NG SHEK WAI v. HONG KONG INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

CACV 41/2021

[2021] HKCA 1920

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 41 OF 2021

(ON APPEAL FROM HCAL NO 81 OF 2016)

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JUDGMENT

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Hon Chow JA (giving the Judgment of the Court):

INTRODUCTION

1.  This is Mr Ng’s appeal against the Judgment of Wilson Chan J dismissing his application for judicial review of the decision (“the Decision”) made by the Professional Conduct Committee (“the Committee”) on behalf of the Hong Kong Institute of Certified Public Accountants (“the Institute”) on 3 February 2016 rejecting his complaint against a certified public accountant, Mr Lin King Wai (“Mr Lin”).

BASIC FACTS

(i)     Mr Ng’s complaint against Mr Lin

2.  Mr Ng is the owner of Flat D, 22/F, Corona Tower, 93 Caine Road, Hong Kong.

3.  Between August 2012 and October 2013, substantial renovation works were carried out at Corona Tower.  The works were approved by The Incorporated Owners of Corona Tower (“the IO”).  Mr Lin was engaged by the IO as its auditor.  He audited the accounts of the IO for the years during which the renovation works were carried out.

4.  According to Mr Ng, he discovered that there were a number of “plausible” frauds in relation to certain works (“the Disputed Works”) carried out or allegedly carried out by the contractor in the renovation, as follows:

(1)  He alleged that the architectural consultant gave a false explanation as to why the Disputed Works were necessary.  The consultant said that the Disputed Works were mandated by law, but Mr Ng claimed that this explanation was untrue.  This raised doubts as to whether the IO was deceived into paying for the Disputed Works.

(2)  The invoices provided by the contractor did not list out the exact locations and quantities of work done.  As a result, Mr Ng suspected that the invoices were inflated and the IO was deceived into paying for works which were not done.

(3)  Mr Ng considered that the Disputed Works also fell within another item in the renovation contract between the IO and the contractor.  On this basis, Mr Ng considered that the IO effectively paid twice for the Disputed Works.

5.  On 30 June 2015, Mr Ng sent a complaint letter to Mr Lin.  In that letter:

(1)  he set out his doubts and concerns in relation to the Disputed Works;

(2)  he requested Mr Lin to seek further evidence from the IO to prove that the Disputed Works were necessary and were in fact carried out; and

(3)  he requested Mr Lin to modify his opinion in respect of the IO’s financial statements for 2014 and 2015 in the event that the IO failed to provide the requested evidence.

Mr Ng followed up on the matter with a telephone call to Mr Lin in early July 2015, and a second letter dated 21 July 2015, in which he threatened to file a complaint against Mr Lin with the Institute in the event that he should refuse to comply with his requests.

6.  Mr Ng did not get the response he wanted from Mr Lin.  Accordingly, on 10 August 2015, Mr Ng formally lodged a complaint against Mr Lin with the Institute.  There were further emails exchanged between Mr Ng and the Institute during the period from 12 August 2015 to 27 April 2016 regarding Mr Ng’s complaint against Mr Lin.  As summarized by the Judge at §44 of his Judgment, the main grounds of Mr Ng’s complaint against Mr Lin were as follows:

(1)  In light of the information provided by Mr Ng, Mr Lin was obliged to demand the IO to provide evidence which proved that the Disputed Works had been carried out.

(2)  In the event that the IO failed to provide such evidence, Mr Lin was obliged to modify his opinion in respect of the IO’s financial statements for financial years of 2014 and 2015, even though the auditor’s reports and financial statements had both been issued.

(3)  Mr Lin was under an obligation to inform Mr Ng of the result of his investigations.

(4)  By failing to take any of those steps, Mr Lin breached Hong Kong Standards on Auditing (“HKSA”) 200, 240 and 560.

7.  By a letter to the Institute dated 2 February 2016, Mr Ng raised an additional ground of complaint against Mr Lin, namely, that (1) Mr Lin had disclosed the details of his complaint to the IO, and (2) in so doing, Mr Lin breached an implied rule that an auditor should not disclose a complaint from an informer to their client unless there is a good reason to do so.

(ii)     The Institute’s handling of Mr Ng’s complaint

8.  Ms Winnie Leung (“Ms Leung”) of the Institute’s Compliance Department was assigned as the case handler to deal with Mr Ng’s complaint against Mr Lin under the supervision of Mr Peter Nip (“Mr Nip”), Deputy Director of the Compliance Department.

