WINNIE LO v. HKSAR

FACC No. 2 of 2011

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 2 OF 2011 (CRIMINAL)

(ON APPEAL FROM CACC NO. 254 OF 2009)

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J U D G M E N T

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Mr Justice Bokhary PJ:

Certified question and introduction

1. Are the ingredients of maintenance sufficiently certain to comply with the “prescribed by law” clause of art.39 of the Basic Law and the “according to law” clause of art.11(1) of the Bill of Rights?  That is the certified question of law in this appeal.  The appellant is a solicitor of previous good character who was convicted of conspiracy to commit maintenance.  If the ingredients of maintenance are not sufficiently certain to be constitutional, then her conviction would have to be quashed for that reason.  Otherwise the appeal would turn on whether her conviction can, in conformity with accepted norms, stand when the law is applied to the circumstances as they emerge.

2. At the conclusion of the hearing, the Court allowed the appeal so as to quash the conviction and consequently set aside the sentence.  The reasons for that result are now handed down.  Costs will be dealt with on written submissions as to which the parties should seek procedural directions from the Registrar. 

Background

3. Shortly stated, the background to this appeal is as follows.  A Madam Cheung Oi-ping, who was the 1^st defendant, and the appellant, who was the 2^nd defendant, stood trial together before Deputy Judge Albert Wong in the District Court.  There were six charges in the charge sheet.  Charge 1 was of conspiracy to commit maintenance.  It was against both defendants.  They were both convicted thereon.  It is the only charge on which the appellant was convicted.  And it is against this conviction that she brought her appeal.  Charge 2 was of champerty.  It was against Madam Cheung alone.  She was convicted thereon. 

4. All the other charges ended in verdicts of acquittal.  They were (to mention them for the sake of completeness): Charge 3 of attempted champerty; Charge 4 of theft; Charge 5 of aiding and abetting another to commit perjury; and, in the alternative to Charge 5, Charge 6 of aiding and abetting another to use a false affidavit.  Charges 3 and 4 were against Madam Cheung alone while Charges 5 and 6 were against both defendants.

5. The appellant’s conviction and sentence were affirmed by the Court of Appeal (Yeung and Yuen JJA and Barnes J).

6. What the appellant has been convicted of having conspired to maintain is a civil action (“the Action”) in respect of which she acted as the solicitor for the plaintiff.  The Action, being HCPI No. 943 of 2002, was brought in the High Court by a Mr Yeung Chun-kit (“the Son”) who sued by his mother and next friend Madam Wong Siu-yin (“the Mother”).  On 6 March 2001, the Son, then in his teens, sustained severe head injuries when a vehicle in which he was travelling as a passenger was involved in a traffic accident. Sadly those injuries have rendered him mentally incapacitated.  The Action was brought against the driver of the vehicle in which the Son was a passenger.  It was brought to recover damages for personal injuries and consequential loss.

7. Quite simply, the particulars of the conspiracy to commit maintenance charge were that Madam Cheung and the appellant had, between 12 March 2001 and 13 October 2003 in Hong Kong, conspired together and with another person or other persons, unlawfully to maintain the Action.

Facts or alleged facts relied upon by the prosecution

8. Questions of law are generally if not inevitably better decided in a matrix of facts rather than in isolation.  What are the facts or alleged facts relied upon by the prosecution in resisting this appeal?  They are largely based on the testimony of the Mother accepted by the trial judge.  As outlined in the prosecution’s printed case, they are essentially to the following effect:-

(i)    In March 2001 the Mother, who had gone to visit the Son in hospital, was approached there by Madam Cheung who offered the family consultancy services in the pursuit of a personal injuries action against the driver to be brought on a “no win, no fee” basis.  This approach resulted in a written agreement dated 22 June 2001 (“the Champertous Agreement”) between the Mother and a consultancy firm represented by Madam Cheung.  It was champertous in that it stipulated that the consultancy firm would get 25% of the compensation received.

(ii)   At the time the Mother did not know that an action could be brought against the driver.  Nor did she know at the time that she could apply for legal aid.  She later came to know about the provision of legal aid.  But by then she had entered into the Champertous Agreement, and she believed that she was bound thereby.  Therefore she did not consider applying for legal aid.

(iii)  In early October 2001 the Mother was introduced to the appellant by Madam Cheung. The appellant told the Mother that she believed that an action against the driver had a high chance of success.  She also told the Mother that since the Son was mentally incapacitated, the amount of compensation had to be endorsed by the court.  As for legal costs, she told the Mother that they would be borne by the defendant.

(iv)  The appellant then helped the Mother to commence and pursue the Action.  She did not explain to the Mother that she could apply for legal aid. No written retainer was issued.  Nor was the Mother asked for costs on account.  The appellant’s husband, a practising barrister, was instructed to advise on quantum and, later, on the offer received from the defendant.  My references to “counsel” when telling the story of the case will be to that barrister.

(v)   In September 2003, on counsel’s advice and with a master’s approval, the Action was settled.  Under the terms of this settlement, the Son was to receive a total of $3,505,370.  Out of that total, two sums were released to the Mother, namely $287,001.80 for past expenses and $871,531.54 for “accrued items”.  According to counsel’s opinion placed before the master who approved the settlement, the accrued items consisted of $695,416.80 for pain and suffering and loss of amenities, $167,728.32 for accrued loss of earnings and $8,386.42 for accrued loss of provident fund.  Counsel had suggested that these accrued items be released to the Mother for the maintenance, care and benefit of the Son.  A bank account (“the Account”) was opened by the Mother in the Son’s name to receive the money released in respect of these accrued items.  The balance of the compensation money was left in court, with provision for the release of monthly sums to the Mother for the Son’s upkeep.  It was not on the Mother’s request that the $871,531.54 was released to her.  She trusted the appellant and had therefore agreed to the arrangements.

(vi)  On 13 October 2003, pursuant to Madam Cheung’s request, the Mother paid $861,652 to Madam Cheung, doing so in the belief that she was obliged to do so under the Champertous Agreement.  The Social Welfare Department had advanced the Mother $58,762 from the Traffic Accident Victims Assistance Fund. Deducting $58,762 from the $3,505,370 receivable by the Son under the settlement of his claim results in $3,446,608, 25% of which comes to $861,652.

(vii)In late 2004 the appellant re-entered the picture.  She did so by commencing miscellaneous proceedings in the High Court, being HCMP No. 2878 of 2004, as solicitor for the Mother.  Those proceedings were instituted to apply for the appointment of the Mother as the committee of the Son’s estate under the Mental Health Ordinance, Cap.136.  Such appointment was sought in order to enable the Mother to obtain the proceeds of two insurance policies held by the Son.

(viii)  On 4 May 2005 the Mother and Madam Cheung had a meeting with the appellant to discuss, among other things, matters relating to the $861,652 which the Mother had paid to Madam Cheung.  During this meeting, the Mother asked if she should tell the court that the money was given to Madam Cheung and the appellant.  The appellant answered in the negative.  Madam Cheung then told the Mother to tell the court that the money was put in a safe deposit box.  The mother replied: “Impossible.” Madam Cheung said that many housewives put their money in safe deposit boxes. The appellant was present throughout this conversation, and she asked if the matter was so decided.  Madam Cheung answered in the affirmative.  The Mother trusted Madam Cheung and the appellant.  So she went along with the proposal.  The appellant prepared an affirmation for the Mother to sign.  Later that day, 4 May 2005, the affirmation was filed in court as the Mother’s 3^rd Affirmation.

(ix)  The Mental Health Ordinance application came before Lam J on 6 May 2005.  Upon Lam J expressing dissatisfaction with the explanation given by the Mother as to the whereabouts of the money, the appellant told him that the Mother was prepared to return the money.  Whereupon Lam J ordered that the Mother do return the money to the Account within seven days.

(x)   Two days later, the Mother and Madam Cheung met in a restaurant. The Mother asked Madam Cheung how to deal with the matter.  Madam Cheung said that she was prepared to contribute half of the money, and asked the Mother to approach the appellant for the other half.  The Mother telephoned the appellant who told her to contact Madam Cheung again.  After seven days had elapsed, the Mother contacted Madam Cheung again.  Madam Cheung told the Mother to drop the application.

(xi)  In October 2005 the Mother engaged another firm of solicitors to deal with the matter.  They helped her to file another affirmation, being her 4^th Affirmation, explaining that the money had in fact been paid to Madam Cheung and that she had been inveigled into making a false statement in her 3^rd Affirmation.

(xii)On 9 February 2006 Lam J appointed the Official Receiver as the committee of the Son’s estate.  And on 10 March that year the Mother made a report to the police.

The appellant’s evidence

9. At her trial, the appellant, unlike Madam Cheung, went into the witness-box.  Her testimony contradicted that of the Mother, who had testified under immunity from prosecution.  Shortly stated, the appellant’s testimony was to the following effect.  She did not know of the Champertous Agreement.  The payment to Madam Cheung was made without her knowledge.  It was not until the Official Receiver asked her on 3 May 2005 for a copy of the statement of the Account that she learned that $861,652 had been withdrawn from it.  On the 4^th of that month Madam Cheung telephoned her and said that the Mother had put the money in a safe deposit box because she believed that to be safer.  At the meeting later that day the Mother confirmed that.  Still in that month, on the 8^th or 9^th, after the hearing before Lam J on the 6^th, she received a telephone call from the Mother who informed her that the money had been paid to Madam Cheung and could not be returned to the Account.  The Mother asked if she should tell the court that the money had been paid to Madam Cheung.  Her answer was that the Mother had committed perjury and could not succeed in her application to be appointed as the committee of the Son’s estate.  She also told the Mother to discuss the matter with Madam Cheung.  In July 2005 she told the Mother that she would cease to act for her.

Ingredients of maintenance and champerty

10. In the fairly recent case of Unruh v. Seeberger (2007) 10 HKCFAR 31 this Court held that maintenance and champerty, whether sued upon as torts or prosecuted as crimes, were still a part of the law of Hong Kong.  Both as crimes and as torts, maintenance and champerty have been abolished in England and Wales.  In Massai Aviation Services v. Attorney General of Bahamas [2007] UKPC 12 at para.12 the Privy Council referred to the Law Commission’s recommendations leading to such abolition.  The Law Commission defined maintenance as “the giving of assistance or encouragement to one of the parties to an action by a person who has neither an interest in the action nor any other motive recognised by the law as justifying his interference” and champerty as “a particular kind of maintenance, namely maintenance of an action in consideration of a promise to give to the maintainer a share of the subject matter or proceeds thereof, if the action succeeds”.

11. Those definitions are consistent with the meanings which Mr Justice Ribeiro PJ gave in Unruh v. Seeberger.  I will proceed on those meanings.  Champerty is maintenance for a share in the proceeds of litigation.  What champerty involves will therefore become clear if and when what maintenance involves is made clear.

12. There are several ways in which to approach the question of whether the ingredients of the offence of maintenance (and those of the tort of maintenance, too) are sufficiently certain to be constitutional.  One is to consider how a jury might be directed thereon.

13. The jury could be told that the first question is this.  Has the defendant officiously intermeddled with someone else’s litigation?  In other words, has he interfered with litigation which is no concern of his?  If “No”, then maintenance has not taken place.  But if “Yes”, then was the defendant’s motive charitable?  If it was, then what he did would not be maintenance.  But if his motive was other than charitable, what he did could be maintenance.

14. At this stage, there might arise the question of whether the defendant’s conduct falls outside the scope of maintenance because his conduct comes within one of the categories excluded from such scope.  These excluded categories are dealt with in paras 91-98 of Mr Justice Ribeiro PJ’s judgment in Unruh v. Seeberger.  One of them consists of cases of legitimate common interest.  The second consists of cases involving access to justice considerations.  And the third is a miscellaneous category of practices which have come to be regarded as lawful, such as the sale and assignment by a trustee in bankruptcy to a purchaser for value of an action commenced in the bankruptcy.  Whether it is necessary to go into the question of conduct being within an excluded category depends on whether there is a real possibility that it might.  And that depends on the circumstances of the case.

