THE LAW SOCIETY OF HONG KONG v. JIM YIU MING AND ANOTHER

CACV 397/2023 & CACV 335/2024

( Heard together)

[2025] HKCA 932

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NOS 397 OF 2023 AND 335 OF 2024

(ON APPEAL FROM AN ORDER MADE BY THE SOLICITORS DISCIPLINARY TRIBUNAL DATED 14 NOVEMBER 2023)

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(Heard together)

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REASONS FOR JUDGMENT

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Hon Kwan VP (giving the Reasons for Judgment of the Court):

1.  These two appeals arose out of the findings and order of a solicitors disciplinary tribunal (“Tribunal”)  dated 14 November 2023 made against two solicitors, Jim Yiu Ming (“R1”)  and Sundaramoothy Krishnan (“R2”), formerly partners of Jim & Co (“Firm”).

2.  R1 and R2 admitted all 20 complaints brought against them by the Law Society at a hearing on 17 March 2023 and confirmed that they have no disputes about the allegations and the facts stated in the particulars of the complaints.  The Tribunal found all the complaints substantiated and proved.  By the aforesaid order (“Order”),  

(1)  R1 was fined $30,000 (for each of complaints 2, 5, 9 and 20), $15,000 (for each of complaints 1, 3, 6, 7, 10 to 13 and 18), $12,000 (for complaint 19), $9,000 (for each of complaints 15 to 17), $6,000 (for each of complaints 4 and 8)  and $3,000 (for complaint 14), making a total of $309,000;

(2)  R2 was fined $10,000 (for each of complaints 2, 5, 9 and 20), $5,000 (for each of complaints 1, 3, 6, 7, 10 to 13 and 18), $4,000 (for complaint 19), $3,000 (for each of complaints 15 to 17), $2,000 (for each of complaints 4 and 8)  and $1,000 (for complaint 14), making a total of $103,000;

(3)  R1 and R2 were censured generally;

(4)  With effect from the date of the Order, R1 and R2’s practice as a solicitor be subject to the following conditions for two years (“Conditions”):

(a)  Each of them cannot practise as a sole proprietor or partner of a solicitors’ firm;

(b)  Their practice as a solicitor be subject to the supervision of a full-time solicitor of no less than 15 years’ standing and of good standing; and

(c)  They shall attend and complete the relevant RME[1] and/or CPD[2] accounting courses for at least 15 hours with satisfactory result before each of them is issued with his practising certificate; and

(5)  R1 and R2 were to pay the costs of and incidental to the disciplinary proceedings in the total sum of $450,000.

3.  By a subsequent decision dated 15 March 2024, the Tribunal ordered that the payment of fines and costs be deferred until 28 February 2024, that there be further deferment of the payment of fines and costs until 3 June 2024, and that the payment of the fines and costs be made in six monthly instalments commencing on 3 June 2024.  We are given to understand by the respondents that the fines and costs have not been paid as the Firm’s accounts are under the control of the intervention agent appointed by the Law Society and the funds have not been released to them.

4.  With leave granted by the Court of Appeal on 1 August 2024[3], the Law Society brought an appeal against the Order insofar as it imposed a penalty of fines.  This is CACV 335/2024.  The Law Society sought to set aside the penalty of fines and in substitution thereof, or in addition thereto, that R1 be suspended from practice for five years and R2 be suspended from practice for three years, and that thereafter R1 and R2’s practice as a solicitor be subject to the Conditions for two years.  At the hearing, Mr C W Ling clarified to this court that the Law Society would seek an order of suspension in substitution of the fines.

5.  R1 and R2 appealed against the Conditions in the Order.  This is CACV 397/2023.  They filed a joint notice of appeal when both were acting in person.  It was not spelt out in the notice of appeal what order they would seek in the event that the Conditions were set aside.  At the hearing of the appeals, R1 continued to act in person and Mr James McGowan appeared for R2.

6.  At the conclusion of the hearing, we allowed the Law Society’s appeal in CACV 335/2024 and dismissed the appeal of R1 and R2 in CACV 397/2023.  These are the orders we made:

(1)  In substitution of the penalty of fines in the Order, R1 be suspended from practice for four years and R2 be suspended from practice for two years, with effect from the date of the Order on 14 November 2023;

(2)  The Conditions in the Order, the general censure and the costs orders of the Tribunal do stand; and

(3)  R1 and R2 do pay the costs of the Law Society in these appeals.

