HKSAR v. Kwok Shun on and Another
Read the full judgment text of CACC 369/2005 on BabelCite. This Court of Appeal judgment was delivered on 8 December 2006.
1. There are two applicants. The first applicant, who was D1 at trial, seeks leave to appeal against sentence; the second applicant who was D2 seeks leave to appeal against conviction. There were ten counts on the indictment but we are concerned with only four. The first two counts alleged that these two applicants conspired to defraud subsidiaries of a public company Shun Cheong Holdings Ltd (SCH); Count 4 that D1 with others so conspired; and Count 10 that D1 with others conspired to deal w
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cacC 369/2005 in the high court of the hong kong special administrative region court of appeal CRIMINAL APPEAL NO . 369 of 2005 (on appeal from HCCC NO. 356 of 2004) BETWEEN
Before: Hon Stuart-Moore VP, Stock JA and Beeson J in Court Date s of Hearing: 25 October 2006 Date of Judgment: 8 December 2006 ______________________ J U D G M E N T ______________________ Hon Stock JA (giving the judgment of the Court): Introduction 1.There are two applicants. The first applicant, who was D1 at trial, seeks leave to appeal against sentence; the second applicant who was D2 seeks leave to appeal against conviction. There were ten counts on the indictment but we are concerned with only four. The first two counts alleged that these two applicants conspired to defraud subsidiaries of a public company Shun Cheong Holdings Ltd (SCH); Count 4 that D1 with others so conspired; and Count 10 that D1 with others conspired to deal with property knowing or believing it to represent the proceeds of an indictable offence. There were other counts with which, and other defendants with whom, we are not for present purposes concerned. 2.The applicants were tried before Mr Recorder R Wong SC and a jury. D1 pleaded guilty to these four counts and was sentenced to a total of six years and eight months’ imprisonment, after giving evidence in the trial of D2. D1 now seeks leave to appeal against that sentence. D2 pleaded not guilty to Counts 1, 2 (and 5) and was convicted upon Counts 1 and 2 after trial and he seeks leave to appeal against those convictions. The facts 3.The facts of the case as asserted by the prosecution and as found by the jury are helpfully set out by the learned Recorder in his sentencing remarks when dealing with D1. We are indebted to him for the thoroughness of that analysis and for its clarity and it is convenient for us to adopt that summary:
Conviction of D2 4.That summary is a summary of the facts agreed in relation to D1 but it is a summary as well, as it so happens, of the case against D2, who was the financial controller of SCH. D2 was said to be fully complicit in dishonest schemes to which the first two counts related, and put his signature on cheques drawn in PAL’s favour. There was also evidence that in issuing its invoices PAL used a post office box number registered in the name of a company of which he, D2, was a director. 5.D2 gave evidence at trial and his case was that he had no knowledge of any of the financial irregularities. His account was that he had been told by D1 that consultants were to be engaged to conduct an overall review of the Shun Cheong Group of companies to improve efficiency and the monitoring of subcontractors. As for the use of the post box, he said that D1 had asked him to allow PAL to use that address as it had not yet rented an office and that if cheques were sent to that post office box, D2 was to hand them on to D1, although that never happened because after the cheques were signed, they were handed directly to D1. He said that, believing everything to be genuine, he had asked D1 towards the end of 1999 whether a consultancy report had in fact been received, and was told that a draft report had. As for the three debit notes in relation to the second count it was D1’s function to oversee projects and he, D2, was not complicit in any dishonesty in relation to them. 6.The first ground of appeal in relation to these convictions is that the judge erred when he gave the following direction to the jury:
7.It is said that by that direction the judge was inviting the jury to make a choice between one account and another, thereby giving rise to the danger that if they considered that the account given by this particular defendant might be true, they might nonetheless discard it. In this regard, we are taken to a passage in Lee Fuk Hing v HKSAR [2005] 1 HKLRD 349, where the Court of Final Appeal expressed dissatisfaction with a phrase used in the summing-up: “You yourselves have to consider whose case is credible.” 8.One seeks to stress time and again that phrases employed by judges must, if they are to be the subject of proposed criticism, be viewed in context. The same caution applies in relation to the citation of passages in appellate judgments upon which counsel seek to rely. The context in which the Court of Final Appeal was making its criticism was entirely different from that of the judge’s comment in this summing-up. What the Court of Final Appeal emphasized in that case, citing, at pp 359-360 para [28], a passage in Liberato & Others v R (1985) 159 CLR 507, at 515, was that if the question as to who was to be believed was in fact raised, it was “essential to ensure, by suitable direction, that the answer to that question … if adverse to the defence, is not taken as concluding the issue whether the prosecution has proved beyond reasonable doubt the issues which it bears the onus of proving”. 