HKSAR v. Tsang Kwong Ping and Others

DCCC 449/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 449 OF 2010

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Reasons for Sentence

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1.The Defendants (D1 to D3 at trial and so termed throughout) are jointly charged on the indictment with one count of conspiracy to obtain services by deception, contrary to Section 18A(1) of the Theft Ordinance, Cap. 210 and Sections 159A and 159C of the Crimes Ordinance, Cap. 200. The particulars of the offence are that between 29 December 2009 and 15 January 2010, they conspired with other persons unknown to dishonestly obtain services from DHL Express (Hong Kong) Ltd. (hereinafter referred to as ‘DHL’) by deception, namely by falsely representing that they were duly authorized to quote Debenhams PLC UK’s (hereinafter referred to as ‘Debenhams’) account number 960305539 for the purpose of settling the payment for courier services provided by DHL to Debenhams.

2.At the outset, D1 and D3 admitted the charge while D2 denied it.  At the first appearance on 28 July 2010, D1 indicated that he would admit the charge but disputed the facts, while both D2 and D3 indicated they would deny the charge.  On 20 September 2010, D1 entered a plea of guilty to the charge and admitted the facts before my learned brother, His Honour Judge Yip and was convicted of the charge by him.  He confirmed his plea and admission of the facts before me on 24 January 2011.  D3 pleaded guilty before me and admitted the facts and was convicted by me on 7 December 2010.  Sentence of D1 and D3 was adjourned until the conclusion of the trial of D2 which was before me.  I delivered verdict in respect of D2 on 24 January 2010.  I was satisfied that the Prosecution had proved the charge against D2 beyond all reasonable doubt and I convicted him of the charge.  However, at the hearing on 24 January 2011, D3’s counsel Mr. Allman-Brown indicated that there might be an issue in respect of D3’s plea – therefore I adjourned the matter in respect of D3 until 25 January 2011 for Counsel to clarify the matter.  Before the hearing, Counsel wrote in saying the matter had been resolved and that D3 maintained his plea and admissions, and sought to vacate the hearing for D3 fixed for 25 January 2011. I acceded to his request.  All the defendants appeared before me on 27 January 2011.  D3 confirmed in open court that he maintained his plea of guilty and his admission of the facts.  After hearing Counsel in mitigation on behalf of each Defendant, I adjourned the matter until today to deliver my reasons for sentence.

3.D1 and D3 are sentenced on the basis of the facts admitted by them whilst D2 is sentenced on the basis of the facts found by this court.  I shall not recite the facts in detail. Briefly, the facts are that between 29 December 2009 and 14 January 2010, a company called the Fai Wa Company in Hong Kong placed a total of 14 orders with DHL Express (HK Ltd.) (“DHL”) for the delivery of cargoes to various countries by quoting the customer account number  ‘960305539’ which belonged to Debenhams PLC UK (“Debenhams”), a major retailer in the U.K., for billing purposes, so the freight charges were debited to Debenhams account for payment.  79 shipments made on 13 different days were successfully effected by ‘Fai Wa Company’ using Debenhams customer account number for payment, involving freight charges of HK$1,881,211.44, which is the loss sustained by DHL.  The last order was placed on 15 January 2010, when the operation turned ouvert, and the three defendants were arrested.  Had that last order been successful, the freight charges would have been HK$183,916.84.  Debenhams did not know ‘Fai Wa Company’ and had no business dealings with them.  Nor had Debenhams ever authorised ‘Fai Wa Company’ to use DHL’s service and bill the freight charges to their customer account for payment.  Debenhams had never authorised any other person or company in Hong Kong to use their account number for payment of DHL services, save for their agent Li & Fung. Save for the first occasion, when the goods were delivered to the DHL service centre, on each occasion the cargo was collected by DHL couriers from the 4^th floor lift lobby of Selwyn Factory Building at 404 Kwun Tong Road.  D3 and another male had gone to view the premises at Room 15, Block E, 4^th floor, Selwyn Factory Building, 404 Kwun Tong Road on 29 December 2009, but the tenancy agreement was actually entered into the following day 30 December 2009.  All the Defendants were present when the tenancy agreement was signed by D1, while it was D2 who actually handed the cash for the payment of the rent, deposit and other charges to the landlord’s representative.  The only furniture in the premises was that provided by the landlord, and as one can see from the photographs produced, the office was very sparsely furnished.  There was not even a telephone, and orders to DHL to pick up the cargo was made from the landlord’s telephone at the reception area.  The premises were rented for the sole purpose of providing an address to DHL to collect the cargo from.  DHL’s suspicions were aroused when one of its couriers who had gone to collect cargo informed his superior on 13 January 2010 that something was wrong because cargo was always already in the lift lobby for their collection, and there was only a desk inside the office premises.  When a check was made with Debenhams, it was confirmed that DHL had never authorised ‘Fai Wa Company’ to use their customer account number for billing purposes.  When the order to collect cargo was placed by ‘Fai Wa Company’ on 15 January 2010, a report was made to the police, and an undercover police officer posing as a DHL courier went to the premises along with the DHL courier – the operation turned ouvert and the three defendants were arrested. D1 and D2 claimed to have been employed by a mainlander named ‘Siu Bor’ whilst D3 said he was unemployed and was asked by D1 if he wanted to do some casual work for his company.  The Defendants received the cargo in Hong Kong and arranged for DHL to collect the cargoes from their premises.  They telephoned DHL to come to collect the cargo, as well as preparing the paperwork to accompany the shipments.  D1 admitted under caution to being paid HK$400 a day, and since he had started the work, D2 had paid him on 2 occasions.  D2 said under caution that he was paid HK$500 a day, and he had also been paid twice since he had started working.

