CHONG YU ON v. LEGAL AID DEPARTMENT OF HONG KONG

[English Translation – 英譯本]

CACV 225/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 225 OF 2013

(ON APPEAL FROM HCA NO 2042 OF 2012)

_________________________

JUDGMENT

Hon Chu JA (giving the judgment of the Court):

1.  On 30 July 2013, Master Ho of the High Court ordered that the Statement of Claim filed by the plaintiff in HCA 2042/2012 be struck out. He dismissed the action and ordered the plaintiff to pay the defendant’s costs. On 3 October 2013, Deputy High Court Judge Leung dismissed the plaintiff’s appeal against the Master’s orders. The plaintiff now appeals to this Court against the decision of Deputy Judge Leung.

2.  On 28 January 2016, the plaintiff filed a summons, applying for leave to produce fresh documentary evidence at the appeal.  On 29 January 2016, we directed that the application by summons be dealt with at the hearing of the appeal.

Factual background

3.  The main factual background of this case was set out by Deputy Judge Leung in paragraphs 2 to 18 of his Judgment dated 3 October 2013, which is quoted below:

“2. In April 2005, the Insurance Authority was informed by the Hong Kong Confederation of Insurance Brokers about the refusal of the membership application made by a company called Whole Winner (Euro-Asia) Investment Limited (“Whole Winner”). The Insurance Authority referred the case to the Professional Insurance Brokers Association (“the Association ”) for investigation. It was alleged that Whole Winner held itself out as an insurance broker in its membership application without proper authorization.

3. At that time, Mr Chong was the person-in-charge of Whole Winner and Mr Chong himself was a member of the Association.

4.  In May 2005, Mr Chong applied to the Association for deregistration of his membership.

5.  In June 2005, Mr Chong obtained a letter of employment from Cinergy Financial Services Limited (“Cinergy”), but it was subject to the condition that Mr Chong had to be successfully registered with the Insurance Agents Registration Board.

6.  In September 2005, Cinergy rescinded the letter of employment issued to Mr Chong.

7.  In October 2005, the disciplinary committee of the Association concluded its inquiry and the finding was that Mr Chong had used a name card of Whole Winner, on which there were the words “in affiliation with ING Financial Planning, a member of the Hong Kong Professional Insurance Brokers Company Limited（香港專業保險經紀有限公司）”, but this statement was made without any authority from the company concerned or the Association.  The Association held that he had violated the relevant rules and issued a written warning to Mr Chong.

8.  Three days later, the Association granted Mr Chong’s application for deregistration.

9.  Mr Chong considered that the inquiry conducted and the decision made by the Association were wrong and unfair.  He made an application to this court and was granted leave to apply for judicial review of the decision.

10.  In February 2006, Mr Chong applied for legal aid.  The Legal Aid Department, pursuant to section 9 of the Legal Aid Ordinance (“the Ordinance”), referred the matter to Mr Kwok Sui Hay, barrister-at-law, to give his legal opinion thereon, and on 7 April 2006, Mr Kwok provided his opinion, in writing, that Mr Chong had reasonable grounds in applying for judicial review.

11.  As Mr Chong complained that the reason for Cinergy to rescind the letter of employment was that the Association made the above-mentioned decision and had delayed in the handling of his application for deregistration, he intended to sue the Association for damages for the financial loss he suffered.  The Legal Aid Department sought Mr Kwok’s further legal opinion in this regard.  On 25 April 2006, Mr Kwok furnished his further written opinion.  He was of the view that there was a prima facie case for Mr Chong’s intended claim for damages.  He suggested that Mr Chong could apply to the court for leave to amend his judicial review application form to add in this claim.

12.  In September 2006, the application for judicial review was disposed of by consent between the two parties.  The decision of the disciplinary committee of the Association to issue a written warning to Mr Chong was set aside.  As a result, the suggestion about amending the judicial review application form to include the damages claim was not put into effect.

13.  In June 2007, the solicitors firm assigned by the Legal Aid Department to act for Mr Chong wrote to the Association on behalf of Mr Chong, making a civil claim against them.  In July, the Association replied and gave an explanation.  They said that when Mr Chong was one of their members, he violated certain rules and therefore they conducted a disciplinary inquiry, and that in the course of the inquiry they had the power to withhold the deregistration which Mr Chong applied for; otherwise, the result of the disciplinary enquiry would be rendered nugatory.

