THE LAW SOCIETY OF HONG KONG v. A SOLICITOR

CACV 78/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 78 OF 2014

(ON APPEAL FROM AN ORDER MADE BY THE SOLICITORS
DISCIPLINARY TRIBUNAL DATED 17^TH DAY OF JANUARY 2014)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.  By our judgment of 2 April 2015, amongst other things, we allowed the appeal by the Law Society in CACV 78 of 2014 and in place of the penalty imposed by the Solicitors Disciplinary Tribunal (a fine of $40,000), we ordered the suspension of the Solicitor for 2 years in respect of a charge arising out of his conduct in a conveyancing transaction.

2.  The Solicitor now seeks leave to appeal against our judgment to the Court of Final Appeal.  In the Notice of Motion of 30 April 2015, the following questions were framed at paragraph 3 as questions of great general or public importance [“GPI”] which justified the appeal being considered by the Court of Final Appeal:

“ 3.1 Where the appellant is the Law Society, seeking to review the Order of the SDT to increase the penalty, is the test of intervention by the Court of Appeal such that it only needs be satisfied that the Order be merely “clearly inappropriate” or “clearly wrong” before interfering with the order?; or

3.2 Where the appellant is the Law Society, seeking to review the Order of the SDT to increase the penalty, must the Court of Appeal be satisfied that the Order was very clearly wrong, manifestly wrong, or wrong in principle?

3.3 Where the appellant is the Law Society, seeking to review the Order of the SDT to increase the penalty, what should be the test for appellate intervention?

3.4 Where the Court of Appeal decides to interfere with the Order of the SDT upon an appeal by the Law Society, should the Court of Appeal consider a discount from its intended penalty given that there was a more lenient, existing penalty by the SDT?”

3.  At paragraph 18 of his written submissions, Mr McCoy SC (arguing the appeal on behalf of the Solicitor, both at the substantive appeal hearing before us and in this application for leave) sought to add this question:

“ Does section 13(2A) of the Legal Practitioners Ordinance (Cap 159) confer a right of appeal upon the Council of the Law Society equivalent in scope to the right of appeal of a Solicitor under section 13(1); or is the Council’s right of appeal limited to “perverse” decisions and/or errors of law?”

4.  Regrettably, and with due respect to Mr McCoy, apart from question 3.4, these questions had not been argued before us at the substantive appeal, at least not in the way as they are now presented in his submissions on the Notice of Motion.  We understand that allowance should be given for some variation in the manner of presentation of a particular line of argument and, at different levels, with the benefit of a judgment from the lower court, counsel may wish to reconsider how a point should be presented or developed and perhaps cite further authorities on appeal in support of a point which had been rejected.  But a line must be drawn between that type of situation and the present case in which, as we said, the questions now put forward had never been argued before us.  To entertain these as grounds of appeal in the latter situation means that the higher court (and in the present context, the Court of Final Appeal) would have to consider these arguments for the first time.  In general, we respectfully take the view that it must be more appropriate for the Appeal Committee of the Court of Final Appeal to consider whether leave to appeal should be granted in such circumstances.  This court should only grant leave in this sort of situation (thereby pre-empting the exercise of discretion by the Court of Final Appeal) in exceptional cases. 

5.  Mr McCoy submitted that the bar against new points being taken is only confined to cases where the determination of the new point involves consideration of fact-sensitive issues that may (had the point been taken below) have resulted in the evidence taking a different course in the court below.  With respect, Mr McCoy failed to appreciate that there are two kinds of hurdle: one absolute and the other discretionary.  It is true that there is an absolute bar in the circumstances described by him.  The rationale for that rule is fairness.  And it may be arguable that other reasons of fairness may give rise to a similar bar, see Lehmanbrown Ltd v Union Trade Holdings Inc HCMP 977 of 2015, 17 June 2015 at [10].  We are not referring to this absolute bar in this instance. 

6.  There is another hurdle in Mr McCoy’s application, which is discretionary in nature.  As explained by Kwan JA in Ageas Insurance Co Ltd v Lam Hau Wah Inneo  CACV 65 of 2014, 19 May 2015 at [7] to [9][1], there is also a practice of this court not granting leave for new points (not restricted to new points involving fact-sensitive issues) which had not been canvassed in the substantive appeal before us.  The rationale for this practice is different from the consideration of fairness for the absolute bar. The rationale for this practice, as explained by Bokhary PJ in Flywin Co Ltd v Strong Associates Ltd (2002) 5 HKCFAR 356 at [39], stems from the undesirability and disadvantages of asking the Court of Final Appeal, as the highest judicial authority in this jurisdiction, to determine a point of great general or public importance without the benefit of earlier rounds of full argument and judgments of the lower courts.  By reason of that, it must be a decision for the Appeal Committee to make as to whether such new points should be entertained by the Court of Final Appeal in such circumstances.

