A SOLICITOR AND ANOTHER v. THE LAW SOCIETY OF HONG KONG

cacv 269/2004

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 269 of 2004

(ON APPEAL FROM THE FINDINGS AND PROVISIONAL ORDERS OF
THE SOLICITORS DISCIPLINARY TRIBUNAL DATED THE 14^TH DAY OF MAY 2004
AND THE FINAL COSTS ORDER OF THE SOLICITORS DISCIPLINARY
TRIBUNAL DATED THE 24^TH DAY OF AUGUST 2004)

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1.  I agree with the judgment of Le Pichon JA.  I only wish to emphasise, once again, the importance of the members of the Solicitors Disciplinary Tribunal being the persons who draft the decisions.  During the course of argument I expressed myself in the strongest terms about the matter.  It is hoped that following this judgment there will be no doubt about this court’s attitude to the matter, nor any doubt as to the course this court will follow should it come to light in any future case that the drafting of a decision has been entrusted to the Clerk or anybody else.

Hon Le Pichon JA:

2.  This is an appeal by the respondents from the final costs order made by the Disciplinary Tribunal of the Law Society of Hong Kong (“the Tribunal”) after it had dismissed all charges that had been brought against the respondents by the Law Society. 

3.  The lay client of the respondents (“the complainant”) had made a complaint to the Law Society concerning the respondents’ delay in the handling of the complainant’s medical negligence claim resulting in its dismissal for want of prosecution.  The basis of the charges laid by the Law Society against the respondents was that such delay constituted unprofessional conduct or professional misconduct.

4.  On 14 May 2004, upon dismissing all charges against the respondents, the Tribunal made a costs order nisi in the following terms:

(a)	no order as to costs between the 1st respondent and the Law Society in relation to the charges brought against the 1st respondent;
(b)	the 1st respondent to pay the costs of the Law Society and the costs of the 2nd respondent in respect of the charges brought against the 2nd respondent on a full indemnity basis.

In practical terms, on the information then available and before the Tribunal, the 1^st respondent was made to bear the costs of the respondents of $585,000 and the costs of the Law Society on an indemnity basis of $233,000 incurred in its application in relation to the 2^nd respondent.  The total costs liability therefore came to $818,000.

5.  The Tribunal heard the respondents’ application to vary the costs order nisi on 24 June 2004 and, on 24 August 2004, the Tribunal made the final costs order, effectively declaring the costs order nisi absolute.  At the conclusion of the hearing, this court allowed the appeal, set aside the final costs order with costs here and below to the respondents.  Written reasons were to be handed down later which we now do.

Background facts

6.  The complainant caused an action in professional negligence to be commenced against two doctors (collectively “the defendants”) in respect of a laparotomy operation performed by the 1^st defendant in 1986 and in respect of a laparoscopy operation performed by the 2^nd defendant in 1990.  The writ had been issued in March 1993 by a different firm.  The 1^st respondent’s firm took over the action on 12 May 1995, the 1^st respondent being the partner in charge of the action.  The 2^nd respondent joined the 1^st respondent’s firm as a trainee solicitor in July 1995 and was assigned to handle this action under the supervision of the 1^st respondent.  The 2^nd respondent was admitted as a solicitor in August 1997.

7.  The action against the 1^st defendant was dismissed by consent in October 1995.  The respondents’ handling of the action in relation to the 1^st defendant is not the subject of any complaint.  So far as the 2^nd defendant was concerned, no procedural step to proceed with the action was taken until October 1998, some 4½ years after the service of the writ and 3½ years after the respondents’ firm had taken over the matter.  The only activity during that 3½ year period was the obtaining of an undisclosed medical report from a Professor Keighley.  On the 2^nd defendant’s application, the action against him was dismissed by the Registrar on 10 May 1999 for want of prosecution.  Seagroatt J dismissed the appeal on 21 October 1999 and made observations in his judgment to the effect that the complainant should be advised to seek independent legal advice.  This the respondents communicated to the complainant and eventually culminated in the disciplinary proceedings.

8.  The complainant lodged a complaint with the Law Society on 1 December 1999.  In response to the Law Society’s request for an explanation, the respondents confirmed that the 1^st respondent was the partner in charge, assisted by the 2^nd respondent who had the conduct of the file.  No substantive explanation was proffered in response to the complaint.  Nothing happened for over 2 years until 30 January 2002 when 3 charges were brought against each of the respondents.

9.  It is unnecessary for present purposes to go into the defence of the respondents save to say that they denied that there had been any inexcusable or inordinate delay: in May 1995, none of the six medical reports then available which had been obtained by the complainant’s previous solicitors supported the professional negligence claim.  The solicitors so advised the complainant in July 1995 but she insisted that she would obtain further medical evidence required to substantiate her claim against the 2^nd defendant from the USA.  Thereafter, they followed up from time to time with the complainant for the production of further medical reports.  The Tribunal found, inter alia, that these further matters transpiring between the respondents and the complainant were not known to the judge who had made the adverse comments.