3. D1 is now aged 55 years. His criminal record dates back to 1972 – he has had 49 previous court appearances with 68 previous convictions. By his present conviction, he is in breach of a suspended sentence imposed on him on 14 October 2009 of 2 months’ imprisonment suspended for 12 months for an offence of importing goods to which the Dutiable Commodities Ordinance applies without a licence. Counsel for D1 submitted in mitigation the D1 was not the mastermind, but rather his role was to do clerical work. He only received a wage of HK$400 a day, and the fraud was not for a long period. His greatest mitigation was his plea of guilty.

4.D2 is now aged 52 years.  His record dates back to 1991 – he has had 14 previous court appearances, 15 convictions, the last being in 2004 when he was sentenced to 2 months’ imprisonment for an offence of theft, of the type commonly referred to as shoplifting.  D2 is married and resides with his wife and mother.  He is the sole breadwinner of his family. He has been convicted after trial, and he has shown no remorse.  Counsel for D2 submitted that the actual loss of DHL would be much less than that invoiced, as there are fixed costs that they would have incurred anyway.  In my view, that is not correct – the loss to DHL must be the freight charges that they have lost, which in my view is a substantial amount, none of which has been recovered, and is unlikely to be recovered.

5.D3 is now aged 50 years.  He has had only one court appearance, and that was in 1992.  He is divorced and lives alone, and I am told that he took part because he was unemployed at the material time.  Mr. Allman Brown submits that he was the least paid of the 3, earning $280 to $300 a day.  Again, save for his plea, there is little in mitigation before me.

6.To effect the shipments, premises had to be leased – it had be made to look that a company actually occupied the premises in question.  The name of a company “Fai Wa Company” was used – this was a company whose business registration had not been renewed when it expired in 2009, and yet a photocopy of the business registration for the company was found from the desk, and this showed that it was current. Clearly, there has been elaborate planning to set up this scheme.  The defendants may not have been the masterminds.  However, but for their participation, the deception would not have been successful, as it was not until the DHL courier became suspicious and voiced his suspicions to his superiors who made inquiries with Debenhams that the matter came to light.  There is also an international element involved here – Debenhams is in the U.K.  The goods were all being shipped overseas.  Hong Kong was being used as a transhipment point – the goods came to Hong Kong and then were shipped out again using the services of DHL. Hong Kong has a significant role as a transhipment centre for international shipments, and its reputation as such needs to be protected.

7.In my view, the only appropriate sentence must be an immediate custodial sentence.  Each defendant played an active part in the scheme and I view each of them as equally culpable.  In respect of each defendant, I take as a starting point 4 years’ imprisonment.  D1 and D3 are entitled to credit for their pleas – I shall give them the usual discount of one-third to reflect that - they are each sentenced to 32 months’ imprisonment.  D1 is in breach of a suspended sentence.  I can see no reason not to activate it – the suspended sentence of 2 months’ imprisonment is activated, to be consecutive to the present term.

8.D2 has been convicted after trial – as I have said, he has shown no remorse.  I can see no other mitigating factors to warrant any discount of sentence.  He is sentenced to 4 years’ imprisonment.