TSE CHUN WAI v. LEUNG KWOK KIN JOSEPH t/a JOSEPH LEUNG & ASSOCIATES

HCA 1981/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1981 OF 2013

________________________

_________________

J U D G M E N T

_________________

Introduction

1.  In the present case, the plaintiff (P) is claiming from the defendant (D) commission or remuneration of legal costs received and to be received by D from clients and/or business introduced by P.

2.  D is a solicitor.  He denies P’s claim and on 22 November 2016, he took out a summons under Order 14A of the Rules of the High Court for disposal of the case on point of law.

3.  D seeks a determination of the following questions of law or construction :

(a)  Whether the agreement of the nature pleaded by P is in contravention of Rule 4 of the Solicitors’ Practice Rules, Cap 159H (“Question (a)”);

(b)     If the answer to Question (a) is yes, whether such an agreement is illegal void and/or unenforceable (“Question (b)”).

4.  D asks that the action be dismissed if the answers to the above questions be answered in the affirmative.  Alternatively, D seeks an order for the statement of claim to be struck out under O 18 r 19(1)(a) as it discloses no reasonable cause of action.

5.  On 30 June 2017 Master S Lo ordered that the Question (a) be answered by P in the affirmative, but dismissed D’s other applications and ordered costs against D to be summarily assessed and paid within 14 days (“30.06.17 Order”). 

6.  D now appeals against the 30.06.17 Order. 

7.  It is trite that an appeal against a Master’s order to the judge in chambers is by way of an actual rehearing of the application which led to the order under appeal and the judge treats the matters as though it came before him/her for the first time.

8.  Counsel Mr Robert Pang SC appeared for D at the hearing before this court with Mr Michael Chai, and Mr Ronald Tang appeared for P.

Background

9.  D is and was at all material times the sole practitioner of a solicitor’s firm in Hong Kong.  P is not a solicitor practising in Hong Kong nor any legally qualified person.

10.  P claims that he has developed an extensive business network and client base and that he has hired agents to reach out to new clients.  P alleges that in 2008 he came to know D through a Mr Lam who also introduced clients to D.  According to P, he was invited to D’s office in around 2009 to explore the possibility of business cooperation.

11.  It was P’s pleaded case that there was an oral agreement reached between him and D (“Commission Agreement”) whereby he agreed to introduce clients to engage D for legal services whilst retaining “extensive contact” with them and maintaining “exclusive control” over their cases and in return D agreed to pay P commission and/or remuneration at the rate of 50% of all the legal costs (excluding disbursements) received and to be received form those clients introduced by P to D (“Commission”).

12.  P has provided further and better particulars of his statement of claim, in answer to D’s request, and in particular his case is:

(1) He was not an employee of D as he had to bear all employer’s MPF contribution, and he to refund the employer’s MPF contribution to D.

(2) P only got paid for the client he referred to D and when the bill of costs was settled;

(3) P retained “extensive contact” with the client referred by him as follows:

(i) P keep contacting the client;

(ii) The contact with client introduced by P would not be done by D or his staff without the consent of approval of P;

(iii) The purpose of the management was to avoid keeping P in the dark of his clients’ cases and/or soliciting his clients who might refer a new case to him;

(4) P maintained “exclusive control” over the client referred by him as follows:

(i) After his agents took instructions from the potential clients and recorded them in his form, P would screen the case and decided whether to take it or not;

(ii) D had no right to say yes or no;

(iii) If P took it and chose to refer the case to D then P would hand over the documents to D’s staff members to open file;

(iv) P had full rights to control the use of the information;

(v) If P did not think any of D’s actual staff should attend the conference with client, no one could attend;

(vi) All the settlement offer and money paid to P’s clients had to be through P.

13.  D terminated the Commission Agreement on 31 January 2013.  It is P’s case that pursuant to the Commission Agreement, P had referred clients from 2009 to 31 January 2013 to D but D failed to pay P the substantial part of the Commission estimated at not less than HK$10m. P claims D was in breach of the Commission Agreement or alternatively, P is entitled to a reasonable remuneration on a quantum meruit basis.  P seeks among other things an account to be taken of the Commission or remuneration.

14.  On the other hand, it is D’s case that the Commission Agreement did not exist, and D was employed by P.  D also takes issue as to P’s allegation that the people named in the annex to the statement of claim were clients introduced by P to D at the material time. 

15.  It is D’s case that the Commission Agreement was illegal, void and unenforceable and D is not entitled to claim on the basis of quantum meruit.