9.  By a letter dated 5 October 2015, Ms Leung sought representations from Mr Lin in response to Mr Ng’s complaint.  Mr Lin responded by a letter dated 22 October 2015, and provided copies of some supporting documents for review by the Institute.

10.  After considering Mr Lin’s responses and additional matters put forward in Mr Ng’s emails dated 21 September 2015, 7 October 2015 and 13 January 2016 respectively, Ms Leung and Mr Nip submitted a report to the Committee dated 15 January 2016, concluding that Mr Ng had not adduced sufficient evidence to establish a prima facie case of professional misconduct on the part of Mr Lin.

11.  Pausing here, it may be noted that the Committee is made up of independent CPAs who are not staff of the Institute.  It acts with delegated authority from the Council of the Institute to receive and consider periodic status reports from the Compliance Department in respect of all complaint cases that it handles.

12.  On 20 January 2016, the Committee agreed with the Compliance Department’s assessment and resolved to dismiss Mr Ng’s complaint.

(iii)    The Decision

13.  By a letter dated 3 February 2016, the Director of Compliance of the Institute wrote to Mr Ng as follows:

“We refer to your complaint lodged with the Institute on 11 August 2015.

The Professional Conduct Committee of the Institute has reviewed your complaint. Based on the information before it, the Committee considers that no prima facie case was shown for your complaint against Mr. Lin King Wai; and Mr Lin would not have a case to answer.

For the reason explained above, no further action will be taken by the Institute.  Accordingly we have closed this case.”

This constitutes the Decision sought to be challenged by Mr Ng by way of judicial review in the proceedings below.

14.  Mr Ng was not satisfied with the Decision, and repeatedly requested the Institute to provide detailed reasons for the Decision.  The Institute responded to Mr Ng’s request by emails dated 4 February 2016, 25 February 2016 and 21 April 2016 respectively.

15.  In the course of the emails exchanged between the Institute and Mr Ng before and after the Decision (including the Institute’s emails dated 15 July 2015, 7 October 2015, 13 January 2016, 4 February 2016, 25 February 2016 and 21 April 2016 respectively), the Institute gave the following explanations to Mr Ng on the scope or objective of the Institute’s disciplinary process, the relevant HKSA, and the essential reasons for the Decision[1]:

“(1) In the context of investigating complaints made against its members, the respondent’s objective is to assess whether the member has properly complied with the applicable audit standards in his performance of the audit.

(2) Under HKSA 560, an auditor is only required to conduct further inquiries if, after issuing the audit report, he becomes aware of any fact that, if known to the auditor at the date of his report, may have caused him to amend the report.

(3) The information and documents provided by the applicant were not sufficient to establish the allegation that the payments for the Lintel Repair Works was not proper. Based on the above, along with the information and documents provided by Mr Lin, the respondent was satisfied that Mr Lin had taken sufficient steps to evaluate the information provided by the applicant for the purpose of compliance with HKSA 560.

(4) The evidence provided by the applicant was also inadequate to show that Mr Lin had engaged in improper conduct by disclosing the Complaint to the IO. The disclosure formed part of the steps properly taken by Mr Lin to follow up on the Complaint.

(5) Pursuant to the Code of Ethics for Professional Accountants, Mr Lin was bound by the principle of confidentiality and, as such, was unable to disclose confidential / information belonging to the IO (as his named client) without appropriate authorization.”

(iv)    The application for judicial review

16.  On 3 May 2016, Mr Ng filed a Form 86 to apply for leave to apply for judicial review of the Decision.  4 grounds of judicial review were advanced in the Form 86.  They all related to the Institute’s alleged failure to provide sufficient reasons:

(1)  Ground 1: “The Council of the HKICPA did not provide sufficient reason to justify why [Mr Ng’s] complaint in the letter that: ‘附件一的投訴信已詳述爭拗...但練先生的反應令本人失望...練先生不停以各種藉口推託調查...他不可能去拆開石屎調查...他不會限期法團交出紀錄，一切隨法團自行決定’ does not show a prima facie case of misconduct.”