7.  Regarding the restrictions on practice under supervision in the Conditions, R2 has completed 22 months of practice under the supervision of Tsang Hon Wai (“Mr Tsang”), his former partner in Krishnan & Tsang.  R1 has proposed a solicitor to supervise his practice but has not been able to obtain approval from the Consents Committee of the Law Society of the solicitor he proposed.

8.  As for completing the relevant courses, R1 and R2 managed to organise their own “personal course” for the required 15 hours of accounting training, which was taught by the University of Hong Kong.

9.  The outcome is that the Conditions would be regarded as largely spent for R2, so that when his suspension expires in November 2025, and after he has completed two more months of practice under supervision, he would be able to resume his practice without being subject to the Conditions.  R1 would still be required to comply with (a) and (b)  of the Conditions upon the expiry of his suspension in November 2027, because he has not been practising under supervision from the beginning.

10.  These are the reasons for the orders we made.

Background

11.  The relevant background matters may be stated as follows.

12.  R1 and R2 were admitted as solicitors in 1993 and were in private practice at all material times.

13.  From November 2013 to March 2015, R1 was the sole proprietor of the Firm.  The Firm’s office was in Fanling, New Territories, initially at Luen Fat Street and a year later at Wo Fung Street.

14.  When R1 set up the Firm, he was introduced by the chairman of a rural district committee to an indigenous villager, Tony Chan Chung (“Tony Chan”)  as a trustworthy and qualified accountant.  Tony Chan told R1 he had retired as a certified public accountant (practising)  but was still able to do accounting works for law firms.  R1 employed him as the Firm’s accounts clerk to handle its accounts and bookkeeping.  At Tony Chan’s introduction, R1 engaged S L Lee & Lau CPA Ltd (“Lee & Lau”)  to audit the accounts of the Firm and prepare the accountant’s report required to be delivered to the Law Society under the relevant legislation.  Tony Chan was not a certified public accountant (practising)  or a person approved by the Council of the Law Society (“Council”)  to authorise the withdrawal of money from a client account.

15.  In November 1999, R2 set up Krishnan and Tsang in equal partnership with Mr Tsang.  Their partnership continued until the Firm was intervened by the Law Society on 20 June 2019.

16.  In March 2015, R1 set up a branch office of the Firm in Jordan, Kowloon and invited R2 to join as a partner.  R2 became the limited and part-time partner of the Firm for its Jordan branch, whilst remaining a full-time partner of Krishnan & Tsang.  Shortly before the Firm was intervened, R2 resigned from the Firm on 17 June 2019.

17.  The irregularities in the accounts of the Firm were first discovered when Lee & Lau provided the Law Society with the 2016/17 accountant’s report belatedly in November 2017.  In the report, the accountant identified several breaches of the Solicitors’ Accounts Rules, Cap 159F (“SAR”), namely paying money into the Firm’s office account rather than the Firm’s clients account and the absence of documents supporting a number of unknown bank receipt and payment transactions in the Firm’s office account.  Lee & Lau resigned as the Firm’s accountant in June 2018. Similar breaches were identified in the 2017/18 accountant’s report filed belatedly in November 2018 by CBD CPA Ltd, which replaced Lee & Lau.

18.  From November 2017, the Law Society wrote to the respondents and Lee & Lau seeking an explanation of the irregularities in the accounts and asking for particulars and supporting documents.  The responses for over a year were unsatisfactory.  In December 2018, the Council resolved to conduct an inspection on the Firm.  As mentioned, the Firm was intervened on 20 June 2019.

19.  During the inspection, the monitoring accountants of the Law Society noticed that the Firm had frequently failed to deposit client’s money into the Firm’s clients account and had deposited client’s money into the Firm’s office account.  One notable example concerned $625 million odd deposited into the Firm’s office account on 5 November 2018. The funds were costs on account of a client Lucky Yuen Holding Ltd for the acquisition of shares in a company which owned Power Industrial Building at Fotan, Shatin and car parking spaces therein.  The Firm applied the bulk of $625 million to purchase seven cashier orders on 6 November 2018 for the completion of the transaction.  After paying the Firm’s profit costs and disbursements, the balance was refunded to the client.

