UMERZAI ABDULHAFIZ ZAHUR v. MASSIE & CLEMENT SOLICITORS (a firm)

DCCJ 562/2023

[2023] HKDC 889

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 562 OF 2023

-------------------------

-------------------------

-----------------

DECISION

-----------------

Introduction

1.  By an Inter Partes Summons filed by the Defendant (“D”) on 16 March 2023 pursuant to O.14A and O.18, r.19(1) of the Rules of the District Court, Cap. 336H (“RDC”) and the inherent jurisdiction of this court, an order is sought that:

(1)  The following questions of law may be determined, namely:

(a)  whether the agreement pleaded in paragraph 2 of the Statement of Claim (“SOC”) is contrary to Rule 4 of the Solicitors’ Practice Rules made under section 73 of the Legal Practitioners Ordinance, Cap. 159 (“Rule 4”), involving as it does an alleged agreement between the Plaintiff (“P”), who was not at the material times a solicitor practising in Hong Kong, and D to share profit costs in respect of legal work introduced by P and/or otherwise (“question 1”); and

(b)  if question 1 be answered in the affirmative, whether such an agreement is illegal, void and/or enforceable (“question 2”);

(2)  If question 2 be answered in the affirmative, then this action be dismissed;

(3)  Further or alternatively, the SOC herein be struck out by reason that it discloses no reasonable cause of action and this action be dismissed;

(4)  Time for filing and service of the Defence, if such be required, be extended until the expiry of 28 days following the final determination of paragraphs (1), (2) and (3) above;

(5)  The costs of the application be to D to be taxed if not agreed in the event the Court finds in favour on either or both paragraphs (2) and (3) above and otherwise be provided for.

(“the Summons”)

2.  An order in terms of paragraph (4) of the Summons has been made by the Order of Master B. Mak dated 13 April 2023. 

3.  The following have been filed in respect of the Summons:

(1)  An affidavit of Richard Mark Clement, a partner of D, dated 16 March 2023 in support of the Summons (“RMC’s Affidavit”);

(2)  An affirmation of P dated 12 April 2023 in response to the Summons (“P’s Affirmation”);

(3)  An affidavit of John William Ross Massie (“Massie”), another partner of D, dated 27 April 2023 in reply to P’s Affirmation (“JWRM’s Affidavit”); and

(4)  A further Affirmation of P dated 16 June 2023 in reply to JWRM’s Affidavit (“P’s Further Affirmation”).

4.  P’s Further Affirmation was filed without leave.  It was agreed that I would consider P’s Further Affirmation on a de bene esse basis.

Background

5.  The following background facts are largely taken from the SOC as pleaded by P. 

6.  P was previously employed by D from 2009 to 2017 as a litigation manager.

7.  Paragraph 2 of SOC pleads that upon P tendering his resignation in about late 2017, it was agreed between P and D that:

“P shall not transfer his personal injuries cases to a new firm where he was about to be employed and D shall receive from P services of legal work, meeting with the clients, and arranging the clients’ meeting with D at his office etcetera.  In return and as consideration of these services provided by P to D, it was further agreed between P and D that D shall pay P and P received from D variable amounts calculated at 35% of the total profit costs earned from legal work introduced by P as service charges of P.” (“the Agreement”)

8.  P’s case is that in breach of contract, despite repeated requests and demand by letter, D has failed to pay a total sum of HK$458,500. 

9.  The names of the clients, file reference numbers and the estimated profit costs earned or to be earned from cases introduced by P, for which P says he has not received his service charges, have been set out in the SOC at §7. 

10.  In the prayer of the SOC, P seeks:

(a)  Liquidated damages as pleaded above at HK$458,500;

(b)  Interest;

(c)  Further and/or other relief as may be just and expedient; and

(d)  Costs.

11.  As mentioned, time for filing D’s Defence has been extended until the expiry of 28 days following the final determination of the Summons.

The evidence filed

12.  RMC’s Affidavit filed in support of the Summons is very short.  There is exhibited thereto the results of a search of the Members of the Hong Kong Law Society with and without practising certificates to show that P is not and never has been a solicitor admitted to practise in Hong Kong.  It is D’s case that the Agreement (which is denied by D) is illegal, void and/or unenforceable by reason of it being contrary of Rule 4.