(2)  Ground 2: “The Council of the HKICPA did not provide sufficient reason to justify why [Mr Ng’s] complaints on Mr Lin King Wai’s allegations that:

(a)  相對於大維修的3千萬元總支出，20萬元是小數目，不值得他去花時間調查；

(b)  他只負責核對會計紀錄，不負責調查。

do not show a prima facie case of misconduct.”

(3)  Ground 3: “The Council of the HKICPA did not provide sufficient reason to justify why [Mr Ng’s] complaint that Mr Lin King Wai’s assertions that: ‘他只會向管理委員會負責，無需向個別業主負責，所以不會向本人交待結果，我要自行向法團查詢結果’ do not show a prima facie case of misconduct.”

(4)  Ground 4: “The Council of the HKICPA did not provide sufficient reason to justify why [Mr Ng’s] complaint that Mr Lin King Wai disclosed [his] complaint to the Management Committee of [his] building without a good reason does not show a prima facie case of misconduct.”

17.  Leave to apply for judicial review was granted by Au J (as he then was) on 12 December 2017.

THE JUDGMENT

18.  The substantive application for judicial review came before the Judge on 13 August 2020.  The Judge handed down a written Judgment on 11 January 2021 dismissing the application for judicial review, finding that the reasons given by the Institute for the Decision were sufficient to enable a reader to understand why the matter was decided as it was and what conclusions were reached on the principal important controversial issues (see §59 of the Judgment).

19.  The Judge considered that the Institute was under no duty to give more detailed reasons than those already given (see §71 of the Judgment), having regard to the following matters:

(1)  the Institute’s position was based on the absence of evidence (see §§72-74 of the Judgment);

(2)  the Decision did not impact on Mr Ng’s rights (see §§75-78 of the Judgment);

(3)  the Committee arrived at its decision based on a collective process (see §§79-82 of the Judgment);

(4)  the need for efficient filtering out of unmeritorious complaints (see §§83-88 of the Judgment);

(5)  Mr Ng had means to seek redress even if the Institute did not provide detailed reasons for the Decision (see §§89-95 of the Judgment); and

(6)  the provision of detailed reasons might reveal confidential information (see §§96-100 of the Judgment).

20.  In addition, the Judge held that the court should not intervene by way of judicial review because Mr Ng “does not claim to have been at all prejudiced by the extent of reasons provided by the [Institute]” (see §§101-103 of the Judgment).  The Judge also considered that, even if the court were to find some technical failure on the part of the Institute to give as full a set of reasons as required by law, there would be no utility in judicial intervention by way of judicial review, and the court should refuse to grant any relief in the exercise of its discretion (see §104 of the Judgment).

THIS APPEAL

21.  By Notice of Appeal dated 2 February 2021, Mr Ng appealed against the Judgment to the Court of Appeal.  8 grounds of appeal are raised in the Notice of Appeal:

(1)  Mr Ng’s right to a fair trial was infringed because the Judge “neglected the relevant background facts in his judgment and repeated R’s boilerplate reasons and did not answer [Mr Ng’s] arguments …”.

(2)  The Judge erred in his ruling on the duty of the Institute to disclose “the response letter of Mr Lin when the Respondent did not dispute that there was prima facie evidence of misconduct and the Respondent reversed its stance of potential breach of PAO after receiving the response letter of Mr Lin …”

(3)  The Judge erred in accepting the following “excuses to relieve the Respondent from the duty of giving sufficient reason …” -

“i. Absence of evidence;

ii. Respondent’s decision is inherently incapable of detailed elaboration;

iii. It is not for the regulator to explain to the applicant what type of evidence or materials would have been sufficient;

iv. R’s decision is a collective process;

v. Need for efficient filtering;

vi. Redress does not require detailed reason;

vii. Confidentiality;

viii. Ms Leung was not a lawyer and lack of clarity does not give rise to any procedural unfairness.”

(4)  The Judge erred in finding that Mr Ng was not prejudiced by the Institute’s failure to give adequate reasons[2], or the Decision had no impact on his rights.

(5)  The Judge erred in his ruling that Mr Lin’s oral communication with him was not relevant.

(6)  The Judge erred in basing his ruling on “the Respondent’s summary of reasons rather than the original version of reasons”.

(7)  The Judge erred in “neglecting all factual background connected to Ground 2 of [Mr Ng’s] judicial review and corresponding argument”.

(8)  The Judge erred in granting certificate for 2 counsel.