9.There is no question in this particular case of the Recorder inviting a choice, without more, between versions. The context in which he made the criticised remark was in instructing the jury what were the true issues in the case as opposed to the irrelevant issues. He had spent some time prior to the passage in question dealing with particular matters about which issue had been taken and suggesting to the jury that those were not relevant issues, and that the true issue was the one the articulation of which is now criticised. Mr Wong, for the second applicant, asserts that the Recorder ought to have told the jury that if the applicant’s testimony might be true he was to be acquitted. In fact, over and over again the Recorder made it clear to the jury that they could not convict unless they were sure that the evidence given by the main prosecution witness was true and that even if the defence account were rejected, they had to be satisfied that the prosecution case was proved. The summing-up is devoid of the problem that sometimes arises where a judge suggests to the jury that they should act only on evidence, whether defence evidence or prosecution evidence, that they are sure is true, thereby denying a defendant the benefit of consideration of testimony of his or on his behalf which they think may be true. There is nothing in this ground. 10.Next, we find a complaint about the following direction:
11.The contention here is that the judge was “directing effectively that the jury could not accept the defence evidence unless they were sure that they are true.” Mr Wong also contended that in Law Chung Ki and another v HKSAR (2005) 8 HKCFAR 701, the Court of Final Appeal expressly disapproved the direction under attack. Neither contention holds water. The direction was given at the very outset of the summing-up where the judge was telling the jury that it was their function to decide what evidence was reliable and what was not and that the evidence included oral testimony of witnesses, in which context he said that the defendant had chosen to give evidence and that that evidence was to be treated in the same fair way as any other evidence in the case; in other words, that the defendant was not to be put at a disadvantage simply because he was a defendant. What the Court of Final Appeal was complaining about in Law Chung Ki was a direction to have regard only to evidence about which the jury was sure, a direction which displaces from the jury’s mind defence testimony that it finds may be true. 12.The next ground is that there was a material irregularity in the trial judge telling the main prosecution witness, who was giving evidence under immunity, that he was entitled to claim legal professional privilege in relation to certain questions asked of him. The passages in question, at p. 144 of the transcript, are as follows:
Mr Souyave acted for D2, the same person for whom Mr Wong now acts. 13.Mr Wong asserts that because the witness had been granted immunity from prosecution his protection from answering questions that might incriminate him had been removed and that, accordingly, the protection which was accorded by the trial judge should not have been accorded and that the defence was therefore wrongly deprived of knowledge of highly relevant matters. This not a meritorious point. What transpired between the witness and his lawyer, in contemplation of the proceedings which he was then facing, was – as D2’s own counsel correctly recognised – covered by legal professional privilege and the fact that he was an accomplice witness had no bearing on that fact. 14.Finally complaint is made that D2’s right of silence was infringed by the following passage in the summing-up:
15.The matter arises in this way. In August 2001, D1 was arrested by the ICAC for suspected corruption. D2, this applicant, was retained by SCH as its financial controller. The company however was under new management and the managing director, Mr Zuric Chan, set about investigating suspected irregularities and, to this end, an audit committee was appointed. He also reported suspected improprieties within the group's accounts to the ICAC. In his capacity as financial controller, D2 took part in the internal investigation, the major part of which was conducted in early 2002. On 7 May 2002, this applicant was arrested, though not charged. D2’s evidence at trial was that there came a time when he told Zuric Chan what it was that Kwok had told him, namely, that payments were for a general consultancy report, a review of the Group’s overall subcontracting practice, with a view to improving efficiency and examining the question of corrupt practices. The report of the audit committee dated July 2003, and presented to the Board of Directors of which both Zuric Chan and this applicant were members, made no such reference. It was a report first produced at trial in re-examination of this applicant. In the course of that re-examination, the applicant was taken through the report and it included reference to the various payments which were ultimately the subject of these counts. In their regard, what was said in the report was that: “The expenses incurred were probably in association with the completion of various work orders issue on to water supply and fire services term maintenance contracts,” an explanation entirely at odds with what the applicant said he had previously told Mr Zuric Chan who prepared the audit report to the Board. It seems unlikely therefore that the testimony of the applicant that he had given quite a different explanation to Chan was true. That was a point that self-evidently did not occur to counsel acting for this applicant when he put the report to D2, his own client, in re-examination. Rather, he did so in order to advance the contention that the report suggested that the board had concluded that there was nothing untoward about the payments. 16.In the course of his closing address, Mr Hoosen, counsel for the prosecution, made the obvious point to be made:
