CHEUNG YICK HUNG also known as CHEUNG YICK HUNG JACKIE v. THE LAW SOCIETY OF HONG KONG

HCMP 1304/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1304 OF 2016

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HCMP 1305/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1305 OF 2016

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J U D G M E N T (NO. 2)

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A.   INTRODUCTION

1.  This judgment should be read together with the judgment that I handed down on 5 October 2016 (“the Main Judgment”).  For present purposes, I will adopt the same abbreviations and nomenclatures used in the Main Judgment.

2.  For the reasons that I gave at Part E5 of the Main judgment, I found that the Law Society’s view that the appellants were responsible for supervision and management of the TST Office and the YMT Office was not borne out sufficiently by evidence.  I therefore held that the principal basis for the Law Society making the Decisions had not been established.  But I went on to observe :

“ 90. Mr Chan submitted that the appellants indisputably did undertake work and serve clients under the auspices of the Firm. In so doing, their clients were, at minimum, exposed to the risk of substantial harm by reason of the systemic failings in the Firm’s administration, including its parlous accounting and client-fund handling practices. There is no suggestion that the appellants took steps to ensure that the Firm’s general administration was sound before exposing their clients to it. Instead, all objective facts suggest that the appellants themselves were, at best, cavalier, and indifferent as to the Firm’s managerial and administrative practices. Thus from a public protection perspective, all this more than suffices to warrant the imposition of the conditions by way of the Decisions. And given the appellant’s fundamental failure to be alert to and protect their clients against the Firm’s deep and manifold problems, each of the conditions is appropriate for the purposes of safeguarding the appellants’ conduct as practising solicitor and the interests of the public.

91. I can see considerable force in Mr Chan’s submissions.  The appellants’ conduct, even on their own case, viewed against the systemic failings in the Firm’s practice, as reasoned by counsel, may justifiably call for immediate disciplinary action by the Law Society by imposing conditions on their practising certificate.  The Law Society should approach the matters afresh accordingly to see if that is in fact the case for each of the appellants and if so what conditions should be imposed on each of their practising certificate.”

3.  I then indicated that I was minded to remit the matters to the Law Society for reconsideration in accordance with my observations.  But I took the view that the parties might well wish to be heard before I actually made an order to that effect.  So I directed them to lodge their submissions on how to dispose of the appeal and costs.  I would then dispose of the outstanding matters on paper.  The parties have duly placed before me their written submissions, both of which are dated 2 November 2016. Having carefully considered their submissions, I will dispose of the appeals and costs as follows.

B.   Disposal of the appeals

B1.   Parties’ stance

4.  Section 6(11) of the LPO provides :

“ On an appeal to the Chief Judge under subsection (9) or (10) he may –

(a) affirm the decision of the Society or Council;

(b) direct the Society to issue a practising certificate to the appellant free from conditions or subject to such conditions as he thinks fit; or

(c) remit the matter to the Society or Council for reconsideration with such directions as he thinks fit.”

5.  Both the Law Society and the appellants take the view that the interests of justice militate against the court remitting the matters back to the Law Society for reconsideration.  They both invite me to exercise my discretion under section 6(11) of the LPO, although they differ as to the actual order that I should make.

6.  Mr Chan for the Law Society submitted that I should affirm the Decisions under section 6(11)(a).  Mr Deng for the appellants submitted that I have already by the Main Judgment quashed the Decisions.  With respect, I think he has misunderstood the effect of the Main Judgment.  I have not made any order to that effect.  And that is exactly why I invited for the parties’ submissions on how to dispose of the appeals.  Mr Deng next submitted that under section 6(11)(b), I may direct the Law Society to issue practising certificates to the appellants either free from conditions or with conditions 2, 3 and 4 in Schedule 1 for 12 months from the date of the Decisions.

B2.   My view

7.  In light of my finding that the principal basis enabling the Law Society to impose the conditions in question on the appellants’ practising certificate had not been established by evidence, the Decisions must be set aside.

8.  Mr Chan submitted that I can affirm the Decisions by reason of the considerations highlighted at [90] and [91] of the Main Judgment.  Mr Chan’s submission is based on the premise that I would exercise my discretion under section 6(11)(b) by directing the Law Society to issue practicing certificates to the appellants with the same conditions imposed by way of the Decisions without remitting the matters back to the Law Society for reconsideration.  However, for the reasons to be given below, I am of the view that I should remit the matters back to the Law Society, despite the parties’ common stance in this regard.

9.  The Law Society is the primary decision maker on disciplinary matters.  It is normally in a better position to assess professional practice rather than the court : Miller v Law Society of Hong Kong [2014] 3 HKLRD 1, per Lam VP at [29].  Although both parties accept that all the relevant evidence is before the court and no further new materials are required, it remains the case that the Law Society had not approached the matters in accordance with what I consider to be the correct basis as set out at [90]-[91] of the Main Judgment when it made the Decisions.  Mr Chan submitted that his submissions as summarized at [90] of the Main Judgment represent the current view of the Law Society.  However, the Law Society has apparently not taken into account the appellants’ arguments as set out in Mr Deng’s written submissions.  (Both Mr Chan’s and Mr Deng’s written submissions are dated 2 November 2016 and Mr Chan has not made any submissions on Mr Deng’s.) I think in fairness, the appellants should be given the opportunity to present to the Law Society, who is the primary decision maker, their case as per Mr Deng’s written submissions or any further necessary submissions as to why no conditions should be imposed or only conditions 2, 3 and 4 of Schedule 1 should be imposed for 12 months on their practising certificate.  The Law Society can then assess the matters afresh with their full case in mind and determine if and, if so, what conditions should be imposed on their practising certificates. I have considered the option of directing Mr Chan to lodge further submissions in reply to Mr Deng’s and holding a further oral hearing.  Eventually I decided that the better course to take is to remit the matters back to the Law Society for reconsideration.  For as Lam VP observed in Miller v Law Society of Hong Kong, ibid, there are good reasons why the legislation entrusted the Law Society with the task of making a primary decision on whether conditions should be imposed on a solicitor’s practising certificate.  I should therefore leave that primary task to the Law Society and will only review its decisions on appeal, if necessary.

B3.   Orders

10.  Accordingly, I make the following orders to dispose of the appeals :

(1) The appeals are allowed;

(2) The Decisions are set aside;

(3) The matters are remitted back to the Law Society for reconsideration in accordance with the court’s observations at [91] of the Main Judgment.

C.   Costs

11.  Subject to one point, costs of the appeals should follow event.  The point is this.  In the Main Judgment, I identified two main issues for determination.  Issue 1 was on statutory construction. Considerable time and submissions had been devoted to it.  And eventually it was resolved in favour of the Law Society.  That being the case, the appellants are not entitled to have their costs in full.  Rather, they should have 50% only.  I therefore order the Law Society to pay the appellants 50% of their costs, to be taxed if not agreed.