DISCUSSION

(i)     Sufficient reasons given by the Institute for the Decision

22.  It is well established that where reasons are given for a decision, the reasons may be briefly and succinctly stated.  It is not necessary for the decision-maker to consider and deal with every single issue raised by an applicant.  The decision-maker needs only deal with the relevant and substantial issues, and explain why it has come to its decision.  In the often quoted judgment of Li CJ in Oriental Daily Publisher Ltd v Commissioner for Television and Entertainment Licensing Authority (1997-98) 1 HKCFAR 279, the following general principles were stated:

“[42] First, the reasons given should show that the Tribunal has addressed the substantial issues before it and show why the Tribunal has come to its decision. There may not be any need however to address every single issue. But the reasons should show that the issues that arise for serious consideration have been considered.

[44] Thirdly, the reasons may not require great elaboration and they may be brief. It is only when they are defective in substance that they should be considered inadequate. Ultimately, what are adequate reasons in the circumstances of a particular case has to be approached sensibly.”

23.  In Capital Rich Development Ltd v Town Planning Board [2007] 2 HKLRD 155, at §98, Stock JA (as he then was) also said the following:

“What is sufficient will depend on the legal framework within which the body takes the decision and upon the case at hand. Sometimes a brief statement of reasons will suffice, because in context no more needs to be said. Sometimes, although the words employed in the reasons articulated might have been more clearly stated, a common sense approach in context of the reasons, or of the particular history, as a whole will readily reveal what was obviously intended and the courts should be loathe to permit scrutiny of reasons as if they constituted a statutory instrument. Reasoning must be examined with reality and contextual common sense. That said, where a real issue arises as to whether an allegedly material issue was or was not taken into account, or what was at the end of the day made of that issue by the decision-maker, the courts are entitled to expect the answer to be sufficiently clear from the evidence before it without having to resort to guesswork.”

24.  As correctly pointed out by the Judge at §53 of the Judgment, there is no rule that all reasons relied upon by a decision-maker must be set out in one document or decision letter.  The reasons for a decision may be gleaned from more than one document in a chain of communications between the decision-maker and the applicant.

25.  In our view, in considering whether the Institute has given sufficient reasons for the Decision, it is permissible to look beyond the letter of 3 February 2016, and consider other emails referred to in §15 above sent by the Institute to Mr Ng which formed a continuous chain of communications between them regarding Mr Ng’s complaint against Mr Lin. The contents of those emails have been summarized in §15 above and shall not be repeated here.  The question for consideration is whether they sufficiently addressed the substantial issues relevant to the central question which the Institute had to decide (namely, whether the materials before them gave rise to a prima facie case of professional misconduct on the part of Mr Lin), and adequately explained to Mr Ng why the Institute considered that no prima facie case of professional misconduct had been disclosed against Mr Lin, and thus no further action would be taken against him by the Institute.

26.  As noted in §§6 and 7 above, Mr Ng raised 4 principal grounds of complaint against Mr Lin.  First, Mr Ng complained that in light of the information provided by him, Mr Lin was obliged to demand the IO to provide evidence which proved that the Disputed Works had been carried out. However, the relevant HKSA 560 did not impose such obligation on Mr Lin.  HKSA 560, §14 (under the heading “Facts Which Become Known to the Auditor after The Financial Statements Have Been Issued”) states as follows:

“After the financial statements have been issued, the auditor has no obligation to perform any audit procedures regarding such financial statements. However, if, after the financial statements have been issued, a fact becomes known to the auditor that, had it been known to the auditor at the date of the auditor’s report, may have caused the auditor to amend the auditor’s report, the auditor shall:

(a) Discuss the matter with management and, where appropriate, those charged with governance;

(b) Determine whether the financial statements need amendment; and, if so,

(c) Inquire how management intends to address the matter in the financial statements.”

Mr Lin would be obliged to act only if he became aware of facts which, if known to him at the date of his report, might have caused him to amend the report, in which case he would be required to take the steps referred to in HKSA 560.  The Institute was satisfied that Mr Lin had taken appropriate steps to evaluate the information provided by Mr Ng for the purpose of considering whether it might be necessary to amend the relevant audit reports, and concluded that there was no need to do so.  The Institute also considered that the available evidence was inadequate to show that Mr Lin had acted in breach of HKSA 560 (see the Institute’s emails to Mr Ng dated 15 July 2015, 13 January 2016, 4 February 2016 and 21 April 2016).

