expressed in Sentencing in Hong Kong (4th ed.) at page 491 where the learned authors say:

“There are sound policy reasons why each separate offence should attract an appropriate sentence.  Artificially low, albeit consecutive sentences may create the impression that serious offences are not being treated as such by the courts.  In the event of an appeal, some of the convictions may be set aside and, in that event, the sentences imposed in respect of the subsisting offences will assume greater significance: Secretary for Justice v Wong Kay-din AR 7/98.  If particular sentences are low it may lead co-accused who have been appropriately sentenced for fewer offences to feel that they have been over-punished.  Such problems can be avoided if sentences of the right duration are passed and then made wholly or partially concurrent.”

34.One other reservation we have about the sentences in D1’s case is the order made by the judge that the sentences on counts 2 and 3 should be entirely consecutive to each other.  Mr Marash argued that the criminality covered by counts 2 (conspiracy to commit criminal damage) and 3 (conspiracy to deal with the proceeds of an indictable offence) was so closely linked that wholly consecutive sentences were inappropriate.

35.On this aspect of his argument, we were in agreement with him although we would not go so far as to say, as Mr Marash sought to persuade us, that wholly concurrent sentences on these counts would have been appropriate or that a 2-year starting point on count 2 would have been sufficient.  Indeed, we respectfully express the view that a 2-year sentence for each of these offences after plea demonstrates an artificially low sentence and fails to reflect the true gravity of these offences.

36.Mr Marash also submitted that the sentencing exercise carried out by the judge failed to give sufficient consideration to the fact that the conspiracies in these counts involved no violence and no triad element.  He pointed out that Judge Sweeney had imposed a sentence of 5 years after trial for offences which involved, unlike the present case, serious threats of violence to those who failed to repay their loans.  On the other hand, we observed that the District Court conspiracies only extended over a period of about 9 months and involved 16 debtors with debts worth about $200,000.  Most importantly, those offences were committed while on bail for the offences with which we are now concerned.  This factor obviously gave rise to the need for a consecutive sentence in the present case.

37.In all the circumstances, we are satisfied that the totality of the sentences imposed in the present matter was appropriate.  However, in view of the reservations we have expressed, we propose as a matter of principle to utilise our powers under section 83I(3) of the Criminal Procedure Ordinance, Cap. 221, having taken the view that D1 should have been sentenced differently on each of the counts to which he pleaded guilty.  For these purposes, the approach to sentence needs to be started again.

38.On count 1, taking the starting point of 8 years adopted by the judge, this is reduced to 5 years and 4 months to reflect the plea.  The other mitigating circumstances which affect the sentence on this count are the time spent in Mainland custody through no fault of D1, which we were told amounted to 186 days (approximately 6 months), and the delay, again through no fault on his part, in the commencement of his trial.  Giving more or less full credit to the former aspect and giving limited credit to the latter, bearing in mind that D1 went straight back to his loan-sharking activities as soon as he was granted bail and was plainly undaunted by his initial arrest, we consider that a further discount of 12 months (6 months for the time spent in Mainland custody and 6 months for the long delay) was warranted.  This leaves a sentence on the 1st count of 4 years and 4 months’ imprisonment.

39.On the remaining counts, again we adopt the same starting points taken by the judge, namely 5 years’ imprisonment in each case.  Reducing these by one-third to reflect the pleas and by a further 6 months on each count to reflect the delay, this leaves a sentence of 2 years and 10 months on each.  In our view, the judge was fully justified in making no part of these sentences concurrent with the 1st count but, in order to achieve the same totality as the judge, we shall make these sentences largely concurrent to each other.  Four months of the sentence on count 3 will be served consecutively to the sentence on count 2 with the remainder to be served concurrently, making a total of 3 years and 2 months on these counts but this term is to be served consecutively to the sentence on count 1.

40.Accordingly, D1’s application for leave to appeal is dismissed and, in the way we have indicated, each of his sentences is increased although his overall sentence on the High Court indictment remains at 7½ years which is to be served consecutively to the sentence of 5 years imposed in the District Court.

D4’s application

41.D4 pleaded guilty to counts 1 and 3 only and was sentenced to consecutive terms of 2½ years and 1½ years’ imprisonment respectively.  It follows from what we have said already about D1’s case that Mr Donald’s submission that 4 years’ imprisonment was manifestly excessive for the role played by D4 did not have a sympathetic reception.  In our view, it was not only appropriate in itself but also as a sentence to be served consecutively to the term of 5 years’ imprisonment which D4 was undergoing arising from his conviction on the charges in DCCC 1181/2002.

