HKSAR v. Wong Chor Wo

CACC 314/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 314 OF 2006

(ON APPEAL FROM DCCC NO. 554 of 2005)

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BETWEEN

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Before:  Hon Ma CJHC, Beeson and Saunders JJ in Court

Dates of Hearing:  6 May 2009

Date of Judgment:  6 May 2009

Date of Reasons for Judgment:  13 May 2009

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R E A S O N S    F O R   J U D G M E N T

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Hon Saunders J (giving the reasons for judgment of the Court):

The application:

1.On 19 July 2006, in the District Court, Mr Wong was convicted on 17 counts by Deputy District Judge Tse.  The charges upon which he was convicted were  :

(i)  theft, contrary to s 9 Theft Ordinance, Cap 210, (counts 1-7);

(ii)  furnishing false information, contrary to s 19(1)(b) Theft Ordinance (counts 8-11);

(iii)  using false instruments, contrary to s 73 Crimes Ordinance, Cap 200, (count 12-14);

(iv)  using copies of false instruments, contrary to s 74 Crimes Ordinance, (count 15);

(v)  an officer of a company knowingly making a false statement to auditors, contrary to s 134 and 351 Companies Ordinance, Cap 32; (count 16), and

(vi)  publishing a false statement, contrary to s 21 Theft Ordinance (count 17).

2.Mr Wong sought leave to appeal against the convictions on counts 1-15, and count 17.  On 16 June 2008, we dismissed the application for leave to appeal.  On 9 September 2008, the Appeal Committee of the Court of Final Appeal dismissed Mr Wong’s application for leave to appeal to that court.

3.Now Mr Wong seeks leave to appeal against the sentences imposed on those charges.  We heard counsel on the application on 6 May 2009, and dismissed the application on that day, with reasons to follow.  These we now set out.

4.Mr Martin Lee SC, relied upon two grounds in respect of the appeal.  They are:

(i)  the Judge failed to impose a separate sentence for each offence, but instead imposed a global sentence for all the offences;

(ii)  the sentences imposed were wrong in principle and manifestly excessive.

A global sentence is wrong in principle:

5.It is correct that a global sentence was imposed.  The Judge said so in terms.  That was plainly wrong in principle.  Mr Alex Lee sensibly accepted that the imposition of a global sentence on multiple charges was wrong in principle. 

6.The law is set out in HKSAR v Chan Nai Keung & Ors, unreported, 19 February 2008, CACC 284/2006.  The correct sentence should always be imposed for each individual offence where there are a multiplicity of offences before the court, and the question of totality then considered.  The appropriate individual sentences are then imposed, either concurrently, or concurrently and wholly or partially consecutively, in order to properly reflect the totality of the offending.

7.The mere fact that the appeal must succeed to that extent does not automatically entitle Mr Wong to a reduction in the total sentence.  That the Judge applied a wrong principle is not a basis to say that the proper sentence should not be imposed.

8.If upon a proper application of sentencing principle a higher total sentence is appropriate, then that higher sentence will usually be imposed by the appeal Court.  That must follow from the provisions of s 83I(3) Criminal Procedure Ordinance Cap 221 (CPO).  We note that the prescribed form (Form XI) for a Notice of Application for Leave to Appeal specifically refers intending appellants to the power of the court under s 83I CPO to either increase or reduce the sentence.  Those advising appellants may well be reminded that this is a provision which ought to be the subject of specific advice to an intending appellant.

Is the total sentence of 6 years manifestly excessive:

9.In order to determine the appropriate sentence it is necessary to consider the circumstances advanced by Mr Martin Lee to support his contention that a total sentence of 6 years was manifestly excessive.

10.In our judgment on the appeal against conviction we described the offences in the following terms:

“3.  In simple terms the case for the prosecution against Wong Chor-wo may be summarised in this way.  Using seven cheques drawn on a wholly-owned subsidiary, Wallmark Enterprise Company Ltd, (Wallmark), of a public company, Wealthmark International (Holdings) Ltd, (Wealthmark), of which he was chairman and majority shareholder, Wong Chor-wo stole $20.8 million, (counts 1-7, the theft charges).  Subsequently, in order to cover up the theft, Wong Chor-wo used a number of false documents and supplied false information, in an attempt to justify the withdrawal of the funds from Wallmark.  The following was the case for the prosecution in respect of those charges.