27.  Second, Mr Ng complained that Mr Lin was obliged to modify his opinion in respect of the IO’s financial statements for the financial years of 2014 and 2015, even though the auditor’s reports and financial statements had both been issued.  The Institute considered, however, that Mr Lin had done what was required of him under HKSA 560, and he came to the view that there was no need to modify his audit opinions.  The Institute also considered that the available evidence did not show that Mr Lin had breached HKSA 560 (see the Institute’s emails to Mr Ng dated 4 February 2016 and 21 April 2016).

28.  Third, Mr Ng complained that Mr Lin was under an obligation to inform Mr Ng of the result of his investigations.  The Institute considered, however, that Mr Lin, as auditor of the IO, was under a duty of confidentiality not to disclose his client’s information to Mr Ng (see the Institute’s emails to Mr Ng dated 15 July 2015 and 21 April 2016).

29.  Lastly, Mr Ng complained that Mr Lin had, in breach of an alleged implied rule that an auditor should not disclose a complaint from an informer to his client unless there was a good reason to do so, improperly disclosed the details of his complaint to the IO.  The Institute considered, however, that Mr Lin’s disclosure of Mr Ng’s complaint to the IO was not improper conduct because Mr Lin was merely taking follow-up action in light of the information provided by Mr Ng (see the Institute’s email to Mr Ng dated 25 February 2016).

30.  In considering whether the reasons given by the Institute for the Decision are adequate or sufficient, it is important to bear in mind that the issue is not whether the Decision is reasonable or correct. The present judicial review is not about the rationality, still less the correctness, of the Decision.  It is only concerned with the adequacy or sufficiency of the reasons given by Institute.  We consider that the Institute has given sufficient reasons for the Decision in the context of the present case.  The Institute has addressed the substantial or significant grounds of complaint raised by Mr Ng against Mr Lin, and sufficiently explained to Mr Ng the reasons why it came to the Decision.  Mr Ng may not agree with those reasons, but that is another matter.

31.  We shall now deal with the 8 grounds of appeal raised by Mr Ng briefly.

(ii)     Ground 1

32.  Mr Ng raises 3 main points: (i) 90% of the Judge’s Judgment was an exact copy of the Institute’s Skeleton Submissions dated 7 August 2020 (“the Institute’s Submissions”), (ii) the Judge ignored the relevant background facts, and (iii) the Judge did not “answer” his arguments.

(1)  In respect of point (i), a comparison of the Institute’s Submissions with the Judgment does reveal a substantial reproduction of the former in the latter.  Mr Abraham Chan, SC has not taken issue with the extent of the reproduction of the Institute’s Submissions in the Judgment as alleged by Mr Ng.  The large-scale verbatim reproduction of the Institute’s Submissions by the Judge in his Judgment is regrettable. Nevertheless, it is well established that the mere fact of incorporation of a party’s written submissions in a judgment, even on a large-scale basis, does not automatically lead to the judgment being set aside by the Court of Appeal. In each case, the critical question is whether, on a fair reading of the judgment as a whole, the judge has brought an independent, analytical mind, to bear on his decision (see Shenzhen Zhaotian Investments Company Limited v Henderson Land Development Company Limited, CACV 79/2012 (11 March 2015), at §38.3).  We have given our anxious consideration to this ground of appeal. Having read and re-read the Judgment, we are ultimately satisfied the Judge did what was required of him.  He properly focused on the critical question before him, namely, whether the Institute had given sufficient reasons for the Decision having regard to the relevant context and circumstances of this case, and came to the conclusion that it had.  In any event, the Court of Appeal is in as good a position as the Judge to form a view on this issue.  We have come to a firm conclusion that the reasons given by the Institute for the Decision were sufficient in all the circumstances to demonstrate that it had addressed all relevant and substantial grounds of complaint raised by Mr Ng against Mr Lin, and clearly explained to him why it had come to the Decision.  In such circumstances, we would not be minded to disturb the Judgment even if we were to uphold Mr Ng’s complaint about reproduction of the Institute’s Submissions in the Judgment.