13.  Rule 4 provides as follows:

“A solicitor shall not share or agree 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;

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

14.  In P’s Affirmation, P says that the Agreement was orally made between him and Massie.  He exhibited various WhatsApp messages between him and Massie which purportedly support his case that the Agreement was made with Massie and that after having resigned, he continued to provide his services to D in respect of the clients which P had introduced to D but he has not been paid the agreed commission. 

15.  In JWRM’s Affidavit, Massie has denied that he made the Agreement with P. Rather, he says that an agreement was made between D and a female solicitor (who formally handled those cases and worked closely with P but also later left the employ of D to work with P at the new firm). 

16.  According to Massie, the agreement was for D to pay that female solicitor a commission in respect of these cases for work handled by her.  He has exhibited two Whatapp messages from Massie to P whereby it is stated inter alia that Mr Khan Jamshed and Madam Musrat were both clients who were introduced by that female solicitor and commission has already been claimed by and paid to her.

17.  It is also stated that D has no objection to making reasonable payment for services actually performed (without implying any admission that they have been) if P had made claims for such services and provided particulars of the services provided, time spent and rates claimed etc.  However, it is said instead P chose to make claims for monies which he is not entitled. 

18.  In P’s Further Affirmation, P denies that the Agreement was made with the female solicitor.  Various Whatsapp messages between P and the female solicitor and also between P and Massie have been exhibited.  They are said to prove that the Agreement existed and that the commissions were owed to P and not the female solicitor.  In particular, according to P, Massie and the female solicitor agreed that Massie would issue a cheque for P’s commission in the female solicitor’s name who was still at the time working for D who would then pay him back. 

19.  P has further stated that as he is not legally qualified, he had no idea as to the legality of the commission and did not know that D cannot pay commission to non-legally qualified employees.

Applicable principles: O.14A RDC

20.  O.14A, r.1(1) RDC provides:

“The Court may upon the application of a party or of its own motion determine any question of law or construction of any document arising in any cause or matter at any stage of the proceedings where it appears to the Court that—

(a) such question is suitable for determination without a full trial of the action; and

(b) such determination will finally determine (subject only to any possible appeal) the entire cause or matter or any claim or issue therein.”

21.  In Rockwin Enterprises Ltd v Shui Yee Ltd [2003] 3 HKC 174 at §18, Recorder Ma SC (as he then was) explains that once seized of an application under O.14A, the court’s approach is essentially a three-step approach:

(1)  Is the relevant question one of law or of the construction of a document?

(2)  If so, is that question one that should be determined under the O.14A procedure?

(3)  If the answer to (2) is ‘yes’, what is the determination of that question and what orders should the court make as a consequence of determining that question?

22.  For step (2), the court is required to be satisfied of the following:

(a)  That the question of law or construction is one that is suitable for determination without a trial.  In other words, the court has all the necessary facts and matters before it in order to determine the question of law or construction.

(b)  That it is so suitable and should it be determined by the court, that it will finally determine (subject to a possible appeal) the entire cause or matter or any issue or claim therein.

(c)  Even if the above two conditions are satisfied, that the court in its discretion is satisfied that the question is one that ought to be determined under O.14A.

See Rockwin Enterprises Ltd, §20.

23.  Only where (a) and (b) referred to in the preceding paragraph are satisfied will the residual discretion come into play: see Rockwin Enterprises Ltd, §27. 

24.  As to how the residual discretion should be exercised, much would depend on the circumstances of the case and the perception and instinct of the judge seized of the matter.  Relevant factors include:

(1)  Whether the question is a dominant feature or goes to the ‘heart’ of the case;

(2)  If the question is dealt with this might or would enable the parties to avoid the expense of trial and assist them in the efficient disposal of the action;

(3)  The court can take an overall view of the matter to see the context in which the question arises.  If the Court is of the view that there will not be great saving of time or costs in determining the question (or indeed if it feels quite the opposite), this would be a factor against adopting the O.14A procedure.  For example, if the question involves an issue that is not determinative of the action or is but one of many issues or which may at the end of the day be an academic one, a court may well not embark on a determination under O.14A.  In such situations, it may be that a determination by the Court leading possibly to appeals at two further levels, will result in more delay and expense to the parties than if the whole matter is decided at one go at trial.