7.  Mr McCoy did not explain why these new arguments were not canvassed before us. We do not think there is any exceptional circumstance in the present case to warrant us exercising the discretion to grant leave on these arguments.

8.  We shall explain why we take the view that these are new arguments.  As we recall, Mr McCoy did not advocate a “very clearly wrong, manifestly wrong” test before us at the substantive appeal.  What he submitted was set out at paragraphs 4 to 10 and 32 of his skeleton submissions of 18 February 2015.  This was how he summarised his case at paragraph 4:

“ 4. The Solicitor’s case in response to the Law Society’s appeal against sentence only can be summarized as follows:

4.1. The Court of Appeal in this case has jurisdiction limited to interpreting the findings of the Tribunal and reviewing the sentencing Order only. There is no jurisdiction to make a finding of dishonesty if no such finding was itself made by the Tribunal;

4.2. As the expert tribunal assessing the alleged misconduct of solicitors, the Tribunal would have been most keenly aware of the consequences of a finding of dishonesty. The Statement of Findings cannot be construed as having found dishonesty when no such express statement has been made.

4.3. On penalties, high deference should be accorded to the opinion of the Tribunal, since it is the Tribunal which is in the best position to determine the standards of ordinary, honest, right-thinking solicitors.”

9.  Thus, as far as the jurisdiction point is concerned, Mr McCoy’s contention in the substantive appeal was that this court does not have jurisdiction to review findings of fact.  In our judgment, we did not review the absence of a finding of dishonesty in respect of this charge.  The review of a penalty by reference to the “clearly wrong” standard in the present case is not a review of findings of fact.  Rather, it is an evaluation of the proper penalty to be imposed on basis of the factual findings made by the Tribunal.  This approach was actually recognized by Mr McCoy at paragraph 34 of his written submissions of 18 February 2015:

“ 34. As to whether the penalties were obviously inappropriate, this Court cannot compare the penalties with what the Court determines to be the facts of the case, but must be compared with what the Court interprets the Tribunal as having determined. Whether the penalties were obviously inappropriate will depend on the Court’s interpretation of the Statement of Findings. However, the Statement of Findings cannot ever bear an interpretation that casts such adverse aspersions against the charater of the Solicitor for which the current penalties can be said to be obviously inappropriate.”

10.  No jurisdiction point was taken by Mr McCoy at that stage (as he now seeks to do) that section 13(2A) of the Legal Practitioners Ordinance Cap 159 should be construed in such a way to restrict the power of the Court of Appeal to correct points of law or perverse findings in the acquittal of a solicitor. The materials relating to legislative history and the enactment of this sub-section were not included in Mr McCoy’s submissions or list of authorities at the substantive appeal. 

11.  To be fair, Mr McCoy did raise the question whether the approach in Preiss v General Dental Council [2001] 1 WLR 1926 should be applied with the same vigour in an appeal by the Law Society as opposed to an appeal by a solicitor.  But, as one can see from paragraphs 7 to 8 of his written submissions of 18 February 2015, his argument was not the jurisdiction point he now takes and at the substantive appeal, he only confined himself to the submission that a high degree of deference should be accorded to the penalty imposed by the Tribunal. 

12.  This is what he said at paragraph 32 of those submissions:

“ 32. As already noted in §6 above, this is an appeal by the Law Society. The Law Society possesses no right of appeal and has only been granted leave regarding the penalties. This Court has no jurisdiction to review the facts of the case. It can only consider whether there was an error of law in the Tribunal’s Reasons and Order (being the only reasons on penalty) or whether the penalties were obviously inappropriate given the findings as stated in the Statement of Findings.”

13.  At the hearing of the appeal, quite apart from the question of dishonesty, both sides engaged in arguments on whether the penalty was appropriate even if there was no finding of dishonesty.  Mr Karas (on behalf of the Law Society) advanced detailed submissions in that respect and invited this court to re-state the proper approach in light of his submissions on A Solicitor v Law Society of Hong Kong [2004] 2 HKLRD 490. Instead of taking the point that this court had no jurisdiction to entertain the question in this appeal, Mr McCoy in his oral submissions accepted that a finding of dishonesty was not a condition precedent for striking off.  He submitted that the conduct must either be reprehensible or in the nature of serious incompetence affecting public confidence or constituting a menace to the public.  He accepted that in the present case the Solicitor could well be suspended, but not struck off.  Whilst he urged this court to pay regard to the penalty imposed by a specialist tribunal, he also submitted that this court must be clearly satisfied that the sentence was wrong in principle or manifestly inadequate before we intervened. 