(2)  In respect of (ii), there is no duty on a judge to set out all facts, relevant or irrelevant, referred to by a party in a judgment.  Indeed, to do so would indicate that the judge has not applied his mind analytically and critically to the case and issues before him.  The Judge has, in our view, set out the relevant facts necessary for a proper consideration of the critical issue raised in the application before him, namely, whether the Institute had given sufficient reasons for the Decision (see Section B3 of the Judgment).  None of the facts referred to by Mr Ng in paragraph 6 of his Skeleton Argument in support of this ground of appeal is, in our view, essential to a proper determination of that question.  Instead, the matters raised by Mr Ng go mainly to the merits of his underlying complaint in respect of the Disputed Works or his complaint against Mr Lin.

(3)  In respect of (iii), there is likewise no duty on a judge to deal with every single argument raised by a party in his judgment, particularly where the argument is irrational or unintelligible, as many of Mr Ng’s arguments are.  A judge’s duty is to deal only with such arguments as are pertinent and necessary for a proper resolution of the case before him.  The question before the Judge in this case was whether the Institute had given sufficient reasons for the Decision, and the bulk of the Judgment was directed towards answering that question.  Mr Ng argues that the most crucial argument which the Judge failed to deal with is that “R is silent to my challenges that its reasons are self contradicting” (see paragraph 9 of Mr Ng’s Skeleton Argument):

(a)  Mr Ng contends that Ms Leung’s statement contained in an email dated 13 January 2016 that “Based on the information gathered regarding your allegations … Mr Lin had taken steps to follow up on the information you provided to him for the purpose of the relevant audits … Mr Lin had responded to your request and informed you that he would not investigate into the matter”, is contradictory to her subsequent statement in an email dated 21 April 2016 that “HKSA 560 does not require an auditor to carry out a detailed investigation into facts known to him after his issuance of an audit report … the auditor is not expected to communicate directly or release any confidential information to individual owners without authorisation by the committee”.

(b)  Mr Ng says that Ms Leung’s latter statement contradicts her earlier “observations” that “Mr Lin informed you that he would not investigate”, and “leads to the question of did or did not Mr Lin investigate and he shall or shall not answer me and what is the relevant HKSA?”[3]

(c)  We do not see that the two statements of Ms Leung are contradictory to each other.  The first statement informed Mr Ng that the Institute was given to understand that Mr Lin had taken steps to follow up on the information provided by Mr Ng and, after taking the follow-up steps (or action), he told Mr Ng that he would not be investigating into the matter, while the second statement informed Mr Ng that the applicable auditing standard did not require Mr Lin to carry out detailed investigation.

(d)  There is no contradiction between Ms Leung’s statement that Mr Lin had taken follow-up steps on the information provided by Mr Ng and her statement that Mr Lin had informed Mr Ng that he would not be investigating into the matter.  As explained in the Institute’s email to Mr Ng dated 13 January 2016:

“(1) Information provided to the Institute suggests that Mr Lin had taken steps to follow up on the information you provided to him for the purpose of the relevant audits. Steps to be taken as required by the relevant auditing standards are for expressing an audit opinion on the accounts of the Incorporated Owners and may not amount to an investigation into the matter.

(2) / (3) Based on your descriptions on the complaint form, Mr Lin had responded to your request and informed you that he would not investigate into the matter.” [emphasis added]

(e)  Read properly, it is obvious that what Ms Leung was telling Mr Ng in the email dated 13 January 2016 was that (based on information gathered by the Institute), Mr Lin had taken some follow-up actions in light of the information provided by Mr Ng and, having taken such follow-up actions, informed Mr Ng that he would not carry out any further investigation into the matter.  Ms Leung’s statement cannot sensibly be read as meaning that Mr Lin had taken no action whatsoever upon receipt of the information provided by Mr Ng.

(iii)    Ground 2

33.  Mr Ng argues that the Judge erred “in his ruling on the duty of the Respondent to disclose the response letter of Mr Lin when the Respondent did not dispute that there was prima facie evidence of misconduct …”.  This ground can be disposed of shortly because it is based on a false premise, namely, that the Institute did not dispute that there was prima facie evidence of misconduct on the part of Mr Lin.  As a matter of fact, the Institute never came to such a view.  Ms Leung asked Mr Lin to respond to Mr Ng’s complaint, not because the Institute considered that there was a prima facie case of misconduct disclosed against Mr Lin, but as part of the normal process of handling a professional complaint received by the Institute against a member[4]. It cannot sensibly be argued that the fact that the Institute asked Mr Lin to respond to Mr Ng’s complaint is evidence that the Institute considered there was a prima facie case of misconduct disclosed against him.  It seems to us obvious that the Institute’s purpose of asking Mr Lin to respond was precisely to enable it to determine whether there was a prima facie case established against him so that further action should be taken[5].

