PANG LAI YIN v. THE LAW SOCIETY OF HONG KONG

HCMP 190/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 190 OF 2011

(ON AN INTENDED APPEAL FROM HCMP NO. 1719 OF 2010)

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BETWEEN

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DECISION

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Hon Kwan JA:

The application for leave to appeal

1.  This is an application for leave to appeal to the Court of Appeal. The summons issued on 9 February 2011 by the applicant, Chan Kin Fung Phil (“Mr Chan”) trading as Messrs. Phillips, seeks leave to appeal the judgment given on 26 January 2011 of Mr Justice Tang, Acting CJHC, sitting as an additional Judge of the Court of First Instance. In that judgment, Mr Justice Tang refused leave to appeal to the Court of Appeal from his judgment on 2 November 2010 dismissing Mr Chan’s application to intervene in the proceedings in HCMP 1719/2010. The judgment for which leave to appeal is now sought from this court should be the judgment of 2 November 2010 and we will treat Mr Chan’s application as such. The application is determined on the basis of written submissions only, as the Court of Appeal is empowered to do under Order 59 rule 2A(5) of the Rules of the High Court.

2.  In support of his application, Mr Chan filed a 50-page statement as amended by his letters to the court dated 10 and 22 February 2011. He set out ten grounds of appeal under letters A to J.

3.  His application is opposed by both parties to HCMP 1719/2010. They are the applicant to the proceedings, Pang Lai Yin (“Mr Pang”), and the respondent being the Law Society of Hong Kong. The Law Society did not make any submission but merely informed the court by letter dated 23 February 2011 that it would like to be excused from attending any hearing of the application in the interest of saving costs. Mr Pang has by counsel provided submissions dated 23 February 2011 stating his reasons for opposition.

The background

4.  The relevant background may be stated as follows.

5.  Mr Chan is the sole proprietor of Messrs. Phillips, a firm of solicitors. Mr Pang served as a trainee solicitor with Mr Chan as his principal on 1 February 2010. This was his second period of traineeship, having served an earlier traineeship under Ms Au Miu Po of Messrs. C.P. Lin & Co. from 7 August 2008 to 31 January 2010. His second period of traineeship would have ended on 6 August 2010 but was terminated prematurely by Mr Chan on 5 July 2010. As Mr Chan refused to execute a release so that Mr Pang could continue his training with another principal, Mr Pang had to apply to the Law Society for termination of his training contract with Mr Chan pursuant to section 22 of the Legal Practitioners Ordinance, Cap. 159 and on 20 July the Law Society resolved to terminate the contract on 5 July. Mr Pang entered into a third training contract with Mr Lam Kwok Ming of Messrs. P. C. Woo & Co. for a period of 32 days from 6 July to 6 August 2010 to complete the remainder of his training period to qualify as a solicitor.

6.  On 13 July 2010, Mr Chan made a complaint against Mr Pang to the Law Society of serious breaches of duty under the trainee solicitor contract.

7.  By a letter dated 19 August 2010, Mr Pang requested Mr Chan to sign a Form 4 as prescribed by the Admission and Registration Rules, Cap. 159B (“the Rules”) regarding his second period of traineeship, so that he could apply to the Law Society for a certificate of eligibility for admission as a solicitor. In signing Form 4, the principal is to confirm among other things that he has provided the trainee the opportunity to learn various basic skills and legal topics and that he considers the trainee fit to be a solicitor. Mr Chan did not respond to the request.

8.  On 31 August 2010, the Council of the Law Society resolved that an investigation committee under the Standing Committee on Compliance (“the Investigation Committee”) would consider the allegations of misconduct against Mr Pang in Mr Chan’s letter of complaint, and an investigation panel consisting of Council members (“the Panel”) would be set up to investigate whether Mr Pang was a fit and proper person for admission as a solicitor and to make recommendation to the Council.

9.  On 10 September 2010, Mr Pang issued the originating summons against the Law Society in HCMP 1719/2010, for an order under rule 13 of the Rules that he may be exempted from submitting a Form 4 in respect of his training period with Mr Chan. He filed three affirmations in support of his application, including his affirmation and the affirmation of Ng Kai Pong (“Mr Ng”), a former employee of Messrs. Phillips and Wallbanck Brothers Securities (Hong Kong) Ltd. (“Wallbanck”), which was controlled by Mr Chan. The Law Society provided copies of the supporting affirmations to Mr Chan on 14 September and informed him of the hearing date of the originating summons. Nothing was heard from Mr Chan until 8 October when he requested the Law Society to seek an extension of time of 28 days for him to respond to the affirmations served by Mr Pang.