(4)  On the other hand, an issue may recur so much on a continuing basis that to determine it may not only be convenient but extremely desirable.  For example, where the determination of any issue would result in the discovery process not being as extensive or expensive as might otherwise be the case, it may well be appropriate to use the O.14A procedure.

See Rockwell Enterprises Limited, §§24-26.

25.  In Shell Hong Kong v Yeung Wai Man Kiu Yip Co Ltd & Another (2003) 6 HKCFAR 222, Chan PJ (with whom all the other judges sitting in the Court of Final Appeal agreed) said as follows:

“20. The O.14A procedure was first introduced in England in 1991 and in Hong Kong in 1992. The underlying policy of this Order is, as The Supreme Court Practice 1993 described, ‘to accelerate the final judicial disposal of an action at the interlocutory stage and thereby save the expense and delay which would otherwise arise not only if the action were to proceed to a full trial but also if the parties would be required to undertake the necessary pre-trial steps to prepare for such trial.’ Vol.1, paras.14A/1-14A/2/1, p. 175.

21. [O.14A, r.1(1), was set out.]

22. This rule may be invoked for a determination of a question of law or construction of any document by the court, provided that the two conditions in (a) and (b) above are fulfilled. The parties must either have consented to adopt such a procedure or have had the opportunity to be heard. O.14A r.1(3).

23. In cases which involve the determination only of a question of law or the construction of a document or where the whole case largely depends on the resolution of a question of law or the construction of a document, the O.14A procedure is often adopted to put an early end to the entire case. However, it can be seen that under the condition in (b), this procedure can be invoked for the purpose of finally determining not only the entire cause or matter but also ‘any claim or issue’ in the cause or matter. It is not necessary for the making of an application under O.14A that the determination of a question of law or construction of any document would finally determine the whole action. Such a requirement would be wrong as a matter of ‘interpretation of the order and as an exercise of discretion’. See Leggatt LJ in Korso Finance Establishment Anstalt v Wedge & Others (unrep., 15 February 1994), CA Transcript, at p 7 (in which it was held that an issue of construction was still suitable for determination under O.14A even though a determination of this issue would not finally determine the entire action between the parties). It is sufficient if an issue in the case can be disposed of using such procedure. However, it is not contemplated that the parties would submit a trivial matter for determination under O.14A. This would not only be contrary to the spirit and purpose of this procedure, but may also lead to possible abuse, resulting in unnecessary expense and delay and wastage of judicial time. No judge would accede to that sort of request or application in the proper exercise of his discretion.

24. It must also be noted that it is inappropriate to use this procedure if the issues of facts are interwoven with the legal issues to be determined. For obvious reasons, the question of law or construction of document cannot be dealt with on assumed or hypothetical facts. And if it is necessary for the court to hear evidence to resolve a factual dispute in order to come to a determination on the question of law or construction of document, it would not normally be suitable to invoke O.14A.

25. Hence, even if the conditions are satisfied, the court still has a discretion under r.1 to decide whether to entertain an application under this Order.  He has to decide on the suitability of adopting the procedure in the case in hand before adjudicating on the merits.  This was what the Deputy Judge had done in the present case.”

Applicable principles: O.18, r.19 RDC

26.  The applicable principles for striking out under O.18, r.19 RDC are well-established and was usefully summarised by Recorder Manzoni SC in Polyline Development Ltd v Ching Lin Chuen [2021] HKCFI 483 at §10 which I gratefully adopt as follows:

(1)  A strikeout application will only be successful in a plain and obvious case.  The claim must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out. 

(2)  However, plain is not the same as simple, and obvious is not the same as short.  If, on a careful reading of the statement of claim, however complicated, it can be seen that there is no cause of action or the claim will obviously not succeed, then it will be struck out despite the apparent complexity.