20.  In the letter of R1 to the Law Society dated 3 July 2019, he claimed that Tony Chan secretly transferred money without his knowledge or authority from the Firm’s office account to his personal account and tried to conceal his fraud by not issuing receipts or recording the same, not recording transactions in the clients’ cash books and not completing the clients reconciliation statements.

21.  Upon discovering Tony Chan’s dishonesty, R1 gave notice to him to terminate his employment with effect in January 2019.  The Firm issued a writ against Tony Chan in the District Court in March 2019.  In August 2019, R1 provided a statement to the Commercial Crimes Bureau regarding the misappropriation by Tony Chan.

22.  As from 28 June 2019, the Law Society has imposed conditions on R1 and R2’s practising certificates for the second half of 2019 and successively for 2020 to 2024 in these terms:

(1)  R1 and R2 are required to complete a period of practice of 24 months under the supervision of a solicitor holding an unconditional certificate;

(2)  They may only practise in an employment that has been approved by the Council;

(3)  They may only practise in a partnership that has been approved by the Council;

(4)  They may only practise on their own account with the approval of the Council;

(5)  They shall not sign cheques on a client account; and

(6)  They shall undertake additional academic or training courses or examination specified by the Council.

23.  Having investigated the conduct of the Firm, on 14 July 2022 the Law Society applied to the Tribunal to consider the 20 complaints against R1 and R2 in respect of the following breaches:

(1)  Breaches of section 8 of the Legal Practitioners Ordinance, Cap 159 (“LPO”)  and rule 8 of the Accountant’s Report Rules, Cap 159A (“ARR”), in that R1 and R2 failed to deliver the 2016/17 accountant’s report and the 2017/18 accountant’s report on time (complaints 1 and 7);

(2)  Breaches of rule 3 of the SAR, in that R1 and R2 paid into the Firm’s office account money which should have been paid into the Firm’s clients account (complaints 2, 5, 10, 11, 12, 13, 17 and 18);

(3)  Breaches of rule 7 of the SAR, in that clients’ money was improperly drawn from the Firm’s clients account (complaints 10 and 12);

(4)  Breaches of rule 7A of the SAR, in that R1 and R2 failed to ensure that money drawn from the Firm’s clients account was drawn only with the authority of persons permitted under rule 7A(1)  of the SAR (complaint 9);

(5)  Breaches of rule 9A of the SAR, in that R1 and R2 failed promptly to remedy the breaches of the SAR upon discovery (complaints 2, 5, 10, 11, 12, 13, 15, 16 and 17);

(6)  Breaches of rule 10(1)  of the SAR, in that R1 and R2 failed at all times to keep properly written up books and accounts in respect of clients’ money (complaints 3, 6, 11, 12, 13, 15 and 16);

(7)  Breaches of rule 10(2)  of the SAR, in that R1 and R2 failed to record all dealings with clients’ money and money being dealt with through the Firm’s clients account in the Firm’s clients’ cash book and clients’ ledger within three working days after the date of such dealings (complaints 3, 6, 11, 12, 13, 15 and 16);

(8)  Breaches of rule 10(3)  of the SAR, in that R1 and R2 failed properly to record non-client dealings relating to their practice as solicitors in an office cash book and ledger (complaints 12, 13, 14 and 17);

(9)  Breaches of rule 10(4)  of the SAR, in that R1 and R2 failed properly to keep a record of all bills of costs (complaint 10);

(10)  Breaches of rule 10A of the SAR, in that R1 and R2 failed to prepare monthly reconciliation statements to account for the differences in the balances of the Firm’s clients account, clients’ ledger and clients’ cashbook (complaint 12);

(11)  Breaches of rule 11 of the SAR, in that R1 and R2 failed to produce for inspection, at such time and place as may be fixed by the Council, the accounting documents and records of the Firm (complaints 9, 11, 12, 13, 15, 17, 18 and 19);

(12)  Breaches of principle 2.03 of the Hong Kong Solicitors’ Guide to Professional Conduct (“Guide”)  and its commentary, in that R1 and R2, as principals of the Firm, should be responsible for the acts or omissions of the Firm or of the other partners and staff (complaints 5, 12, 13, 14, 15, 16, 17 and 18);

