THE LAW SOCIETY OF HONG KONG v. SHAM YICK CHUN GARY AND OTHERS

CACV 189 /2023

[2025] HKCA 676

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 189 OF 2023

(ON APPEAL FROM THE DETERMINATION AND DECISION ON SENTENCING AND COSTS OF
THE SOLICITORS DISCIPLINARY TRIBUNAL DATED 13 MARCH 2023 AND 2 JUNE 2023)

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J U D G M E N T

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

1.  This is an appeal from the determination (“Determination”)  of the Solicitors Disciplinary Tribunal (“Tribunal”)[1] dated 13 March 2023 and the decision on sentencing and costs (“Decision”)  dated 2 June 2023.  For ease of reference, the terms and expressions in the Determination will be adopted.

2.  The Tribunal found the complaints proved against each of the five respondents, who brought this appeal.

The complaints, the findings and the sanction

3.  Sham Yick Chun Gary (“R1”)  was the sole proprietor of Messrs Sham & Co, Solicitors, a firm which has since been closed (“Closed Firm”).  The Closed Firm commenced practice on 18 February 2013 at premises in Wing On House Central (“Wing On Premises”).

4.  Tse Chun Wai, Chow Cheuk Hei and Ku Sze To (“R2”, “R3” and “R4” respectively)  were clerks employed by the Closed Firm since around 18 February 2013.  Before that, they were employed by Messrs Joseph Leung & Associates (“JLA”).  R2 and R3 were founder members and directors of a company named Accident Assistance Association Limited (“AAAL”). AAAL rented the Wing On Premises until it terminated its tenancy on 5 February 2013, when the Closed Firm became the new tenant.

5.  Chan Kam Tak (“R5”)  was employed by JLA as an assistant solicitor prior to 13 March 2013.  He was employed by the Closed Firm as a consultant since around 25 March 2013.

6.  The 24-page complaint sheet filed by the Law Society sets out the five complaints, one against each of the respondents.  In gist, the allegations of each complaint are as follows:

(1)  From about December 2012 to July 2013, R1 influenced and allowed R2 to R5, to arrange for at least 93 clients of JLA to transfer their files to the Closed Firm, to determine the retainers of the Closed Firm with at least nine clients without the express consent of those clients, and proceeded to have the Closed Firm act for some of those clients without the consent of JLA.  In so doing, R1 breached Rules 2(a), (b)  and (d)  of the Solicitors Practice Rules, Cap 159H (“SPR”)[2] and Principles 2.03 and 5.11 of the Hong Kong Solicitors’ Guide to Professional Conduct (volume 1, 2^nd ed)  (“Guide”)[3].

(2)  From about December 2012 to July 2013, R2 engaged in a scheme with R1, R3 to R5 to move at least 93 clients of JLA to the Closed Firm, during which R2 improperly influenced at least 49 clients of JLA to terminate their retainers with JLA and to transfer their files to the Closed Firm, and utilised confidential information from JLA.  In so doing, R2 committed disgraceful, dishonourable or discreditable conduct within section 2(2)  of the Legal Practitioners Ordinance, Cap 159 (“LPO”)[4].

(3)  From about December 2012 to July 2013, R3 engaged in a scheme with R1, R2, R4 and R5 to move at least 93 clients of JLA to the Closed Firm, during which R3 improperly influenced at least 44 clients of JLA to terminate their retainers with JLA and to transfer their files to the Closed Firm, and utilised confidential information from JLA.  In so doing, R3 committed disgraceful, dishonourable or discreditable conduct within section 2(2)  of the LPO.

(4)  From about December 2012 to July 2013, R4 engaged in a scheme with R1 to R3 and R5 to move at least 93 clients of JLA to the Closed Firm and in so doing committed disgraceful, dishonourable or discreditable conduct within section 2(2)  of the LPO.

(5)  From about December 2012 to July 2013, R5 engaged in a scheme with R1 to R4 to move at least 93 clients of JLA to transfer their files to the Closed Firm, to determine the retainers of the Closed Firm with at least nine clients without the express consent of those clients, and proceeded to act for at least 47 of those clients without the consent of JLA.  In so doing, R5 breached Rules 2(a), (b)  and (d)  of the SPR.

7.  The complainant in this matter is Deputy High Court Judge Seagroatt, whose involvement in the civil proceedings concerning JLA and the respondents will be mentioned later.  The Law Society also received separate complaints from Joseph Leung Kwok Kin (“Mr Leung”)  on behalf of three clients of JLA[5].

8.  After a three-day trial in May 2022, the Tribunal handed down the Determination by which it found: (1)  R1 was in breach of Rules 2(a), (b)  and (d)  of SPR and Principles 2.03 and 5.11 of the Guide; (2)  R2, R3 and R4 committed disgraceful, dishonourable or discreditable conduct within section 2(2)  of the LPO; and (3)  R5 was in breach of Rules 2(a), (b)  and (d)  of SPR.