42.In passing sentence on D4, the judge took starting points of 6 years for the loan-sharking conspiracy (count 1) and 4 years’ imprisonment for the money-laundering conspiracy (count 3).  The judge then gave the usual discount of a third in recognition of D4’s pleas of guilty and, combining this with the “other mitigation available to [him]”, reduced these starting points to 3 years and 8 months on the 1st count and to 2 years and 4 months on the 3rd count.  The judge added that bearing in mind that D4 was already serving 5 years’ imprisonment, the sentences she was imposing produced too high a totality.  She went on to say:

“I propose to let the sentences which I pass on you today run consecutively to that sentence, but I will take that 5-year sentence into account in the way which I have already explained.  Leaving out of consideration for the moment the 5-year sentence which you are already serving, I will consider an overall sentence of 4½ years’ imprisonment to be appropriate for the whole of your criminality as reflected in the two conspiracies to which you have pleaded guilty.

This brings me to the further discount which I will give you to take into account the sentence which you are already serving and to which the total sentence which I pass on you today will be consecutive.  I need not repeat what I have already said to (D1) which is also appropriate to you.  All things considered, I give you a further discount so as to bring the total sentence which I pass on you down to 4 years’ imprisonment.

I propose to achieve that total by passing consecutive sentences of 2½ years for the loan-sharking conspiracy and 1½ years for the money-laundering conspiracy, making a total of 4 years’ imprisonment which sentence is, as I have already said, to run consecutively with your existing 5-year sentence.

On the basis which I have explained, I sentence you to 2½ years’ imprisonment for the loan-sharking conspiracy count and 1½ years’ imprisonment for the money-laundering conspiracy count.  Each of these sentences will run consecutively, making a total of 4 years’ imprisonment in all.  This total sentence of 4 years’ imprisonment will run consecutively to your existing 5-year sentence.” (Appeal bundle pp. 203-204)

43.The criticisms which we have already made in D1’s case to this approach to sentencing, producing artificially low sentences for offences of considerable gravity, apply equally in D4’s case.  We do not need to repeat what we have said earlier, but, for precisely the same reasons, we are satisfied that while the totality achieved by the judge was appropriate, the individual sentences did not properly reflect the seriousness of these offences.

44.Again, as a matter of principle, we propose to utilise our powers under section 83I(3) of the Criminal Procedure Ordinance, Cap. 221, having taken the view that D4 should have been sentenced differently on both of the counts to which he pleaded guilty.  Looking afresh, therefore, at the sentencing exercise in D4’s case, and taking the 6-year starting point adopted by the judge for D4 on the 1st count, this is reduced to 4 years’ imprisonment to reflect the guilty plea.  The other mitigating factors taken into account were, as in D1’s case, the time spent in Mainland custody which would otherwise have been counted towards his sentence if D4 had been arrested in Hong Kong and the lengthy delay in his trial.  In his case, giving full effect to the time in custody, we shall make a further reduction of 6 months and, having regard to delay, we shall reduce the sentence by another 5 months making 11 months in all.  This brings the sentence on count 1 to 37 months’ imprisonment.  The first of these considerations plainly should not to be factored into the sentence on count 3 as D4 has already received the benefit of his time spent in mainland custody.  Hence, D4’s sentence on count 3 is discounted by a third for the guilty plea and by an additional 5 months for the delay, leaving a sentence of 27 months’ imprisonment.  In order to achieve the same totality as the judge, we shall order that 11 months of this sentence should be served consecutively to the 37 months’ imprisonment we have imposed on the 1st count with the remaining 16 months to run concurrently, making 4 years in all.

45.Accordingly, D4’s application for leave to appeal against sentence is dismissed but his individual sentences are increased in the way we have set out.  We make no alteration to the order which the judge made that the resulting sentence of 4 years’ imprisonment is to be served consecutively to the sentence of 5 years’ imprisonment arising from DCCC 1181/2002.

Hon Stock JA:

46.I have read in draft the judgment of the Vice President and respectfully agree with it.  I wish however to take this opportunity of saying something about the presentation of Grounds of Appeal and written arguments, as an addition to the case-specific remarks made by him at paragraphs 13 and 14 above.  I do so because what happened in this case is illustrative of what should not happen and of the burden that is sometimes unacceptably imposed upon the Court of Appeal in its criminal jurisdiction.  I emphasise “in its criminal jurisdiction” because my experience tells me that the discipline encountered in the presentation of civil appeals is too often not mirrored in the presentation of criminal appeals.  That lack of discipline, when it occurs, makes the work of the Court much more onerous than it should be: it means, in short, that the Court is then left to do the homework that counsel is paid to do and that his professional duties require him to do.