15. Even if every question so far is answered against the defendant, there is still one more question to be answered.  On the totality of the circumstances, did the defendant’s conduct pose a genuine risk to the integrity of the court’s process?  If “Yes” the jury would be entitled to find the defendant guilty of maintenance.  But if “No”, then the defendant must be acquitted.

16. If the charge is of champerty, then the directions would of course have to cover one more ingredient, namely a share of the proceeds of the litigation maintained.

17. I do not offer the foregoing as an all-encompassing specimen direction.  And, after all, even such a specimen would have be tailored to meet the particular needs of any given case.  But I do think that directions along those lines – whether by a judge to a jury or by a tribunal of both law and fact to itself – would convey the essence of the ingredients of maintenance or, if that is the charge, champerty.

Legal certainty

18. Such being the essence of its ingredients, is the crime of maintenance unconstitutional for uncertainty?  The question of legal certainty first came before this Court in Shum Kwok Sher v. HKSAR (2002) 5 HKCFAR 381, and was dealt with in depth by Sir Anthony Mason NPJ.  Since then it has been considered by us, sometimes in some detail and sometimes almost only in passing, on a number of occasions.  The case are: Lau Wai Wo v. HKSAR (2003) 6 HKCFAR 624; Morter v. HKSAR (2004) 7 HKCFAR 53; Noise Control Authority v. Step In Ltd (2005) 8 HKCFAR 113; Sin Kam Wah v. HKSAR (2005) 8 HKCFAR 192; Mo Yuk Ping v. HKSAR (2007) 10 HKCFAR 386; and B v. Commissioner of Independent Commission Against Corruption (2010) 13 HKCFAR 1.

19. The requirements of legal certainty are commonly expressed in terms of adequate accessibility and sufficient precision.  People must be able to access an adequate indication of the legal rules applicable to any given situation.  And those rules must be stated with sufficient precision to enable people, with appropriate advice if need be, to foresee to a reasonable degree in the circumstances whether their conduct would be lawful or unlawful.

20. It is recognised that the common law involves development and that statute law involves interpretation.  The law – even the criminal law – will from time to time have to be clarified by the courts as and when cases are decided.  Absolute certainty at all times is unattainable, and is therefore not demanded.

21. What degree of certainty is required will depend on the circumstances.  Without derogating from the generality of that observation, there are a number of points worth making.  Where an offence criminalizes conduct in such a way as to affect a fundamental right or freedom, e.g. free speech, then a higher degree of definitional certainty than otherwise would be required.  Subject to that, a measure of flexibility is needed if the criminal law is to retain its effectiveness, something which often involves keeping up with the ingenuity of criminals.  And where the welfare of the public is concerned, it is not necessarily offensive to legal certainty that being safe from falling foul of the law sometimes means staying well within the prudent side of the line between legality and illegality.

Maintenance and champerty are sufficiently certain to be constitutional

22. The ingredients of the torts and crimes of maintenance and champerty are restrictive, and rightly so.  In so far as the law thereon is in a state of development, such development involves contraction and not expansion.  Subject to one question, I have no hesitation in holding that the requirements of adequate accessibility and sufficient precision are met.  The question which has given me pause is this.  Access to justice is of course a fundamental right.  And it has to be decided whether its protection is properly provided for by the ingredients of these two torts and crimes.  I have come to the conclusion that it is.  Such protection is accorded by the excepted category consisting of cases involving access to justice considerations.  In their approach to the ambit and operation of this category, the courts will always take all due care to protect the fundamental right concerned.  That being so, I am satisfied that the torts and crimes of maintenance and champerty are sufficiently certain to be constitutional.  I answer the certified question in the affirmative.

Departures from accepted norms

23. So it is now necessary to turn to the question of whether the appellant’s conviction can, in conformity with accepted norms, stand upon an application of the law to the facts as they emerge.

24. On this question, the immediate difficulty confronting the prosecution is, quite simply, that the appellant was acting in her professional capacity as a solicitor.  Without more, that is irreconcilable with the notion that her involvement in the litigation was that of an officious intermeddler.  If she knew of the champerty involved, she might be said to have aided and abetted the commission by the Mother of the offence of champerty. And then the appellant herself would have committed the offence of champerty (because – as s.89 of the Criminal Procedure Ordinance, Cap.221, provides – “[a]ny person who aids, abets, counsels or procures the commission by another of any offence shall be guilty of the like offence”).  But the appellant was not charged with champerty.

25. In any event, there is a serious problem with the finding, made by the trial judge and endorsed by the Court of Appeal, that the appellant knew of the champerty involved.  The problem lies in the fact that the courts below had, in making and endorsing that finding, proceeded on the view that the appellant’s admitted behaviour was inconsistent with that of a solicitor acting honestly.  There is no warrant for taking that view.

26. Giving the judgment of the Court of Appeal, Yeung JA said this (in para.45):

“Although the Trial Judge did not agree with some of the criticisms of the prosecution against part of the evidence of [the appellant], he considered the alleged way in which [the appellant] handled the personal injuries case was not reasonable and credible, including: not obtaining costs on account and other service fees; the amount of expenses paid on behalf [the Mother]; allowing [the Mother] to have received $800,000 odd dollars from the quantum of damages; and accepting, without verification and obtaining instructions, [the Mother’s] representation that the $800,000 odd dollars was placed in a safe deposit box and preparing her affirmation on that basis; and finally, after knowing that the content of the relevant affirmation was not correct and had misled the Court, having taken no remedial measures, yet continuing to represent [the Mother].”

27. There is nothing sinister in the appellant having agreed to act without taking costs on account.  In October 2001 the solicitor in whose firm she used to be employed telephoned her to say that a friend of his wanted her to handle a personal injuries claim.  A few days later she received a telephone call from a man who requested her not to charge until after the conclusion of the claim, saying that the proposed client was of limited means.  That is how the appellant came to act in the Son’s claim.  At the time she was a solicitor of about six years’ standing.  She had started her own firm, of two partners including herself, only the year before.  About 90% of her firm’s work concerned real property transactions.  The firm had little litigation work.  She had never handled a personal injuries case before.  Her firm’s costs were eventually paid by the other side.

28. As for the release of $871,531.54 to the Mother in respect of accrued items, the trial judge noted (in para.140 of his reasons for verdict) that “there is no evidence at all in the case to show that there was anything improper on the part of [counsel]; nor did the prosecution make such allegation”.  But then (in the same paragraph) the trial judge continued by saying this:

“I have not overlooked this point, and I also have had regard to the point that under normal circumstances [counsel] would give legal advice according to instructions, and the instructions must have been obtained from [the appellant]. When [the appellant] gave evidence she did not point out that [counsel] acted on his own and did not comply with instructions. I infer that the proposal of [counsel] on this aspect was made in accordance with [the appellant’s] instructions.”

That observation reveals a misconception of counsel’s duty, which is to accept instructions to advise but not on what to advise.  It also reverses the burden of proof, proceeding in effect on the basis that counsel is not to be taken to have acted in accordance with his duty to advise independently unless the appellant testified that he had.

29. Saying that the appellant had allowed the Mother to receive $800,000 ignores the appellant’s denial that she knew that the money had gone to the Mother otherwise than for the purpose of looking after the Son.

30. Then it was said against the appellant that she had accepted, without verification and obtaining instructions, the Mother’s representation that the $800,000 had been placed in a safe deposit box.  But what verification or instructions could the appellant have sought?  Her evidence was that the Mother had confirmed that the money had been put in a safe deposit box.  And having regard to the Son’s mental condition, she was driven to taking instructions from the Mother as the Son’s next friend.  Just as I did in Vivien Tam v. HKSAR, FACC Nos 6, 7 & 10-12 of 2010 (15 July 2011) at para.101, I point here to Mr Justice Ribeiro PJ’s statement in HKSAR v. Egan (2010) 13 HKCFAR 314 at para.185 that:

“In the absence of actual knowledge, a solicitor (or barrister) is bound to adopt an agnostic approach towards the client’s instructions in carrying out his professional duties since it is not his business to judge their truth or falsity. The solicitor or barrister may privately harbour distinct feelings of scepticism about his client’s story but that is wholly beside the point. Professionally, he is required to abstain from forming any belief one way or the other on the topic. For a court to attribute guilty knowledge or belief and criminal liability to the legal adviser in such circumstances would gravely endanger the fundamental right to legal advice and representation.”

No valid reason has been put forward as to why the appellant ought to have suspected the Mother of lying.

31. The final observation in para. 45 of Yeung JA’s judgment refers to a number of strictures against the appellant.  These are that she had not corrected the falsehood in the Mother’s 3^rd Affirmation and had misled the court, having taken no remedial measures, yet continuing to represent the Mother.  First of all, the fact that the appellant had not revealed the perjury of someone whom she seems to have viewed as a client did not point to conspiracy.  Indeed, the stricture under consideration seems to proceed on the premise that the appellant only discovered the truth well after the time when she is alleged to have conspired and acted in furtherance of such conspiracy.  As to continuing to represent the Mother, the appellant said in evidence that her reaction upon learning of the falsehood in the Mother’s 3^rd Affirmation was to tell her that she could not succeed in her application to be appointed as the committee of the Son’s estate.  And that application was not taken any further.

Result

32. For the foregoing reasons, I do not think that the appellant’s conviction can stand.  It is only natural and proper that the courts below deplored what Madam Cheung did.  But as far as the appellant is concerned, there have occurred at trial – and have been repeated rather than corrected on intermediate appeal – a series of departures from accepted norms. These departures are so serious as to render the appellant’s conviction a substantial and grave injustice.  We had to intervene in order to remedy that injustice by allowing the appeal so as to quash the appellant’s conviction and consequently set aside her sentence.

33. Before parting with this case, I wish to make it clear that nothing which I have said is meant to discourage consideration of legislative reform of the law as to maintenance, champerty or matters relating thereto.

Mr Justice Chan PJ:

34. I agree with the Reasons given by Mr Justice Bokhary PJ and Mr Justice Ribeiro PJ.

Mr Justice Ribeiro PJ:

35. At the hearing, the Court allowed the appeal with reasons to be given later.  My reasons are as follows.

36. This appeal is concerned with the conviction in the District Court[1] of the appellant, a practising solicitor, for conspiracy to commit maintenance in connexion with her conduct of a personal injury action.  She had been charged as 2^nd defendant and was sentenced to imprisonment for 15 months.  Her appeal to the Court of Appeal was dismissed.[2]  By leave of the Appeal Committee,[3] she challenges both conviction and sentence. 

37. It is argued on her behalf first, that the offence of maintenance is constitutionally bad on the ground of legal uncertainty, a ground certified as raising a point of law of great and general importance by the Court of Appeal.[4]  Secondly, it is argued that the criminal offence of maintenance has been abrogated by desuetude.  And thirdly, it is contended that conviction in the circumstances of the present case involves such a serious departure from established legal norms as to constitute a substantial and grave injustice.  Since the appeal against conviction has been allowed, it is unnecessary to deal with points made in respect of sentence on the appellant’s behalf.

A.   The course of events and the persons involved

A.1  The personal injury action

38. Events unfolded in two phases.  The first began with a tragic accident.  On 6 March 2001, Yeung Chun-kit (“Yeung”), then 18 years old, had been out celebrating his birthday and was a passenger with others in a van driven by one Yu Tao (“Yu”).  They had been drinking and Yu, driving much too fast, lost control of the van, resulting in the death of one of the other passengers and in Yeung suffering serious head injuries, causing him to be mentally incapacitated.

39. Yeung’s mother is Wong Siu-ying (“Wong”). She had been a restaurant worker but had had to give up work to take care of Yeung.  About a week after the accident, she was approached at the hospital by Cheung Oi-ping (“Cheung”) who was later charged as the 1^st defendant.  Cheung (who was not a lawyer) offered to help Wong claim damages for the injuries suffered by Yeung on the basis that Cheung would not charge anything for her services but would take 25% of the amount recovered, if the claim succeeded. 