10.  On 11 October 2010, the Investigation Committee unanimously adjudicated that Mr Chan’s complaint against Mr Pang was not substantiated and no case of professional misconduct could be found against Mr Pang. On the same day, the Panel interviewed Mr Pang and made these findings:

(1) Throughout his two years of traineeship, Mr Pang had covered at least three of the ten practice areas/legal topics and his training was diverse.

(2) His salary was increased a few days before he tendered his resignation from Messrs. Phillips and he was asked by the firm to stay on after his traineeship.

(3) His two other principals at Messrs. C. P. Lin & Co. and Messrs. P. C. Woo & Co. had supported his application.

11.  In view of these findings and having noted the Investigation Committee had unanimously adjudicated that the complaint against him was unsubstantiated, the Panel unanimously recommended to the Council to consent to Mr Pang’s application for exemption from submitting Form 4 in respect of his traineeship with Mr Chan.

12.  The Council of the Law Society resolved on the following day to accept the Panel’s recommendation. The Law Society took the view it would not apply for an extension of time for Mr Chan to file any reply if he should wish to oppose Mr Pang’s application and informed Mr Chan accordingly on 12 October.

13.  Mr Chan requested the Law Society on 15 October to review the decision of the Investigation Committee regarding his complaint. The Council considered the review application on 26 October 2010 and resolved to uphold the decision of the Investigation Committee.

The application to intervene

14.  On 28 October 2010, Mr Chan issued a summons in HCMP 1719/2010 for leave to intervene in those proceedings and for the entire affirmation of Mr Ng and certain parts of the affirmation of Mr Pang to be struck out as scandalous and irrelevant to the issues of the proceedings. He also sought an adjournment of the proceedings with an extension of time of 28 days for him to file a further affirmation in reply to the affirmations of Mr Ng and Mr Pang.

15.  In his supporting affirmation, Mr Chan alleged that most of the contents of the affirmations of Mr Ng and Mr Pang are scandalous in that they only aimed at discrediting his professional integrity but are “irrelevant for the purpose of [Mr Pang’s] Application as the same has no bearing on whether Pang is fit and proper and why he had failed to produce a Form 4 for admission purpose.” Notwithstanding such allegations are “completely irrelevant for the purpose of these proceedings”, he asserted it is necessary for him to be joined in the proceedings “since Pang is apparently taking issue regarding [Mr Chan’s] professional integrity and fitness as an officer of this Court”, and unless he is allowed to join in the proceedings, “it will be grossly prejudicial and unfair with all these unsubstantiated allegations be made against [him], Messrs. Phillips and Wallbanck, a client of Messrs. Phillips in open court”. He further deposed it is just and convenient for all relevant issues concerning Mr Pang’s application, namely his fitness and competence and the reason why Mr Chan did not sign a Form 4, to be “effectually and completely determined and adjudicated with [Mr Chan’s] presence in these proceedings.” He made various allegations of “possible breaches of various duties of care and fiduciary care” owed by Mr Pang as a trainee solicitor to Messrs. Phillips and Wallbanck, for the court to consider if Mr Pang is fit and proper to be admitted as a solicitor and be exempted from submitting Form 4. Finally, he asserted the reason why he did not sign Form 4 was because Mr Pang did not provide him with the training record for his approval and Mr Pang had refuse to comply with the “standard exit policy and procedure” to confirm the proper handover of all clients’ files and documents on the last day of his employment.

16.  In response, Mr Pang filed a second affirmation denying the allegations in the Mr Chan’s affirmation.

The judgment in HCMP 1719/2010

17.  The Acting Chief Judge was referred to the decision of Ma CJHC (as he then was) in Fu Sze Ying Mabel v. The Law Society of Hong Kong, HCMP 908/2008, 17 June 2008. In considering whether “special grounds” are made out for an exemption to be granted under rule 13 of Rules from submitting Form 4, Ma CJHC stated in paragraph 6 of the judgment that the following ought generally to be demonstrated to the court:

“(1) It must be shown that the underlying objective or purpose of the ‘formality’ or step (for which exemption is sought) is in fact fulfilled such that the failure to comply with that formality becomes then merely a technicality. In other words, the spirit or substance of the formal requirement must be shown to exist or be satisfied, leaving unfulfilled only the form. …

(2) Cogent reasons must be given as to why the formal requirement cannot be fulfilled.”

18.  The Acting Chief Judge was satisfied both requirements were met in this instance. On the evidence before the court, there was complete breakdown in the relationship of Mr Chan and Mr Pang. He noted that Mr Chan’s complaints were first made in writing after Mr Pang had informed Mr Chan in writing he did not wish to work for Mr Chan after qualification; that Mr Pang’s traineeship was only terminated after he had in writing declined an offer to continue working for Mr Chan, and this was surprising given the seriousness of Mr Chan’s allegations; that the salary of Mr Pang was increased a few days before he tendered his resignation; that the Law Society has concluded Mr Pang is a fit and proper person to be admitted as a solicitor after Mr Chan’s complaints were found to be unsubstantiated; and that the first and third principals of Mr Pang are of the highest reputation and standing and both were satisfied with Mr Pang.