16.  P’s response to the illegality issue is that it was D who shared profit costs and had breached Rule 4, and that P’s receipt of Commission would not result in any “criminal culpability” on his part, and that the Commission Agreement was therefore enforceable against D.

Question (a)

17.  The learned Master ruled that Question (a) must be answered in the affirmative.  P confirmed the acceptance of this answer at the end of the hearing before the Master.

18.  There is no appeal against the Master’s answer in respect of Question (a).

19.  Rule 4 of the Solicitors’ Practice Rules (“Rule 4”) provides as follows:

“Sharing with non-qualified persons

A solicitor shall not share or agree to share with any person not being a solicitor practising in Hong Kong his profit costs in respect of any business whether by way of paying or agreeing to pay a commission on business introduced by any such person not being a solicitor, or otherwise:

Provided that—

(a) a solicitor carrying on practice on his own account may agree to pay an annuity or other sum out of profits to a retired partner or predecessor or the dependants or legal personal representative of a deceased partner or predecessor;

(b) a solicitor who has agreed in consideration of a salary to do the legal work of an employer who is not a solicitor may agree with such employer to set off his profit costs received in respect of contentious business from the opponents of such employer or the costs paid to him as the solicitor for such employer by third parties of non-contentious business, against the salary so paid or payable to him and the reasonable office expenses incurred by such employer in connection with such solicitor and to the extent of such salary and expenses; and

(c) a solicitor whose firm is a party to an Association may share fees and profits with the foreign firm or firms in that Association.”

20.  Having considered P’s claim in the statement of claim, I agree that the alleged Commission Agreement as pleaded by P was in contravention of Rule 4, and Question (a) must be answered in the affirmative.

Question (b)

21.  I then come to Question (b).

22.  Mr Pang had referred this court to Tinsley v Milligan [1994] 1 AC 341, and submitted that even though Tinsley had been overruled by the majority of the 9 Lord Justices of the UK Supreme Court full bench in Patel v Mirza [2016] UKSC 42, Tinsley remains binding on this court by reason of the Hong Kong Court of Appeal’s decision in Kan Wai Chung v Hau Wun Fai [2016] 5 HKC 585.  It was further stated in Kan Wai Chung that the majority approach in Tinsley was adopted in Hong Kong and approved by the Court of Final Appeal[1].

23.  In Tinsley, the plaintiff was the sole owner of a property although both she and the defendant had contributed to the purchase price and it was the understanding that they were joint beneficial owners.  The purpose of that arrangement was to enable the defendant with the connivance of the plaintiff to make false claims for social benefits.  The parties later fell out and the plaintiff asserted the sole ownership of the property and the defendant counterclaimed for a declaration that the plaintiff held the property on trust for the parties in equal shares.  The plaintiff’s claim was dismissed and the defendant’ counterclaim was allowed.  The plaintiff appealed.

24.  The Court of Appeal (by a majority) dismissed the plaintiff’s appeal on the ground that in the circumstances the public conscience would not be affronted if the defendant’s counterclaim were to succeed.

25.  The House of Lords unanimously rejected the “public conscience” test, but by a three to two majority upheld the Court of Appeal’s decision.  The leading speech was given by Lord Browne-Wilkinson.  His starting point was that title to property could pass under an unlawful transaction; but he held that the court would not assist an owner to recover the property if he had to rely on his own illegality to prove his title[2].

26.  As submitted by Mr Tang, the ratio as decided by the majority of the House of Lords can be found in the following passage of Lord Browne-Wilkinson:

“… In my judgment the time has come to decide clearly that the rule is the same whether a plaintiff founds himself on a legal or equitable title: he is entitled to recover if he is not forced to plead or rely on the illegality, even if it emerges that the title on which he relied was acquired in the course of carrying through an illegal transaction[3]”

27.  This has become known as the “reliance rule”. As said by Lord Toulson JSC in Patel, Tinsley has been the subject of much criticism in UK and other jurisdictions for its reasoning rather than its result, but the first time the reasoning in Tinsley had been directly called into question was in Patel[4].  After considering the developments in England and other jurisdictions in the two decades following Tinsley, the majority of the highest court in UK decided that the “reliance rule” as laid down in Tinsley should no longer be followed[5].