(3)  There should be no trial upon affidavit and disputed facts should be taken in favour of the party sought to be struck out.  Where the legal viability of a cause of action is sensitive to the facts, an order to strikeout should not be made.  However, the court should remain vigilant to ensure that its processes are not abused by the prosecution of hopeless claims.

(4)  The court should not decide difficult points of law in striking out proceedings.

(5)  It is for the party seeking to strikeout the pleading to demonstrate that the case is a plain and obvious one in which the other party’s claim is bound to fail.  However, in the context of limitation, once a limitation defence is raised, the onus is on the plaintiff to prove that the cause of action relied upon accrued within the limitation period, even in a strike out application.

27.  Furthermore, as was stated in Polyline Development Limited at §11, insofar as the application is premised upon the proposition that there is no reasonable cause of action, I must proceed on the basis that the facts alleged in the statement of claim will be established.  No evidence is admissible in relation to the “no reasonable cause of action” limb and I must address the matter simply on the basis of what is pleaded.

Analysis

28.  As the application for striking out is said to be in the alternative to the O.14A application and the basis for striking out the SOC is the non-enforceability of the Agreement, I will consider the O.14A application first. 

29.  It was submitted by counsel for D, Mr McLeish, that the present case is “on all fours” with the appeal to a judge of the High Court from the decision of a Master in the case of Tse Chun Wai v Leung Kwok Kin Joseph [2017] 4 HKLRD 563 insofar as the contractual claim of the plaintiff therein is concerned.

30.  In Tse Chun Wai, the defendant was a solicitor and the sole practitioner of a solicitor’s firm.  The plaintiff was not a solicitor practising in Hong Kong or a legally qualified person.  It was claimed by the plaintiff therein that the parties reached an agreement whereby the plaintiff agreed to introduce clients to engage the defendant for legal services whilst retaining extensive contact with them and maintaining exclusive control over these cases.  In return, the defendant would pay him 50% of all legal costs received from those clients.  The plaintiff claimed that the defendant had failed to pay him commission in excess of HK$10 million in breach of the agreement or that alternatively he was entitled to a reasonable remuneration on a quantum meruit basis.

31.  The defendant in Tse Chun Wai applied under O.14A for the determination of the following questions of law: (a) whether the agreement was in contravention of Rule 4; and (b) if so, whether the agreement was illegal, void and/or unenforceable.  In the event both questions were answered in the affirmative, the defendant applied for the action to be dismissed. Alternatively, the defendant sought an order for the statement of claim be struck out under O.18, r.19(a) as it discloses no reasonable cause of action.

32.  The Master ordered that question (a) be answered in the affirmative but dismissed the defendant’s other orders. 

33.  On appeal, the Honourable Bebe Chu J answered both questions (a) and (b) in the affirmative, having found the agreement to be illegal, void and unenforceable and dismissed the plaintiff’s contractual claim. The learned judge also struck out the part in the statement of claim concerning the plaintiff’s contractual claim in the alternative.  However, the learned judge was not prepared to dismiss or strike out the plaintiff’s claim on quantum meruit. 

34.  On first blush, it did appear that the present case is on all fours with Tse Chun Wai.  However, as I pointed out to Mr McLeish, there seems to have been no consideration and discussion of the three-step approach which he himself has set out in his Skeleton Submissions by reference the Hong Kong Civil Procedure 2023, Vol 1 at §14A/2/4 and as I have set out above.  Mr McLeish confirmed that the three-step approach is one that I need to apply.

35.  Applying the three-step approach, plainly the 2 questions identified in the Summons are questions of law and step 1 is satisfied.

36.  However, as I had indicated to Mr McLeish, it was step 2 (where I have to consider whether the question of law is one that should be determined under the O.14A procedure and the exercise of residual discretion to determine the question of law under O.14A) which causes more difficulty for which I invited his further oral submissions.  Specifically, I was concerned whether all the necessary facts and matters are before me in order to determine question 2. 

37.  Mr McLeish in his Skeleton Submissions at paragraph 40 had referred to and invited me to apply the “range of factors approach” as held by the majority of 6-3 of the UK Supreme Court in Patel v Mirza [2017] AC 467 to be the correct test to be applied to the defence of illegality.