14.  In the light of the Association’s explanation, Mr Kwok tendered his further written opinion dated 6 July 2007, in which he opined that Mr Chong’s claim against the Association had no prospect of success.  He advised that the legal aid [certificate] of Mr Chong should be discharged.

15.  In the same month, the court declared Mr Chong bankrupt.

16.  In February 2008, Mr Chong’s legal aid [certificate] was discharged.

17.  Mr Chong appealed against the decision to discharge his legal aid [certificate] (LAA 100/2008), but the appeal was dismissed by a Master in July 2008.

18.  Starting from 2011, Mr Chong applied repeatedly for legal aid in relation to his claim against the Association, but his applications were refused and his appeals against the refusals were also dismissed.”

HCA 2042/2012

4.    On 2 November 2012, the plaintiff commenced the action HCA 2042/2012 against the Legal Aid Department (“the defendant”) for damages in the sum of $12,330,000.

5.    The contents of the claim which the plaintiff set out in his Statement of Claim was as follows:

“The defendant, being the “ultimate person-in-charge and gatekeeper” in connection with the processing of legal aid applications and conferred with the powers relating to this important public office and capacity (including the power to make final decisions about approving or refusing an application in all cases of legal aid applications), on 15/4/2008, behaving in a manner and adopting an approach which displayed the utmost dereliction of duty:

(1)  completely disregarded the plaintiff’s right and opportunity to sue and deprived the plaintiff of such right and opportunity;

(2)  ignored the duty, right and opportunity to protect the creditors’ rights and interests which the Official Receiver should have and prevent the Official Receiver from performing, exercising and making use of such duty, right and opportunity;

(3)  in the end illegally and unreasonably revoked the legal aid which the plaintiff applied for and was granted on 2/6/2006 (LA/M/087/2006).

(4)  by its decision to revoke the legal aid, caused the plaintiff to immediately lose his right and opportunity to sue and thus fail in his claim for damages of HK$12,330,000 that he claimed he was entitled to;

(5)  at the same time caused the plaintiff to lose the opportunity to pay back all the debts (HK$560,000) to the Official Receiver and the creditors, so that the order made by the High Court on 19/7/2007 that the plaintiff be adjudged bankrupt forthwith could not be averted.

(6)  In respect of the defendant’s professional misconduct, the plaintiff claims from the defendant the following items: (1) damages in the sum of HK$12,330,000, being the total amount of income which the plaintiff failed to earn for being unable to perform the three year contract for his new job; (2) interest, determined by the court as the court deems fit pursuant to sections 48 and 49 of the High Court Ordinance, Cap 4, Laws of Hong Kong; (3) costs; (4) further and/or other relief as the court deems fit.”

Deputy Judge Leung’s Judgment

6.    Deputy Judge Leung, in paragraphs 28 to 48 of his Judgment, analysed and examined the plaintiff’s reasons for making his claim.  In the end, he concluded that the Master’s decision was correct and dismissed the appeal.  The Deputy Judge’s reasons for judgment are outlined below:

(1)  The plaintiff’s allegation that the defendant relied solely on the advice given by the counsel Mr Kwok, without verifying it and without considering other legal advice was inconsistent with what was disclosed in the letter dated 31 December 2007 of Hastings & Co (“Hastings”), the solicitors firm assigned by the defendant, to the plaintiff (paragraphs 30-32 in the Judgment).

(2)  If the plaintiff was aggrieved by the defendant’s decision to discharge his legal aid [certificate], he had to appeal under section 26 and 26A of the Legal Aid Ordinance, Cap 91, Laws of Hong Kong.  In fact, the plaintiff did appeal according to those provisions but was unsuccessful.  According to section 26(4), a decision of the Registrar on an appeal against discharge of a legal aid [certificate] is final.  The plaintiff’s bringing of the action HCA 2042/2012 was a disguised attempt to bypass the procedures prescribed by legislation to challenge the Registrar’s decision and, as such, was an abuse of the court’s process (paragraphs 33 to 35 of the Judgment).