28.  Patel concerns a claim for the return of money paid by the claimant to the defendant pursuant to a contract to carry out an illegal activity, and the illegal activity is not in the event proceeded with owing to matters beyond the control of either party[6].  The judge dismissed the claim as being barred by illegality, applying the “reliance principle” in Tinsley, and that the claimant could not bring himself within the exception of the doctrine known, misleadingly, as locus poenitentiae as he had not voluntarily withdrawn from the illegal scheme. The Court of Appeal allowed the claimant’s appeal, agreeing with the judge on the reliance issue but disagreed with him on the application of the locus poenitentiae exception. The defendant then appealed to the Supreme Court.

29.  Upon holding that the reliance rule in Tinsley should no longer be followed, Lord Toulson JSC approached the illegality doctrine by a “trio of necessary considerations” which he summarized as follows :

“The essential rationale of the illegality doctrine is that it would be contrary to the public interest to enforce a claim if to do so would be harmful to the integrity of the legal system (or, possibly, certain aspects of public morality, the boundaries of which have never been made entirely clear and which do not arise for consideration in this case). In assessing whether the public interest would be harmed in that way, it is necessary (a) to consider the underlying purpose of the prohibition which has been transgressed and whether that purpose will be enhanced by denial of the claim, (b) to consider any other relevant public policy on which the denial of the claim may have an impact and (c) to consider whether denial of the claim would be a proportionate response to the illegality, bearing in mind that punishment is a matter for the criminal courts. Within that framework, various factors may be relevant, but it would be a mistake to suggest that the court is free to decide a case in an undisciplined way. The public interest is best served by a principled and transparent assessment of the considerations identified, rather by than the application of a formal approach capable of producing results which may appear arbitrary, unjust or disproportionate[7].”

30.  Although Lord Toulson did not lay down a prescriptive or definitive list of “various factors” which may be relevant, he had said potentially relevant factors include the seriousness of the conduct, its centrality to the contract, whether it was intentional and whether there was marked disparity in the parties’ respective culpability[8].

31.  In short, the majority of the Lord Justices in Patel was in favour of the “range of factors approach”, as opposed to the “rule based approach”, although they unanimously dismissed the appeal by the defendant.

32.  So far as Hong Kong is concerned, the decision in Kan Wai Chung was handed down on 22 July 2016, two days after Patel but it appears that Patel was not drawn to the attention of our Court of Appeal.  In any event, Cheung JA made it clear that in terms of the application of precedents, the Court was bound by the decision of the Court of Final Appeal which adopted the majority view of Tinsley in HKSAR v Lau Kam Ying (2013) 16 HKCFAR 595[9].

33.  Mr Pang further referred this court to two cases involving solicitors which bore similarities to the facts of the present case.

34.  The first one was Mohamed v Alaga, [2000] 1 WLR 1815, the plaintiff (a translator and interpreter of the Somali language) claimed against a firm of solicitors for breach of contract, in that the plaintiff had agreed to introduce Somali refugees to the law firm and to assist the law firm in the preparation and presentation of asylum claims, in consideration for 50% of the fees received by the law firm by way of legal aid.  In the plaintiff’s case, he had introduced a number of such clients to the law firm and carried out associated services.  He had been paid by the law firm in respect of some of the services performed.  The plaintiff also claimed restitution, in that he was entitled to claim for the services rendered on the basis of quantum meruit.  The law firm applied to strike out the claim.

35.  The master refused to strike out the claim, and on appeal, Lightman J held, assuming that the agreement had been made and that the plaintiff was unaware of any prohibition on fee-sharing agreements, that since the agreement was in breach of rule 7 of the English Solicitors’ Practice Rules 1990, which prohibited solicitors from sharing fees or agreeing to do so, it was void and unenforceable and that any claim by way of restitution failed.  The claim was then struck out and the action dismissed. 

36.  On further appeal by the plaintiff, the Court of Appeal dismissed the appeal on the contractual claim but allowed the case to proceed only on the basis of quantum meruit for professional services rendered.

37.  As pointed out by Lord Bingham of Cornhill CJ, the central issues in the appeal were whether the agreement on which the plaintiff relied was illegal and unenforceable and, if so, whether the alternative claim in restitution was maintainable, and that these were questions to be answered on the basis of factual assumptions made at that stage in the plaintiff’s favour. 

