Chu Ka Po and Another v. The Queen

CACC000783/1981

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

CRIMINAL APPEAL NO. 783 OF 1981

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Coram: Hon. Leonard, J.A.

Date of Judgment: 28th December, 1981.

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JUDGMENT

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1. In this case the appellants originally pleaded guilty to 20 charges of which 10 were charges of offences contrary to Section 29 of the Money Lenders Ordinance of failing to make memoranda in compliance with Section 18 of the Money Lenders Ordinance, of agreements entered into in December 1980 and January 1981. 9 of the other charges concerned the charging of excessive interest on loans advanced contrary to Section 24 of the Ordinance and one consisted of a charge of obtaining an unlawful security. On each of the charges of failing to make a memorandum the appellants were fined 2 thousand dollars ($2,000); on 5 of the original charges of lending at excessive interest they were fined 2 thousand dollars ($2,000) and on the other four they were sent to prison for one month on each charge, the sentences to run consecutively. On the remaining charge of obtaining an unlawful security they were each fined 2 thousand dollars. However, it is against the setences of imprisonment alone that they now appeal.

2. The case has been fully argued and it is only right that I should give my views but I must, disavow any desire to lay down a tariff of sentences for offences of this nature. I do not think that sitting alone I would be justified in doing so particularly when dealing with an Ordinance which has so recently come into force.

3. The first argument advanced by Mr. Wei on which I desire to comment rested on an emphasis of the safe guards in the legislation itself against the likelihood of recurrence of this offence. Severe sentences were not justified, he suggested, because of these. This appears to me to be a two edged argument in that it tends to emphasize the seriousness with which the legislature has approached the social problem of usurious money lending in the Colony at the present time. Clearly it regards the activities of money-lenders who exceed the proper rates of interest as a major social evil and the sentences must be approached with that in mind.

4. My primary duty is to consider whether on the particular facts of this case, a sentence of four months' imprisonment is on the face of it manifestly excessive. I am satisfied that it is, in view of the clear records of the appellants, the absence of any suggestion of intimidation or triad back ground and the pleas of guilty. Had the sentences been of one month's imprisonment on each charge, the sentences to run concurrently I would not have felt free to interfere. But since I must interfere I think I can approach the matter de novo. I say I consider that the sentence of four months' imprisonment is excessive bearing in mind the warning issued by Huggins J.A. in the case of Lee Cham-chuen v. Queen⁽¹⁾ in which he said that he would "reiterate the warning which was given in the case of R. v. Kastercum⁽²⁾ that in cases where the offences are part of the same transaction there is always a danger that the total sentence will be excessive if consecutive sentences are passed." I think this is one of those cases. The matters which I take into account as being in mitigation of the offences committee by the appellants may be listed as follows :

5. Firstly, there is no suggestion on the agreed facts of the presence of any triad society connection or any intimidation being offered to borrowers.

6. Secondly, there is an absence of complaint by any person victimized. Indeed, the agreed facts commence with the time honoured phrase "acting on information received". The premises of the appellants were raided. Presumably, it was when the premises of the appellants were raided and documents relating to loans discovered that the victims of these offences were approached.

7. Thirdly, there was no evidence that any of these victims was in a particularly vulnerable position to the knowledge of the appellants. Nor was there evidence that they have been forced by reason of previous indebtedness to take the loans the subject of proceedings. There was evidence that they had had such previous loans but the all important connection between those previous loans and the loans the subject of the proceedings was not established.

8. There is, however, as Mr. Longley has pointed out a need to indicate that the courts will take these offences seriously and that indication must be given from the very beginning. The legislature requires that unlawful money lending be stamped out and has charged the courts with seeing that it is. There are some other aspects which I am obliged to take into account in considering the appropriate sentence. The plea of guilty is, perhaps more important, in the case of second appellant than in the case of the first appellant. For the second appellant although an executive partner of the firm was apparently absent from the Colony when two of the loans were made and it is agreed that he did not participate in the day-to-day running of the company. That, however, in my mind, can be discounted, he was a partner in the firm, his money was being lent and no doubt, he did not hesitate to share in the excessive interest earned. There was, no suggestion on the agreed facts that the offence of conspiracy to act in violation of the Ordinance was made out. Although excessive interest was charged in 9 cases it was not shown that any practice habitually to charge it existed. On the appeal the appellants faced 4 isolated charges and is that factor more than any other that persuades me that the sentence of 4 months' imprisonment is manifestly excessive. There is one other matter to which I should refer and that is the interest charged in these cases. In the first of the charges with which I have to deal, the interest charge was 89.14 per cent per annum. In two of the others it is 90.9 per cent per annum and in the 4th it is 90.6 per cent per annum. Under the Ordinance any money lending contract may be reopened if there is evidence that the transaction is extortionate and if the interest is more than 48 per cent per annum it shall be presumed to be extortionate. If my recollection serves me correctly 49 per cent per annum has always been regarded as a usurious rate of interest. The legislature when making it criminal to charge more than 60 per cent per annum was clearly Mr. Longley suggested dealing with the extreme case and it is quite clear that people who charge anything more than 60 per cent per annum are guilty of criminal activity. The history of the Bill suggests that the time it was introduced common rates of interest charged were between 100 per cent per annum and 350 per cent per annum and that the top rate was in the vicinity of 1,500 per cent per annum and that such rates were the mischief aimed at.

9. The magistrate was under the impression that this was first case of its kind to be heard in the courts. In that as Mr. Wei has pointed out he was wrong. That, however, did not materially affect his decision and does not materially affect mine. The two cases which were decided before this case, were cases which could not have affected the blame worthiness of the appellants because those two cases came before other magistrates after the commission of these offences. I must, as I see it approached the sentences which should be imposed in the light of all these circumstances and I consider that the proper sentence to impose is a fine of $5,000 on each of these four charges. I therefore, order that the4sentences of imprisonment be quashed and a sentence of $5,000 on each of the charges be imposed in their stead.

Representation:

Mr. R. Wei, Q.C. & Mr. Leo Remedios (Philip K.H. Wong) for 1st Appellant.

Mr. C. Ching, Q.C. & Mr. K.M. Chong (Woo & Woo) for 2nd Appellant.

Mr. Longley, C.C. for Crown/Respondent

(1) (1976) Cr. App. 347

(2) (1972) 56 Cr. App. R. 298