THE COUNCIL OF THE LAW SOCIETY OF HONG KONG v. THE ESTATE OF IP TAI LUI LEONARD, DECEASED (PREVIOUSLY PRACTICING AS A SOLE PROPRIETOR OF T L IP AND CO)

HCMP 863/2024

[2025] HKCFI 4982

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 863 of 2024

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JUDGMENT

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A.  INTRODUCTION

1.  This is the hearing of the Plaintiff’s Originating Summons filed on 24 May 2024 (“the OS”) pursuant to Schedule 2 to the Legal Practitioners Ordinance, Cap. 159 (“LPO”) for various directions concerning disposal of the money and files of the firm of TL Ip and Co (“the Firm”).

2.  Mr. Ip Tai Lui Leonard (“Mr. TL Ip”) was the sole proprietor of the Firm before he passed away on 23 August 2022.

3.  Mr TL Ip’s executor pre-deceased him. No one has yet applied for letters of administration for Mr TL Ip’s estate (“the Estate”). The solicitor manager whom Mr TL Ip had appointed by will to manage his firm upon his death was not willing to take up that post. Interested parties (such as beneficiaries of the Estate and creditors) or the OS are not willing to represent the Estate.

4.  Accordingly, on 8 November 2022, the Council of the Law Society of Hong Kong (“Plaintiff”) resolved to intervene (“Intervention Resolutions”) in the practice of the Firm and appointed Messrs. Ronald Tong & Co (“RTC”) as the intervention agent. The intervention in the practice of the Firm (“Intervention”) commenced on 9 November 2022.

5.  On 25 July 2025, Master Maurice Lam (a) appointed Mr Lau Wing Keung, an independent solicitor, to represent the Estate for the limited purpose of accepting service of the OS; and (b) gave an order to proceed in the absence of a personal representative representing the Estate. Mr Lau has acknowledged receipt of the OS by signing the cover letter attached to the OS. The Estate has never filed an acknowledgment of service.

6.  I am also satisfied that the OS and notice of this hearing have been given to a son of Mr TL Ip and the only known beneficiary to Mr TL Ip’s estate. The son has not responded.

7.  The Plaintiff has advertised the notice of this hearing on 3 September 2025 but no one has responded.

8.  RTC has entered caveats in respect of the Estate, the last one being on 18 September 2025. No one has contacted RTC as a result.

9.  Having satisfied myself as to service, I proceeded to hear the OS in the absence of persons representing the Estate.

B.  LEGAL PRINCIPLES

10.  The Council of The Law Society of Hong Kong v. Li Hoi Kwong (previously practising as a Sole Proprietor of Li & Associates) [2023] 1 HKLRD 1096 (“Li & Associates”) and the principles set out therein are applicable to this OS.

C.  VERIFICATION OF CLAIMS AND CLAIMANTS’ BENEFICIAL ENTITLEMENT TO THE MONEY IN THE FIRM’S CLIENT A/C (§1-3 OF THE DRAFT ORDER)

11.  The Plaintiff resolved in the Intervention Resolutions (§5) that the Firm’s client account maintained with Hang Seng Bank (“Firm’s Client A/C”) be vested in the Plaintiff as trustee, pursuant to Schedule 2 of the LPO.

12.  In identifying beneficiaries of the trust, the Plaintiff (acting through RTC) must exercise its power in a way that is bona fide, rational, reasonable, and only take into account relevant considerations. This power is subject to review on public law grounds (see §7 of Li & Associates).

13.  The detailed procedures and RTC’s general methodology in respect of verifying the claims received in the present case are substantially the same as those adopted in §8 of Li & Associates. For claims for the refund of costs on account (being 1 out of the 7 claims received), RTC applied the methodology summarized in §10 of Li & Associates.

14.  Of the remaining 6 claims, which are for the release of monies held by the Firm as stakeholder for conveyancing files, on top of the applicable general methodology, RTC stated that it will check the stakeholding condition to see if it has been satisfied.

(1)  If the condition is satisfied, RTC will approve the claim and release the stakeheld sum to the claimant.