(iv)    Ground 3

34.  Mr Ng argues that the Judge was wrong to rely on a number of “excuses” to “relieve the Respondent from the duty of giving sufficient reason”.  This ground is based on a misreading or misunderstanding of the Judgment.  The Judge was not saying that the Institute was under no duty to give reason(s), or sufficient reason(s), for the Decision because of the considerations, described by Mr Ng as “excuses”, referred to in Sections E1 to E6 of the Judgment (“the Section E Considerations”).  The Judge had already reached the conclusion in Section D of the Judgment that the Institute’s reasons for the Decision were adequate.  In Section E of the Judgment, the Judge was merely explaining why, having regard to the Section E Considerations, the Institute was under no duty to provide more detailed reasons than those already given[6].

35.  For our part, we consider that the preferable approach would be to take into account the Section E Considerations in an overall assessment of the adequacy of the reasons given by the Institute for the Decision.  This difference of approach would not, however, lead to any different outcome in the present case, namely, that the reasons for the Decision given by the Institute were adequate.  For the purpose of disposing of this appeal, it is not necessary to consider the Section E Considerations individually and ask whether any one or more of them would justify a lowering of the level of details of reasons required to be given by the Institute for the Decision.  We would prefer to leave them open for further consideration in an appropriate future case should it become necessary to do so.

(v)     Ground 4

36.  Mr Ng argues that the Judge erred in finding that he was not prejudiced by the Institute’s failure to give adequate reasons, or the Decision had no impact on his rights.

37.  The first part of this complaint cannot stand in view of our conclusion that the Institute has given adequate reasons for the Decision.  For the sake of completeness, we should mention that, had we found that the Institute failed to give adequate reasons for the Decision, we would not have accepted the Judge’s view that Mr Ng was not prejudiced by the “extent of reasons” provided by the Institute[7]:

(1)  At §101 of the Judgment, the Judge stated, correctly, that the court should not intervene on the basis of an alleged failure to give reasons unless the applicant can satisfy the court that he has genuinely been substantially prejudiced by the alleged failure.

(2)  At §102 of the Judgment, the Judge went on to find that in the present case, Mr Ng did not claim to have been at all prejudiced by the extent of reasons provided by the Institute, and referred back to §78 of the Judgment in support of this finding.

(3)  However, §78 of the Judgment is about the “lack of impact on Mr Ng’s rights” arising from the Decision.

(4)  In our view, the Judge has, incorrectly, conflated (i) prejudice arising from the failure to give adequate reasons for the Decision, with (ii) prejudice arising from the Decision itself.

38.  As for the second part of this complaint, the Judge’s finding at §78 of the Judgment that the Decision did not impact on Mr Ng’s rights was based on what Mr Ng himself said at §87 of his affirmation dated 3 May 2016:

“My complaints to the HKICPA are not related to any personal benefit of me. At the end, even if Mr Lin is disciplined or the [audited] report is amended, the Owners Incorporation benefits nothing from the outcome as well. Thus, this Application is not bought for the benefit of any person.”

39.  We do not consider the Judge to be wrong to find that the Decision, which concerned whether there was a prima facie case of professional misconduct disclosed against Mr Ng, did not impact on Mr Ng’s personal rights.

(vi)    Ground 5

40.  Mr Ng argues that the Judge erred in his ruling that Mr Lin’s communications with him was not relevant.  This ground is directed against §66 of the Judgment, where the Judge rejected Mr Ng’s complaint about the Institute’s failure to deal with his criticism of the oral responses allegedly given by Mr Lin to him, namely, that “練先生不停以各種藉口推託調查...他不可能去拆開石屎調查...他不會限期法團交出紀錄，一切隨法團自行決定” (referred to in Ground 1 of Judicial Review in the Form 86).