9.  By the Decision, the following penalty was imposed on the respondents:

(1)  As against R1: (i)  a fine of $150,000 be paid into the general revenue; (ii)  suspension from practice for 84 months, such period to commence on the date of filing of the Decision with the Determination with the Registrar of the High Court; and (iii)  to the extent that (ii)  is inoperable due to the fact that R1 has been struck off, employment of R1[6] by any solicitor or foreign lawyer be prohibited for 84 months, such period to commence on the date of filing of the Decision with the Determination with the Registrar of the High Court.

(2)  As against R2, R3 and R4: the employment of each of them by any solicitor or foreign lawyer be prohibited for 60 months, such period to commence on the date of filing of the Decision with the Determination with the Registrar of the High Court.

(3)  As against R5: (i)  a fine of $100,000 be paid into the general revenue; (ii)  suspension from practice for 60 months, such period to commence on the date of filing of the Decision with the Determination with the Registrar of the High Court; and (iii)  upon expiration of the said period of 60 months, R5 be permitted to resume practising, but restricted from being a partner or principal of a firm without supervision, and such restriction shall last for 24 months, immediately starting from expiration of the suspension.

10.  The Tribunal ordered R1 to R5 to pay the following costs: (1)  costs and disbursements of the investigation by the Law Society assessed at $298,000; (2)  costs of the clerk of the Tribunal assessed at $75,300; and (3)  costs of the prosecutor in the proceedings, inclusive of all costs reserved, to be taxed by a Master of the High Court on a full indemnity basis if not agreed.

Relevant background

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

12.  On 18 February 2013 (the day the Closed Firm commenced business), JLA received more than 80 letters from the Closed Firm claiming that the relevant clients of JLA had instructed the Closed Firm to represent them, and asking JLA to transfer the files to the Closed Form.  Each of the letters enclosed a document purportedly signed by the relevant client stating that he or she had decided to terminate JLA’s representation.  Further letters from the Closed Firm were received by JLA since 18 February 2013, and notices of change of solicitors were received by JLA from the Closed Firm in a number of cases.  It is not in dispute that at least 54 clients of JLA moved to the Closed Firm from around February 2013 to March 2013.

13.  Clients have the right to choose their legal representation and it is not unusual for them to change solicitors when the solicitor and/or staff who had been handling their cases moved to another firm. The complaints concerned whether the respondents had carried out a premeditated and concerted scheme to transfer a number of JLA’s clients to a new firm under their control without the consent of JLA, and much worse, without the clients’ consent.

14.  The main allegations of the Law Society on the concerted scheme[7] are that R2, R3 and R4 met with at least 93 clients of JLA at, inter alia, the Wing On Premises, between December 2012 and March 2013, and requested those clients to sign certain documents, including blank paper, representing that the documents were authorisations to obtain medical reports.  Further,

(1)  some of the clients were told that the Wing On Premises was JLA’s branch office or new office, or that JLA would move to the Wing On Premises;

(2)  some of the clients were told to attend the Wing On Premises purportedly to deal with their cases handled by JLA;

(3)  R4 participated in asking clients to attend at the Wing On Premises;

(4)  on one occasion, R1 was present when a client attended at the Wing On Premises, R1 was introduced to the client as a solicitor working with R3;

(5)  on one occasion, R2 and R3 informed a client that JLA could not handle her case and she should instruct R1;

(6)  on one occasion, a client was informed by R2 that he did not need to pay JLA and should pay R2 to handle his file;

(7)  while R5 was still employed by JLA, he had informed at least one client that R2 and R3 would continue to follow the client’s case, notwithstanding the cessation of employment of R2 and R3 with JLA on 31 January 2013;

(8)  R5 took a list of JLA’s clients with him when he left JLA’s employment on 12 March 2013.  After he joined the Closed Firm on 25 March 2013, further letters were sent to JLA by the Closed Firm which claimed that certain clients, many of whom R5 had previously acted for, had instructed the Closed Firm to represent them instead; and

(9)  at least 22 former clients of JLA gave written confirmation to JLA subsequently that they never instructed anyone or agreed to terminate JLA’s retainer and/or to instruct the Closed Firm.

15.  JLA brought a civil claim against the five respondents in HCA 1250/2013 (“High Court Action”)  and on 10 July 2013 issued a summons for interlocutory injunction seeking, inter alia, to restrain the respondents from acting for persons who were clients of JLA between March 2005 and March 2013 and approached by any of the respondents when the information of such clients was in the possession or under the control of any of the respondents.  Mr Leung made an affirmation dated 9 July 2013 (“Leung’s Aff in HCA”)  in support of the application, and exhibited the statements made by nine clients of JLA[8] confirming the matters mentioned in the foregoing paragraph that subsequently formed the main allegations of the Law Society in the disciplinary proceedings (“Main Allegations”). 