(3)  On the basis of the following legal principles laid down by the Court of Appeal in Ngao To Ki v Attorney General [1981] HKLR 259, the defendant did not owe the plaintiff any contractual duty or any duty of care relating to professional negligence, and did not bear any vicarious liability:

(a)  No contractual relationship whatsoever exists between the Legal Aid Department and a legally aided person;

(b)  The principal duty of the Legal Aid Department under the Legal Aid Ordinance is to see that the legal aid scheme is competently managed so that public funds are not wasted;

(c)   Under the Legal Aid Ordinance and its subsidiary legislation, the Legal Aid Department has no duty to supervise the conduct of legally aided proceedings or any duty to invigilate the performance of the assigned lawyers, whether they are solicitors or counsel; and

(d)  In the course of the Legal Aid Department’s performing the duty mentioned in (b), it will not be burdened with any professional duty to the aided person or become vicariously liable for the professional acts or defaults of the assigned lawyers (paragraphs 37 to 40 of the Judgment).

(4)  Although the plaintiff’s legal aid certificate was discharged and he was not provided with any legal service, the plaintiff would not thereby be deprived of or forfeit his right to sue against the Professional Insurance Brokers Association (“the Association”) (paragraphs 41 to 45 of the Judgment).

(5)  There is no connection between the plaintiff’s being adjudged bankrupt and his inability to pay back his debts by reason of, according to him, his being prevented from recovering damages for his loss.  Firstly, the defendant did not discharge the plaintiff’s legal aid [certificate] until almost six months after he was adjudged bankrupt.  Secondly, having been adjudged bankrupt, the plaintiff was required to have the Official Receiver’s consent before he could commence any proceedings, and the Official Receiver would surely weigh up the overall interests of the debtors [sic] as a whole when he made his decision (paragraphs 46 to 48 of the Judgement). 

Application for adducing fresh evidence

7.  We shall first deal with the plaintiff’s application for adducing fresh evidence during the appeal.  The fresh documentary evidence is in part F of the appeal bundle.  There are altogether 20 documents, 45 pages in total.

8.  In Chong Yu On v Kwok Sui Hay CACV 62/2014 (paragraph 16 of the Reasons for Judgment dated 21 August 2015), this court elaborated on the criteria for receiving fresh evidence during an appeal as follows:

“The clear legal principle is that only in exceptional circumstances and when the applicant fulfils the following three conditions will the court receive fresh evidence during an appeal (Order 59, rule 10(2), Rules of the High Court, Cap 4A, Laws of Hong Kong; Ladd v Marshall [1954] 1 WLR 1489): (1) Even though the applicant exercised reasonable diligence, he could not obtain such evidence for use at the trial; (2) If such evidence is admitted, it will have an important influence on the result of the case, though it needs not be decisive; and (3) The evidence must be apparently credible, though it needs not be incontrovertible.”

9.  Part of the fresh documentary evidence which the plaintiff intended to adduce was included in the exhibits attached to the affidavits filed by him for the hearings before the Master and Deputy Judge Leung (the declarations marked items 14 and 16).  They are not fresh evidence and no application is needed in respect of them.

10.  There are some documents which simply cannot be counted as documentary evidence; for example, code of professional conduct of the Hong Kong Bar Association, and reports about court judgments found in the newspapers or on the internet (item 7 and items 18 to 20).

11.  Similarly, the chronology of events prepared by the plaintiff (item 5) is only an indirect description of certain evidence.  On its own, it is not evidence or fresh documentary evidence.  Furthermore, most of the documents (items 1 to 16) already existed between 2006 and April 2013.  The plaintiff did not offer any explanation at all as to why he did not produce these documents during the hearings before the Master or Deputy Judge Leung. These documents do not meet requirement (1) laid down in Ladd v Marshall.

12.  As for items 17 to 20, they have no conceivable connection with either the plaintiff’s claim or his appeal, and so requirements (2) and (3) in Ladd v Marshall are not fulfilled.

13.  For the above reasons, we refuse the application for adducing fresh evidence and order that the plaintiff shall pay the defendant’s costs of this application.

Grounds of appeal

14.  Apart from the Notice of Appeal, the plaintiff has also, at different times, filed an Amended Grounds of Appeal and a total of four Supplemental Notices of Appeal.  In his written submission, the plaintiff stated that the final Supplemental Notice of Appeal which he filed was to replace the Notices of Appeal filed earlier.  In this appeal, we consider only the grounds of appeal put forward in the Supplemental Notice of Appeal dated 3 August 2015.