This appeal

10.  Mr Shum who appeared for the respondents submitted that the costs order was wrong in principle, that as a general rule, the usual order that costs should follow the event ought to have been applied since the respondents had been completely successful in their defence: none of the six charges had been made out and there were no exceptional and/or special circumstances to justify a departure from the usual costs order.  It was further submitted that the proceedings should not have been brought against the 2^nd respondent given that at all material times he was acting under the supervision of the 1^st respondent and, from the outset, this fact had been disclosed to the Law Society.  Moreover, a full explanation had been provided in the letter dated 15 May 2002 from the respondents’ solicitors such that, in any event, the respondents should not be ordered to pay any costs after that date. 

The costs of the 2^nd respondent

11.  Paragraph 47 of the final costs order reads as follows:

“The Order nisi of this Tribunal in relation to the costs of the prosecution of the 2nd Respondent were occasioned, in their entirety, by the failure on the part of the 1st Respondent from the inception of this matter, not to assert that the 2nd Respondent, both in this capacity as a trainee, and subsequently as a newly qualified solicitor, had no discretion whatsoever in the conduct of the action, the subject of complaint.”

In upholding the order nisi and declaring it absolute, the Tribunal observed (at paragraph 55) that “the conduct of the 1^st respondent in not taking those obvious steps to ensure from the outset the exoneration of the 2^nd respondent” was “quite unacceptable”.

12.  It is to be noted that in the respondents’ letter dated 9 December 1999 to the Law Society, it was made plain that the partner in charge was the 1^strespondent, “assisted by [the 2^nd respondent] who had the conduct of the file.”  In his statement dated 12 November 2002, the 2^nd respondent explained that he was “assigned to handle this matter under the supervision of [the 1^st respondent].”  The 1^st respondent confirmed the truth and accuracy of the contents of the 2^nd respondent’s statement and adopted them in so far as they were relevant to the 1^st respondent.  Finally, in the agreed statement of facts signed by the parties on 17 June 2003, some four weeks prior to the hearing, it was stated that:

“

(2)

… the 2nd respondent, began working as a trainee solicitor with the Firm in July 1995.  He was admitted as a solicitor of the High Court of Hong Kong in August 1997.  Since then, the 2nd respondent has been practising as a solicitor with the Firm.”

13.  The Tribunal’s approach appeared to be that those statements were insufficient inasmuch as they did not categorically state that the 2^nd defendant had no discretion in the conduct of the matter and that that fact had to be elicited by the Chairman of the Tribunal in oral examination.  In my view, the Tribunal’s reasoning is unsustainable.  In ordinary language, to supervise someone is to oversee and/or direct and/or exercise control over the actions or work of that person.  It is implicit that the supervisor would bear overall responsibility; it is incumbent on him to ensure that the person under his supervision executes or performs the work or tasks properly.  When it is borne in mind that during the period of 3¼ years from July 1995 to October 1998 in question, for the first two years, i.e. from July 1995 to August 1997, the 2^nd respondent was but a trainee solicitor and for the year or so following, a freshly qualified solicitor, the notion that he would be at liberty to exercise his discretion in the conduct of the matter is, frankly, absurd.  Moreover, the Law Society plainly had the means at its disposal to ascertain the status of the 2^nd respondent from inception had it wished to do so.  In my view, for all these reasons, the final costs order so far as it concerned the costs of the 2^nd respondent cannot stand and must be set aside.

The costs of the 1^st respondent

14.  The Tribunal’s reasons for making no order as to costs thus depriving the 1^st respondent who had been successful in defending himself against the charges brought against him of his own costs appear at paragraph 57 of the final costs order:

“… if the 1st Respondent had, (as we believe it was incumbent upon him to have so done in the performance of his professional obligations), kept a comprehensive file with contemporary and accurate attendance notes, and undergone the obvious and fundamental step of advising the Complainant of the inherent pitfalls in being unable to prosecute the Complainant’s action, for reasons beyond the control of the 1st Respondent and/or his firm, we echo our earlier hypothesis that the prosecution may not have been brought and/or there would have been no case to answer.”

The 1^st respondent’s alleged ‘shortcomings’ were set out at greater length in paragraph 56 such as the failure to keep proper records and to warn the complainant in writing of the risks involved in not proceeding with the action diligently.  The Tribunal considered (albeit not without difficulty) that the alleged shortcomings constituted “very exceptional circumstances.”