16.  The summons came before DHCJ Seagroatt on 12 July 2013.  Upon hearing counsel on both sides, he adjourned the application to the summons judge to a date in August 2013 and granted an interim injunction (“Injunction”)  against the respondents which, inter alia, restrained them and the Closed Firm from using various types of information concerning clients of JLA, accepting instructions to act for persons who were clients of JLA between March 2005 and March 2013 and approached by any of the respondents when the information of such clients was in the possession or under the control of any of the respondents, and ordered the respondents to disclose on affirmation certain information concerning those clients.

17.  Subsequent to the Injunction, the respondents filed affirmations to disclose and deliver information.  On 6 August 2013, Mimmie Chan J made an order by consent in the High Court Action which allowed the respondents to send letters and copies of the Injunction to the clients to explain that the respondents were prohibited from acting for them.

18.  From August to September 2013, 30 of the clients applied for variation of the Injunction to the effect that the Closed Firm could act for them.  The application was heard by Deputy High Court Judge Leung Chun Man on 22 November 2013.  DCHJ Leung handed down his judgment on 10 April 2014 allowing the Closed Firm to continue to act for 25 of the former clients of JLA[9].

19.  In December 2013, JLA initiated contempt proceedings against the respondents in HCMP 3334/2013, alleging that the respondents had breached provisions in the Injunction preventing them from acting for persons who were clients of JLA between March 2005 and March 2013 and requiring them to deliver up documentation containing information concerning persons who were JLA’s clients during that period.  The contempt proceedings, which were defended by the respondents, culminated in a hearing before DHCJ Seagroatt on 25 November 2014.  The parties had by then agreed terms of settlement and the judge made an order by consent pursuant to the settlement staying all further proceedings in the contempt proceedings, with costs to be paid by the respondents to JLA on an indemnity basis.  At the close of the proceedings, the judge made comments criticising the respondents for the “lack of professional conduct”, “verging on dishonesty and certainly demonstrating greed”.  The judge made complaints to the Law Society against the respondents on 27 November 2014 and 8 December 2014.

The disciplinary proceedings

20.  On 3 October 2019, the Law Society issued the present disciplinary complaint against the respondents and filed in support Tung 1^st Aff, made by its Director of Compliance.  Ms Tung produced as exhibit to her affidavit Leung’s Aff in HCA, which in turn included the documents Mr Leung had exhibited such as the statements made by the ten clients of JLA.  Ms Tung has no personal knowledge of the facts pertaining to the accusations and her evidence is mainly hearsay.  Tung 1^st Aff was the only affidavit filed by the Law Society in support of its case at that stage.

21.  On 31 August 2010, the respondents applied for permanent stay of the disciplinary proceedings on the ground of the long delay in bringing the prosecution, contending that a fair trial would not be possible because of the fading memories of witnesses, and citing prejudice to the respondents of having the matter hanging over their heads for so long.  In opposing the application, the prosecutor Mr Richard Hudson, informed the Tribunal at the hearing on 3 September 2020 that the Law Society would only rely on Tung 1^st Aff and would not be calling any of the clients whose statements were exhibited to Leung’s Aff in HCA.  He confirmed to the Tribunal that “the Law Society in fact do not have any witnesses”, so there was no question of recollection of evidence by any witness due to the delay.  The chairman of the Tribunal indicated that he did not think the Law Society “has confirmed no witnesses will be called”, and it would not be “appropriate to ask the Law Society to confirm whether or not they may call other witnesses if there would be a substantive hearing”.

22.  On 16 October 2020, the Tribunal handed down its decision dismissing the respondents’ application for permanent stay[10].

23.  On 20 April 2021, the Law Society’s solicitors (Messrs Deacons)  wrote to the respondents’ solicitors (John W Wong & Co; “JWW”)  proposing directions for the future conduct of the disciplinary proceedings, which included the following:

“(a)  The Respondents shall serve affidavit evidence in opposition (and deliver copies of the same to the Clerk to the Tribunal)  within 28 days from the Tribunal’s directions order.

(b)  The Applicant shall serve affidavit evidence in reply, if any (and deliver copies of the same to the Clerk to the Tribunal)  within 28 days thereafter.

…

(i)  The affirmation(s)  and affidavit(s)  served by the parties shall stand as those witnesses’ respective evidence-in-chief at the substantive hearing.