40. Wong was persuaded and signed an agreement in Chinese to the aforesaid effect.  That document has since gone missing. However, a second agreement in identical terms, signed by Wong in circumstances that are not material, is available.  It purports to be made between Yeung (although signed by Wong) and Hopewell Consultants HK Limited, Cheung’s company. The agreement has throughout been treated as arising between Wong and Cheung and I will approach it in that light.

41. In translation, the agreement provided that Cheung would be responsible “for the payment of fees and expenses to all the related professionals on your behalf, including any professional fees and consultant service charges incurred in your personal injury claim...”  In return, Wong agreed to pay Cheung 25% of the damages or settlement amount recovered. It stipulated that Wong would not have to pay fees or disbursements, adding: “As we pay the fees and expenses to all the professionals, we will reimburse these related amounts directly from the aggregate amount of damages.”  The agreement contained a penalty clause requiring Wong to pay “liquidated damages” of $5,000 or 10% of the claimed amount if she should fail to give instructions necessary for prosecution of the claim.  It is relevant to note that according to the agreement, any lawyers engaged were to be remunerated out of Cheung’s 25% portion of the recovered amount.

42. It was not until October 2001, over six months later, that the appellant, Winnie Lo Wai-yan (“Lo”), came into the picture.  She had commenced practice as a solicitor in 1995 with Lau Wang-fu, whose firm was known as Messrs John W F Lau & Company.  In July 2000, she set up her own firm in partnership with another solicitor, practising as Messrs Winnie Lo and Wong. 

43. Lo testified that in October 2001, her former employer Lau Wang-fu (then in retirement) asked her to take up a personal injury case for a friend.  Later, a Mr Tong, Lau Wang-fu’s friend, contacted Lo and repeated the request, adding that the friend in question had no money and that he hoped Lo would only charge at the end of the case.  Although Lo’s background was almost entirely in conveyancing and this would be her first personal injury case, she agreed to consider taking it on.  A few days later Cheung called and told Lo that the son of “one of her friends” had suffered serious injuries in a traffic accident.  Having obtained and considered the police accident reports, medical reports and other documents, Lo concluded that establishing liability ought to be straightforward and agreed to accept the case on the basis that she would look to the defendant rather than her client for her costs.

44. Lo’s first meeting with Cheung and Wong took place in her office in October 2001.  Lo’s evidence was that she explained to Wong that Lo would not charge any fees as they would be borne by the defendant.  Lo also explained to Wong that she could apply for legal aid but was told this would not be necessary.  It was agreed that proceedings would be started with Wong acting as her son’s next friend and that a conference with counsel should be arranged. 

45. On 30 October 2001, that conference took place with Anthony Cheung of counsel who also happened to be Lo’s husband.  Wong, Yeung, Wong’s husband (whom she subsequently divorced) and Cheung attended.  Initial advice was given and the question of legal aid raised again, with Wong signing a letter subsequently dated 1 November 2011 stating that she did not intend to apply for legal aid. 

46. An action was begun[5] and the claim proceeded in the usual way with Lo’s firm as the solicitors on the record.  On 22 April 2002, Anthony Cheung advised in writing on liability, evidence and procedure.  He was also of the view that liability was straightforward but identified contributory negligence as a possible issue since Yeung had accepted a ride with a driver who had had a lot to drink and since Yeung was not wearing a seat belt.  Counsel also noted that Yeung’s mental incapacity meant that court approval would be required for any settlement.  On 8 August 2002, in an advice on quantum, Anthony Cheung estimated a 20% reduction for contributory negligence and calculated damages at $3,335,690.00. 

47. As the action proceeded, Wong attended at Lo’s office on some 10 occasions, always accompanied by Cheung.  Lo was engaged in settlement negotiations with solicitors for the defendant and, after having negotiated their offer up from $1.9 million plus costs to $3 million plus costs, Lo asked Anthony Cheung for a further advice on quantum with settlement in view.  The latter suggested a counter-offer of $3.5 million plus costs.  That counter-offer was accepted on 23 April 2003.

48. Conscious of the need for court approval, on 13 May 2003, Lo instructed Anthony Cheung to advise on how the settlement amount should be apportioned in the court’s order.  She sent reminders on 13 June and 13 July pressing for the advice which was eventually delivered on 5 August 2003. 

49. After noting the court’s discretion and setting out his detailed calculations and their legal basis, Anthony Cheung suggested that the $3.5 million settlement amount should be divided into three sums: (i) $287,001.80 to be paid to Wong personally to reimburse and compensate her for the cost of caring for Yeung (including giving up her employment); (ii) $871,531.54 representing what Anthony Cheung called “accrued items” made up of sums representing an award for pain, suffering and loss of amenities, accrued loss of earnings and accrued loss of provident fund; all calculated with interest; and (iii) $2,341,467.26 representing an award for future loss of earnings, loss of provident fund, the cost of future care for Yeung and medical and other expenses.  He proposed that sum (ii), the $871,531.54 sum, should be paid to Wong for Yeung’s “maintenance, care and benefit” and that sum (iii) should remain in court to be invested by the Registrar, with specified monthly payments made to Wong for Yeung’s maintenance, care and benefit until that sum was exhausted.  The treatment of sum (ii) became a focal point in the case.

50. The Court approved the settlement on 11 September 2003.  With minor adjustments to the draft order, Master Betty Kwan directed that the $3.5million sum should be divided up in the manner referred to above with sums (i) and (ii) paid out to Lo’s firm and released forthwith to Wong, the latter amount to be applied for Yeung’s maintenance, care and benefit.

51. The defendant’s solicitors paid the money into court and, on 9 October 2003, the Court remitted a cheque for $1,173,974.34 (representing sums (i) and (ii), presumably with a small amount of interest) to Lo’s firm.  Lo then deducted $58,762.00 to refund to the Social Welfare Department money Wong had previously received under the Traffic Accident Victims Assistance Fund.  A cheque for the balance in the sum of $1,116,212.34 was handed to Wong.  As always, Cheung was in attendance and she took Wong to the bank where the latter deposited the $1,116,212.34 cheque and immediately withdrew $861,652.00, giving it to Cheung.  The sum of $861,652.00 was calculated by Cheung to be 25% of $3.5million after deduction of $58,762.00 and was payment made under the agreement Wong had signed with Cheung in March 2001.

52. This marked the end of the first phase of the relevant events.  Lo’s evidence was that as far as she was concerned, the personal injury action had ended.  She recovered her costs from the defendant. Subject to what is said below in relation to the advice which she obtained from counsel, no criticism has been levelled at the way she conducted the claim. 

A.2  The mental health application

53. The second phase began a year later in November 2004.  Wong approached Lo, again accompanied by Cheung, for help in making a claim on two insurance policies under which Yeung was the beneficiary.  Because of Yeung’s mental incapacity, it was proposed that Wong should apply to the Court to be appointed the committee of Yeung’s estate under the Mental Health Ordinance.[6]

54. An originating summons was issued for this purpose on 3 November 2004, supported by Wong’s affirmation dated 2 November 2004. This referred to the payments received in settlement of the personal injury action and asked for authority to apply those funds in payment, among other things, of solicitors’ costs and expenses.  A second affirmation, setting out Wong’s own financial position, was filed on 7 April 2005.

55. On 3 May 2005, the Official Solicitor asked to see Wong’s bank book and, at Lo’s request, Wong faxed Lo a copy that day.  Lo testified that this was when she first discovered that a sum of $861,652.00 had been withdrawn from the account.  It was Lo’s case that she had throughout been unaware of the March 2001 contingency fee agreement between Cheung and Wong, and of Wong’s payment of the 25% sum to Cheung.  Lo’s evidence was that she immediately telephoned Wong to ask why she had withdrawn the money but was told that Wong had to look into the matter before replying.  Lo arranged a meeting with Wong for the following day to prepare an affirmation providing the information which the Official Solicitor wanted.

56. Lo testified that in the morning of the following day, 4 May 2005, Cheung telephoned her to say that Wong had withdrawn the money and put it in a safe deposit box.  When asked why, Cheung replied that Wong had said this was safer.  That afternoon, when Wong and Cheung came to Lo’s office, Lo again asked why the money had been placed in a safe deposit box, commenting that this “seems unreasonable”.  She stated that Wong said she felt it was safer and that many “grannies” did the same for fear of losing the passbook. This was supported by Cheung.  Lo testified that she therefore prepared an affirmation in which Wong gave that explanation for the withdrawal of the $861,652.00.

57. The prosecution case concerning that meeting on 4 May 2005 was that it had been preceded by Cheung calling Wong to say that “the judge required her to account for the matter in relation to the previous $800,000”. When the three of them met up in the afternoon, Lo asked how the sum should be accounted for to the judge, to which Wong said: “Why not say to the judge that the money has been given to you people?” to which Lo replied: “No”.  Cheung intervened, saying “The Law Society does not allow a third party to introduce clients to solicitors’.”  Wong says she asked “Why not?” but did not receive a reply.  Cheung then told Wong: “You tell the judge, the money has been put inside your safe deposit box”, to which Wong says she replied that this was “Impossible”, meaning that it would be incredible.  Cheung however prevailed on her to say this, suggesting that “...quite a number of housewives would put money inside a safe deposit box and take it out to have a look from time to time”.  Wong’s evidence was that Lo was present during these exchanges but did not say anything until finally asking: “Has it been decided to do it this way?” Cheung confirmed this and Wong agreed.[7]  An affirmation was then prepared in which Wong deposed to the money being in a safe deposit box because she thought that safest.

58. On the following day, Lo appeared before Lam J on the hearing of the application to appoint Wong as the committee of Yeung’s estate.  Wong was present.  As the transcript shows, the Judge asked why the $861,652.00 could not be put into an account in the patient’s name, commenting that he thought the idea that a safe deposit box was safer was “nonsense”.  Lo told the Court that she had discussed this with her client who was prepared to redeposit the money in a bank account.  After the case was stood down to allow instructions to be taken, Lo informed Lam J that she had instructions that Wong was able to redeposit the money into the patient’s bank account within seven days.  His Lordship then indicated the revisions to the draft order required. These included inserting Wong’s undertaking to deposit the $861,652.00 into Yeung’s account within seven days.

59. An exhibit produced by Lo at her trial was a note in her own handwriting on the back of a bill of costs which had been exhibited in the application before Lam J.  This recorded the seven-day undertaking and contained a note of other matters dealt with at the hearing.  In one of her police statements, Wong acknowledged “that after the hearing on 6 May 2005, [Lo] said to her that the $800,000 placed inside the safe deposit box had to be taken out”.[8]  Wong did not respond but decided to contact Cheung to discuss this.

60. A draft order with the seven-day undertaking was duly drawn up and, on 9 May 2005, Lo’s firm received a letter from Lam J’s clerk stating that His Lordship had directed that there be an “order in terms as amended upon confirmation in writing by [Wong] that the undertakings have been explained to her and she agreed to give such undertakings”.  Such confirmation was never given.

61. Wong’s evidence is that when contacted on 9 May 2005, Lo reminded her that the Judge required her to put the money back, whereupon Wong said that that would not be possible, adding: “You also know that I have given the $800,000 to Cheung”.  Lo’s evidence was that this was when she first learnt of the contingency fee arrangement between Wong and Cheung and discovered that the $800,000 sum was not in the safe deposit box.  When, at Lo’s suggestion, Wong contacted Cheung about the problem, Wong says Cheung told her that while Cheung was willing to return half of the $800,000, Lo was not and suggested that Wong contact Lo about this.  Cheung told her that the guardianship order could not be obtained because of Lo’s refusal to hand over the money.