38.  It was held by the English Court of Appeal that (1) the contracts such as that made by the defendant with the plaintiff were illegal under the Solicitors Practice Rules and it would defeat the public interest for the non-solicitor party to enlist the court’s assistance to enforce such an agreement, and accordingly, the contract was void and unenforceable; (2) that since public policy precluded recovery under the contract the plaintiff could not obtain the same relief by bringing a claim in restitution and that claim could not be maintained; (3) allowing the appeal in part and granting leave to amend that since the plaintiff had carried out specific services for some part of which he had received payment, since he was seeking reward for professional services he had rendered and not recovery of any part of the consideration payable under the agreement and since the parties were not in a situation of equal blameworthiness he might properly pursue a quantum meruit claim against the defendants for reasonable remuneration for those services; and that, since a tortious claim in negligence might be considered as potentially arguable, the plaintiff should be permitted to amend his pleadings to include that claim.

39.  The other case that Mr Pang had relied on was Westlaw Services Ltd v Boddy (Solicitors Regulation Authority, Interveners) [2010] EWCA Civ 929, [2011] PNLR 4. 

40.  In Westlaw Services Ltd v Boddy,the plaintiff claimed against the estate of a solicitor and sole practitioner Mr Boddy, for payment for services provided.  The claim was that the plaintiffs not themselves qualified solicitors had been employed by Mr Boddy as legal consultants to help in his criminal litigation practice and were to be remunerated by being paid a percentage of net fees received from the Legal Services Commission by Mr Boddy in respect of any case in which they assisted. Their claims were dismissed by the judge, holding that the arrangements in question were unlawful agreements to share fees in breach of r 7(1) of the Solicitors’ Practice Rules and that as such they were void and unenforceable. The plaintiffs appealed.

41.  Their appeal was dismissed.  It was held by the Court of Appeal among other things that[10](1) the fee-sharing arrangement were  void and unenforceable since (i) The Solicitors’ Practice Rules having the effect of subordinate legislation under s 31 of the Solicitors Act 197 it followed that the making of an agreement in breach of them was unlawful; (ii) a fee-sharing arrangement in breach of r 7 was not only unlawful, but unenforceable; (iii) the arrangement in question, when made, had involved matters expressly prohibited by r 7(1); and (iv) the operative time for assessing matters of unlawfulness and public policy was when the agreements were concluded, in this case 2002, and if followed that, even if r 7(1A) in 2004 had legalized arrangements of the type in issue (a matter which was not beyond doubt), this was irrelevant; (2) the fact that an agreement for remuneration by a solicitor involved impermissible fee-sharing did not necessarily bar a claim on the basis of quantum meruit for at least some services rendered; (3) nevertheless permission to introduce quantum meruit claim which had not been run at first instance should be refused.

42.  Westlaw had followed Mohamed, which was said to be a binding authority on the court that a fee-sharing arrangement in breach of   r 7 was not only unlawful, but void and unenforceable.

43.  Mr Tang however submitted that both the case of Mohamed and the case of Westlaw are out of date because of Patel, and also that the old UK Solicitors’ Practice Rules, namely rule 7, referred to in the two cases Mohamed and Westlaw have now been repealed. I agree with Mr Pang that the change of rules in England is irrelevant.  In fact, Westlaw was decided in 2010 when the old 1990 rules had been repealed, and it was held that the operative time for assessing matters of unlawfulness and public policy was when the agreement was concluded in 2002.  In any event, the Hong Kong rules have not been changed.

44.  Notwithstanding holding that Tinsley should no longer be followed, as pointed out by Lord Toulson JSC in Patel, in fact Mohamed took a more flexible approach in that although the claimant was precluded by the doctrine of illegality from claiming payment for services provided under the contract, the Court of Appeal restored the claim for payment on quantum meruit[11].  As stated by Lord Toulson JSC, Lord Bingham CJ preferred to view the quantum meruit claim as a claim for a reasonable reward for professional services rendered and had considered it relevant (obviously to the question of the public interest in permitting or disallowing the claim) that the parties were not equal in blameworthiness, in that the solicitors firm could be assumed to know the rules and by contrast, and that Lord Bingham CJ had no difficulty in accepting that the plaintiff was unaware of any reason why the firm should not make the agreement which was a common type of agreement in other commercial fields[12].

45.  It was submitted on behalf of the defendant/appellant in Patel that Mohamed was a one off case and either represents an exception peculiar to its particular facts to the general rule that a party is not entitled to payment for services rendered under an illegal contract or was wrongly decided[13].   However, this was firmly rejected by Lord Toulson JSC, who affirmed the correctness of the Court of Appeal’s decision in Mohamed, rejecting the view that it should somehow be confined to its own peculiar facts[14].