(j)  The parties’ witnesses shall attend the substantive hearing for cross-examination and re-examination (if any). …”

24.  A copy of the letter of Deacons was provided to the clerk to the Tribunal, who directed JWW to respond to the proposed directions.  JWW wrote to the clerk to the Tribunal on 10 May 2021 asserting that “the only way” to prove the serious allegations against the respondents was “to call those persons who allegedly had a meeting with one or more of the Respondents” and stating that “Any application to adduce such evidence by way of hearsay would be strongly opposed and it would be extremely unfair and unjust to convict any of the Respondents of such serious allegations based on hearsay evidence.”  JWW sought an order directing the Law Society to serve “(a)  a list of witnesses that the Law Society proposes to call in the disciplinary proceedings, and (b)  a copy of the witness statements of such witnesses, within 14 days.”

25.  The Tribunal gave these directions on 11 May 2021 (“May 2021 Directions”):

“1. The Respondents shall serve affidavit evidence in opposition (and deliver copies of the same to the Clerk to the Tribunal)  within 28 days from the date hereof;

2. The Applicant shall serve affidavit evidence in reply, if any (and deliver copies of the same to the Clerk to the Tribunal)  within 28 days thereafter;

…

4. The parties shall confirm the name(s)  of the witness(es)  who will be called to attend the substantive hearing and use their best endeavours to prepare statements of agreed facts and disputed facts and deliver copies of the same to the Clerk to the Tribunal within 14 days thereafter;

…

9. The affirmation(s)  and affidavit(s)  served by the parties shall stand as those witnesses’ respective evidence-in-chief at the substantive hearing;

10.  The parties’ witnesses shall attend the substantive hearing for cross-examination and re-examination (if any); …”

26.  Pursuant to the above, the respondents served the affirmations in opposition of Or Fo Chung (“Mr Or”)  dated 25 May 2021 (in which he adopted his affirmation in the High Court Action filed on 11 September 2013)  and the affirmation of R5 dated 22 June 2021 denying for himself and R1 to R4 the Main Allegations and all the allegations in the statements made by the clients exhibited to Tung 1^st Aff.  The Law Society served in reply the 2^nd affidavit of Ms Tung dated 20 July 2021 (“Tung 2^nd Aff”)  and Mr Leung’s affirmation dated 9 August 2021 (“Leung’s Aff”).  In Leung’s Aff, he exhibited statements made by another 12 former clients of JLA that were not used in the injunction application in July 2013[11] and the statements made to the police by three former clients[12].

27.  The respondents objected to the 12 clients’ statements exhibited to Leung’s Aff, contending that they should not be regarded as evidence in reply to the affirmations in opposition.  The Tribunal overruled the objection, but gave leave to the respondents to serve evidence in response.  The respondents did not do so. 

28.  On 24 August 2021, the Law Society confirmed that they would be calling only two witnesses, Ms Tung and Mr Leung.

29.  The substantive hearing of the disciplinary proceedings took place from 3 to 5 May 2022.

30.  In the opening submissions of Mr Hudson, he mentioned that the Tribunal would hear evidence from Ms Tung, Mr Leung, R5 and Mr Or, the four persons who had provided affidavits or affirmations pursuant to the May 2021 Directions.  He referred to the 22 client statements exhibited to Tung 1^st Aff and Leung’s Aff and summarised their contents in a schedule to his submissions, which he characterised as “damning” evidence against the respondents.

31.  The hearsay nature of the clients’ statements was raised in the opening submissions of Mr Ronald Tang, who appeared for the respondents throughout.  He referred to the letter of JWW to the Tribunal dated 10 May 2021 and pointed out that the respondents had objected to “all forms of hearsay evidence sought to be used by the Law Society and that the Law Society must prove their case by calling witnesses”.  He maintained his objection to the use of any hearsay evidence to establish what allegedly happened in the meetings of R2 and R3 with clients, which neither Ms Tung nor Mr Leung had attended. 

32.  Notwithstanding this strong objection, no application was made to the Tribunal by the Law Society or by the respondents in the course of the hearing on the admission or exclusion of the hearsay evidence.  The issue of whether to admit the hearsay evidence was left unresolved[13]. This is plainly unsatisfactory, on all sides, including the Tribunal.  The affidavits and affirmation of Ms Tung and Mr Leung were produced by the prosecutor and treated as their evidence in chief, including those parts which referred to the contents of the statements of 22 clients and the clients’ statements exhibited to affidavits or affirmations.

33.  The parties returned to the issue of hearsay evidence in their closing submissions.

34.  In Mr Hudson’s closing, he made the point that it would appear from Mr Tang’s opening and cross-examination of the Law Society’s witnesses that the respondents took the view they could not be found liable for the complaints on the basis that the evidence against them is hearsay.  He submitted that this is misconceived as this ignores the “primary evidence” given by Mr Leung, that the weight of the evidence was sufficient to satisfy the test of preponderance of probability[14] as there was “ample evidence” that the respondents acted in concert and no less than 22 clients gave statements showing that they had been duped by the respondents.