62. Lo testified that at about the end of May or early June, Wong called again asking about progress on the insurance claim.  Lo told her that since the $800,000 had not been replaced, the Court would not make the necessary order.  When Wong asked if the Court could be told that the money was given to Cheung, Lo replied that that would be tantamount to making a false affirmation and the Court would refuse to make the order.  On 19 July 2005, Lo wrote to Wong saying that since the undertaking had not been met, the order could not be obtained and Lo’s firm would cease to act on the mental health application.

63. Wong engaged fresh solicitors and, on her renewing the mental health application, Lam J appointed the Official Solicitor as the committee of Yeung’s estate and directed that a report be made to the police regarding the fate of the $800,000.  Wong made statements to the police on 10 March 2006, 25 April 2006 and 17 December 2007.

B.   The charges and the decisions of the Courts below

64. The charge which is the subject-matter of this appeal (Charge 1) alleges a conspiracy between Lo and Cheung to commit maintenance in relation to the personal injury action:

Statement of Offence: Conspiracy to commit maintenance, contrary to section 159A of the Crimes Ordinance, Cap 200 and the Common Law and punishable under section 101I of the Criminal Procedure Ordinance, Cap 221

Particulars of Offence: Cheung Oi-ping and Lo Wai-yan, Winnie, between the 12^th day of March, 2001 and the 13^th day of October 2003, in Hong Kong, conspired together and with another person or persons, unlawfully to maintain a civil action (HCPI No 943/2002) in the High Court of the Hong Kong Special Administrative Region between Yeung Chun-kit, by his mother and next friend Wong Siu-yin, the Plaintiff and Yu Tao, the Defendant.

65. The particulars which merely allege a conspiracy “unlawfully to maintain a civil action” are unhelpful.  What unlawful conduct did the two alleged conspirators agree upon so as to constitute a conspiracy to commit maintenance?

66. It is also hard to see why a conspiracy rather than the substantive offence was charged.  Given that the action allegedly maintained was the personal injury action which Lo had conducted from commencement to settlement, one would have thought that if maintenance was involved at all, the full offence must have been committed since the personal injury action was not merely contemplated or pending but had run its full course.

67. Cheung alone was charged with champerty (Charge 2).[9] Lo was not charged with that offence.  Nor was she charged with conspiring with or aiding and abetting Cheung to commit champerty.  Nevertheless, Mr Kevin Zervos SC, appearing for the prosecution on this appeal,[10] informed the Court that the prosecution had opened the trial on the basis that its case against Lo was in effect that Lo had aided and abetted Cheung’s champerty.  That certainly appears to be the way the trial judge and the Court of Appeal approached the case against Lo although no application was made to amend the charge.  That the case was left on this basis was quite unsatisfactory.

68. In relation to the mental health application, both Lo and Cheung were charged with aiding and abetting Wong to commit perjury (Charge 5) or alternatively, aiding and abetting her to use a false affidavit (Charge 6).  Those charges were dismissed on the basis of a legal argument[11] and need not concern us further.

69. Deputy District Judge A Wong convicted both Lo and Cheung of conspiring to commit maintenance under Charge 1.  Cheung was additionally convicted of champerty under Charge 2.  Cheung and Lo were sentenced respectively to 16 months’ and 15 months’ imprisonment.

70. The Court of Appeal dismissed Lo’s appeals against conviction and sentence.  It rejected the argument that the offence of maintenance is legally uncertain[12] and essentially upheld the trial judge’s findings and approach.

C.   Legal uncertainty

C.1  The requirement of certainty

71. I turn then to the contention advanced by Mr Clive Grossman SC[13] on Lo’s behalf that the offence of maintenance (and hence conspiracy to maintain) is so uncertain in its nature and scope that its prosecution is constitutionally objectionable.

72. The principles governing such a challenge are well-established and are set out in the judgments of Sir Anthony Mason NPJ in Shum Kwok Sher v HKSAR[14] and Mo Yuk Ping v HKSAR.[15]

73. They are principles based on Article 39 of the Basic Law which provides that the rights and freedoms enjoyed by Hong Kong residents “shall not be restricted unless as prescribed by law”.  As Sir Anthony Mason explained,

“... the expression ‘prescribed by law’, when used in a context such as art.39 of the Basic Law, mandates the principle of legal certainty. This principle is likewise incorporated in the expression ‘according to law’ in art.11(1) of the Bill of Rights.”[16]

74. In Mo Yuk Ping,[17]his Lordship summarised the principles as follows:

“61. ... A criminal offence must be so clearly defined in law that it is accessible and formulated with sufficient precision to enable the citizen to foresee, if need be with appropriate advice, whether his course of conduct is lawful or unlawful. It is, however, accepted that absolute certainty is unattainable and would entail excessive rigidity. Hence it is recognised that a prescription by law inevitably may involve some degree of vagueness in the prescription which may require clarification by the courts.

62. The concept of legal certainty recognizes that in a common law system, the common law, declared as it is by the judges, involves an incremental element of judicial lawmaking, whether by way of moulding the law to meet new circumstances and conditions or to correct errors of principle or doctrinal error. In any event, with the common law, as with the interpretation of statute law, it is inevitable that questions continue to arise which require clarification by judicial decision. That is one reason why absolute certainty is unattainable and why some degree of vagueness is inherent in the formulation of laws, especially laws expressed in general terms.

63.    It is also to be expected that, in the case of a general offence expressed in broad and abstract terms, that the degree of vagueness will be perhaps greater than that to be expected in the case of a specific offence directed to a particular situation or particular situations.”

75. The central requirement is therefore that the offence must have a sufficiently clearly formulated core to enable a person, with advice if necessary, to regulate his or her conduct so as to avoid liability for that offence.  At the same time, the principles recognize the need for both flexibility and development. 

76. A crime may be of such a nature that its definition has to be broad and flexible enough to embrace many different ways of committing that offence.  Such was the case, for instance, with the offences of conspiracy to defraud, considered in Mo Yuk Ping and misconduct in public office, examined in Shum Kwok Sher.  Offences so defined are not legally uncertain. 

77. And, as noted in the summary above, in a common law system, the courts develop the law over time, clarifying it and modifying it to meet new circumstances and conditions.  As Sir Anthony Mason made clear, such a process of development is not constitutionally objectionable provided that it does not result in judicially extending the boundaries of criminal liability:

“Mr Griffiths SC made the valid point that, in conformity with DPP v Withers[1975] AC 842 and R v Knuller (Publishing, Printing and Promotions) Ltd[1973] AC 435, it was not for this Court to create a new offence as an answer to a perceived problem of imprecise definition or accessibility. That said, it is well established that, by employing accepted and traditional judicial techniques, a court is entitled, indeed bound, to clarify the existing law where clarification is needed so long as, in doing so, the court does not extend the boundaries of criminal liability. To do so would create retrospective criminal liability and offend the provision of art.12(1) of the Bill. The offence of misconduct in public office, as I have explained it, is consistent with the existing authorities. The explanation amounts at most to a clarification which, even if it does not narrow the offence, does not expand it.”[18]

C.2  Are the offences of maintenance and champerty legally uncertain?

78. Applying the foregoing principles, it is in my view clear that the offences of maintenance and champerty possess the required legal certainty to qualify as measures duly “prescribed by law” for Article 39 purposes. 

79. In Unruh v Seeberger, [19] this Court noted that these offences are traceable in English law back to at least the 13^th century.  It was pointed out that their core definitions, applicable equally to maintenance and champerty as crimes, as torts and as the basis for rendering contracts unenforceable as against public policy, have remained essentially unchanged throughout this time. 

80. The kernel of the offence of maintenance has always involved a defendant’s “officious intermeddling” in litigation in which he has no legitimate interest.  And the crux of champerty has always involved a defendant who takes a share of the proceeds of the litigation maintained.  Thus:

(a) In 1913, in Neville v London Express Newspapers Ltd,[20] Lord Finlay LC put it as follows:

“The essence of the offence is intermeddling with litigation in which the intermeddler has no concern, unless the case falls under some of the heads of exception to which I have above adverted. It was considered that it is against public policy that litigation should be promoted and supported by those who had no concern in it. ... Champerty is a form of maintenance, and occurs when the person maintaining another takes as his reward a portion of the property in dispute.”

(b)   In the House of Lords in 1994, the essentials were described by Lord Mustill in Giles v Thompson,[21] in the following terms:

“It is sufficient to adopt the description of the policy underlying the former criminal and civil sanctions expressed by Fletcher Moulton LJ in British Cash and Parcel Conveyors Ltd v Lamson Store Service Co Ltd [1908] 1 KB 1006, 1014: ‘It is directed against wanton and officious intermeddling with the disputes of others in which the [maintainer] has no interest whatever, and where the assistance he renders to the one or the other party is without justification or excuse.’ This was a description of maintenance. For champerty there must be added the notion of a division of the spoils.”

81. As the Court noted in Unruh v Seeberger,[22] the scope of these two offences has progressively been narrowed over the years by the courts carving out common interest and similar exceptions to liability to reflect changed public policy considerations.  As Dixon J pointed out in Stevens v Keogh:[23]

“The law of maintenance is founded not so much on general principles of right and wrong or of natural justice as on considerations of public policy (per Lord Esher): Alabaster v Harness [1895] 1 QB 339. Notions of public policy are not fixed but vary according to the state and development of society and conditions of life in a community. The exceptions or justifications which allow a person or body of persons to maintain a litigant in a suit do not form a closed category ...”

82. While this process led Fletcher Moulton LJ to remark that it was “far easier to say what is not maintenance than to say what is maintenance,”[24] this does not mean that the offence should be regarded as constitutionally uncertain.  Rather, the process of development is an instance of the courts clarifying and modifying a law with ancient origins to meet the needs of modern conditions, applying the traditional methods of the common law.  In so doing, the courts have unobjectionably narrowed, and not extended, criminal liability.

83. In Unruh v Seeberger,[25] this Court held that the traditional legal policies underlying maintenance and champerty continue to apply, with the mischief aimed at continuing to be “officious intermeddling” in litigation in the case of maintenance.  It acknowledged the continued relevance of the traditional concerns underlying champerty, namely, the tendency of an agreement to share the spoils of litigation to encourage the perversion of justice; to endanger the integrity of the judicial process or to involve trafficking in the outcome of litigation.  It emphasised the need to consider the totality of the facts in ascertaining liability and the importance of considering countervailing policies and recognizing that other approaches may be more suitable in a particular case.

84. Doctrinal issues undoubtedly remain to be addressed and clarified.  Questions may, for instance, arise as to the extent to which the elements of maintenance and champerty as criminal offences might differ from their elements in the civil context.  It was held, for example, in Neville v London Express Newspapers Ltd,[26] that special damage must be proved as an element of the tort of maintenance.  Is there a similar requirement in the criminal offence?  That question does not require to be decided in the present case.  But if and when it falls to be resolved by the courts, that would provide another illustration of the common law at work.  The existence of such debatable issues surrounding a settled core does not make the offence legally uncertain.  In my view, the appellant’s legal uncertainty argument must fail. 

D.   Desuetude

85. Some legal systems recognize a doctrine of desuetude whereby laws (generally statutes creating criminal offences) that have not been invoked for a very long time may, subject to certain conditions, be treated by the courts as having tacitly been abrogated.  The appellant seeks to contend that the doctrine of desuetude applies to abrogate maintenance as a criminal offence.

86. The appellant’s printed case submits:

“That the concept of abrogation by desuetude exists in our law is clear from Sykes v DPP [1962] AC 528 at 536-7. See also the South African case of Green v Fitzgerald 1914 AD 88 at 101-2 and Committee on Legal Ethics of the West Virginia State Bar v Printz 416 SE 2d 720 (1992).”

