A SOLICITOR v. THE LAW SOCIETY OF HONG KONG

CACV 382/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 382 OF 2008

(ON APPEAL FROM THE ORDER OF THE SOLICITORS DISCIPLINARY
TRIBUNAL DATED 11 DECEMBER 2008)

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J U D G M E N T

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Hon Rogers VP:

1.  This was an appeal from a decision and order of the Solicitors Disciplinary Tribunal (“the Tribunal”).  The order was made on 11 December 2008 and the statement of findings were dated 9 September 2008.  The appellant had been found guilty on four complaints made against him and fined a total of $200,000.  The appellant was restricted for a period of two years from the date when the order would take effect that he would not be permitted to practise as a sole proprietor or partner of any solicitors firm and could only practise as a solicitor under the supervision of another solicitor of at least 10 years standing.  Finally the solicitor was ordered to pay two thirds of two thirds of the costs of the applicant in these proceedings.  At the conclusion of the hearing of this appeal, judgment was reserved which we now give.

Background

2.  The complaints against the appellant were as follows:-

“1.1  That you, [the solicitor], a solicitor, committed professional misconduct contrary to Principle 5.03 of the Hong Kong Solicitors’ Guide to Professional Conduct (2^nd Ed.) Vol 1 (the “Guide”) and/or Rule 2 (a), (c), (d) and (e) of the Solicitors’ Practice Rules (the “SPR”) by accepting instructions and acting for clients on matters that you did not have the necessary competence and experience to undertake.

Particulars

From around April 2000 to July 2002, you accepted instructions and acted for nine Mainland residents in their purported application for business visa to travel to and permanent right to stay in Hong Kong when in fact you had no or insufficient knowledge, experience and competence to undertake such work.

1.2  That you, [the solicitor], a solicitor, committed professional misconduct contrary to Principle 5.18 of the Guide and/or Rule 2 (a), (c), (d) and (e) of the SPR by failing to be honest and candid in your advice to clients.

Particulars

From around April 2000 to July 2002, you advised 9 Mainland residents that they were entitled to and/or you could successfully assist them to apply for business visa to travel to and permanent right to stay in Hong Kong when in fact either they had no such entitlement and/or you had no or insufficient knowledge, experience and competence to undertake such work.

1.3  That you, [the solicitor], a solicitor, committed professional misconduct contrary to Principle 13.02 of the Guide and/or Rule 2 (a) and (d) of the SPR by failing to honour a cheque drawn by you in connection with your practice.

Particulars

On or about 31^st July 2002, you drew a cash cheque in the amount of HK$220,000 on your office account.  The cheque was meant to be refund to your clients for your failure to complete the work which they had engaged you to do.  However, the cheque was dishonoured upon presentation on or about 2^nd September 2002.

1.4  Further or in the alternative to Charge 1 and 2 above, you, [the solicitor], a solicitor, committed professional misconduct contrary to Rule 2 (a), (c), (d) and (e) of the SPR by failing to properly surpervise your clerk Ho Yuen Kwong as a result of which he committed misconduct particularized below to the prejudice of your clients.”

3.  Principle 5.03 of the Guide provides that:

“5.03  A solicitor must not act or continue to act in circumstances where he cannot represent the client with confidence or diligence.”

4.  This is amplified by Rule 2(a), (c)-(e) which reads:

“2.  A solicitor shall not, in the course of practising as a solicitor, do or permit to be done on his behalf anything which compromises or impairs or is likely to compromise or impair-

(a)  his independence or integrity;…

(c)  his duty to act in the best interests of his client;

(d)  his own reputation or the reputation of the profession;

(e)  a proper standard of work; ...”

5.  Principle 5.18 of the Guide reads:

“5.18  A solicitor must be both honest and candid when advising client.

13.02  A client account cheque must never be dishonoured.  A solicitor must take care to ensure that any cheque for use in connection with this practice will be honoured upon presentation.

2.03  A sole practitioner...  is prima facie responsible for the acts or omissions of his firm and this extends to the acts or omissions of his… staff.”

6.  There were also two charges against the clerk, Ho Yuen Kwong (“Ho”).  Ho initially took part in the proceedings when he represented himself.  After a time he took no further part in the proceedings and did not appeal against the findings or order.