15.  With respect, the matters mentioned in paragraph 56 did not form the basis of any charge made against the 1^st respondent.  That being so, it was not open to the Tribunal to avail itself of the alleged shortcomings as the reason for depriving the 1^st respondent of his costs; it would have been unfair to punish him for something for which he had not been charged and which did not form the basis of any charge the 1^st respondent had to meet.  It must follow that the Tribunal erred as a matter of principle with the necessary consequence that that part of the order must also go.

The without prejudice negotiations

16.  In view of the conclusions on the two limbs of the costs order appealed from, it is unnecessary to deal with the further argument of the respondents based on the without prejudice negotiations that took place between May and September 2002.

The role of the Clerk to the Tribunal

17.  I now turn to consider what has transpired to be the most troubling aspect of the whole case.

18.  In paragraph 11.12 of the “Findings and Provisional Orders” the Tribunal said:

“The Tribunal is also aware of the observations of the Court of Appeal in Au Wing Lun William v. The Solicitors Disciplinary Tribunal and Another CACV 4154/2001 (decided dated 9 September 2002) regarding the role of the Clerk to the Tribunal.  The Clerk is of course not aligned with one party or another but is a practising solicitor appointed by the Tribunal itself from a panel of clerks in order to assist the Tribunal.  The assistance of the Clerk to Tribunal, of this nature is invaluable as the Clerk is remunerated for his services were as members of the Tribunal are not.  Were it incumbent upon the unpaid members of the Tribunal to physically draft findings, particularly in relatively difficult cases, it would be difficult to find anyone suitable willing to give their free time to serve their profession in this capacity.  The Tribunal wishes to make it clear that the decisions reached an order is made in this matter and the basis of the same were agreed orally between the members of the Tribunal without influence from the Clerk and thereafter conveyed to the Clerk to enable his preparation of an initial draft of the findings and orders which draft was thereafter discussed and settled by the members of the Tribunal.  The Tribunal is of the view that proceeding in this matter combines practicality with fairness to the parties.”

19.  I venture to suggest that although the Tribunal has cited the decision of this court which is referred to in that quotation, it has not understood what was said in that case nor in the decisions which were referred to in the judgment.  As was said in paragraph 12 of that judgment:

“Natural justice dictates that there must not be any observations made to the Tribunal in the absence of the parties that might influence their decision.  Actual influence of the Tribunal would be unthinkable.  If the Clerk to the Tribunal takes part in the writing of the findings that, in itself, gives rise to a perception that that could have happened.”

20.  In the present case, pursuant to the court’s request, the Law Society provided information concerning its costs including those attributable to the Clerk to the Tribunal.  The itemised bill for the Clerk confirmed that time (totalling 16.80 hours) had been spent drafting “Findings and Order”.  When the court indicated that that fact alone merited the setting aside of the costs order, Mr Carolan who appeared for the Law Society drew the court’s attention to the fact that the Clerk’s involvement only concerned the findings and provisional orders dated 14 May 2004; that the Clerk did not draft the final costs order which he submitted formed the subject matter of the appeal: it was submitted that the latter had been prepared by the Chairman of the Tribunal and the Clerk had had no hand in it.

21.  The reality of the situation was that the order nisi relating to costs that had been written by the Clerk formed the basis of the final costs order.  As noted above, the reasoning as well as factual errors concerning the two limbs of the costs order challenged on this appeal were carried through to the final costs order.  The final costs order merely elaborated and amplified what was stated in the order nisi.  It could not therefore reasonably be said that the Clerk had had no role in what became the final costs order.

22.  What is essential in any judicial decision is that the parties involved should know exactly not only what the particular Tribunal has decided but the reasons therefor.  It is not sufficient that others are permitted to articulate the reasons.  The particular manner in which a decision is framed and the wording used is often vitally important.  Not only that, the manner in which the Tribunal has indicated in this case that it saw fit to proceed would indicate that it would be open to the Clerk to insert thoughts and expressions of his own, albeit subject to review by the Tribunal.  As was said that must in itself be wrong.  It would involve a person making suggestions to the Tribunal in secret and without the knowledge of the parties.  More importantly, those who have been involved in making judgments know full well that the very exercise of framing that judgment can bring home points which may be of particular significance.  In this case, the Tribunal failed to appreciate the significance of what had been said by the respondents and indeed in the agreed facts.  Whether they would have done that if they themselves had taken the trouble to draft their decision is thus open to question.

23.  This court can only express its regret that the Tribunal should have failed to appreciate not only the distinction but the responsibility which appointment as a member of the Solicitors Disciplinary Tribunal brings.  It has failed to appreciate that the retention of the privilege of self-regulation of the professional body of which they are members will entail self-sacrifice even to the extent of having to give their services free.  It is a sad reflection that members of the profession so appointed can express the view that they are not prepared to devote time and energy in furtherance of the public interest and the interest of their profession without payment.

Hon Burrell J:

24.  I agree.