19.  The Acting Chief Judge made clear in paragraph 11 of his Reasons for Decision on 16 November 2010 that it was not necessary to adjudicate on the allegations made against Mr Chan in the affirmations of Mr Ng and Mr Pang and he made no such adjudication. In paragraph 12, he expressed doubt if it would ever be right to permit intervention by a third party in exemption proceedings under rule 13 of the Rules, as the possibility for abuse is obvious and ensuing delay can be substantial. He therefore dismissed the application to intervene and allowed Mr Pang’s application.

Merits of the proposed appeal

20.  As mentioned earlier, Mr Chan advanced a total of ten grounds of appeal, some of which were raised before the Acting Chief Judge when he first sought leave to appeal, and were rejected by the court.

21.  We are concerned with an exercise of discretion under Order 15 rule 6(2)(b)(i) or (ii) whether to permit an intervener to be joined as an additional respondent in the exemption proceedings. The court has a discretionary power to refuse to join an intervening party.

22.  It is well established that in an appeal against the exercise of discretion of the court, the decision of the court is not interfered with unless the discretion was exercised under a mistake of law, or in disregard of principle, or under misapprehension as to the facts, or it had taken into account irrelevant matters, or that the exercise of discretion was outside the generous ambit within which a reasonable disagreement is possible.

23.  In this instance, it is clear beyond peradventure Mr Chan is unable to bring himself within any of the above situations. As mentioned earlier, he has acknowledged in his own affirmation that the allegations made against him in the affirmations of Mr Ng and Mr Pang are “completely irrelevant for the purpose of these proceedings”. The Acting Chief Judge stated in paragraph 11 of his Reasons for Decision he was not in the position to adjudicate on these allegations against Mr Chan and did not find it necessary to do so. Given these circumstances, Mr Chan clearly has no sufficient interest in the proceedings to be joined as an intervening party under rule 6(2)(b)(i), nor is the matter of the allegations against him an issue common to an issue in the proceedings between Mr Pang and the Law Society so that it would be just and convenient to determine those allegations in the proceedings for him to be joined as a party under rule 6(2)(b)(ii).

24.  In the latest proposed grounds of appeal advanced by him, Mr Chan sought to attack the conclusion arrived at by the Law Society that Mr Pang is a fit and proper person to be admitted as a solicitor. Following the guidance given in paragraph 18 of Fu Sze Ying Mabel v. The Law Society of Hong Kong, the Law Society has, in discharge of its duty, arrived at a firm view after careful consideration to consent to Mr Pang’s application. As mentioned earlier, the Investigation Committee unanimously adjudicated that Mr Chan’s complaint against Mr Pang was not substantiated and the Panel charged with the investigation whether Mr Pang was fit and proper to be admitted as a solicitor made a recommendation in his favour. Details of the interview conducted by the Panel were given in the evidence filed by the Law Society. There is no sufficient basis to impugn the assessment made by the Panel that Mr Pang is a fit and proper person for admission as a solicitor. Indeed, as the Acting Chief Judge had remarked, given the seriousness of Mr Chan’s allegations against Mr Pang, if they were true, it is surprising that his traineeship was only terminated after he had declined an offer to continue to work for Mr Chan after qualification.

25.  The various provisions in the Hong Kong Bill of Rights and the Basic Law relied on by Mr Chan in his proposed grounds of appeal are simply not engaged.

26.  There is no basis for interfering with the costs orders made on 2 November 2010 and 26 January 2011.

Orders

27.  For the above reasons, I refuse leave to appeal to the Court of Appeal. As this application is totally without merit, I make a further order under Order 59 rule 2A(8) that no party may request the determination to be reconsidered at an oral hearing inter partes.

28.  Costs of this application should follow the event. These are the orders nisi as to costs: there would be no order as to costs between Mr Chan and the Law Society (as no substantive submission was made by the latter) and Mr Chan is to pay Mr Pang’s costs of this application. It is appropriate to assess Mr Pang’s costs on a gross sum basis. For that purpose, I direct Mr Pang’s solicitors to submit a bill of costs within seven days hereof and leave is given to Mr Chan to submit his response within seven days thereafter.

Hon Fok JA:

29.  I agree that the application for leave to appeal should be dismissed, for the reasons set out in the judgment of Kwan JA above. I also agree that an order under Order 59 rule 2A(8) is appropriate in the present case.  As to costs, I concur in the orders nisi proposed by Kwan JA and the directions in respect of the assessment of Mr Pang's costs on a gross sum basis.