46.  Mr Tang had also relied on two Hong Kong personal injuries cases, namely Chung Man Yau & Anor and Sihon Co Ltd [1997] HKLRD 1221 and this court’s decision in Mohammad Amjad v John M Pickavant & Co, HCPI 100/2009 (18 Nov 2013) and an earlier decision of Master Marlene Ng, as she then was, in the same case [2013] 1 HKC 145.

47.  Chung Man Yau is a case where the plaintiff worked as an illegal hawker at the time of the accident.  The trial judge’s decision that the plaintiff was not entitled to any award in respect of future loss of earnings from illegal hawking.  The Court of Appeal overturned the decision.

48.  It was held by Mortimer VP that when considering the relevant question, what damages the court would award when the basis of the loss was said to be tainted by illegality, the court must examine all the circumstances – the nature of illegality complained of, the moral and criminal culpability and the plaintiff’s conduct, and also any relevant legislation must be considered.  Having done that the court must decide whether in all those circumstances it would affront the public conscience or offend the ordinary right-thinking citizen if compensation for the loss concerned was awarded[15].

49.  In Amjad v Pickavant, the plaintiff was a former litigation manager of a law firm.  After obtaining a judgment in his EC claim, he claimed for damages in the personal injuries action.  The monthly average “commission” given by the law firm to the plaintiff was taken into account in the calculation of the loss of earnings. 

50.  This court had followed what was held by Mortimer VP in Chung Man Yau and having considered all the circumstances of the case, this court had expressed the view that it was not satisfied that there would be criminal culpability on the part of the plaintiff in relation to his receipt of commissions or that having considered all the circumstances of the case, it would affront the public conscience or offend the ordinary right-thinking citizen if compensation for the loss concerned is awarded. 

51.  This court’s views above were expressed without the benefit of any of the authorities which Mr Pang relied on in the present case. In any event, there was no illegality defence pleaded by the defendant in Amjad v Pickvbant and in fact this court’s finding of the amount of the plaintiff’s average monthly income/earning capacity prior to the accident was based on the amount of plaintiff’s income as reported in his salaries tax returns and the finding of the Judge Chow in the EC Trial.

52.  In Patel, Lord Toulson had referred to a Canadian case Hall v Herbert [1993] 2 SCR where the Canadian Supreme Court held that the driver’s claim against the owner in negligence was not barred by illegality, the illegality being the driver’s unlawful drink driving, although there should be reduction in damages for contributory negligence.

53.  The judgment of the majority was given by McLachlin J in Hall v Herbert.  She held that the courts should be allowed to bar recovery in tort on the ground of the plaintiff’s illegal or immoral conduct only in very limited circumstances.  McLachlin J emphasised the importance of defining what was meant by profit when speaking of the plaintiff profiting from his or her own wrong, and that compensation for something other than wrongdoing such as for personal injury, would not amount to profit in that sense[16].

54.  I accept Mr Pang’s submission that the policy considerations in personal injuries cases are different from those in the cases where the court is asked to enforce an illegal contract, as in the former, the plaintiff merely relies on the wrong of the defendant to establish the right to the compensation.

55.  As further pointed out by Mr Pang, Lord Mance also acknowledged in Patel that whilst the position of illegality in tort might be controversial, the doctrine of illegality in contract is well established.  Lord Mance also referred to the part of the judgment in Hall v Herbert that  the plaintiff was merely relying on the tortious conduct of the defendant to establish the right to compensation, namely that McLachlin J had said in Hall v Herbert that the compensatory damages claimed were not properly awarded as compensation for an illegal act, but only as compensation for personal injury, and that such damages accomplished nothing more than to put the plaintiff in the position he or she would have been in had the tort not occurred and that no part of the award which compensated injury could be said to be the profit of, or the windfall from, an illegal act[17].

56.  Mr Pang thus argued that there was no need for a plaintiff in an personal injuries case claiming for the loss caused to him by reason of the defendant’s negligence or other tort to plead or rely on an illegal contract to establish his claim, and in this regard, it would be akin to the principle in Tinsley.

57.  I accept Mr Pang’s submissions and I agree that the two personal injuries cases do not really assist P.

58.  In the present case, the conduct said by P to be agreed under the Commission Agreement consist of the following:-

(i) P would introduce D clients to engage his legal services;

(ii) P would retain extensive contact with such clients and maintain exclusive control over their case; and

(iii) P would share the profit costs of D’s legal practice by way of commission.