87. I cannot agree.  In my view, the doctrine is not part of the law of Hong Kong.

88. Sykes v DPP, cited by Mr Grossman, is in fact against him.  The pages referred to set out part of the (losing) argument of the appellant’s counsel and not any part of the judgments.  Counsel for the appellant in that case submitted:

“...in Scots law a statute may be impliedly repealed by falling into desuetude: see Gloag and Henderson's Introduction to the Law of Scotland, 6th ed p 4, para 8. Accordingly, if statute law in Scotland can become non-operative by passage of time, a fortiori the common law in England can fall into desuetude.” [27]

89. The House of Lords in fact rejected that argument.  After reviewing the history of the common law offence of misprision of felony, Lord Denning concluded:

“In the light of this history it is plain that there is and always has been an offence of misprision of felony and that it is not obsolete. It is true that until recently it has been rarely invoked, but that is no ground for denying its existence.”[28]

90. Lord Goddard stated:

“...it is contended that the offence is obsolete or fallen in desuetude. On this subject we have the guidance of Lord Sumner in Bowman v Secular Society Ltd [1917] AC 406 where he said: ‘if [a] maxim expresses a positive rule of law, once established, though long ago, time cannot abolish it nor disfavour make it obsolete.’ This in no way detracts from the wisdom of Bacon who, in his Essay on Judicature, observes: ‘Penal laws if they have been sleepers of long time or if they have grown unfit for present use should by wise judges be confined in execution,’ which seems to me to mean should be sparingly enforced.”[29]

91. And in the view of Lord Morris of Borth-Y-Gest:

“It may well be that long periods passed during which there were no recorded convictions for this offence, but this does not warrant an assumption that in some way or by some process the law became changed.”[30]

92. In Bowman v Secular Society Ltd,[31] Lord Sumner was dealing with the case of a testator’s next-of-kin challenging the validity of the testator’s will which had left his residual estate to “a society whose objects seek to subvert Christianity”.  The next-of-kin asserted that it was an established common law maxim “that Christianity is part of the law of England” obliging the Court to refuse to give effect to the testamentary gift.  One contrary argument was that the maxim had fallen into desuetude, an argument which Lord Sumner rejected:

“It is not enough to say with Lord Coleridge CJ in Ramsay's Case (48 L T 733, 735) that this maxim has long been abolished, or with my noble and learned friend the Master of the Rolls in the Court below that ‘the older view,’ based on this maxim, ‘must now be regarded as obsolete.’ If that maxim expresses a positive rule of law, once established, though long ago, time cannot abolish it nor disfavour make it obsolete.” [32]

93. In the same case, Lord Finlay LC emphasised the need for legislative change:

“It may be that there has been a considerable change of public opinion with regard to the discussion of religion, but the question is whether anything has taken place to justify any Court in holding that the principle of law on this matter may be treated as obsolete. From time to time the standard as to what is decent discussion of religious subjects may vary, and in one age a jury would find that a particular publication was blasphemous in the strict sense of the term which would not be so considered in another. With regard to questions of public policy, such as those arising in connection with restraint of trade, circumstances with regard to facility of communication and of travel may so alter that the principle invalidating such contracts would apply to a particular state of circumstances in one age but not in another. But it is difficult to see how a change in the spirit of the time could justify a change in a principle of law by judicial decision. Such changes in public opinion may lead to legislative interference and substantive alteration of the law, but cannot justify a departure by any Court from legal principle, however they may affect its application in particular cases.”[33]

94. The South African case of Green v Fitzgerald[34] is again squarely against the proposition advanced on the appellant’s behalf.  In his learned disquisition tracing the doctrine of desuetude from its Roman law origins, Innes J states in terms that the doctrine is not recognized in English law:

“... we are brought face to face with the inquiry whether the statutory provisions which more than two hundred and fifty years ago in Holland stamped the act of adultery as criminal are still binding upon South African Courts. According to English authority, there could be only one reply to that question. The law of England recognises no principle by which a statute may in any circumstances be regarded as obsolete, in the sense of being tacitly repealed. An enactment once upon the statute book remains in force until removed by the Legislature, no matter how long it may have fallen into disuse or how far its provisions may be in conflict with the altered circumstances of society. ... The civil law on the other hand recognised the principle that a statute might not only be expressly repealed by legislative authority, but tacitly repealed through disuse by silent consent of the whole community ... In Holland the same doctrine was laid down.” [35]

95. Innes J contrasted the position under Scots law and made it plain that the desuetude doctrine in South Africa arises under Roman-Dutch law:

“In Scotland, as might have been expected, we find an approximation to the rule of the civil law. For it would seem that statutes passed before the Union have been held by Scotch Courts to have fallen into desuetude upon adequate proof of contrary usage. ... I do not think, however, that the doctrine of the Roman-Dutch law can be confined to cases where contrary usage has been established; both in principle and on authority mere desuetude must in certain circumstances be sufficient. ... In order to justify the abrogation of a law as being obsolete, its disuse for the necessary period must be shown to have existed in the face of circumstances calling for its enforcement; the desuetude must be such, in other words, as to establish that common consent to abrogation which is the basis of the doctrine both in the Roman and the Dutch law.” [36]

96. The difference between the position under Scots law and in the law of “the sister country”, ie, England, was acknowledged in Brown v Magistrates of Edinburgh,[37] where the magistrates’ decision to licence cinemas to open on the Sabbath was challenged as ultra vires and in violation of four Scottish Acts dating from 1579 to 1690.  Lord Mackay stated:

“I face then the question whether it is made out that these four remanent statutes have fallen into desuetude on account of what is alleged by the magistrates to be their antiquated character, their not having been in observance within living memory, and because of frequent and continual commission of offences under them without action taken by the competent interveners. Here one is not aided by any authority from the sister country where somewhat similar questions are coming before the Courts, for it is common ground that in that country all statutes are enforceable, however antiquated, until repealed, and never fall into desuetude.” [38]

97. Finally, the appellant’s argument leans heavily on the decision of the Supreme Court of Appeals of West Virginia in Committee on Legal Ethics of the West Virginia State Bar v Printz.[39] There seems to be little doubt that the State of West Virginia does indeed embrace the desuetude doctrine.  However, it may be noted that as a commentator in a Note published in the Harvard Law Review in 2006 points out:[40]

“Desuetude, the obscure doctrine by which a legislative enactment is judicially abrogated following a long period of non-enforcement enjoys recognition in the courts of West Virginia and nowhere else.”

98. If any doctrine of desuetude exists under Hong Kong law, it can only exist as a doctrine of the common law made applicable by Article 8 of the Basic Law.[41]  It is the common law which derives from English common law as received in Hong Kong, not Scots law, not South African Roman-Dutch law and not the law of West Virginia.  As the citations above demonstrate, the doctrine of desuetude is not part of English law.  No such doctrine has been made applicable in Hong Kong by the Basic Law and the appellant’s argument under this head must be rejected.

E.   Solicitors and maintenance

E.1  Solicitors and the core requirements

99. As we have seen, at the core of the offence of maintenance is “officious intermeddling” in someone else’s litigation (whether as plaintiff or defendant).  “Officious intermeddling” denotes interfering with something that is not one’s concern.  On the face of the charge, the prosecution would be in serious difficulty since it is hard to see how Lo, having been instructed to act as Yeung’s attorney and solicitor on the record by Yeung’s mother and next friend, could be said to have been “officiously intermeddling” in that litigation or conspiring to do so. 

100. Even though, as pointed out above, the case proceeded as if Lo had been charged with abetting champerty, the starting-point must nevertheless be the well-established proposition that a solicitor acting in his or her ordinary professional role in conducting litigation which is mounted in good faith does not “officiously intermeddle” in the action and does not commit maintenance.  In Wild v Simpson,[42] Atkin LJ thought this obvious:

“Obviously no one intermeddles more with litigation than the solicitor for one of the parties. As long as he confines himself to lawful terms of remuneration he has a lawful concern in the litigation. If however he is acting, not on ordinary professional terms, but has a direct interest to receive part of the proceeds of the litigation, he has altered his position and is deemed to be an unlawful intermeddler.”

101. The High Court of Australia[43] in Clyne v New South Wales Bar Association, took the same view:

“...whether we regard it as a crime or as a civil wrong only, it is obvious that, in relation to maintenance, special considerations must apply to a solicitor, since it is, in a sense, the business of a solicitor to maintain litigation for his clients. It would appear indeed to be impossible for a solicitor to be held, in relation to legal proceedings conducted for a client, to be guilty of maintenance except perhaps in two cases, one of which might amount to champerty. For a solicitor could hardly be held guilty of a crime in respect of conduct which is recognized by the law as perfectly proper professional conduct.”

102. In R (Factortame Ltd) v Transport Secretary (No 8),[44] this approach was applied even in a case involving contingency fees:

“In Giles v Thompson [1994] 1 AC 142 Lord Mustill applied the test of public policy identified by Fletcher Moulton LJ in British Cash and Parcel Conveyors Ltd v Lamson Store Service Co Ltd [1908] 1 KB 1006. That test is appropriate when considering those who, in one way or another, support litigation in which they are not concerned. It is not, however, really in point when considering agreements under which those who are playing a legitimate part in the process of litigation provide their services on a contingency fee basis. A solicitor who charges a contingency fee which does not satisfy the requirements of section 58[45] can hardly be said to be guilty of ‘wanton and officious intermeddling with the disputes of others ... where the assistance he renders to the one or other party is without justification or excuse’.”

E.2  When solicitors attract liability

103. A solicitor who has conduct of a piece of litigation therefore may attract liability only when he transgresses his proper professional role.  This has occurred where, for instance, an action brought in a client’s name was in reality a suit being conducted for the solicitor’s own purposes and not bona fide litigation on the client’s behalf.[46]

104. But by far the most common instance of a solicitor incurring liability in respect of litigation which he is conducting involves his committing champerty.  In such cases, the solicitor plainly departs from his proper professional role and is held liable for that “particularly obnoxious form” of maintenance “when the maintainer seeks to make a profit out of another man's action – by taking the proceeds of it, or part of them, for himself.”[47]

105. That proposition is reflected in the citation from Atkin LJ in Wild v Simpson above.[48]  And in Erle v Hopwood,[49] Erle CJ noted:

“What a man does as attorney is not maintenance: but he must not make a speculative bargain apart from and independent of his character of attorney.”

106. Not surprisingly, the boundaries of the principle have been much debated: when does a solicitor’s conduct cross the line so as to be regarded as champertous?  It has been held, for instance, that it is not maintenance or champerty for a solicitor to agree to act in litigation without charge.[50]  Nor is it unlawful for the solicitor to agree to act for less than his ordinary charges or on terms that he will merely be reimbursed his disbursements.[51]

107. This is so whether the solicitor agrees to charge nothing or a reduced amount in any event or whether the solicitor agrees to look to a hoped-for favourable costs order against the other side to recover his ordinary costs and disbursements.  As Lord Neuberger MR noted in Morris v Southwark London Borough Council,[52]

“No case has been cited in which it has been held to be champertous for a person to agree to run the risk of a loss if the action in question fails, without enjoying any gain if the action succeeds.”

108. In Ladd v London Road Car Co,[53] anticipating by many years the current emphasis on promoting access to justice, Lord Russell of Killowen LCJ considered laudable solicitors who accepted bona fide cases taking the chance whether they would ultimately be paid:

“In reference to the subject of speculative actions generally, I think it right to say, on the part of the profession and the class of persons who were litigants in such cases, that it was perfectly consistent with the highest honour to take up a speculative action in this sense – viz, that if a solicitor heard of an injury to a client and honestly took pains to inform himself whether there was a bona fide cause of action, it was consistent with the honour of the profession that the solicitor should take up the action. It would be an evil thing if there were no solicitors to take up such cases, because there was in this country no machinery by which the wrongs of the humbler classes could be vindicated. Law was an expensive luxury, and justice would very often not be done if there were no professional men to take up their cases and take the chance of ultimate payment; but this was on the supposition that the solicitor had honestly satisfied himself by careful inquiry that an honest case existed.”