35.  Mr Tang’s closing submissions again emphasised that neither Ms Tung nor Mr Leung was able to prove the Main Allegations as neither had attended the meetings in which the alleged misrepresentations were made.  He referred to Rule 14 of the Solicitors Disciplinary Tribunal Proceedings Rules, Cap 159C (“SDTPR”)  which provides as follows:

“14. Evidence

The Solicitors Disciplinary Tribunal may either as to the whole case or as to any particular fact or facts proceed and act upon evidence given by affidavit:

Provided that any party to the proceedings may require the attendance upon summons of any deponent to any such affidavit for the purpose of giving oral evidence and of being cross-examined, unless the Solicitors Disciplinary Tribunal are satisfied that the deponent is absent from Hong Kong or is for any other good and sufficient reason unable to give evidence in person at the hearing.”

36.  He contended that despite Rule 14 and the clear directions in the May 2021 Directions, the Law Society had not served any affidavit or affirmation of any of the clients whose statements were exhibited and none of them had been called to give evidence.  No suggestion was made that any of the 22 clients was not in Hong Kong, or was unable to make an affirmation, or unable to give evidence in person.  He submitted that the Law Society cannot ignore the requirements of Rule 14 and the May 2021 Directions by simply exhibiting the clients’ statements to Tung 1^st Aff and Leung’s Aff, thus sabotaging the respondents’ opportunity to cross-examine the persons who allegedly made serious allegations against them.  He argued that as none of the hearsay statements is admissible in evidence, the Law Society has adduced no evidence to prove any of the serious allegations and the complaints should be dismissed.

37.  In Mr Hudson’s reply submissions, he contended that the issue of hearsay evidence has been addressed in his closing submissions as summarised above.  As for Rule 14, he submitted that this provides that the Tribunal “may”, not shall, act upon evidence given by affidavit and this provision does not exclude reliance on “other evidence”.  He submitted that “there is nothing to prevent the Tribunal considering the statements made by the former clients to Mr Leung when reaching its decision in these proceedings.”

The Determination

38.  In the Determination, the Tribunal did not deal with Mr Tang’s objections to hearsay evidence expressly, despite those objections forming a crucial part of the respondents’ opposition.  It did not even record the fact that the respondents had objected to the admissibility of the 21 clients’ statements.  No mention was made of Rule 14 or Mr Tang’s take on the May 2021 Directions.  In finding the complaints proved, the Tribunal had taken into consideration and relied on the statements of 21 clients[15] notwithstanding its awareness that this is hearsay evidence[16], but the reason for overruling the hearsay objection was not stated expressly in the Determination, unless one takes this as implicit acceptance of Mr Hudson’s submissions.  

39.  After analysing the evidence at §§24 to 33 of the Determination, the Tribunal found the complaints proved for the reasons given in §§34 to 40.  Mr Tang contended before us that the clients’ statements constituted the only evidence to prove the serious allegations.  Mr Ling contended there is other supporting evidence apart from the clients’ statements.  Irrespective of whether there were other grounds for finding the complaints or part of them proved, in view of the nature of the Main Allegations, it cannot be gainsaid that the contents of the clients’ statements did play an important or material part in the conviction.

40.  The Tribunal has this to say in §34 regarding the statements of the 21 clients:

“Although none of C1 to C21 who made the above statements were called as witnesses in these proceedings, the number of clients who made the accusations is overwhelming. There is no evidence these clients were acting in concert, and it is quite possible they shared nothing in common other than the fact that they all engaged JLA to represent them. The fact that all of them made statements tends to suggest what they alleged in the statements did take place.”

This appeal

41.  Mr Tang advanced two main grounds in the respondents’ supplemental notice of appeal: the inadmissibility of the 21 clients’ statements which is hearsay evidence, and the unreliability of those clients’ statements.  For reasons which will become apparent, we will focus on Mr Tang’s submissions that the Tribunal erred in admitting and relying on hearsay evidence.

Admissibility of hearsay evidence in solicitors disciplinary proceedings

42.  In gist, Mr Tang’s contentions on the admissibility of hearsay evidence in the present context may be stated as follows:

(1)  The mode of receiving evidence in a solicitors disciplinary tribunal is prescribed by Rule 14.  It was made clear in the May 2021 Directions that affidavit evidence was to be served in line with the requirements of Rule 14.  The Law Society did not serve any affirmation of any of the 22 clients.  It is disingenuous for the Law Society to ignore the requirements of Rule 14 by exhibiting the clients’ statements to Tung 1^st Aff and Leung’s Aff.

(2)  Rule 14 is to ensure procedural fairness.  It envisages that all testimony is to be given by affidavit and, if contested, the affidavit is admissible in evidence without the need for the deponent to attend, but the deponent would have to attend to give oral evidence and be cross-examined if so required by any party to the proceedings, unless the deponent is absent from Hong Kong or is for any other good and sufficient reason unable to give evidence in person. The respondents must be given an opportunity to cross-examine persons who made serious allegations against them.  They have been deprived of a fair trial without the opportunity to test the veracity of the allegations by cross-examination.