4.  In the course of the preparation of the Wallmark ledger, Wong Chor-wo supplied to the accounting staff of Wallmark four false receipts purporting to come from Guangzhou Construction Co Ltd (GCCL), a non-existent mainland company, for the receipt of the sum of $20.8 million in consideration for the purchase of land and construction of a factory in Huizhou, (count 8-11, furnishing false information).

5.  In the course of the preparation of the audit of Wealthmark, Wong Chor-wo supplied the auditor with a false contract with GCCL and the four receipts, (count 12, using false instruments).  When the auditor was still not satisfied he supplied the auditor with four false subcontracts purportedly made with GCCL for construction work in Cambodia and Huizhou, (count 13, using false instruments), and false documents which had the effect of falsely increasing the purchase price of land and buildings in Cambodia, (count 14, using false instruments).

6.  Upon yet further enquiry by the auditor, who was still not satisfied, he supplied the auditor with copies of false quotations and receipts relating to construction work undertaken in Huizhou, (count 15, using copies of false instruments).

7.  When further pressed by the auditor to provide a resolution substantiating a board meeting he supplied the auditor with a false set of minutes in relation to a meeting that had not taken place, (count 16, company officer making a false statement to auditors).

8.  In the annual report of Wealthmark, the public company of which he was chairman of directors, and from whom the $20.8 million had been taken, he made false statements as to the application of that sum, those statements purporting to justify the expenditure in terms of the false documents supplied to the auditor, (count 17, publishing a false statement).”

11.The evidence established that $20.8 million had been stolen by Mr Wong, and that after making allowance for certain funds that had been deposited into Wallmark’s accounts, a total sum of $17.32 million was missing.

12.Mr Martin Lee’s principal submission before us was that the finding of the Judge that that sum was still missing was wrong, because the inference was open that the sum of $17.32 million had been applied for the purchase of land and construction work in both Huizhou and Cambodia.

13.The submission was a hopeless submission, quite unjustified on the evidence, and quite impossible following the rejection of the appeal against conviction, and the dismissal of the application for leave to appeal to the Court of Final Appeal.

14.If there was any basis in the evidence for the submission, it would have been a submission that would have been open to Mr Wong at trial, before us on the application for leave to appeal, and before the Appeal Committee of the Court of Final Appeal.  If that inference was open, then there would have been an argument that the prosecution had failed to prove the appropriate dishonesty on the part of Mr Wong.  It would have been arguable that notwithstanding the method used to secure the funds, the application of the funds for the purposes of Wallmark would negate any dishonest intention on the part of Mr Wong.

15.Had the submission been open, even only on the basis of a reasonable inference, available to be drawn, thereby raising a reasonable doubt as to the application of the funds, it would certainly have been made in relation to count 17, the particulars of which specified precisely that the stolen funds were falsely stated in the Annual Report of Wealthmark to have been used for construction and renovation work in both Huizhou and Cambodia.  That inference would have provided an answer to that charge.

16.No such submission was made at any stage of the proceedings, plainly because there was no basis in the evidence for that submission. 

17.In fact the submission made was that there was an inference that the funds had been remitted to GCCL, a non-existent company, by way of the underground banking system.  As we pointed out at paragraphs 125-127 of our Judgment of 16 June 2008, there was nothing in the evidence to substantiate such an inference.

18.While it is right that there was evidence that certain construction and renovation works had been undertaken in both Huizhou and Cambodia, there was nothing at all in the evidence upon which it might be asserted that the inference arose that the funds stolen by Mr Wong were applied in payment of those works.

19.Mr Martin Lee next said that there was no evidence of any private gain on the part of Mr Wong.  There is no direct evidence as to the application of the funds following the theft.  However, the central role of Mr Wong in the cover-up that followed (counts 8-15), plainly raises the inference that it was Mr Wong personally who was the beneficiary of the stolen funds.  There is nothing in the submission.

20.The final submission made by Mr Martin Lee was that the offences were technical in nature.  The basis of the submission is found in the assertion that the funds were in fact applied for the purposes of Wallmark.  There being no basis for that inference, there is no basis for a submission that the offences were in any way “technical” in nature.