109. As the Australian High Court in Clyne v New South Wales Bar Association held,[54] this applies equally to cases where the solicitor takes on the burden of paying the client’s disbursements in the hope of recovering costs and disbursements from the other side, subject to the cause of action or defence being reasonable and the absence of champerty:

“...And it seems to be established that a solicitor may with perfect propriety act for a client who has no means, and expend his own money in payment of counsel's fees and other outgoings, although he has no prospect of being paid either fees or outgoings except by virtue of a judgment or order against the other party to the proceedings. This, however, is subject to two conditions. One is that he has considered the case and believes that his client has a reasonable cause of action or defence as the case may be. And the other is that he must not in any case bargain with his client for an interest in the subject-matter of litigation, or (what is in substance the same thing) for remuneration proportionate to the amount which may be recovered by his client in a proceeding...”

110. It should furthermore be noted, as Lord Denning MR held in In re Trepca Mines Ltd (No 2),[55] that mere knowledge of the client’s participation in a champertous scheme does not taint the solicitor provided that he keeps within his proper professional domain:

“When a solicitor is retained to conduct litigation on the ordinary and accustomed terms, he is not debarred from acting in that litigation simply because he knows, or gets to know, that his client has made a champertous agreement to share the proceeds with another. He is entitled to conduct the litigation to the end, and to recover his proper costs for so doing, unless he has himself in some way or other participated in the champertous agreement.”

111. It has also been held that it is not champerty for a solicitor to take security for payment of his ordinary fees.[56]

112. The debate as to the scope of champerty in relation to solicitors continues in England and Wales, notwithstanding the statutory regulation of conditional fees.[57]  A controversy has developed as to the extent to which contingency fee agreements falling outside the Act constitute champerty.[58]  The debate does not bear on the issues in this case and requires no further discussion.  But under the law as it stands, it does further illustrate the importance of solicitors keeping within their usual professional role as litigation attorneys, charging no more than their ordinary fees, if they are to avoid being tainted with maintenance or champerty.

F.   The approach to Lo’s liability

F.1  A matter of inference

113. Lo’s conduct of the personal injury action has been described above.[59]  On its face, Lo would appear to have simply discharged her duties as a litigation solicitor, obtaining a settlement that has not been criticised as insufficient or otherwise unsatisfactory, and receiving no more than her ordinary fees from the costs paid by the other side (which were capable of being taxed). 

114. There is no doubt that Cheung was guilty of champerty by taking 25% of the damages recovered on Yeung’s behalf and she has not appealed her conviction or sentence.  But on what basis has Lo been held to have been party to Cheung’s champerty?  It will be recalled that Cheung sought out Wong and Yeung at the hospital in March 2001 and that it was not until October 2001 that Cheung brought Wong to see Lo in her office.  There is no evidence that Lo was previously acquainted with Cheung.  Mr Zervos made it clear that there is no suggestion that Lo received any part of the 25% siphoned off by Cheung.  There is certainly no direct evidence that Lo abetted Cheung’s champerty.  Accordingly, Lo’s conviction depends wholly upon inference and her conviction is only sustainable if the inference that she was so complicit was the only reasonable inference to be drawn.

115. There are three requirements for drawing such an inference.  First, it must be grounded on clear findings of primary fact. Secondly, the inference must be a logical consequence of those facts.  Thirdly, beyond being logical (since more than one inference might logically be drawn), in a criminal case the inference must be “irresistible”, that is, it must be the only inference that can reasonably be drawn on the basis of those facts.

116. As was stated in Nina Kung v Wong Din Shin:[60]

“...any such inference must be properly grounded in the primary facts found. The court guards against indulging in conjecture under the guise of drawing an inference where the primary evidence does not logically and reasonably justify the particular inference in question.”

117. And, as Lord Diplock pointed out in Kwan Ping Bong v The Queen:

“The requirement of proof beyond all reasonable doubt does not prevent a jury from inferring, from the facts that have been the subject of direct evidence before them, the existence of some further fact, such as the knowledge or intent of the accused, which constitutes an essential element of the offence; but the inference must be compelling – one (and the only one) that no reasonable man could fail to draw from the direct facts proved.” [61]

F.2  The approach of the Judge, the Court of Appeal and the respondent on this appeal

118. So far as one can tell from the Reasons for Verdict,[62] the Judge relied principally on three matters as founding an irresistible inference that Lo actively assisted Cheung to obtain the champertous sum: (i) Lo’s “insufficient explanation to [Wong] about the matter of legal aid”; (ii) Lo’s obtaining an opinion from counsel (her husband) advising that $871,531.54 should be released to Wong; and (iii) Lo telling Wong “that the court could not be informed of the truth” and tendering a false statement to the Court.  On this basis, the Judge concluded that :

“...the only reasonable inference supported by the totality of evidence must be that [Lo] and [Cheung] had reached an agreement to act together to intermeddle with the litigation unlawfully.”[63]

119. The Judge found that crucially, Lo “came to know of [Cheung’s] service mode” and essentially convicted her of aiding and abetting Cheung’s champerty, stating: 

“ ... what is crucial is that [Lo] came to know of [Cheung’s] service mode, and she also knew and acted recklessly in spite of the risk brought about by this type of service, she still (sic) reached an agreement with [Cheung] to launch a joint enterprise. And when she rendered legal service to [Wong] she assisted her in instituting the litigation, and coordinate appropriately with [Cheung] so as to enable her to collect the service fee.”[64]

120. The Court of Appeal added to this list of criticisms, taking the view that the Judge :

“... considered the alleged way in which the Applicant handled the personal injuries case was not reasonable and credible, including: (a) not obtaining costs on account and other service fees; (b) the amount of expenses paid on behalf Madam Wong; (c) allowing Madam Wong to have received $800,000 odd dollars from the quantum of damages; and (d) accepting, without verification and obtaining instructions, Madam Wong's representation that the $800,000 odd dollars was placed in a safe deposit box and preparing her affirmation on that basis; and finally, (e) after knowing that the content of the relevant affirmation was not correct and had misled the Court, having taken no remedial measures, yet continuing to represent Madam Wong.”[65]

121. Appearing before us, Mr Zervos narrowed the focus of the respondent’s case.  His central proposition was that Lo’s participation in the champertous arrangement could be inferred from her instructions to counsel, the resultant advice and the release of the $871,531.54 to Wong.  I shall return to consider his argument more fully in the context of how the courts below dealt with Lo’s alleged knowledge of the champertous arrangement; her alleged knowledge of the falsity of Wong’s explanation of the withdrawal of $861,652.00 from the account; and the question of legal aid.  But first, the other matters relied on below for the drawing of the inference can briefly be dealt with.

F.3  Irrelevant matters

122. As we have seen in Section D.2 of this judgment, there was nothing unlawful about Lo agreeing to take on the case on the basis that she would look only to the defendant and not to the client for her ordinary costs and disbursements.  It was therefore misconceived to regard the fact that she had not taken costs on account[66] and had paid a disbursement on Yeung’s behalf,[67] (or as also suggested in the Reasons for Verdict, her having failed to issue a retainer letter[68]) as providing some basis for inferring maintenance or participation in champerty.  They were irrelevant to the question of her criminal liability. 

F.4  Failing to correct the information provided to the Court

123. The Judge’s point (iii) and the Court of Appeal’s points (d) and (e) involve criticisms of Lo’s conduct of the mental health application.  There are two aspects to those criticisms.  First, Lo is accused of knowingly submitting to the Court Wong’s affirmation falsely representing that the $861,652.00 withdrawn from the bank account had been placed in Wong’s safe deposit box.  Secondly, whether or not Lo had previously known of its falsity, Lo is criticised for her failure to correct that misrepresentation after she had admittedly been told by Wong of its falsity.  The first aspect is intimately related to the question of Lo’s alleged knowledge of the champertous arrangement and will be dealt with in that context below. 

124. Both aspects were the subject-matter of the false affirmation and perjury charges against Lo which were dismissed. 

125. Regarding the second aspect, instead of returning to the Court to correct the misrepresentation, Lo advised Wong to try to work something out with Cheung, and when that came to nothing, Lo ceased acting for Wong.  Lo explained that she had not gone back to the Court since she was concerned that this would involve disclosing her own client’s perjury.  She thought inaction was acceptable since the Court had written saying that its order appointing Wong a committee of Yeung’s estate was subject to confirmation that the undertaking had been met.  Since Lo knew that confirmation would not be forthcoming, she knew that the order would not be finalised and therefore thought that she had not obtained any order of the Court on the basis of Wong’s misrepresentation.[69]  Whatever criticism such conduct on her part might have merited, it provides no basis for irresistibly inferring that she knew about the champertous arrangement and actively assisted Cheung in its implementation.

F.5  The basis of the respondent’s case on this appeal

126. As noted above, Mr Zervos’s central proposition was that Lo’s aiding and abetting Cheung’s champertous arrangement could be inferred from Lo’s instructions to counsel, the resultant advice and release of the $871,531.54 to Wong.  It was necessarily part of his case, although he did not deal with this at any length, that Lo knew of Cheung’s scheme. 

127. The respondent therefore had the burden of showing that on the Judge’s findings, two inferences were irresistibly to be drawn, namely, (i) that Lo knew of Cheung’s champertous agreement with Wong; and (ii) that, with a view to assisting Cheung in her scheme, Lo caused counsel (her husband) to provide a legal opinion which enabled the $871,531.54, an amount sufficient to pay off Cheung, to be released to Wong.

F.6  Inferring an agreement to abet champerty: the inherent probabilities  

128. If one considers the inherent probabilities at the start, it is hard to detect any reason for thinking that Lo might have wished to abet Cheung in her champerty.  There is no suggestion that Lo was previously acquainted with Cheung or that Lo got the case because of Cheung.  On the contrary, the uncontradicted evidence was that Lo had been approached by her former employer, a retired solicitor, Lau Wang-fu who asked her to take up a case for an impecunious client.  It was not a case in a field where Lo was accustomed to practice and it did not hold out lucrative prospects for her. She knew that if she took it on, she would have to take her chances about getting paid her costs by the other side at the end of the case.  No one suggests that Lo received more than her ordinary costs and disbursements.  It is certainly not alleged that she ever received or agreed with Cheung to receive any share of the champertous amount.  Indeed, Lo had to advance the court fees payable by her client out of her own pocket, and had to look to recover them ultimately from the other side. 

F.7  Inferring Lo’s knowledge of Cheung’s champerty: how legal aid was dealt with

129. The Judge regarded the manner in which legal aid was dealt with by Lo as one of the most important planks on which he rested his finding that she had connived in Cheung’s champerty:

“I am of the view that [Lo’s] insufficient explanation to [Wong] about the matter of legal aid, and the subsequent apportioning arrangement of the quantum of damages show that she was acting in coordination with [Cheung].”[70]

130. The Judge’s conclusion is startling since Lo’s raising of the question of legal aid with Wong was at least prima facie exculpatory since such conduct appears inconsistent with Lo knowing about or abetting Cheung’s champertous scheme. 

131. There is no doubt that Lo did in fact raise with Wong the possibility of her applying for legal aid when they first met in Lo’s office in October 2001.  As the Judge had noted at the start of his Reasons for Verdict,[71] the prosecution’s case was that while Wong had not known about legal aid when signing the contracts with Cheung, she came to learn of that possibility but:

“... as she had already signed contracts with D1she did not consider applying for legal aid.” [72]

132. Secondly, there was clear documentary evidence that the possibility of legal aid had been drawn to Wong’s attention.  Wong accepted that when she attended the first conference with counsel, she had signed a document stating (in translation):

“... upon your firm explaining the eligibility and procedure concerning application for legal aid, clearly understand that I may apply for legal aid for the abovementioned case. However, I do not intend to make an application for the time being. I understand that I may make the relevant application at any time during the litigation.”

133. Thirdly, Wong testified in chief that while on their way to see Lo, Cheung told Wong that the agreement she had signed was legally binding and indicated that she would sue Wong if she breached it.  Wong testified that she believed Cheung.  This lends credence to Lo’s evidence that a possible application for legal aid was declined by Wong.