(3)  The Law Society has never made any application, before or at the substantive hearing, to adduce the clients’ statements by way of hearsay evidence.  There is no evidence or suggestion that the 21 clients are not in Hong Kong, or are unable to make an affirmation, or are unable to give evidence in person.

43.  On behalf of the Law Society, Mr C W Ling submitted in reply that Rule 14 does not debar the Tribunal from admitting hearsay evidence in solicitors disciplinary proceedings.  His submission is along these lines:

(1)     Rule 35 of SDTPR provides as follows:

“35. Evidence

The Evidence Ordinance (Cap 8)  shall apply in relation to proceedings before the Solicitors Disciplinary Tribunal in the same manner as it applies in relation to civil and criminal proceedings.”

There can be no doubt that solicitors disciplinary proceedings are civil proceedings to which the civil standard of proof applies.

(2)  Section 47(1)  of the Evidence Ordinance provides:

“47. Admissibility of hearsay evidence

(1)  In civil proceedings evidence shall not be excluded on the ground that it is hearsay unless -

(a)  a party against whom the evidence is to be adduced objects to the admission of the evidence; and

(b)  the court is satisfied, having regard to the circumstances of the case, that the exclusion of the evidence is not prejudicial to the interests of justice.”

(3)  The use of affidavit evidence as provided in Rule 14 is permissive, not mandatory.  It provides for one of the ways in which evidence may be given before the Tribunal.  The Law Society may choose not to adduce the evidence in the clients’ statements by way of affidavit evidence under Rule 14.

(4)  Even at common law, there is no absolute rule entitling a person facing disciplinary proceedings to cross-examine witnesses on whose evidence the allegations against him are based.  “The need for the availability of cross-examination depends essentially upon the particular facts of the individual case and the nature of the evidence offered.”[17]

(5)  In light of the Strasbourg jurisprudence, the English Administrative Court in R (Bonhoeffer)  v General Medical Council[18] formulated these principles on the right to cross-examine in disciplinary proceedings:

(i)  In proceedings other than criminal proceedings, there is no absolute right to cross-examine pursuant to Article 6(3)(d)  of the European Convention on Human Rights (“ECHR”)[19].

(ii)  However, disciplinary proceedings against a professional man or woman, although not classified as criminal, may still bring into play some of the requirements of a fair trial spelt out in ECHR Articles 6(2)[20] and (3)  including in particular the right to cross-examine witnesses whose evidence is relied on against them.

(iii)  The issue of what is entailed by the requirement of a fair trial in disciplinary proceedings is one that must be considered in the round having regard to all relevant factors.

(iv)  Relevant factors to which particular weight should be attached in the ordinary course include the seriousness and nature of the allegations and the gravity of the adverse consequences to the accused party in the event of allegations found to be true.

(v)  The ultimate question is what protections are required for a fair trial.  Broadly speaking, the more serious the allegation or charge, the more astute should the courts be to ensure that the trial process is a fair one.

(vi)  In disciplinary proceedings which raise serious charges amounting in effect to criminal offences which, if proved, are likely to have grave adverse effects on the career and reputation of the accused party, if reliance is sought to be placed on the evidence of an accuser between whom and the accused party there is an important conflict of evidence as to whether the misconduct alleged took place, there would, if that evidence constituted a critical part of the evidence against the accused party and if there were no problems associated with securing the attendance of the accuser, need to be compelling reasons why the requirement of fairness and the right to a fair hearing did not entitle the accused party to cross-examine the accuser.

(6)  The Tribunal’s decision to rely on the 21 clients’ statements without affording the respondents an opportunity to cross-examine the clients did not render the convictions unfair for these reasons:

(i)  Whilst the complaints are fairly serious in nature and led to sentences of suspension from five to seven years, the standard of proof remains a preponderance of probabilities, not beyond reasonable doubt.

(ii)  Each of the 21 clients’ statements does not stand alone but corroborate each other in material respects.  They are also supported by three police statements.  There was no evidence and no suggestion that those clients were acting in concert.

(iii)  None of the respondents sought to refute the allegations in the 21 clients’ statements through direct testimony.

(iv)  The Tribunal also relied on other evidence to support its finding that the complaints are proved apart from the 21 clients’ statements[21].

44.  In reply, Mr Tang made these points:

(1)  He reiterated that the May 2021 Directions had decided that evidence of witnesses was to be received in the manner prescribed under Rule 14.  There is therefore no need to decide whether Rule 14 is permissive or mandatory.  As no affidavit evidence has been filed in respect of the 21 clients in compliance with the May 2021 Directions, their statements are inadmissible.