38.  Prior to Patel, the courts applied the “reliance approach” or “reliance rule” as laid down by the House of Lords in 1993 in the case of Tinsley v Milligan [1994] 1 AC 340.  In Tinsley, the plaintiff was the sole owner of a property though both she and the defendant had contributed to the purchase price and on the understanding both 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 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 leading speech was given by Lord Browne-Wilkinson.  At 376E-F, his Lordship held:

“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.”

39.  Mr McLeish also referred me to the Hong Kong Court of Appeal’s decision in Monat Investment Ltd v All Persons in Occupation of Part of the Remaining Portion of Lot No 591 in Mui Wo DD4 No 16 & Anor [2023] 2 HKC 627 which held that the Patel approach should also be followed in Hong Kong. 

40.  However, in the course of his oral submissions, Mr McLeish said he was withdrawing paragraph 40 of his Skeleton Submissions.  He clarified that the present case is not concerned with the common law defence of illegality (as the court was concerned with in Patel) but statutory illegality. 

41.  Firstly, I was referred to Chitty on Contracts, 34^th Edn, §18-193 which states:

“In Patel v Mirza, the Supreme Court was addressing illegality in the narrower sense identified earlier, viz contracts that somehow involve a legal wrong. The decision does not affect directly the question of statutory illegality. Lord Toulson, speaking for the majority, said that the court ‘must abide by the terms of the statute,’ but the court in construing the statue could:

‘… have regard to the policy factors involved and to the nature and circumstances of the illegal conduct in determining whether the public interest in preserving the integrity of the justice system should result in the denial of the relief claimed.’

Thus the factors will be used as interpretative aids.  The following paragraphs should be read in that light.”

42.  Secondly, I was referred to Andrew Burrows, A Reinstatement of English Law of Contract, 2^nd Edn, sections 44(1)-(3) and the commentary to section 44(3) at pp.233-235:

“44 Illegality and public policy

(1) If the formation, purpose or performance of a contract involves conduct that is illegal (such as crime) or contrary to public policy (such as a restraint of trade), the contract is unenforceable by one or either party if enforcement would be harmful to the integrity of the legal system taking into account the following considerations:

(a) the purpose of the rule which the conduct has infringed;

(b) any policies that may be rendered ineffective or less effective by denying enforcement;

(c) the need to ensure that a denial of enforcement is not a disproportionate sanction for the conduct.

(2) In applying subsection (1)(c), more specific factors that may be taken into account include:

(a) the seriousness of the conduct;

(b) the centrality of the conduct to the contract;

(c) whether the conduct was intentional;

(d) whether there was a marked disparity in the parties’ respective culpability.

(3) There are legislative provisions which, expressly or impliedly, provide that a contract or contract term is unenforceable by one or either party (or void).

…

44(3)

Subsections (1)-(2) have dealt with the effect on a contract at common law of illegal contract and conduct that is contrary to public policy. Section 44(3) deals with the statutory effect of that conduct. If a legislative provision has expressly or impliedly dealt with the effect on a contract of the objectionable conduct in question, then the courts must apply that. This has been referred to as ‘statutory illegality’ to distinguish it from the ‘common law illegality’ dealt with in s 44(1)-(2). But it is important to realise that the distinction is referring to the effect of the illegal conduct and not the source of the illegal conduct. The source of the illegal conduct is most commonly statutory (even if the effect is being assessed at common law) because most cases on illegality have been concerned with statutory offences.

It is noteworthy that where the courts are deciding, as a matter of statutory interpretation, whether a contract has been rendered unenforceable by implication, it would appear that they take into account (most obviously in construing the purpose of the statute) at least some of the factors set out in the range of factors approach. In this sense there is, as one would expect, some convergence between the question of statutory interpretation and the approach to ‘common law illegality’.

…

In the vast majority of cases the effect of illegality on contract enforceability has not been laid down, whether expressly or impliedly, in a statute (even though, as will usually be the case, the relevant illegality is a statutory offence).  The effect of illegality on contract enforceability will therefore normally be determined by applying the common law set out in s 44(1)-(2).”