(13)  Breaches of principle 6.04 of the Guide and its commentary, in that R1 and R2 failed to reply fully and promptly to inquiries from the Law Society (complaints 4 and 8); and

(14)  Breaches of rules 2(d)  and (e)  of the Solicitors’ Practice Rules, Cap 159H (“SPR”), in that from the facts of complaints 1 to 19 above, R1 and R2’s conduct compromised or impaired or was likely to compromise or impair their own reputation and the reputation of the profession and a proper standard of work (complaint 20).

24.  R1 and R2 each filed an affirmation in mitigation.  R1 claimed that the complaints all arose from the misplaced trust of the Firm’s former staff, Tony Chan, and its former accountant Lee & Lau. R2 made the point that all the complaints related to cases in the main office in Fanling and he had no involvement there.

25.  As stated in the findings of the Tribunal, the importance of complying with the provisions in the LPO, SAR, ARR and the Guide – which set out the manners in which clients’ money shall be dealt with – is crucial.  “A Solicitor has a duty to protect client’s interest and in particular, their money should be dealt with in a careful manner.  Failure to comply with them can result in severe and serious financial loss to a client, not to mention the damage caused to the reputation of the Professional in that the public may lose confidence in the ability of solicitors to deal with their money.”  The Tribunal considered the breaches as “very serious”.  They showed that the Firm did not maintain a proper set of accounting system, that R1 and R2 did not acquaint themselves with the relevant rules and both lacked proper or any supervision of their accounting staff.

26.  According to the affirmation of the intervention agent appointed by the Law Society made in 2021, the remaining balance in the clients account of the Firm was about $14.8 million, the remaining balance in the office account of the Firm about $2.1 million, and the total amount of justified claims of clients about $6.1 million, so that after release of monies from the clients account to meet justified claims, there would be a balance of $8.6 million in the clients account.

The Tribunal’s reasons for the Orders

27.  In considering the appropriate penalties, other than the serious nature of the complaints, the Tribunal took into account these mitigating factors:

(1)  Both respondents had pleaded guilty at the outset.

(2)  No clients of the Firm suffered any financial loss, as confirmed by the prosecutor.

(3)  No dishonesty of the respondents was involved.

(4)  Both respondents had suffered great financial loss caused by Tony Chan and the stress in the disciplinary proceedings.

(5)  R1 played a major role and R2 played a lesser role in the supervision of staff and management of all matters of the Firm including accounting, thus R2 should receive a lesser sentence.

(6)  The costs of the Law Society and the prosecutor in the disciplinary proceedings were excessive.  In assessing the costs and disbursements that should be paid by the respondents, the amount should not be wholly disproportionate to the penalty imposed. 

The Law Society’s grounds of appeal

28.  Mr Ling submitted for the Law Society that the sentence, being a combination of fines, general censure, and a two-year restriction on practice is manifestly inadequate in view of the seriousness of the 20 complaints and is clearly wrong.  Although the appeal court pays considerable respect to the decisions of the Tribunal as an expert and informed tribunal particularly well placed to assess what sanctions are required to deal with a defaulting solicitor and to protect the public interest, the appeal court will intervene where the sentencing decision of the Tribunal is “clearly wrong”[4].

29.  Mr Ling referred to these principles established in a number of authorities.  Where a solicitor has not acted dishonestly but has fallen below the required standards of “integrity, probity and trustworthiness”[5], suspension is generally the appropriate sentence although in an appropriate case, an order of striking off may be called for.  It is only in the most exceptional cases that orders other than striking off or suspension should be imposed[6]. Further, when considering an appropriate penalty, emphasis should be on the need to protect the public and maintain public confidence in the profession[7].

30.  He submitted that the conduct of R1 and R2 fell below the required standards of integrity, probity and trustworthiness, in view of (1)  the sheer scale and pervasiveness of the accounting irregularities; (2)  the systemic mishandling of vast amounts of client monies; and (3)  the total lack of supervision of the Firm’s accounting staff.  In accordance with the above principles, a period of suspension should be imposed on R1 and R2 to reflect the gravity of their misconduct and maintain public confidence in the profession. 