(2)  Neither section 47 nor Part IV of the Evidence Ordinance (which regulates hearsay evidence in civil proceedings)  was engaged in the proceedings before the Tribunal.  The Law Society has not prayed in aid section 47 or Part IV at the hearing.  As the party proposing to adduce hearsay evidence, the Law Society has not given notice to the respondents “as is reasonable and practicable in the circumstances for the purpose of enabling … them to deal with any matters arising from its being hearsay”, pursuant to section 47A(2)(a).  Nor has the Law Society sought any direction from the Tribunal that the 21 clients’ statements be admitted into evidence without calling the makers.  The Tribunal never considered or addressed any of the safeguards in Part IV, such as[22]: section 47(1)  (by excluding hearsay evidence where there is objection and the court is satisfied in the circumstances of the case the exclusion of the evidence is not “prejudicial to the interests of justice”); section 48 and Order 38 rule 21(1)  of the Rules of the High Court (by allowing the respondents to call the 21 clients for cross-examination on their statements as if they had been called by the Law Society and as if the hearsay evidence were their evidence in chief); sections 49(1)  and (2)  (in estimating the weight, if any, to be given to the hearsay evidence, to have regard to any circumstances from which inference can reasonably be drawn as to the reliability or otherwise of the evidence including “whether it would have been reasonable and practicable” for the Law Society to have produced the makers of the clients’ statements as witnesses).

(3)  Section 47 does not prevail over Rule 14, which enables cross-examination of deponents of affidavit evidence.  By virtue of section 47(4)[23], the admission of affidavit evidence would continue to be governed by Rule 14.  This is analogous to the situation where directions were given by the court for the cross-examination of deponents of affirmations under Order 38 rule 2(3)  and it has been held[24] that section 47 “does not bestow on a litigant a right to ignore or disregard” such directions and section 55B(1)[25] of the Evidence Ordinance reinforces this conclusion.

(4)  If the Tribunal had properly directed itself, it would have exercised the power under section 47(1)  to exclude the 21 clients’ statements as the exclusion would not be “prejudicial to the interests of justice” in that:

(i)  The respondents were faced with very serious allegations that they had dishonestly and fraudulently misled clients into signing termination of retainers of JLA.

(ii)  The evidence of the 21 clients was the “only evidence” which can prove those serious allegations.

(iii)  JLA and the respondents have a history of mutual allegations of manipulation of clients into making statements and complaints against each other.  It cries out for cross-examination of the clients.

(iv)  The Law Society has not advanced any reason why it is impossible or impracticable for any one of the 21 clients to provide an affidavit or give oral evidence.

Analysis

45.  Adducing evidence by an affidavit on the material facts supporting a complaint is commonly used in solicitors disciplinary proceedings[26]. Provision has been made for this in Rule 14.  Where the deponent is the Director of Compliance or one of the other officers of the Law Society, who is not expected to have personal knowledge of the facts pertaining to the allegations in the complaint, the affidavit evidence would be hearsay in nature.

46.  We do not read Rule 14 and/or the May 2021 Directions as prescribing or deciding that the evidence of witnesses is to be received only by affidavit and no other method.  Mr Tang appears to be skirting the issue in submitting that there is no need to decide whether Rule 14 is permissive or mandatory.  We agree with Mr Ling that Rule 14 is permissive.  On a fair reading of the May 2021 Directions, it cannot be suggested that the Tribunal had decided that all evidence in the proceedings must be received on affidavit without exception.  There may be situations where it is not possible or reasonably practicable to obtain an affidavit from a person who had previously provided evidence by other means (such as a statement), making the procedure in Rule 14 inapplicable.  The situations envisaged are where there is genuine inability to provide evidence on affidavit, unlike those instances where a party is seeking to avoid or disregard the directions of the court to have a deponent attend for cross-examination, as in the cases cited by Mr Tang.  His submission that the admission of affidavit evidence should be governed by Rule 14 and section 47 does not prevail over Rule 14 is not to the point.

47.  To overcome the kind of genuine inability mentioned above, resort may be had to the provisions governing hearsay evidence.  Hearsay evidence may be admitted in the disciplinary proceedings. Rule 35 provides that the Evidence Ordinance shall apply to proceedings before the Tribunal, in the same manner as it applies in relation to civil proceedings.  Needless to say, the parties must have regard to the provisions in Part IV in seeking to admit or exclude hearsay evidence.

48.  The problem here is that neither side had regard to the provisions in Part IV, and the Tribunal had not applied its mind as to the basis on which hearsay evidence should be admitted, which could have a bearing on estimating the weight that should be given to the hearsay evidence under sections 49(1)  and (2), see Chan Wai Yee v Kwong Wai Piu [2022] HKCA 346 at §§18.2, 31.1.  Whilst R5 has deposed to the information he received from R3 on the difficulty of asking some of the clients who had provided statements to be the respondents’ witnesses and only Mr Or agreed to be their witness[27], there is no information from the Law Society in this regard on the 22 clients who had provided statements to JLA.  It is not known whether it would have been “reasonable and practicable” for the Law Society to have produced as witness any of the clients.