59.  As pointed out by Mr Pang, the Commission Agreement relied on by P did not only seek to share the profit costs of a solicitor but the “extensive contact” with the clients and “exclusive control” over their cases, and such was plainly intended to undermine the independence of a solicitor in handling his clients’ cases and the integrity of a solicitor with the ultimate goal of guaranteeing that the clients’ interest, and the public interest would give way to P’s financial or other interests without ensuring that client’s interests were protected.  As submitted by Mr Pang, the arrangement sought to ensure that the solicitor would be subject to every external pressure from non-qualified persons not subject to the same professional code as a solicitor.

60.  I agree that the conduct under the Commission Agreement goes to the very subject matter which Rule 4 seeks to prohibit.

61.  Mr Pang has further submitted that P’s claim must fail even if Patel is applied.  In respect of the trio of considerations :-

(i) The policy of Rule 4, similar to the English rule 7, has been clearly set out in the two cases of Mohamed and Westlaw, and that Rule 4 is not for the protection or benefit of solicitors but for the public interest, and to allow P’s claim will clearly undermine the public policy;

(ii) At the hearing before the Master, Mr Tang referred to Hounga v Allen [2014] 1 WLR 2889 and submitted that the court had to consider “other public policy” without identifying the contrary public policy which might be infringed.  In Hounga, there was a clear policy of preventing human trafficking which operated in favour of relief to Ms Hounga, but there was nothing of similar nature in the present case;

(iii) P is claiming for profits for his “extensive contact of clients” and “exclusive control over the case”, deprivation of his benefit is not disproportionate.

62.  I agree with (i) and (ii) above.  As for the 3^rd consideration is concerned, P is claiming loss and damages based on his performance of an illegal contract and D’s breach thereof, and in my view deprivation of this claim is not disproportionate.

63.  As pointed out by Mr Pang, in Patel, the illegal agreement was eventually not executed because the insider information did not materialize and in Patel, the plaintiff was seeking return of his own money where the illegal contract was not performed.  It was the fact that the agreed course of conduct was not performed which led to the dismissal of the defendant’s appeal unanimously by the full bench of the Supreme Court, albeit for different reasons from Lord Mance, Lord Clarke of Stone-cum-Ebony and Lord Sumption JJSC.  However, in the present case, P seeks loss and damages by reason of his performance of an illegal contract.

64.  I agree that even if one were to apply the trio of considerations set out by Lord Toulson JSC in Patel, P’s claim must fail.  In any event, I am of the view that this court is bound by Kan Wai Chung which has adopted Tinsley.  There had also been observations made by our Chief Justice in the case of Ryder Industries Limited and Chan Shui Woo, FACV Nos 12 & 13 of 2015 that, accepting that the facts in any given case will inevitably differ, the question of illegality must be based on firmer principle and policy[18].

65.  Having considered all the above, with respect to the Master, I have come to the view that the Commission Agreement is illegal, void and unenforceable and Question 1(b) should be answered in affirmative.  In light of this, I am of the view that P’s contractual claim in the present case should be dismissed.  Alternatively, I am also satisfied that the part in the statement of claim concerning P’s contractual claim should be struck out under Order 18 rule 19(1)(a) of the Rules of the High Court as it is a plain and obvious case that it discloses no reasonable cause of action.

66.  P claims, in the alternative, for a reasonable remuneration on a quantum meruit basis taking into account all the aspects of the introduction of the clients referred by P to D and services provided in handling their cases.

67.  Mr Pang argues that as the conduct giving rise to the claim for quantum meruit relied on by P is in substance the conduct under the Commission Agreement, this claim must also be dismissed.

68.  I do not agree with this.  D’s claim on quantum meruit is not simply based on introduction of the clients referred by P but also services provided in handling their cases.  The parties were not equal in blameworthiness or culpability in that under Rule 4, D would be the one who was in breach of rules and D ought to know the rules.  Even though the capacity in which P worked in D’s firm is disputed, D’s case is that P’s role was to liaise with D’s clients, to collect documents from clients and to find new clients for D’s firm mainly on personal injuries cases[19].  P should be allowed to pursue a claim for reasonable remuneration for the services provided by him.  I am not prepared to dismiss or strike out P’s claim on the basis of quantum meruit.

Conclusion 

69.  For the reasons stated above, both Questions 1 (a) and (b) should be answered in the affirmative.  P’s contractual claim is dismissed.

70.  As for costs, D has been successful in respect of the contractual claim.  I will award D 80% of the costs of this appeal including all costs reserved and costs below, to be taxed if not agreed. This is an order nisi which shall be final after 21 days.