41.  As the Judge rightly pointed out, the Institute had in its email dated 7 October 2015 already explained to Mr Ng that “[t]he Institute’s complaint handling process focuses on assessing whether conduct of [Mr Lin] complied with the relevant audit standards in the audits on the Owners’ Incorporation’s financial statements”.  In our view, what Mr Lin might, or might not, have said to Mr Ng was of little significance.  The fact of the matter was that Mr Lin decided that it was not necessary to carry out further investigation into the matters raised by Mr Ng, or to amend the audit reports. The question was whether Mr Lin failed to observe any professional standards in coming to that decision.  The relevant professional standards in the present case were HKSA 560.  The Institute, after considering the materials provided by Mr Ng and Mr Lin, came to the view that Mr Lin had done what was required of him, and there was no sufficient evidence to show that he had failed to observe those standards.  We do not see that the Institute was under any duty to make a separate, factual determination of what Mr Lin might, or might not, have said to Mr Ng.  The Judge was, in our view, correct to reject Mr Ng’s complaint about the Institute’s failure to deal with his criticism of Mr Lin’s alleged oral reasons for declining to investigate into the matters raised by him, bearing in mind that the present judicial review was not about the rationality of the Decision, but the sufficiency of the reasons given for the Decision.

(vii)   Ground 6

42.  Mr Ng complains that the Judge erred “in basing his ruling on the Respondent’s summary of reasons rather than the original version of the reasons”.  This ground is directed at the Judge’s rejection, at §67 of the Judgment, of Mr Ng’s contention that Mr Nip had given “new reasons” for the Decision in his summary of the contents of various emails sent by the Institute to Mr Ng[8]. There is nothing in this ground of appeal.  In §34 of Mr Nip’s First Affirmation, he expressly referred to the pages of the Exhibit SWNG-1 where the relevant emails appeared, and summarized the contents of those emails.  Copies of the emails were before the Judge, and he was entitled to accept, or reject, Mr Nip’s summary.  It is of note that the Judge in fact quoted verbatim from the relevant parts of the Institute’s emails at §52 of the Judgment.  We consider that the Judge correctly focused on the actual emails, instead of Mr Nip’s summary, in coming to his conclusion that the reasons given by the Institute for the Decision were adequate (see §§59-70 of the Judgment).

(viii)  Ground 7

43.  Mr Ng argues that the Judge erred in neglecting all factual background connected to Ground 2 of his judicial review and corresponding arguments.  Ground 2 of the judicial review, it will be recalled, concerned Mr Ng’s allegation that the Institute failed to give sufficient reason for taking the view that Mr Lin’s alleged statements to him, namely, that (a) 相對於大維修的3千萬元總支出，20萬元是小數目，不值得他去花時間調查，and (b) 他只負責核對會計紀錄，不負責調查, did not disclose a prima facie case of misconduct on the part of Mr Lin.  The same reasons for rejecting Ground 5 above apply equally to this ground of appeal.

(ix)    Ground 8

44.  Finally, Mr Ng complains that the Judge erred in granting certificate for 2 counsel to the Institute in the proceedings below. Whether to award costs to any party, and whether to grant a certificate for 2 counsel, were matters within the Judge’s discretion.  The grounds for intervention by the Court of Appeal in such decisions are limited, such as where the judge exercised his discretion under a mistake of law or in disregard of principle, or the decision was plainly wrong.

45.  Mr Ng argues that this case did not raise complex issues such as would justify the engagement of leading counsel by the Institute.  The question of whether the issues raised in the present application were sufficiently complex to justify the Institute’s engagement of senior counsel to appear at the substantive hearing of the judicial review was a matter which fell within the broad area of discretion of the Judge.  We do not consider that there is sufficient basis to disturb the Judge’s exercise of discretion in this case.

46.  Finally, we note that in each of the 8 grounds of appeal, Mr Ng adds the following words at the end: “and erred in failing to sufficient reason” or “without giving sufficient reason”.  They do not add anything of substance to his appeal.

47.  In conclusion, all 8 grounds of appeal are rejected.

DISPOSITION

48.  Mr Ng’s appeal against the Judgment is dismissed.  We see no reason why costs should not follow the event.  We accept that the appeal potentially raises issues of importance to the Institute, and may have systemic and resource implications on the Institute’s complaint handling process.  The Institute is, in our view, justified to instruct leading and junior counsel to attend the hearing of the appeal.  Accordingly, we make an order that Mr Ng shall pay the Institute’s costs of resisting this appeal, to be taxed if not agreed, with certificate for 2 counsel.