14.  We did not, and do not, see any material difference between the “clearly wrong” test and “manifestly inadequate” test. 

15.  Thus, we did not have any effective submission from Mr McCoy at the substantive appeal that the “clearly wrong” approach should not be applied in respect of an appeal by the Law Society against penalty.  Had the questions now framed before us been raised at the appeal, we would have asked Mr McCoy to clarify what are the differences between “perverse” and “clearly wrong” and between “very clearly wrong, manifestly wrong” and “clearly wrong”.  At the moment we cannot see how these different formulations could have taken the Solicitor’s case further in view of what we said as to the serious nature of the misconduct in our main judgment.  

16.  Hence, these new questions were not effectively raised before us and, for the reasons given above, we should not grant leave for them to be considered by the Court of Final Appeal.

17.  As Mr McCoy had not argued the new points in the appeal before us, we will not deal with the merits of those points as if this were a supplemental judgment to our main judgment.  It would be wrong in principle to do so as it would be tantamount to giving Mr McCoy a second bite of the cherry.  However, what we will say is this - after reading the materials relating to the legislative history regarding section 13(2A) of the Legal Practitioners Ordinance, we are not persuaded that he is correct in his restrictive interpretation of that sub-section.    

18.  In his reply submissions on this Motion dated 17 June 2015, without framing a separate question of GPI, Mr McCoy advanced a submission that this court did not have jurisdiction in the present appeal to review the penalty due to the limited scope of the Notice of Appeal, confining the Law Society’s appeal to the single question of whether a finding of dishonesty had been made by the Tribunal. 

19.  With respect, though Mr McCoy had alluded to the lack of a finding of dishonesty as the main issue, he did not go so far as to take this as a jurisdiction issue.  Actually, it could not have been a jurisdictional issue because under Order 59 Rule 3(3), this court can grant leave for grounds not set out in a notice of appeal to be raised.  In view of the engagement of both sides on this question in their respective submissions and absence of unfairness to the Solicitor in this instance, this court would not have had difficulty in granting such leave. 

20.  Mr McCoy further advanced an argument in his reply submissions that the order of Chu and Macrae JJA granting leave pursuant to Section 13(2A) has restricted the challenge by the Law Society to the finding of dishonesty.   That again was not a point taken in the substantive appeal.  In any event, there is no such restriction on the face of the order, which was the only document in respect of that leave application placed before us. 

21.  We therefore do not regard these additional points (not embodied in any questions framed) as reasonably arguable.  Nor can we see how they could be formulated as GPI questions (and as we said, Mr McCoy had not attempted to do so).

22.  As for question 3.4 in the Motion, though Mr McCoy invited us to take account of the disappointment of the Solicitor upon an increase in the penalty by this court, and faintly suggested in such context that an analogy could be drawn with a discount being given on review of sentence in criminal cases, he did not go as far as suggesting this court must apply in this context the full vigour of the practice in reviews of sentence in criminal cases.  No authority was cited for such a rule in the context of disciplinary appeals by a regulatory authority against penalty.  In light of the difference in the nature of criminal proceedings and disciplinary proceedings, and the significance in terms of the maintenance of public confidence in the profession in the latter context as highlighted at [70] of our main judgment, we do not agree that this court must apply the same approach as that applied in a review against sentence in a criminal case.  In the absence of any authority mandating the adoption of this approach in disciplinary cases (and, despite his immense experience, Mr McCoy did not refer to any authority supporting this proposition), we do not accept this ground to be reasonably arguable.

23.  We do not consider there is any basis for us to grant leave on the “otherwise” limb of s22 of the Hong Kong Court of Final Appeal Ordinance. 

24.  For these reasons we dismiss the Motion with costs.  Having regard to the statement of costs placed before us, we assess the costs of the Law Society at $60,000.  

25.  Other matters were raised by Mr McCoy in his submissions which have no bearing on the Motion.  Without any summons, they are not properly before us.  In any event, the question of instruction of Mr Karas seems to us to be a matter for taxation.  If necessary, this question will have to be determined by the taxing master.  As regards the request for redaction, our main judgment was delivered on 2 April 2015 and it has been in the public domain for quite some time.  It is now too late for this request to be entertained.  Also, as a matter of principle, we do not see any ground to justify such a course in view of what we said at [86] of our main judgment.