31.  He contended that the Tribunal failed to have regard to the above principles and instead cited mitigating factors including the admission of guilt at the outset, the absence of financial loss of the Firm’s clients, the absence of dishonesty of the respondents, the great financial loss suffered by the respondents as well as stress in the disciplinary proceedings.  Counsel submitted that none of these matters could amount to exceptional circumstances to justify a departure from the sentence normally imposed in this type of situation.

32.  Furthermore, Mr Ling pointed out that the Tribunal appeared to have given insufficient consideration to the gravity of the admitted breaches in the 20 complaints in terms of the magnitude, duration, frequency and pervasiveness of the respondents’ disregard of the relevant provisions.  The unchallenged evidence revealed a flagrant, sustained and systemic failure of the respondents to observe basic accounting requirements in relation to clients’ money and client accounts.  In summary: payment into the Firm’s office account of monies which should have been paid into the Firm’s clients account was up to $715 million (breach of rule 3 of the SAR); failure to keep properly written up books and accounts in respect of clients’ money was up to $15 million (breach of rule 10(1)  of the SAR); failure to record dealings in clients’ cash books and accounts was in the region of $15 million (breach of rule 10(2)  of the SAR); failure to remedy, promptly or otherwise, breaches of the SAR upon discovery was up to $673 million (breach of rule 9A of the SAR); systemic failure to keep properly written up books and accounts, office cash books and ledgers in respect of non-client dealings, and monthly reconciliation statements (breach of rules 10(3)  and 10A of the SAR); and failure to produce for inspection accounting documents and records to explain suspicious transactions amounted to over $3 million (breach of rule 11 of the SAR).

33.  The above breaches occurred on multiple occasions affecting many clients over a period of one to two years.  The respondents compounded their errors by failing to reply fully and promptly to inquiries in relation to the accounting irregularities raised by the Law Society.  The reckless decision to allow Tony Chan, an unqualified member of their accounting staff, to operate clients’ accounts via online banking without ever verifying his credentials (in breach of rule 7A of SAR), positively put clients’ money at risk of embezzlement.  Mr Ling submitted that the fact that the resulting losses were borne by the respondents rather than by the Firm’s clients is irrelevant, as far as the respondents’ blameworthiness is concerned. The penalties imposed are wholly insufficient to protect the public and maintain public confidence in the profession.

34.  Mr Ling referred to several decisions in appeals involving serious accounting irregularities in the absence of a finding of dishonesty in which a term of suspension from practice was imposed[8].

The respondents’ submissions

35.  Both respondents took issue with the contention that they had failed to remedy breaches of the SAR involving up to $673 million. As mentioned earlier, $625 million of this amount concerned a client’s monies for the acquisition of a company which owned an industrial building and most of the monies wrongly paid into the Firm’s office account were withdrawn the following day to purchase seven cashier orders for the client.  Hence, the accounting breaches could not be rectified albeit the monies were properly used for the completion of the client’s transaction.  R1 had submitted to the Tribunal a letter in mitigation from the chairman of the group of companies which included this client, confirming that the group did not suffer any loss in the transaction and appreciating his honesty and efforts for serving the group in the past. 

36.  As regards the principle that suspension is generally appropriate where a solicitor has not acted dishonestly but has fallen below the required standards of “integrity, probity and trustworthiness”, Mr McGowan submitted that the test is conjunctive.  This requires all three “prongs” to be engaged before suspension becomes “generally” appropriate, quoting Bolton v Law Society at 519D (“the essential issue [being] the need to maintain among members of the public a well-founded confidence that any solicitor whom they instruct will be a person of unquestionable integrity, probity and trustworthiness”).

37.  To maintain such public confidence, major considerations are that solicitors will safeguard clients’ money with which they are entrusted, that they are honest, and that they are not unjustly enriching themselves at clients’ expense.  Mr McGowan emphasised there was no dishonesty of the respondents, no clients suffered financial loss, and there was no personal benefit to the respondents.  It is in this context that the respondents’ failings should be judged.  No member of the public had complained. It would appear there was no publicity or scandal, no adverse social media comment.  Hence, no matter what the “internal” view within the profession might be, the external reputation of the profession does not seem to have suffered.  Given that R2 had nothing to do with the Firm’s office in Fanling and was only a limited partner of the Jordan office, R2’s own behaviour did not impinge on the reputation of the profession and his failings, which were offences of omission rather than commission, did not breach the three-pronged standards of “integrity, probity and trustworthiness”.