7.  The appellant is the sole proprietor of his firm.  Ho was a clerk employed in the firm.  He was, apparently, given the title of manager of the firm but, nevertheless, being an unqualified person, he worked under the supervision of the appellant.

8.  As will be seen from the charges, the complaints arise out of the conduct of the appellant and Ho in respect of work undertaken on behalf of the nine complainants.  The evidence before the Tribunal was confined to evidence of the first and second complainants.  None of the other complainants gave evidence and neither the appellant nor Ho gave evidence.

9.  The first and second complainants, Mr Lam and Mr Chau respectively, gave evidence that they wished to come to settle and stay in Hong Kong.  They were introduced to Ho by one of the other complainants, a Mr Lam Wing Mong.  It seems that the initial meeting was in Shenzhen about April 2000 when Ho made claims that the appellant was a solicitor who had a great deal of experience in that type of immigration work, namely applying for business visas for Mainland residents for permanent stay and settlement in Hong Kong.  The Tribunal accepted that the complainants had been promised that they would obtain their permits within about six months and that they had been guaranteed that they would have their money back should that not happen.  It was in reliance on that that each of the complainants paid $30,000 in respect of fees, save for Mr Lam Wing Mong who paid only $25,000.

10.  There is no doubt that the appellant’s firm undertook a certain amount of work.  Much of that appears to have been concerned with writing letters to various Public Security Bureaus in the Mainland, writing to the Premier of the People’s Republic of China as well as to the Hong Kong Immigration Department and, on one occasion, to the Chief Executive.  Those facts alone, might generate an impression of unreality.  The notion that a solicitor in Hong Kong might write to the Chief Executive in the following terms can only lead to the impression that the appellant scarcely knew what he was doing at all:

“That is why we now write to you asking for assistance on behalf of the above persons to follow up the matter with the relevant Public Security Bureau in China and also advise us as to the exact department where these applications should be submitted to, the address of the same, as well as the relevant steps and procedures concerning the said application.”

11.  The Tribunal said at paragraph 27 of the findings:

“These were clear evidence that the Respondents had no relevant or insufficient knowledge, experience or competence in the Applications for which they were instructed, and had undertaken to do for the Complainants.”

12.  On that basis the Tribunal found that the first charge had been proved.

13.  Likewise, the Tribunal found that the appellant was neither honest not candid with the advice to the complainants.  The Tribunal accepted that the appellant had told the complainants in July 2001 that the application would succeed.  The Tribunal found that the appellant had not been frank and honest with the complainants about the lack of knowledge about himself and Ho and that they had insufficient knowledge or competence or experience in the kind of work which they had been retained to do.  Both the appellant and Ho had failed to give the client honest and proper opinions on the matter and had failed to inform the complainants about the merits and probable result of the applications.  In those circumstances the Tribunal held that the second complaint had also been proved.

14.  As regards the third charge, which was the dishonour of the cheque, the complainants gave evidence that this cheque had been given in satisfaction of the appellant’s undertaking to pay the fees should the applications be unsuccessful.  The first and second complaints, Mr Lam and Mr Chau, denied that that had been obtained under duress and, indeed, they gave evidence that the appellant had paid $25,000 to them when they had made complaint after the cheque had been dishonoured.  The Tribunal accepted the complainants’ evidence and, in addition, had noted that the cheque for $220,000 was dishonoured because there was insufficient funds and not because payment had been stopped.

15.  As regards the fourth charge the Tribunal had little difficulty in coming to the conclusion that the appellant had failed to supervise Ho properly and that this had led to Ho being the primary instigator of the false claims to the complainants.

This appeal

16.  On this appeal, Mr Shum, who appeared on behalf of the appellant, relied on three main grounds.  The first ground was that the Tribunal had not given adequate reasons for believing Mr Lam and Mr Chau.  That was in the face of the fact that Mr Lam, in particular, had been shown to have given, at the very least, conflicting evidence on a material matter in the course of the hearing.  The other major matter relied upon by Mr Shum was that Mr Lam and Mr Chau were inherently unreliable because they admitted and it was their case that they had been prepared to execute and rely upon false documents in order to obtain the visas.