47.I illustrate what I mean by providing a few examples in this case in the grounds drafted on behalf of D7:

(1) The first ground of appeal stated that:

“The learned trial judge wrongly admitted evidence of five financial transactions, where virtually all of the money involved was transferred outside the period covered by the evidence…”

Leaving aside the obvious fact that the statement is self-contradictory, it is meaningless.  What is any court, fresh to the case, reading the papers beforehand in order to prepare itself for an appeal, supposed to make of a statement of that kind?  So one looks to the written submissions to see if any light is thrown upon the matter.  There is nothing there that paints a picture of the immediate or relevant context in which the prime ground of appeal arises.  It is simply there said that:

“The learned trial judge wrongly admitted evidence of 36 financial transactions (as contained in folders 12, 13, 25 and 27) where virtually all of the money involved was transferred outside the period covered by the evidence…”

We are not shown the folders.  They are not in the appeal bundle and when we ask for them upon the hearing of the appeal, a hand is waved in the general direction of the boxes of documents that happen to be in the court.  The grounds do not explain the transactions, and their nature, and the written argument talks of transfers without telling the court what these transfers were – to whom, by whom, for what alleged purpose.  Nor did we find that our difficulties in following what this appeal was all about were put to rest by the respondent’s submissions.

(2)  It is remarkable that the appeal bundle does not contain the ruling of the judge about which complaint is made.  It almost defies belief that this court is expected to come to grips with the issue without a study of that ruling.  The written argument even refers to the ruling and its date but with no reference to where it appears in the appeal bundle; the absence of which reference is hardly surprising because it is not in a bundle in the first place.  Counsel for the respondent has equally failed in his duty by not ensuring that the ruling upon which he relies to answer the argument of the particular applicant was included in the bundle.

(3)  Ground 4 of the grounds of appeal starts as follows:

“Collectively the learned trial judge’s directions on this financial material in her summing up were so confused and contradictory…”

We look in vain through the Perfected Grounds of Appeal for any reference whatsoever to the passages of which complaint is made.  The failure to do so is a failure to do what common sense should dictate, let alone a failure to follow paragraph 7 of the Practice Direction on Criminal Appeals: see paragraph 7-105 Archbold Hong Kong.

(4)  Ground 6 of the perfected grounds is that:

“The learned trial judge failed to give any or any sufficient directions to the jury on lies…”

Which is it?  Were directions given or not?  If they were given and insufficiency is relied upon, where in the extensive summing up is the Court to look for the passage about which complaint is made?

48.This is not good enough.  What we as a court ask in this regard is that counsel attend to their task with professional discipline and precision.  And we do not ask it for its own sake, but, rather, because the failure thus to attend to the task has a significant practical impact upon the court’s work.  The court’s role (and its workload) is such that it should be able to expect that, as a matter of course, it is told the story and that the grounds are couched in such a way that it is readily apparent to the reader what the issues are and that the relevant rulings, passages of evidence, passages in authorities, and exhibits can easily be identified and found by a court preparing itself for a hearing.

49.The failure adequately to present grounds or written arguments can be dealt with by a court in one of two ways.  Either the court carries out for itself the homework that counsel should have carried out or the court, absent sound reason to the contrary, adjourns the matter so that counsel does properly what he should have at the outset.  The problem with the latter course is that it tends to enure to the disadvantage of the lay client.  On the other hand, the time wasted by the court doing the homework of counsel tells to the disadvantage of the system generally and of other appellants to whose cases the court is required to attend and prepare.  In my judgment, it is the latter course which should be followed and I say so here as a form of notice.  The fact that such a course will mean the wasted expenditure of public funds can no longer be held to the head of the court as a form of pressure which too often means, in its effect, that the court does counsel’s homework.  The remedy – as we have so often said, though with no effect – is a power, as in other jurisdictions, to ensure that the wasted costs fall upon those in default.

Hon McMahon J:

50.I agree with the judgments of Stuart-Moore VP and Stock JA.

(M. Stuart-Moore)
Vice-President
(Frank Stock)
Justice of Appeal
(M.A. McMahon)
Judge of the Court of First Instance

Mr Peter Cahill, Counsel on fiat and Mr Kelvin Lee, GC, of the Department of Justice, for the Respondent.

Mr Daniel Marash, SC, instructed by Messrs Simon Si & Co., assigned by Director of Legal Aid, for the 1st Applicant (D1) (re: Sentence).

Mr Richard Donald, instructed by Messrs F. Zimmern & Co., assigned by Director of Legal Aid, for the 2nd Applicant (D4) (re: Sentence)

Mr Kevin B Egan, instructed by Messrs Krishnan & Tsang, assigned by Director of Legal Aid, for the 3rd Applicant (D7) (re: Conviction).