17.It is difficult to see how any question of a right of silence entered the matter when it came to what transpired at Board meetings, a Board of which the applicant was a member, and a person, furthermore, who was purportedly assisting in the internal inquiry to which the report related. In the conduct of the inquiry the audit committee was not acting as an agent of the law enforcement authority in its investigations. But in any event the gravamen of the point made by prosecuting counsel, to which the judge drew attention, was a point about inconsistency. The report was introduced at trial by the second applicant’s own counsel and he deliberately opened the question of what the audit committee had found and what reasons had been put forward for the expenses in question. That course having been adopted, the point stood out like a sore thumb: if the applicant’s evidence were true, why did the report not reflect what the applicant had allegedly told the author of the report; and it is that question – the fact that the report itself sat ill with the applicant’s testimony – upon which the judge’s remarks concentrated, a matter that had nothing to do with any right of silence. The only question that might be urged upon us is whether it was appropriate for prosecuting counsel to make his point without it having been put to the second applicant; and, further, whether the Recorder might have more appropriately reminded the jury that it had not been put and that there may have been a reason for the applicant not correcting the report at the Board meeting. We do not know how that might have been received, for such a suggested reason would have been speculative, and in any event there was no protest by counsel for the applicant when prosecuting counsel had made his point, no suggestion that there was an explanation which warranted re-calling his client, nor was it a matter even touched upon in the closing speech by counsel for this applicant. We do not in the circumstances take the view that the episode and the passages about which a complaint is made reveal any material irregularity. 18.Accordingly, the application by the second applicant for leave to appeal against conviction is dismissed. D1 and Sentence. 19.The sentences imposed by the learned Recorder took the following course:
20.Mr Macrae SC argues that the result is manifestly excessive and/or wrong in principle. He emphasises that the applicant had pleaded guilty, was previously of good character, and had given credible evidence which had resulted in the conviction of an offender. He points to the fact that the maximum sentence for conspiracy to defraud is 14 years’ imprisonment and that the figure of about $20 million, which is the amount defrauded in the conduct reflected by Counts 1, 2 and 4 is much less than the amounts one sees in other serious commercial crime cases. 21.Where the judge has erred, he argues, is in making the sentences in relation to Counts 4 and 10 wholly consecutive to the other sentences. He contends that one is in effect looking at an overall starting point of something in the order of 15 years, which is far too high. 22.The Recorder noted everything that could be noted in this applicant’s favour, including his previous good character, at the age of 45 years, his pleas of guilty and the fact that he had given evidence. He noted, on the other hand, that the amounts taken in this case were very substantial and, more particularly, that this applicant was the instigator of the crimes. He noted as well that these were not spur of the moment offences, but were well planned and spanned a lengthy period and that there was no restitution in favour of the companies. He said, correctly, that the applicant occupied a prominent position in a public company and that the case involved a serious breach of trust in relation to the assets of that company. He said that it was a case that “involved flagrant disregard of the duties of a managing director over a sustained period of time. The public company was treated as the defendant’s purse to be drawn on as and when required ... the acquisition of the Yau Lee portfolio was the prime purpose of consolidating the defendant’s position in SCH.” He noted as well that the funds which were obtained by the conduct reflected in the second count were funds used to bribe an official of the Housing Authority. He might have added that in relation to one of the offences, the applicant used a man in his late 60s to facilitate that scam, and to cover his own tracks. 