15.  The issues involved in the plaintiff’s grounds of appeal can be summarized as follows:

(1)  In HCAL 8/2006, Lam J granted the plaintiff leave to apply for judicial review.  Where there was no change in the prospects of success in the arguments advanced in the case, the defendant, by solely relying on Mr Kwok’s advice, without asking the plaintiff or Hastings for verification, discharged the plaintiff’s legal aid [certificate].  In addition, subsequently it refused the plaintiff’s application for legal aid twice.

(2)  By solely relying on the contents of the Association’s reply letter dated 4 July 2007, without doing anything to verify what it said, Mr Kwok concluded that the legal aid [certificate] of the plaintiff should be discharged.  This was a complete disregard of the presence of the plaintiff and Hastings, and was a vindictive act in reaction to the plaintiff’s authorizing Hastings to write to the Association to claim against them.  Mr Kwok’s advice was without any basis, not supported by any reason, unprofessional and unconvincing.  Nevertheless, the defendant accepted such advice, thereby depriving the plaintiff’s “right to sue with the assistance of legal aid”.

(3)  The defendant refused to accept the plaintiff’s suggestion that there should be follow up enquiry and that legal advice from a third party should be sought.  The refusal was made because the plaintiff was a bankrupt and had no say.

(4)  The Court of First Instance turned a blind eye and paid no attention to the above matters and the reasons and evidence provided by the plaintiff to challenge the Association’s letter dated 4 July 2007, Mr Kwok’s opinions and the defendant’s decision to discharge the plaintiff’s legal aid [certificate].

Reasons for judgment

16.  The plaintiff’s core reason for claiming against the defendant in HCA 2042/2012 was that the defendant’s decision to discharge his legal aid [certificate] was wrong, unreasonable and illegal.

17.  As Deputy Judge Leung has pointed out, the statutory duty borne by the defendant under the Legal Aid Ordinance is to administer the legal aid scheme, process legal aid applications and to provide legal aid to those applicants who meet the requirements.  An applicant for legal aid or an aided person who is aggrieved by the refusal of his legal aid application or the discharge of his legal aid [certificate] may appeal under section 26 or 26A of the Ordinance.  Although the Legal Aid Ordinance imposes a statutory duty on the defendant, it does not confer on an applicant for legal aid or an aided person a civil cause of action to enable them to claim civil damages from the defendant in respect of a decision to refuse to grant legal aid or to discharge a legal aid [certificate].  This legal principle was well established in Ngao To Ki v Attorney General.  In a more recent case Liu Mei Huei v Government of the HKSAR CACV 185/2012 (30 April 2015, paragraphs 74 to 78 of the Judgment), the Court of Appeal made further elaborations.

18.  That being so, as a matter of legal principle, the plaintiff’s claim cannot possibly be established.  Deputy Judge Leung’s dismissal of the plaintiff’s appeal against the Master’s striking out his Statement of Claim and dismissing his action was correct and not erroneous at all.

19.  Furthermore, the plaintiff’s complaint that because of the discharge of his legal aid [certificate], he lost his right to sue the Association to claim against them is not tenable.  As rightly found by Deputy Judge Leung, the fact that a litigant is unable to obtain legal aid or is not legally represented is not an impediment to his commencing an action or instituting any proceedings.  As far as the plaintiff is concerned, the crux of the matter is that he was adjudged bankrupt on 19 July 2007.  Thereupon, any right to sue which he had was vested in the Official Receiver, whose consent he had to obtain before he could commence or carry on any action.  The Official Receiver did not consent to claiming against the Association.  The fact that the plaintiff was unable to claim against the Association was not because the defendant discharged his legal aid [certificate].

20.  As for the various allegations made by the plaintiff in his grounds of appeal and his written submission against the Official Receiver and Mr Kwok, they are neither here nor there.  Moreover, the claims make by the plaintiff against the Official Receiver and Mr Kwok on the basis of such allegations were all dismissed, and his appeals against the dismissals of his claims have also been dismissed by the Court of Appeal: see Chong Yu On v Official Receiver CACV 115/2014 (Judgments dated 13 October 2015 and 14 December 2015); and Chong Yu On v Kwok Sui Hay CACV 62/2014 (Judgments dated 21 August 2015 and 11 December 2015).

Conclusion

21.  For the above reasons, we dismiss the plaintiff’s appeal.

22.  The plaintiff does not dispute that the usual principle that costs should be ordered to follow the event is applicable to this appeal. We therefore order that the plaintiff shall pay the costs of the defendant, to be taxed if not agreed.

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. P. Y. Lo, Barrister-at-law.