(2)  If the condition is not satisfied, RTC will only release the amount of the claim when the stakeholding condition is satisfied or a new stakeholder is arranged. In such cases, RTC will invite the claimant and the counterparty of the relevant conveyancing transaction (either the vendor or the purchaser) to arrange a new stakeholder, after which RTC will transfer the amount of the claim to the new stakeholder.

15.  I am satisfied that the above methodology was bona fide, rational and reasonable in the public law sense and I accept the same.

D.  FURTHER NOTICE (§4 OF DRAFT ORDER)

16.  On 16 December 2022 and 14 April 2023, two rounds of newspaper advertisements and a gazette notice had been published to invite claimants of the Client A/C Money to lodge their claims by 16 March 2023 and 14 July 2023 respectively.

17.  By the time of this hearing, more than 27 months have elapsed since 14 July 2023 and more than 35 months since the commencement of Intervention.

18.  As sufficient notice has been given and it is unlikely that further potential claimants will come forward, I therefore will not require a further round of advertisement or notice to be placed before distribution, to save costs and avoid delay. See e.g. Li & Associates at §13.

E.  DISTRIBUTION OF CLIENT A/C MONEY (§§5 AND 6 OF THE DRAFT ORDER)

19.  The last known balance of the Client A/C Money as at 24 May 2024 was HK$337,748. As at 10 October 2025, RTC has received 7 completed claims totalling HK$172,445.00. There is also 1 claim pending arrangement of new stakeholder, totalling HK$10,000. There is another claim of HK$10,000 in the process of being verified. The money available for distribution is sufficient to satisfy these amounts.

20.  In view of paragraph 19 above, it is appropriate to grant a distribution order in terms of §§5-6 of the draft order.

21.  Given the lapse of more than 35 months since the commencement of the Intervention and the fact that no new claims have been received for the past 12 months, the Plaintiff need only continue to receive and verify claims filed for a period of 6 (rather than 12 months) after the date of the Court order. The Plaintiff has agreed to provide undertakings in the draft order which are substantially similar to those accepted in §17 of Li & Associates such undertakings are bona fide, rational, and reasonable in the public law sense, and I accept the same.

F.  DISPOSAL OF THE FIRM’S DOCUMENTS (§§7-11 OF THE DRAFT ORDER)

22.  Among about 3,625 files of the Firm seized by RTC during the Intervention, about 3,302 are conveyancing files, 319 are general files, and 4 are criminal files.

23.  As at 10 October 2025, about 40 former clients have retrieved their files from RTC. The remaining files are currently in either the Law Society’s possession or in RTC’s office.

24.  The Plaintiff’s proposal to dispose of these files are essentially the same as that described and approved in Li & Associates at §§23-32 as meeting the relevant statutory rules and Law Society’s Circular on the minimum retention period of old files. I agree with these proposals.

G.  INTERVENTION COSTS (§12 OF THE DRAFT ORDER)

25.  Section 10 of Schedule 2 to LPO provides that subject to any order for costs that may be made by the court, any costs incurred by the Council shall be paid by the solicitor concerned and recoverable as a debt owed to the Council. See §34 of Li & Associates.

26.  I order the Estate to pay the Plaintiff’s costs of and occasioned by this OS in the terms set out in §12 of the draft order, summarily assessed at $1,017,090.63 up to and including the date of this order. Any other costs occasioned by this Intervention thereafter shall be recoverable from the Estate as a debt owing to the Plaintiff.

H.  APPLICATION OF MONEY IN THE FIRM’S ACCOUNTS TOWARDS PAYMENT OF PLAINTIFF’S INTERVENTION COSTS (§13-15 OF THE DRAFT ORDER)

27.  As at 24 May 2024, the last known balance of the Firm’s office accounts (“Firm’s Office A/Cs”) was HK$3,811,834.07.

28.  I agree that the Intervention costs ordered shall be paid out of money in (or money to be received) in the Firm’s Office A/Cs as proposed in §§13-14 of the draft order to the extent sufficient to cover such costs, and that the money kept in the Firm’s Client A/C after distribution to the claimants entitled may also be applied towards the payment of the Intervention costs to the extent sufficient to cover such costs. See §§37-38 of Li & Associates.

I.  CONCLUSION

29.  For the foregoing reasons, I grant an order in terms of the draft order as amended by me. I also give liberty to apply.

30.  I thank Ms Lee for her assistance.