38.  Mr McGowan argued that suspension is not appropriate or necessary in these circumstances, in particular for R2 who had taken a “lesser role” all along.  He accepted that whilst individually none of the mitigating factors would negate suspension, the totality of the mitigating factors does, particularly given that both respondents had been subjected to practice under restrictions for more than four years by the time the Order was made (in the case of R1, he had not been able to practise as his proposed supervising solicitor was not approved)  and more than six years at the hearing of these appeals.  As one of the purposes of an order of suspension is “to be sure that the offender does not have the opportunity to repeat the offence” for a limited period[9], the same purpose would be achieved by a lengthy period of practice subject to restrictions, as had happened to the respondents.  The appeal court should not interfere unless the sentence was wholly out of proportion to the gravity of the offence.

39.  Alternatively, if the court decides to substitute the penalty with a period of suspension, the delay in bringing the disciplinary proceedings (three years after the Firm was intervened)  and passing sentence (eight months between the hearing and decision)  should be relevant in determining the length of suspension.  The respondents both cited Roderick Miller v Law Society of Hong Kong [2024] 3 HKLRD 929 at §77 in support of the contention that previous and continuing periods of practice under restrictions should be taken into account by a Tribunal when considering its own penalties.  R1 argued that his situation should be regarded as less serious than Mr Miller and Mr McGowan argued that R2’s situation is comparable to Mr Miller.  The Court of Appeal allowed Mr Miller’s appeal, it reduced the fines for ten complaints to $250,000 and varied the restrictions on practice for three years to commence on an earlier date instead of the date of the Tribunal’s order.

40.  Mr McGowan and R1 sought to distinguish the authorities cited by Mr Ling on the facts of those cases, arguing that the transgressions of the solicitors who were given the penalty of suspension were far more serious in that there was financial loss to clients (in some instances substantial), there was serious breach of the public trust and gross dereliction of duty and bringing disrepute on the profession.  Mr McGowan also cited an additional case in which the Court of Appeal reduced the period of suspension of two years to one year, describing two years’ suspension as “an extremely heavy penalty” for a solicitor who had fallen below the required standard of integrity, probity and trustworthiness with no allegation of dishonesty or personal benefit[10]. He submitted that this demonstrates that the Law Society’s proposed suspension periods of five years for R1 and three years for R2 are manifestly excessive.

Discussion

41.  We are satisfied that the penalty of a combination of fines, general censure, and a two-year restriction on practice imposed by the Tribunal is “clearly wrong”.  There are no exceptional circumstances, whether individually or cumulatively, to justify a departure from what has been regarded as the generally appropriate sentence of a suspension where no dishonesty is involved but the offender has fallen below the required standards of “integrity, probity and trustworthiness”.

42.  The breaches of the respondents are very serious indeed in terms of the magnitude, duration, frequency and pervasiveness, as summarised by Mr Ling.  It was a complete and systemic failure to observe basic accounting requirements in relation to clients’ money and client accounts.  That this was due to omission in failing to supervise the accounting staff rather than commission does not lessen the respondents’ culpability.  

43.  The fact that it was the Firm rather than the clients that had suffered financial loss as a result of the fraud of the accounting staff does not mean that suspension is not warranted.  We do not think the need to protect the public and maintain public confidence in the profession should be any less in this instance.  Nor do we regard as material that no client or member of the public has complained or that there appeared to be no adverse publicity so far[11]. We are given to understand that the Law Society’s intervention of the Firm was made public but not the Order of the Tribunal against the respondents pending the determination of these appeals.

44.  As stated by Lord Bingham of Cornhill in Weston v Law Society[12], the Account Rules “exist to afford the public maximum protection against the improper and unauthorised use of their money and that, because of the importance attached to affording this protection and assuring the public that such protection is afforded, an onerous obligation is placed on solicitors to ensure that the Accounts Rules are observed.  That is a duty which binds solicitors, quite apart from a duty to act honestly and in accordance with the duties of a trustee.”