17.  The second ground relied upon was that the Tribunal had found that the appellant knew everything that went on between the complainants and Ho.  On this aspect, reliance was placed on the fact that the various documents did not demonstrate that there had been any guarantee of success given by the appellant.  They merely showed that the appellant had undertaken work.

18.  The third point taken was that much of the work to be undertaken concerned applications to organisations and authorities in the Mainland.  In so far as the Tribunal held that the appellant had not been competent to undertake that, the question was raised as to whether it was the duty of the prosecutor or the Tribunal to explain exactly what the proper procedure would have been.

19.  By far the most important aspect was the credibility of the complainants, in particular Mr Lam.  He had initially given evidence that he had been employed throughout the relevant period of many years by the Public Security Bureau in the Mainland.  He was then shown in cross-examination one of the documents which was said to have been used as part of his application.  The document purported to show that Mr Lam had been a sales manager earning 5,000 RMB per month and had been successful in that job.  It went on to say that Mr Lam now wanted to invest and develop his career in Hong Kong.

20.  When challenged about this he said that it was entirely false.  Later, after there had been 2 adjournments and the matter had been investigated by the police, specifically, Mr Lam had been questioned in relation to whether he had been guilty of a criminal offence, what seems to have emerged is that Mr Lam had probably worked for that company for a short time, more probably as a janitor or caretaker or in some capacity of that nature, but not as sales manager.

21.  The appellant is justified in saying that Mr Lam changed his evidence about that document.  One thing, however, that is abundantly clear is that the Tribunal must have been fully aware of this since there had been 2 adjournments because of it, there had been extensive cross-examination and the conduct of the hearing had been delayed for 2 years as a result of the adjournments.  The Tribunal was fully justified in approaching the matter in the way it did and to accept that the complainants, and Mr Lam in particular, were “frank and their evidence were on the whole unshaken during cross-examination.”  The Tribunal had seen the witnesses give their evidence.  It was amply justified in concluding that, in the circumstances of the particular case, specifically where the complainants had wanted to obtain business visas so that they could come to Hong Kong, when they were almost certainly not entitled to obtain such visas, it could find the case against the appellant and his staff proved.

22.  As regards the second point, the Tribunal was amply justified in concluding that the appellant and his staff worked as a team.  Given the documents in the case, in particular those which the appellant must have known were being prepared, the Tribunal was bound to come to the conclusion that the appellant knew what his staff had done.  In this respect the appellant’s failure to give evidence is something which the Tribunal was entitled to take into account.

23.  The third point taken on behalf of the appellant that the prosecution had not explained what procedure should have been undertaken, is, in my view, simply unarguable.  The appellant had demonstrated by what had happened that he had no idea as to how to go about getting business visas.  To write to the Chief Executive in the manner he did and to the Premier of the People’s Republic reduces the matter to a farcical level.

24.  In conclusion, I would say that on the evidence the decision which the Tribunal came to was clearly the correct decision.  When the Tribunal came to make its order on 11 December 2008 it expressed sympathy for the complainants because of their “unhappy experience” with the appellant and his staff and said that it regretted that it did not have power to order that the appellant and Ho should recompense the complainants.  However counsel for the Law Society has drawn this court’s attention to section 10(2)(bb) of the Legal Practitioners Ordinance Cap. 159 which provides that

“(2)  Subject to the provisions of this Ordinance, on completion of its inquiry and investigation, a Solicitors Disciplinary Tribunal shall have power to make such order as it thinks fit and any such order may, in particular, include provision for all or any of the following matters-

………

(bb)  payment by that solicitor or foreign lawyer to the complainant of an amount not exceeding the amount paid to the solicitor or foreign lawyer by way of fees and disbursements in relation to the complainant’s matters in dispute;”

25.  It is clear that, if the Tribunal had been aware of that provision, it would have made some compensatory order.  In those circumstances, I consider that it would be right for this court to exercise its powers on the appeal to vary the order below by ordering that each of the complainants should be reimbursed $12,000, if and in so far as it is possible to contact them.  The fine of $200,000 should be reduced by the amounts that are paid to the complainants.  Save as aforesaid, I would dismiss this appeal with an order nisi of costs in favour of the Law Society.

Hon Le Pichon JA:

26.  I agree.

Hon Burrell J:

27.  I agree.