[original emphasis]

43.  Mr McLeish has submitted that where the statute prohibits the entering into a contract (such as in the case of Mohamed v Alaga & Co.  [2000] 1 WLR 1815 and the present case he says) one is concerned with statutory illegality.  However, Mr McLeish seems to accept that Rule 4 does not expressly lay down the effect of illegality on contract enforceability.  Rather, he has submitted that this case concerns implied statutory illegality. 

44.  In that case, as he accepts, I would still need to apply the “range of factors approach” (or at the very least, some of the factors set out in the “range of factors approach”) to determine question 2.  However, at this stage when I am not at stage 3 to substantively decide the question of law, I do not think it is necessary for me to determine whether the present case concerns the common law defence of illegality or statutory illegality. 

45.  As for the “range of factors approach”, in Patel, Lord Toulson at §101 held that a court should consider the following “trio of necessary considerations” to determine if it would be contrary the public interest because it would be harmful to the integrity of the legal system to allow a claim tainted by illegality:

(a)  Considering the underlying purpose of the prohibition which has been transgressed;

(b)  Considering conversely any other relevant public policies which may be rendered ineffective or less effective by denial of the claim; and

(c)  Keeping in mind the possibility of overkill unless the law is applied with a due sense of proportionality.

46.  Further, at §107, Lord Toulson held in considering whether it would be disproportionate to refuse relief which the claimant would otherwise be entitled, as a matter of public policy, various factors may be relevant.  Although he expressly stated that he would not attempt to lay down a prescriptive or definitive list, because of the infinite possible variety of cases, he said that 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.    

47.  See also §109 where it was said that it was right for the court which is considering the application of the common law doctrine of illegality, to have regard to the policy factors involved and to the nature and circumstances of the illegal conduct in determining whether the public interest in preserving the integrity of the justice system should result in denial of the relief claimed.

48.  Therefore, it follows if I were to determine question 2 by applying the “range of factors approach”, to consider the enforceability of the Agreement, I would have to consider the “trio of necessary considerations” and within that framework, the more specific factors which are potentially relevant. 

49.  This is in contrast with the “reliance approach” which the courts have described as a “mechanical” approach or process; concentrating on the procedural aspects of a claim for relief, the focus being on the state of the pleadings to see if the cause of action is founded on an illegal act, rather than on the merits of the claim:  see Monat Investment Ltd at §§27, 28.1 & 28.2 and 36.4.

50.  Nonetheless, Mr McLeish has submitted that based on the matters pleaded in the SOC and P’s evidence, I have “sufficient” facts and matters before me to apply the “range of factors approach”. 

51.  In oral submissions, Mr McLeish repeated his submissions in his Skeleton Submissions.  To do justice to his full analysis of Tse Chun Wai and how he submits that I should apply the same reasoning to determine question 2, the material paragraphs of his Skeleton Submissions are set out as follows:

“31. Firstly, the learned Judge found that the conduct under the impugned agreement in Tse Chun Wai went to the very subject matter that Rule 4 seeks to prohibit because:

(1) not only did the agreement seek to share the profit costs of a solicitor but there was ‘extensive contact’ with the clients and ‘exclusive control’ over their cases;

(2) such an agreement:

(a) 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’ interests, and the public interest would give way to the plaintiff’s financial and other interests without ensuring the clients’ interests were protected;

(b) 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.

32. The same is the case here, i.e. the Alleged Agreement goes to the very subject matter that Rule 4 seeks to prohibit because:

(1) the Alleged Agreement sought to share the profit costs of D / a firm of solicitors;

(2) P pleads that the cases concerned were ‘his [i.e. P’s] personal injuries cases’ and his own evidence discloses that P regarded the clients concerned as his clients and complained about D regarding them as its / the firm’s clients; and

(3) the alleged consideration for the Alleged Agreement included P’s agreement not to transfer ‘his personal injuries cases to a new firm where he was about to be employed’.

33. For (3) to make sense, P would allegedly have to have control over the cases concerned (which is what he pleads in averring that they are ‘his personal injuries cases’) through his contacts with the clients concerned and/or otherwise. This is so even though P was (and is) a non-qualified person who was (and is) not subject to the same professional code as a solicitor, with the consequence that he was under no obligation to ensure that the clients’ interests, and the public interest, did not give way to his financial and other interests.