134. So on what basis did the Judge transform the apparently exculpatory fact that the possibility of legal aid had twice been raised by Lo with Wong into something to “show that [Lo] was acting in coordination with [Cheung]”? 

135. Wong’s evidence on the point was a jumble of contradictions.  Referring to the defence submission as to her evidence, the Judge stated:

“The defence criticises that when [Wong] testified on whether the two defendants had explained to her about legal aid, she wavered in her testimony. [Wong’s] testimony on this issue can be summarized as follows: In the examination-in-chief, she said that [Cheung] and [Lo] had never told her anything about legal aid. Under cross-examination, initially she said she forgot about it, later she said it seemed that it had not been mentioned, and thereafter she even said that it had not been mentioned, finally she could not be sure of that, but she said that on reflection, [she] felt that it seemed that it had not been mentioned. When the defence showed her defence exhibit D1 [the document mentioned above], she admitted that she did sign it, but she said she forgot whether she understood the contents or not because she had signed many documents at that time. The document(s) was/were signed at the time on the day when she met Mr. CHEUNG of counsel. Then the defence asked [Wong], though she had been saying to the lawyer(s) and the police that [Cheung] and [Lo] had not told her about legal aid, however, whether after reading the document(s) to refresh memory she could remember that in fact [Cheung] and [Lo] had said so but she had not taken it to heart. [Wong] answered that this might be possible. However, she later also said that she was sure that it had not been mentioned as she did not have such recollection. A while later she agreed that no recollection did not mean no mentioning of it.”[73]

136. Despite the great confusion, the Judge felt able to find “that she was saying that whether the defendants had explained legal aid to her, she did not have a sure recollection”.[74]  He found on the basis of Wong’s demeanour that her credibility was not affected – a dubious approach to the numerous contradictions of substance.  Wong’s honesty as a witness might not have been in doubt, but surely her reliability on this point was put severely in question.  As appears later in the Reasons for Verdict, the Judge would use Wong’s evidence for a finding that Lo had somehow been deficient in explaining legal aid to Wong.  He laid down a marker stating:

“... whether the fact that she said the defendants had not explained to her about legal aid can be relied on as evidence has to be thoroughly considered.”[75]

137. The Judge later returned to this question, criticising Lo in the following terms:

“[Lo] said that she understood that [Wong] had financial problem, hence she was willing to adopt the costs arrangement in this case, and also not to charge for costs on account. In this context, that she had not more enthusiastically explained to [Wong] the matter of legal aid, and provided a bit more assistance in this aspect, cannot be reckoned as very reasonable acts. The fact that she did not immediately produce the document defence exhibit D1 to [Wong] to ask her to sign to confirm her understanding of legal aid is also undesirable. And [Lo’s] explanation for no correction being made to a wrong date is unsatisfactory.”[76]

138. Those criticisms are hard to follow.  They seem to be coloured by the Judge’s erroneous view that a failure to charge costs on account was somehow blameworthy.  His Honour’s reasoning misses the point, namely, that Lo is most unlikely to have drawn Wong’s attention to the possibility of legal aid at all if she was party to or assisting Cheung’s champertous plan.  Instead, the Judge directs his fire at Lo’s “lack of enthusiasm”, etc, in explaining legal aid.  And instead of regarding the admitted signing by Wong of the document declining legal aid as exculpatory he criticises Lo for not having immediately sought Wong’s signature on it, then criticising the dating of the document.  The conference with counsel took place 30 October and the document is dated 1 November.  Its authenticity and her signing of it were admitted by Wong.  So it is impossible to see the relevance of the date or the purport of the Judge’s criticisms. 

139. The Judge returns finally to the legal aid question at §§146-148 of his Reasons for Verdict.  As indicated above, in §146, he states his conclusion that Lo’s “insufficient explanation” coupled with “the subsequent apportioning arrangement of the quantum of damages” show “that she was acting in coordination with [Cheung].”  In §147, he suggests a motive:

“...she gave [Wong] insufficient explanation about legal aid because she did not want to lose this litigation.”

140. With respect, that does not bear examination.  Surely, if Lo did not want to lose the litigation for fear that Wong might take up the suggestion of going over to the Legal Aid Department, Lo would not have mentioned legal aid at all.  Instead, Lo twice raised the possibility of legal aid and obtained Wong’s signature on a document acknowledging that she did not intend to seek legal aid “for the time being” but that she understood that she might “make the relevant application at any time during the litigation.”  Yet the Judge somehow saw fit to inculpate Lo on the basis that her explanation was insufficient and not enthusiastic enough, points he reiterated at §148.

141. The Court of Appeal noted in various places the defence submissions as to the significance of legal aid and the Judge’s findings that:

“The Trial Judge regarded that the Applicant had not sufficiently explained to Madam Wong about the services of the legal aid; the purpose was to avoid Madam Wong from obtaining legal aid ...”[77]

It did not, however, explore the question or come to any conclusions on the point.

142. In my view, the appellant’s complaint that the Judge fell seriously into error on this point (uncorrected by the Court of Appeal) is made out.  Without any evidentiary or logical justification, he turned what should have been an important exculpatory feature of the case into a purported basis for inferring knowledge of and complicity in the champertous arrangement on the part of Lo.

F.8  Inferring Lo’s knowledge of Cheung’s champerty: Lo’s conduct inconsistent with knowledge

143. The Judge also relied heavily on Wong’s evidence of what was said at the meeting in Lo’s offices on 4 May 2005 in support of the inference that Lo must have known about the champertous arrangement.  As described in Section A.2 above, that meeting was called by Lo after having received a fax from Wong which showed that $861,652.00 had been withdrawn from the account which had been set up to receive the proceeds of the personal injury action’s settlement. 

144. In my view, it was highly significant and again at least prima facie exculpatory that Lo was calling for an explanation of that withdrawal and had set up the meeting with Wong for that purpose.  That this was so is explicit in Lo’s evidence and clearly an inference open on Wong’s evidence.  If, as the prosecution was suggesting and the Judge found, Lo had assisted Cheung to obtain that sum (by engineering an appropriate legal opinion facilitating this), then Lo must have known that the sum had gone to Cheung as her cut of the settlement proceeds.  She would not have asked Wong to account for the money and would not have elicited Wong’s question (much relied on by the prosecution):  “Why not say to the judge that the money has been given to you people?”  I shall return to consider the significance of that question and Lo’s answer later.  But for the present, the important point is that Lo’s conduct in seeking an explanation for the withdrawal is inconsistent with her knowing about and having participated in Cheung’s champerty.

145. Having obtained Wong’s explanation that the withdrawn sum had been placed in her safe deposit box, Lo prepared an affirmation for Wong to make to that effect.  I shall come later to the prosecution’s argument that this was done knowing that the contents were false.  But to pursue the present line of reasoning, in my view, Lo’s response to Lam J’s reaction to the affirmation reinforces the view that she did not know that the money had been extracted by Cheung and was no longer available. 

146. We see from the transcript of the mental health application hearing before Lam J on 6 May 2005 that when confronted with His Lordship’s unhappiness about the withdrawal, Lo immediately replied that she had discussed this with her client and that Wong was prepared to redeposit the sum into a bank account.  Lam J adjourned to give Lo the chance to take instructions and her evidence is that she duly discussed the matter with Wong during the break and jotted down her instructions on the back of an exhibited document.  That note was exhibited at the trial.  It includes the words “undertaking” and “800,000 into Ct w/in 7 days...” which Lo says was a record of her seeking instructions from Wong.

147. What the Judge said about this document was as follows:

“The defence endeavoured to submit that the record was written out on the reverse side of a piece of paper and that piece of paper was already in existence on the day of hearing. Nevertheless, as alleged by the prosecution this cannot rule out the possibility that it was a later invention. I agree to this point.”[78]

148. That was a highly unsatisfactory approach.  If Lo was being accused of the serious offence of fabricating documentary evidence, that accusation ought to have been properly supported by evidence (which it was not) and a finding clearly made one way or the other, beyond reasonable doubt.  To say that the accusation was made but “could not be ruled out” is not a finding and is unacceptable.  It is difficult to know what use, if any, the judge made of the point to which he was expressing agreement.

149. There is further support for Lo in Wong’s evidence.  As noted in Section A.2 above, Wong stated in a police statement “that after the hearing on 6 May 2005, [Lo] said to her that the $800,000 placed inside the safe deposit box had to be taken out”.[79] Wong testified that she did not respond but decided to contact Cheung to discuss this.  This demonstrates that Lo was assuming that the money was still available to be re-deposited and therefore that she did not know that it had gone to Cheung.  It also shows that Wong did not there and then disabuse Lo of her belief.

150. Furthermore, Wong gave evidence that on 9 May 2005, Lo again reminded her that the Judge required her to re-deposit the money, obviously still under the impression that the money was in the safe deposit box and available.  It was only at this point, Lo says, that Wong told her this could not be done and indicated that she believed that Lo knew that the money had gone to Cheung.

151. One might add that at the stage of the hearing before Lam J the appellant must have realized, had she been guilty, that the scheme was about to unravel, in which case the easiest thing for her to do would be to secure payment of the outstanding sum into the account.

152. The evidence therefore clearly supported the inference that, until 9 May 2005, Lo did not know that Cheung had obtained the withdrawn funds and that she had not been complicit in Cheung’s champerty.  In convicting Lo and upholding her conviction, the courts below did not give any weight to this aspect of the case.  Instead, they focussed on what was said at the meeting in Lo’s office on 4 May 2005, to which I now come.

F.9  Inferring Lo’s knowledge of Cheung’s champerty: the meeting of 4 May 2005

153. What occurred at that meeting is described in Section A.2 above.  I have already examined the exculpatory significance of Lo having called the meeting to ask Wong about the withdrawal of the relevant sum.  What the prosecution has focussed on, however, was the Judge’s finding that when Lo asked her how the sum should be accounted for to the judge (Lam J), Wong said: “Why not say to the judge that the money has been given to you people?” to which Lo replied: “No”.  The prosecution argued that this provided a clear basis for inferring Lo’s complicity in Cheung’s champertous scheme.

154. I do not agree.  Wong’s question and Lo’s answer must be understood in their evidential context.  As pointed out in Section A.1 above, the agreement which Wong signed with Cheung provided that the latter would be responsible “for the payment of fees and expenses to all the related professionals on your behalf,” further explaining: “As we pay the fees and expenses to all the professionals, we will reimburse these related amounts directly from the aggregate amount of damages.”  It follows that Wong would have understood from that agreement that Lo was to be remunerated out of Cheung’s 25% cut of the recovered amount.  If so, the premise of Wong’s question – that Lo had been paid out of the funds she had handed to Cheung – is not in the least bit surprising.  Was this how she in fact understood the position?

155. The answer is clearly “Yes”.  This appears from Wong’s evidence in cross-examination:

“Q: Why would you have such accusation against [Lo]? Because all along, you were not informed that [Lo] had any share in the $860,000. Why would you suddenly on 4^th May 2005 say, ‘why not say the $860,000 was given to both of you? What chance ... pushed you to say ‘given to both of you’ to her?

A: Because Ms Cheung told me, 25% was inclusive of her fee and legal fee. She had worked for me so I felt that I needed to pay her legal fee. That was not possible for not required to pay legal fee on instructing lawyers.

Q: But ... you already mentioned to us that at the 1^st meeting, Ms Lo had already told you that you did not need to worry about legal fee because it would be assessed by the Court and paid by the defendant, she could not charge you in excess, you did agree that she had said so, do you remember?

A: But I did not apprehend that she did agree.

Q: On one hand you agreed that she had mentioned but on the other you did not apprehend?

A: I really didn’t know that ... really to tell the truth, until I went to Messrs K B Chau & Co then I knew that the Court had given another sum of legal fee for Ms Lo.  I really didn’t know that at the beginning.”

156. A little later, she said: “Ms Cheung said legal fee would be charged”.  When it was put to her that “[Cheung] in the absence of [Lo] told you, ‘we charge you 25%, that is inclusive of legal fee’”, she agreed.  Wong specifically explained that when she asked: “Why not tell the Judge it was given to both of you?”, “[she]felt that was a must.  [She] had to pay for their work.”