45.  There is a degree of overlap in the required standards of “integrity, probity and trustworthiness”.  We do not treat these epithets as separate and distinct but as strengthening and reinforcing the meaning of one another.  The combined purport of these epithets is clear, as explained by Bingham MR in Bolton v Law Society:

“It is required of lawyers practising in this country that they should discharge their professional duties with integrity, probity and complete trustworthiness.” (at 518A)

“If a solicitor is not shown to have acted dishonestly, but is shown to have fallen below the required standards of integrity, probity and trustworthiness, his lapse is less serious but it remains very serious indeed in a member of a profession whose reputation depends upon trust.” (at 518D)

“… to maintain the reputation of the solicitors’ profession as one in which every member, of whatever standing, may be trusted to the ends of the earth. … If a member of the public sells his house, very often his largest asset, and entrusts the proceeds to his solicitor, pending re-investment in another house, he is ordinarily entitled to expect that the solicitor will be a person whose trustworthiness is not, and never has been, seriously in question. Otherwise, the whole profession, and the public as a whole, is injured. A profession’s most valuable asset is its collective reputation and the confidence which that inspires.” (at 518H to 519A)

46.  In the subsequent decision of Weston v Law Society, Lord Bingham further explained that in speaking of “trustworthiness” in the above passage, the court also had in mind “the duty of anyone holding anyone else’s money to exercise a proper stewardship in relation to it”, and “[that] is violated if one solicitor with a duty to see that the rules are observed fails to do so”.

47.  Sir John Thomas in Iqbal v Solicitors Regulations Authority [2012] EWHC 3251 (Admin)  added these further remarks at §23:

“It seems to me that trustworthiness also extends to those standards which the public are entitled to expect of a solicitor, including competence. If a solicitor exhibits manifest incompetence, as, in my judgment, the appellant did, then it is impossible to see how the public can have confidence in a person who has exhibited such incompetence. It is difficult to see how a profession such as the medical profession would countenance retaining as a doctor someone who had showed himself to be incompetent. It seems to me that the same must be true of the solicitors’ profession. If in a course of conduct a person manifests incompetence as, in my judgment, the appellant did, then he is not fit to be a solicitor. The only appropriate remedy is to remove him from the roll. It must be recalled that being a solicitor is not a right, but a privilege. The public is entitled not only to solicitors who behave with honesty and integrity, but solicitors in whom they can impose trust by reason of competence.”

48.  We reject the contention of Mr McGowan that as there was absence of dishonesty of the respondents and no personal benefit, the respondents or R2 did not fall below the required standards of integrity, probity and trustworthiness.  There are no exceptional circumstances to justify not imposing a suspension for both respondents.  We accept his submission that a shorter suspension should be imposed on R2 to take into account his lesser role in the affairs of the Firm as a limited partner.

49.  As for the citation of sentencing cases, this court has in the past[13] mentioned that it is unhelpful to refer to cases showing that a lighter or heavier sentence was imposed contending that the case on appeal is not as serious as others.  Each case has to be determined on its own facts and the sentences in other cases are not designed as precedents.  Even though dishonesty is not proved, cases where there has been a lapse of standards of integrity, probity and trustworthiness will vary in gravity, and this explains why there is a range in the periods of suspension in the cases cited.  What the court said in one case that a period of suspension of two years was “extremely heavy penalty” must be understood in the context of the transgressions in that case.

50.  We do not agree with the respondents’ suggestion that they should be treated as having served in effect a period of suspension as restrictions were imposed on their practising certificates since June 2019. Being suspended from practice and being subject to the restriction of practising under supervision do not serve the same purpose.  In view of the respondents’ failure to observe basic accounting requirements and the extent of serious accounting irregularities, we think it is appropriate that they should be subject to the restriction of practising under supervision for a period in addition to being suspended.