34. Having concluded that the impugned agreement in Tse Chun Wai went to the very subject matter that Rule 4 seeks to prohibit, the learned Judge found the following on the ‘trio of necessary considerations’:

(1) consideration (a): the policy of Rule 4 was not for the protection or benefit of solicitors but for the public interest, and to allow the plaintiff’s claim would clearly undermine public policy;

(2) consideration (b): there was no other public policy on which the denial of the claim may have an impact;

(3) consideration (c): since the plaintiff was claiming loss and damage based on his alleged performance of an illegal contract and the defendant’s breach thereof, deprivation of his claim was not disproportionate.”

52.  Various references to the SOC and P’s evidence were given in the footnotes to those submissions.  In oral submissions, Mr McLeish referred to various parts of P’s Affirmation which he said demonstrates the degree of control maintained by P over his clients including:

(1)  Paragraph 5 of P’s Affirmation reference to “my client”;

(2)  Paragraph 20 of P’s Affirmation reference to “my leftover clients”; and

(3)  Exhibit 18 to P’s Affirmation which exhibits a Whatsapp conversation between Massie and P where P says “I need to discuss with you over my leftover cases.  Now a day, your office started to call them directly and your office regards them the firm clients.”

53.  He also relied on Tse Chun Wai and Mohamed for the policy considerations behind Rule 4. 

54.  He submitted that whilst the learned judge in Tse Chun Wai took the view that she was bound by Cheung JA in Kan Wai Chung v Hau Wun Fai [2016] 5 HKC 585, who made clear in terms of the application of precedents that the Court was bound by the decision of the Court of Final Appeal in HKSAR v Lau Kam Ying (2013) 16 HKCFAR 595 which adopted the majority view of Tinsley, she did say the claim must fail even if one were to apply the trio of considerations set out in Patel.

55.  He therefore invites me to adopt the same reasoning and to find by applying the “trio of necessary considerations” to answer question 2 in the affirmative and to dismiss this action.

56.  With greatest respect to Mr McLeish, I am of the view that I cannot simply adopt the analysis of the learned Judge in Tse Chun Wai (which as I mentioned at the outset does not contain discussion on the 3-step approach) to answer the question of the enforceability of the Agreement without first satisfying myself on the suitability of this case, having regards to the facts and circumstances of this case, to have question 2 be decided by O.14A procedure.  Whilst the analysis in Tse Chun Wai might be useful or instructive on step 3, at this stage I must first be satisfied on step 2.

57.  In the present case, I am not so satisfied by reason of the following matters.

58.  Firstly, even if the policy behind Rule 4 and any countervailing policies can be gleaned from the previous cases cited to me by Mr McLeish or as a matter of statutory interpretation of Rule 4, to determine whether it would be disproportionate to refuse relief (the third of the “trio of necessary considerations”) plainly would require me to consider the nature and circumstances of the illegal conduct, its centrality to the Agreement, whether it was intentional and the respective culpability of the parties.  It seems to me that these are factual matters.  Hence the question of the enforceability of the Agreement is not a pure question of law.  The question of law in question 2 is necessarily interwoven with the factual matters brought into play by the “range of factors” approach which Mr McLeish accepts the court has to apply. 

59.  Secondly, I am not satisfied that I have all the relevant facts and matters before me.  Where presently only the SOC has been filed and where, perhaps partly because of the stance taken by the D to deny there was an Agreement between P and D, there is a dearth of evidence before me concerning the circumstances surrounding the Agreement, the true nature of the Agreement, the respective roles played by the parties in entering into and carrying out the Agreement etc., I do not agree that I have sufficient facts and matters before me to determine question 2.

60.  As held by Recorder Geoffrey Ma SC (as he then was) in Rockwin Enterprises Ltd at §27, where the court is not seized of all relevant facts, it would be extremely rare case (if ever) in which the procedure under O.14A would be adopted.  See also the caution of the courts against deciding a question of law without knowing the full facts in China Ping An Insurance (HK) Co Ltd v Tsang Fung Yin Josephine [2012] 2 HKLRD 674 per Antony To J at §19 and Ghazi Faidi v Qantex Capital Markets Ltd [2022] HKCFI 1632 per Recorder Madam Winnie Tam SC at §29.