157. Wong was therefore making it clear that she had asked that question, not because she had any independent knowledge that Lo was in on the champertous deal, but that she was proceeding on the basis of what Cheung had told her about having to share the 25% with Lo.  Since it is accepted that Lo received none of the money, Cheung must have lied to Wong, confirmation of this appearing from Wong’s evidence that Cheung had told her that the money could not be restored because Lo was unwilling to give up her half. 

158. The Judge found that when asked that question, Lo had merely said “No”. That was clearly capable in the context of meaning: “No you can’t tell the Judge that the money was given to the two of us” – a perfectly reasonable answer given that Lo certainly had not been given any part of the sum withdrawn.

159. Understood in its context, Wong’s question and Lo’s answer are perfectly capable of being regarded as evidence only of the false belief Cheung had instilled in Wong, and not as evidence of Lo’s guilt.  No irresistible inference of Lo’s complicity can be grounded on that evidence. 

160. However, having admitted that she found the explanation about the money being held in Wong’s safe deposit box “unreasonable” and having heard the discussion between Cheung and Wong which resulted in that explanation being placed before Lam J, Lo can legitimately be criticised for not having, for instance, required the money to be re-deposited into the bank account or otherwise satisfying herself of its availability before providing the Judge with an explanation.  If she had done that, it may well be that Wong would have told her prior to the hearing that the money had been paid to Cheung.  If so, events would have followed a different course in the mental health application.  But this criticism provides no grounds for inferring that Lo had previously known of or assisted Cheung in her champertous scheme, particularly given the contrary inferences to be drawn from the way Lo had dealt with legal aid and her evident ignorance of the fact that the money was no longer available to be re-deposited.

G.   Inferring Lo’s active participation in champerty

161. Mr Zervos accepted that, as pointed out In re Trepca Mines Ltd (No 2),[80] mere knowledge that Wong had entered into a champertous agreement with Cheung (assuming that could be proved) would not taint Lo provided that she had never departed from her proper professional role.  He therefore accepted that more than knowledge was needed.

162. He pinned his colours to the mast, submitting that an irresistible inference that Lo had actively assisted Cheung’s scheme could be raised from the fact (i) that Lo had instructed her husband as counsel to advise;  (ii) that this had resulted in an opinion which quantified as “accrued items” $871,531.54 which counsel advised should be released to Wong even though Wong had never asked for this and did not need the money to take care of Yeung; and (iii) that this sum of $871,531.54 was very close to the $861,652.00 amount paid to Cheung, which represented 25% of the settlement amount.  Mr Zervos submitted that the irresistible inference was that Lo had “engineered” this piece of advice to enable or facilitate Cheung’s obtaining of her champertous payment.

163. The criticism that there was no justification for releasing the $871,531.54 to Wong evidently proceeds on the premise that such release involved some impropriety and some unwarranted risk to the money and therefore merits the drawing of an adverse inference as to Lo’s intentions.  That view was no doubt based on the hindsight that it was out of the monies released to her that Wong subsequently paid over $861,652.00 to Cheung. 

164. However, looked at objectively at the time the advice was given and acted upon, there was nothing objectionable or alarming about letting Wong have the money.  Wong was Yeung’s mother and had sued as his next friend.  She had given up her job and incurred expenses to take care of her son.  She was the only parent having care of Yeung, having divorced his father.  In fact the entirety of the settlement amount had been entrusted to her.  She was to receive not merely the $871,531.54, but also each of the monthly payments to be made out of the sums in Court.  She did not have any apparent immediate need for that sum of money, but she would inevitably have had to meet significant expenses for the “maintenance, care and benefit” of Yeung, which is what the Order drafted by Counsel and approved by Master Betty Kwan said the money was for. 

165. I am therefore unable to see how the fact that the money was released to the mother, albeit without her request and without any apparent immediate need for the whole amount should be regarded as suspicious or as capable of forming the basis of an irresistible inference that Lo was motivated by a desire to abet Cheung’s scheme.

166. A fundamental difficulty with the prosecution theory is that it sits extremely uncomfortably with the Judge’s and the prosecution’s acceptance that there was no evidence that counsel had acted improperly.  If counsel was not complicit in Cheung’s champertous scheme, how can one conclude that his advice, particularly his advice that $871,531.54 should be released to Wong, was the contrived means whereby Cheung was enabled to get her hands on the money?  The Judge’s solution, cited in extenso in Mr Zervos’s printed case, was as follows:

“The defence pointed outthat there is no evidence at all in the case to show that there was anything improper on the part of Mr. CHEUNG of counsel; nor did the prosecution make such allegation. I have not overlooked this point, and I also have had regard to the point that under normal circumstances Mr. CHEUNG of counsel would give legal advice according to instructions, and the instructions must have been obtained from [Lo]. When [Lo] gave evidence she did not point out that Mr. CHEUNG of counsel acted on his own and did not comply with instructions. I infer that the proposal of Mr. CHEUNG of counsel on this aspect was made in accordance with [Lo’s] instructions. Even if it was not so, the foregoing impropriety in the apportioning of the amount of money can be noticed by an ordinary person after knowing the totality of the circumstances and understanding the result of the arrangement, However, in the absence of [Wong’s] request for this sum of money, [Lo] accepted the counsel’s advice on this point, but there was no detailed explanation for the advice, nor did she make any enquiry. Certainly, I have not overlooked that this could also be [Lo’s] honest judgment. Whether it was a product of deliberate arrangement, the totality of evidence has to be considered.”[81]

167. With respect, the reasoning is unsustainable.  One would have thought that once it was recognized that “this could also be Lo’s honest judgment”, the point would have fallen away.  But the Judge and the prosecution nonetheless persisted in the assertion that Lo managed to get the advice that she illicitly desired because counsel somehow merely gave advice in accordance with Lo’s instructions, a conclusion said to be reinforced by Lo failing to suggest in her evidence that counsel “did not comply with instructions”.  This bizarre view of the nature of solicitors’ instructions in general and of Lo’s instructions in particular is wholly without foundation.  And it is a view that fails to take account of counsel’s duty to the client to give impartial and independent advice.

168. Anthony Cheung delivered four written advices, three dealing with quantum: giving initial advice on quantum; giving advice as to settlement and suggesting how the settlement amount should be split up when drawing up the order to be approved by the Court. 

(a)   The first advice did not mention quantum but warned of possible reduction for contributory negligence. 

(b)   In his second advice dated 8 August 2002, he assessed quantum at $3,335,690.00, assuming a 20% reduction for contributory negligence.  This had a breakdown of items including $640,000.00 for pain, suffering and loss of amenities; $102,000.00 for accrued loss of earnings; $5,100.00 for accrued loss of provident fund, plus associated sums of interest.  Future loss of earnings was assessed at $1,224,000.  At that stage, no settlement offer had yet been made by the other side.

(c)   In the third advice dated 7 March 2003, Anthony Cheung revised his total assessment to $3,245,408.00.  There was no change to his estimate of $640,000.00 for pain, suffering and loss of amenities.  Reflecting the time that  had passed, his estimate for accrued loss of earnings was raised to $144,000.00; and for accrued loss of provident fund put at $7,200.00.  The calculations of interest were also increased.  He adjusted the estimate of future loss of earnings downwards to $1,152,000.00 because he thought a multiplier of 16 more likely than one of 17.  At that stage, settlement offers had been received, initially for $1.9 million, raised later to $2.3 million.

(d)   When Anthony Cheung wrote his final (and controversial) opinion dated 5 August 2003, the offer of settlement at $3.5 million had been accepted.  It is clear that counsel adhered to the itemised amounts he had previously advised but increased each amount by 7.85% to reflect the increase represented by the settlement amount over his previous global assessment.

169. It is therefore clear that counsel arrived at the total for “accrued items” in the sum of $871,531.54 by adding together (with the upward adjustment of 7.85%) the figures he had previously adopted for pain, suffering and loss of amenities, accrued loss of earnings and accrued loss of provident fund (all with interest).  It is therefore wholly unfounded to suggest that that figure was contrived to match or slightly exceed 25% of the settlement amount.  The origins of the $871,531.54 figure are traceable to a time before any settlement offer was made and before the final settlement figure was known.

170. I have already rejected the notion that (unless one presumes knowledge of the champertous arrangement) there was any reason for concern over releasing the money to Yeung’s mother.  Accordingly, counsel’s advice that the $871,531.54 to compensate for items of loss and damage that had already “accrued” should be released to Wong, while sums catering for future loss of earnings and future expenses should remain in court provides no basis for suspicion or any inference of connivance by Lo.

171. One might also add that it is inherently improbable that Lo could have “engineered” some desired opinion from counsel. This was Lo’s first personal injury case.  She was pressing for counsel’s advice on apportionment and sent him two “chasers”.  It is wholly unrealistic to think that she could contrive to frame her instructions in such a way as to produce a desired recommendation that the relevant amount be released to Wong.  

172. The Court of Appeal suggested:

“... if the improper conduct of Cheung was to be successful, it must require the full cooperation of the Applicant in all aspects. Otherwise, she could not possibly obtain 25% of the damages as service fees immediately after the conclusion of the case.”[82]

173. With respect, that conclusion cannot be supported.  The evidence shows that Cheung was perfectly able to obtain the money through her manipulation of Wong without the knowledge or connivance of Lo.  Moreover, even if, for the sake of argument, it had transpired that the Master had only authorised $287,001.80 to be released to Wong instead of $1,173,974.34, ordering the rest to be invested in Court, the outcome realistically would almost certainly have been that Cheung would have demanded all or most of that $287,001.80 sum and obtained the balance by taking a share of each instalment subsequently paid to Wong out of court. 

H.   Conclusion

174. Accordingly, the finding that Lo knew of and connived with Cheung is in my view unsustainable.  The inferences drawn by the Judge and upheld by the Court of Appeal were founded in part on irrelevant materials and in part on matters that ought to have been regarded as exculpatory but were unjustifiably treated as incriminating.  The prosecution’s reliance on the 4 May 2005 meeting failed properly to take account of the context of what was said.  The inference that Lo knew and wished to assist Cheung’s champertous scheme was against the inherent probabilities.  The suggestion that the means of assisting Cheung involved a contrived legal opinion is irreconcilable with acceptance that there was nothing improper about counsel’s involvement.  Counsel’s reasoning showing how the $871,531.54 figure was arrived at is transparently accessible and belies the suggestion that it was improperly manipulated. 

175. It is therefore amply clear that inferences consistent with Lo’s innocence can cogently be postulated and that the prosecution has fallen far short of demonstrating that the inference that Lo knowingly abetted Cheung’s champerty is the only reasonable inference to be drawn.  For the foregoing reasons, my view is that the appeal had to be allowed and the conviction quashed. 

176. In his Reasons, Mr Justice Bokhary PJ has given directions as to how costs should be dealt with. 

I.  Law Reform

177. As a postscript, I wish to raise for consideration the question whether and to what extent criminal liability for maintenance should be retained in Hong Kong. 

178. In England and Wales, criminal and tortious liability for both maintenance and champerty were abolished by the Criminal Law Act 1967.[83]  As pointed out in 1997 in Magic Menu Systems Pty Ltd v AFA Facilitation Pty Ltd,[84] such liability was abolished in Victoria in 1969, in South Australia in 1992 and in New South Wales in 1995 by the Maintenance and Champerty Abolition Act 1993 (NSW). 

179. The issues are, however, of some complexity and may involve taking a different view in respect of maintenance as opposed to champerty; and of criminal as opposed to tortious liability.  It is in my view a fit topic to be referred to the Law Reform Commission.

Mr Justice Stock NPJ:

180. I agree with the Reasons given by Mr Justice Ribeiro PJ.

Sir Anthony Mason NPJ:

181. I agree with the Reasons given by Mr Justice Ribeiro PJ.