51.  The circumstances in Roderick Miller v Law Society of Hong Kong are very different.  The solicitor was subject to practice under the conditions imposed by the Law Society since 2014.  Disciplinary proceedings were brought against him in 2016.  Almost two years after the solicitor admitted the complaints and 17 months after the final hearing, the Tribunal handed down its decision in October 2018 and imposed conditions on practice for three years.  Thus, through no fault of the solicitor, the delay of the Tribunal in handing down its decision caused his practising certificate to be subject to conditions longer than was appropriate and was plainly wrong and excessive.  On the hearing of the appeal in 2024, the court ordered the effective date of the conditions be varied to June 2017, which was the date after the solicitor filed an affidavit in response to the prosecutor’s submission, so the condition would have expired on 31 May 2020 instead of 1 October 2021.

52.  The delay of this Tribunal in making the Order was eight months.  We do not think the situation of the respondents is comparable.  That said, in substituting the penalty of fines with a period of suspension, we have ordered that the suspension should take effect from the date of the Order on 14 November 2023, as sought by the Law Society.  The effect of our order is that having regard to the lapse of time since the Order, R1 would serve a suspension of slightly more than two years of the four years’ suspension and R2 would serve a suspension of just under two months of the two years’ suspension.  We are satisfied that the duration of the respective period of suspension for each is appropriate in all the circumstances.

53.  We therefore allowed the Law Society’s appeal and made the orders mentioned at the outset of this judgment.

The respondents’ appeal

54.  The respondents’ appeal may be dealt with succinctly.  Ground 2 of their appeal (that the Tribunal erred in imposing the condition by requiring them to attend 15 hours of relevant accounting courses with satisfactory result before a practising certificate can be issued)  was not pursued.

55.  That leaves only one ground in their notice of appeal, which was pursued by R1 but not by Mr McGowan.  R1 contended that the period of two years in the Conditions in which they must practise under supervision is ultra vires, in that it exceeded the statutory maximum of three years provided in section 10(2)(ba)  of the LPO.  Section 10(2)  empowers the Tribunal, upon completion of its inquiry, to make such order as it thinks fit including permitting the solicitor to continue to practice, but subject to conditions which may be imposed for up to three years.

56.  R1 pointed out that since June 2019, the respondents have already been subject to conditions imposed by the Law Society when they apply for a practising certificate, which included the condition of practising under supervision.  He argued that the Conditions of the Tribunal added two years to the periods of conditions that the respondents have been subject to and this exceeded the statutory maximum.

57.  The power of the Law Society to issue a practising certificate subject to such conditions as may be prescribed by the Council is pursuant to section 6(5)(b)  of the LPO and section 3 of the Practising Certificate (Special Conditions)  Rules, Cap 159Y.  The latter provision sets out the conditions subject to which the Law Society may issue a practising certificate, including “in the case of a solicitor who was a principal in or a consultant of a firm at the time of an intervention of the firm by the Society … during the preceding 18 months, any one or more of the conditions specified in Schedule 1”.  This power of the Law Society is separate from the sentencing power of the Tribunal exercisable upon a finding of professional misconduct.  We agree with Mr Ling there is no basis for aggregating the two periods of time for the purpose of deciding whether the time limit under section 10(2)(ba)  of the LPO has been exceeded.

58.  Mr McGowan sought to argue in R2’s appeal that the period of practising under supervision imposed by the Conditions should be reduced or backdated, in view of R2’s lesser role in the Firm and that R2 has completed over four years of supervised practice under similar conditions by the time the Conditions were imposed by the Tribunal in November 2023.  We allowed him to raise these arguments without an amendment to the notice of appeal, as he has made them in his written submissions and Mr Ling has responded in his submissions in opposing the appeal.

59.  We are not persuaded that the Tribunal was “clearly wrong” in imposing a term of practising under supervision for two years for each respondent.  In his affirmation in mitigation, R2 pointed out that conditions were imposed on his practising certificate on 28 June 2019 and he has since been practising as a consultant solicitor under the supervision of his former partner Mr Tsang.  R1 also deposed in his affirmation in mitigation that he has not been able to meet the conditions imposed on his practising certificate since 28 June 2019 and contended he has in effect been suspended from practice for over three years at the time of his affirmation in February 2023.

60.  The Tribunal mentioned the affirmations filed by the respondents in its finding.  There is no reason to think that the Tribunal was not aware of the above matters when it imposed the Conditions for a two-year period to take effect from the date of the Order.  We see no basis to interfere with that decision. 

61.  We therefore dismissed the respondents’ appeal and ordered the Conditions in the Order do stand.