The proper sentence:

21.The conversion of the guidelines in R v Clark [1982] 2 Cr App R 137 to Hong Kong circumstances was undertaken by the Court of Appeal in HKSAR v Cheung Mee-kiu [2006] 4 HKLRD 776.  In the context of this case the relevant bands are:

(b)  $3 million to $15 million – 5 to 9 years;

(c)  $1 million to $3 million – 3 to 4 years;

(d)  $250,000 to $1 million – 2 to 3 years;

It is necessary to apply those guidelines to establish the proper sentences in respect of the seven counts of theft.

22.We have had due regard to the matters of mitigation that were put before the Judge in assessing sentence.  For convenience we set out also the dates upon which each offence occurred. The appropriate sentences are:

Count 1:     $3.2 million,   16 January 2001,      5 years;

Count 2:     $800,000,      16 January 2001,      2 years 9 months;

Count 3:     $2.5 million,   22 February 2001,    3 years 6 months;

Count 4:     $1.3 million,   22 February 2001,    3 years 4 months;

Count 5:     $5 million,      17 March 2001,        6 years,

Count 6:     $3 million;      19 March 2001,        4 years;

Count 7:     $5 million;      21 March 2001,        6 years.

23.Counts 8-11 related to furnishing false information as part of the cover-up in relation to the thefts.  On each count a sentence of 2 years imprisonment is appropriate, bearing in mind that the substantive offence in each case was the theft, and the false information offences merely for the purpose of cover-up.  Counts 12-15 also related to the cover-up, each count involving using false or false copies of instruments.  Again on each count a sentence of 2  years imprisonment is appropriate. 

24.Count 16 involved the supply by Mr Wong to the auditor of Wealthmark of a false set of minutes in relation to a meeting that had not taken place.  It is a serious matter to make a false statement to the auditor of a public company.  The maximum sentence which may be imposed upon conviction on indictment, (see s 351 & Schedule 12, Companies Ordinance, Cap 32), is a fine of $150,000 and 2 years imprisonment. 

25.The District Judge imposed a two year sentence.  While this is a clear and egregious case of this offence, there may be more serious cases and we do not consider that this case demands the maximum penalty.  A sentence of 18 months imprisonment is appropriate.

26.Counts 17 relates to the publishing of a false statement contrary to s 21 Theft Ordinance, Cap 210, for which the maximum sentence is 10 years imprisonment.  In this case the false statement was made in the annual report of a publicly listed company. 

27.Significant weight is placed by investors in Hong Kong on the annual report of publicly listed companies.  Those investing in publicly listed shares in Hong Kong comprise not only Hong Kong residents, but also international corporations and investors.  They are entitled to be able to rely upon statements made in the annual reports of public companies in the consideration of investments.  Great importance is placed by the Government of the Hong Kong Special Administrative Region on the integrity of the market.  Offences such as this strike at the heart of that integrity.

28.Weighing this matter into account we take the view that the District Judge was quite right to impose a term of 6 years imprisonment on this charge.

29.The sentences imposed by the Judge are set aside, except those on counts 5, 7  & 16, and the sentences specified above are imposed.

Totality: 

30.When the totality of the offending is considered in relation to the appropriate individual offences, it is immediately seen that we were entirely justified in saying to Mr Martin Lee that a sentence in excess of the 6 years imposed by the Judge could well be justified in this case.  At the end of the day we determined that the sentence need not be increased.

31.It would be appropriate for each of the “cover-up” charges to be the subject of concurrent sentences with the theft charges to which they relate.  We have set out the dates upon which the various offences of theft occurred.  Although covering only a three month period they fall into three clear groups.  Proper sentencing principle would require that the sentences imposed should overlap in order to reflect the continuing nature of the offending over a period of time.

32.Bearing in mind that two of the offences require a term of 6 years imprisonment, in the circumstances, the totality of the offending may be sufficiently reflected by ordering that all sentences be served concurrently.  Mr Wong must serve a total term of 6 years imprisonment.

Mr Alex Lee, SADPP, of the Department of Justice, for the Respondent

Mr Martin Lee SC, leading Mr Lee Siu-him, instructed by Messrs Lui, Choi & Chan, for the Applicant, Wong Chor-wo