23.In all these remarks, and in emphasising them, the learned Recorder was perfectly correct. A reading of the facts of this case illustrates a person in a senior position in a public company instigating several serious frauds over an extended period during which, at his behest, dishonesty was rampant, and by which he used and pulled in others. It is a particularly unattractive feature of cases such as this, that persons in senior positions exert the authority of their seniority and employment powers to cause those working under them to join them in crime. That is not to excuse those who are willing to be drawn in, but it is to direct attention to an ugly aspect of the conduct of persons in a position of power who abuse that power in this particular manner. True it is that the applicant pleaded guilty and gave evidence against another person, albeit that the person against whom he gave evidence was an underling whom the applicant brought in to the extended and illicit schemes. But the counts in respect of which the applicant was convicted, on his plea, involved three quite distinct conspiracies, each carried out for its own different purpose and the sums involved were substantial indeed. It was therefore, in principle, appropriate for the sentencing tribunal to start from the basis that the sentences in respect of Counts 1, 2 and 4 should run consecutively, with that relating to Count 10 to run concurrently with that on Count 4. The remaining question became one of totality. 24.We do not, with respect, agree with Mr Macrae that one assumes in this case that the sentencing judge adopted a starting point of 15 or so years for all the offences taken together. That figure is reached by saying that since the Recorder ended with a term of 6 years and 8 months’ imprisonment, one doubles that to recognise the 50% discount and then adds ten months to recognise the delay factor, thus arriving at a 15 year starting point. That is not how the sentencing process works. Judges do not sentence for separate offences by looking first at a starting point for all the offences taken together, and then working backwards. They sentence appropriately for each offence, and then, if in principle consecutive sentences are called for, they ask whether the resulting totality is excessive and if it is, they assess the appropriate totality and give effect to it by making concurrent or partially consecutive sentencing orders as is appropriate. The analytical approach suggested by counsel in this case is one that we see presented quite regularly in sentencing appeals, but it is not an appropriate one. 25.The total of the four sentences added together would have been one of ten years and four months, and there has therefore been a significant reduction to take account of totality. No suggestion is made, nor realistically could it be, that the sentence imposed in relation to the first count, a sentence of three years and 10 months’ imprisonment, was excessive. As against the applicant, however, issue can be taken in two regards in relation to the sentence imposed on the second count. First, the sentence of ten months’ imprisonment was remarkably low for an offence of fraud the ultimate purpose of which was to obtain funds in order to bribe a public official. Secondly, the applicant was fortunate in the order that the sentences for the first and second counts were to run wholly concurrently. It would be open to us to increase that particular sentence and although we do not intend to do so, it is a factor to which we are bound to have regard when assessing whether the overall result was or was not manifestly excessive. 26.In relation to Counts 4 and 10, the applicant received credit for giving evidence against the second applicant in relation to other offences (Counts 1 and 2) for which credit was already accorded: the second applicant was not involved in the matters giving rise to Counts 4 and 10. That is not to say that credit could not to have been given, but the judge was not bound to do so: see Gallagher (1991) 53 A Crim R 248 at 258. Furthermore, the deduction for delay was seven-months, a delay which the judge decided was not reasonable, and in recognition of that fact the Recorder accorded a five-month deduction twice over, once in relation to Counts 1 and 2, and once again in relation to Counts 4 and 10. Mr Macrae concedes that the more appropriate approach is for a deduction to be made from the final sentencing figure arrived at after consideration of totality. In the event a seven-month delay has been recognised by a ten-month deduction, which in our judgment was over generous. 27.On a proper approach, that of correct sentences for individual offences, recognising further that in principle quite separate offending merits consecutive sentences, recognising too that in this case the sentences for Counts 1 and 2 might well have been ordered to run consecutively; that the sentence on Count 2 was too low; and having regard to the facts of the case, and that the Recorder did make a substantial reduction from the overall total when addressing the question of totality, we are not prepared to say that the totality was manifestly excessive. 28.Accordingly, the application for leave to appeal against sentence is dismissed.
Mr P S Chapman, SADPP of Department of Justice for Respondent Mr Andrew Macrae, SC and Mr Hectar H Pun instructed by Messrs Yuen & Partners for D1 (Kwok Shun-on) Mr Wong Man Kit, SC, Mr William Lam and Ms Amanda W Y Lee instructed by Messrs Ko & Chow for D2 (OU Ka-chi) Application for leave to appeal dismissed: see FAMC63/2006 dated 19 April 2007 |
Cases cited in this judgment