61.  Thirdly, I have my concerns whether O.14A is appropriate where D has all along strenuously denied that the Agreement was made between P and D yet the questions of law identified in the Summons is based on the assumption that the Agreement was made between P and D.   Is it right that I should embark on a determination of the enforceability of an agreement, the existence of which is hotly in dispute between the parties?  See Shell Hong Kong Ltd, §24.

62.  In case I am wrong, I now turn to consider whether I ought to exercise my residual discretion under step 2.

63.  Mr McLeish submitted his case “ticks all the boxes” in respect of the considerations set out in Rockwin Enterprises Ltd at §§24 and 25.  He said the question of law is a dominant feature of the case.  The disposal of the question of law would avoid the expense of trial.   He also invited me to consider the context of the question raised being one which concerns public policy raised and are recurring, and as demonstrated in Tse Chun Wai, the question of law can and should be determined summarily.  As to the case of Tse Chun Wai, I believe I have already made clear my views on that case.

64.  As for whether the question of law raised is the core or dominant feature of this case, certainly it is the core or dominant defence for D, but it appears to me it can also be said that a dominant and important feature of P’s case is to recover his charges for the services he has rendered to D pursuant to the Agreement.  As I read the SOC, paragraph 2 has pleaded an agreement that D shall receive from P services of legal work, meeting with clients and arranging the client’s meetings with D.  The claim by P is not merely for introducing business to D but in consideration of provision of his services.  His claim is for “services charges”.    

65.  Even if his contractual claim may be defeated by the defence of illegality, it seems to me based on the authorities cited to me and given the position of D (as already mentioned) that they may be amenable to any claim for reasonable payment for the services actually performed, P may have a viable claim based on quantum meruit, and a trial of that claim may not be avoided.

66.  Of course I note that no application to amend the SOC has been made to plead a claim based on quantum meruit even after I have raised this issue with Mr McLeish and P (who appeared before me in person and unrepresented). 

67.  Given that when a court is seized with an application for strike-out under O.18, r. 19, the court is empowered to amend any pleading or give the opportunity to amend even though the formulation of the amendment is not before the court (see Hong Kong Civil Procedure 2023, Vol 1, §18/19/4 paragraph (2)) and in the present case P is not legally represented but I am satisfied there are pleaded facts sufficient to give rise to such a claim, this is a matter I would also bear in mind in the exercise of my discretion.

68.  I also bear in mind what was said in China United Holdings Ltd & Another v Johnson Stokes & Master [2004] 2 HKLRD 272 by Stone J at §26:

“As a matter of principle O.14A applications are to be approach with considerable care, particular if, as in this case, a determination of the questions posed cannot be shown to avoid the necessity for a trial. If this be the case, therefore, why should a trial judge be thus fettered by determination of an issue under this rule? Would it not clearly be more advantageous to leave all issues open, thereby enabling the trial judge to decide such issues with the framework of the trial as now anticipated to take place before him?”

69.  Taking an overall view of the matter to see the context in which the question of law arises, based on my perception and instinct from the materials before me, I would not have exercised my residual discretion under step 2 even if I was satisfied: (a) that the question of law is one that is suitable for determination without a trial; and (b) that it is so suitable and should it be determined by the court, that it will finally determine the entire cause or matter or any issue or claim therein.

Conclusion

70.  In the premises, I would refuse the application under O.14A and it follows that the application under O.18, r.19 also fails.  I am of the view (for the same reasons I have given why O.14A is not appropriate) that the legal viability of the P’s claim is sensitive to the facts and an application for striking out would not be appropriate at this stage. 

71.  Although D has failed in its applications, given the circumstances of the case and some indulgence was given on my part to P being unrepresented, I am of the view that the costs of the Summons (including all reserved costs) should be in the cause.  This is an order nisi which shall become absolute in the absence of any application to vary (which, if any, shall be made by letter, and will be disposed of on paper) within 14 days hereof.

72.  Lastly, I thank Mr McLeish for his able assistance to the court.