49.  The Law Society did not serve notice to the respondents pursuant to section 47A(2)  on the hearsay evidence it intended to adduce, “as is reasonable and practicable in the circumstances for the purpose of enabling … them to deal with any matters arising from its being hearsay”. Even though no rules have been prescribed under section 47A(1)  for this purpose (in contrast to the English position), as stated by Lam J (as he then was)  in Cheung Wei Man Vivien v Centaline Property Agency Ltd & Ors at §14: “As a matter of common sense and good case preparation and management, hearsay notice should be given well in advance to forewarn the other party so that if necessary, application could be made by him under Order 38 rule 21 for such witness to be called for cross-examination.” Although the Tribunal has power under section 47A(4)  to admit the hearsay evidence where there is failure to give notice, this power may not be properly exercised without full information why notice to adduce hearsay evidence was not served.

50.  We do not think the responsibility rests solely with the Law Society.  The respondents have just as much an interest in this in seeking to exclude the hearsay evidence.  Neither side sought directions from the Tribunal under section 47(1)  to admit or exclude the hearsay evidence.  The respondents did not seek directions under section 48 and Order 38 rule 21(1)  to call the 21 clients for cross-examination on their statements as if they had been called by the Law Society and as if the hearsay evidence were their evidence in chief.

51.  The Law Society has urged upon us that the admission of the hearsay evidence would not render the convictions unfair.  The respondents have advocated the contrary position that the admission of hearsay evidence had deprived them of a fair trial.  The prior question that must be resolved is whether the hearsay evidence should be admitted.  Due to the procedural irregularities mentioned above, the issue of the admissibility of the hearsay evidence, which played a significant part in the convictions, has not been considered by the Tribunal, properly or at all.  As relevant information has not been made available, this court is not in a position to decide whether the hearsay evidence should be admitted or excluded.

52.  The appeal of the respondents should be allowed on the basis that the Tribunal has failed to consider whether the hearsay evidence should be admitted and, if admitted, the weight (if any)  that should properly be placed on the hearsay evidence with regard to the considerations set out in sections 49(1)  and (2).

53.  In light of the above conclusion, it is not necessary and not appropriate to deal with the other ground of appeal being the unreliability of the clients’ statements, particularly in view of the order we would make to dispose of the appeal.

Disposition

54.  The respondents seek a dismissal of the complaints in the event that the appeal is allowed and oppose an order remitting the complaints to be heard by a differently constituted tribunal.  Mr Tang submitted that a fair trial is not possible, praying in aid the considerations he had urged upon the Tribunal when he sought permanent stay of the proceedings on the ground of long delay in the institution of proceedings[28]. He stressed that the delay of over ten years makes it impossible for justice to be done due to the “sheer frailty of human memory”.  He argued there must be balancing of the public interest.  Whilst the community should be protected against the misconduct and abuses of professionals and their staff, this must be balanced against the interest of justice in that proceedings must not be brought in circumstances that are oppressive and an abuse of process.

55.  We have weighed the competing considerations of public interest.  We think it is appropriate in all the circumstances that the complaints should be remitted to a differently constituted tribunal.  The issue of admissibility of the hearsay evidence has yet to be properly resolved.  The newly constituted tribunal may admit or exclude the hearsay evidence and impose conditions for admitting the evidence.  We should not pre-empt its decision on this.  The respondents may renew their application for permanent stay of proceedings depending on the order and directions made by the tribunal on the hearsay evidence.  We do not think this is oppressive or prejudicial to the respondents.

56.  Accordingly, we allow the respondents’ appeal, set aside the Determination and the Decision, and order that the complaints be remitted to be heard by a differently constituted Solicitors Disciplinary Tribunal.

Costs

57.  There is no dispute that costs of the appeal should follow the event.  We order the Law Society to pay the respondents’ costs of this appeal.

58.  We make an order nisi as regards the costs below.  The costs ordered in the Decision are made up of three items: (1)  costs and disbursements of the investigation by the Law Society assessed at $298,000; (2)  costs of the clerk of the Tribunal assessed at $75,300; and (3)  costs of the prosecutor in the proceedings, inclusive of all costs reserved, to be taxed by a Master of the High Court on a full indemnity basis if not agreed.

59.  As we are of the view that both sides should take some blame and have played a part in not having the issue on hearsay properly dealt with by the Tribunal, we think it is appropriate to make no order as to costs on items (2)  and (3).  As for item (1), we think it is appropriate to reserve this to the newly constituted tribunal for an appropriate order to be made depending on the outcome of the re-trial.  There will be an order nisi in the above terms.