HKSAR v. MUI KWOK KEUNG

DCCC 890/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 890 OF 2012

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Reasons for Verdict

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1.  The defendant has pleaded not guilty to five charges of champerty, contrary to the common law and punishable under section 101I of the Criminal Procedure Ordinance, Cap 221.

2.  The prosecution alleges the defendant, a practising barrister of 19 years’ call, consistently made champertous agreements with lay clients directly, in total five.  They agreed to the defendant taking as his fee 25 per cent or, where Charge 1 is concerned, 30 per cent of the ultimate award, if any.  They were all ignorant of the fact their costs would be and were in fact in the main borne by their opposition in litigation.  The defendant had conduct of their civil litigation which is not in dispute.

3.  More precisely, the lay client of Charge 1 did not pay any fees on account despite the commencement of litigation.  His litigation was not successful.  He received no award but did not pay any costs.  Insofar as Charges 2 to 4 are concerned, the defendant successfully litigated for three lay clients and took, pursuant to their agreements, 25 per cent of the damages received by them.  They paid no costs at any stage.  The lay client of Charge 5 agreed to the defendant taking 25 per cent of any award he received but ultimately received only 38 per cent of the final payout with the defendant deducting 62 per cent.

4.  I will deal specifically with the evidence of each lay client of each charge, PW1 to 5 in turn.  However, I will first set out the law and definition of champerty.

The Law and Definition of Champerty

5.  Champerty is a tort as well as an ancient common-law offence.  It has been abolished as a crime in some common-law jurisdictions; in England and Wales in 1967, Canada in 1985, New South Wales in 1993 and ACT, Australian Capital Territory in 2002.

6.  Despite this, the common-law offence of champerty is still part of Hong Kong law, applicable by virtue of the Basic Law.  As recently as 2007 and 2012, the Court of Final Appeal has confirmed the offence is sufficiently certain to be constitutional.  It is, however, now qualified by modern public policy considerations which I will come to.  It is an ancient crime but not obsolete in Hong Kong.

7.  Champerty has been defined as a bargain or an agreement whereby one party is to assist the other in recovering property and is to share in the proceeds of the action.

8.  In the authority of Neville v London Express Newspapers [1919] AC 368 at 382, Lord Finlay LC said:

“Champerty is a form of maintenance and occurs when the person maintaining another takes as his reward a portion of the property in dispute.”

9.  In Haseldine v Hosken [1933] 1 KB 822 at 837, Greer LJ cited from Stephens Criminal Law (6th edition, article 156):

“Champerty is maintenance in which the motive of the maintainer is an agreement that if the proceeding in which the maintenance takes place succeeds, the subject matter of the suit shall be divided between the plaintiff and the maintainer.”

10.  Maintenance in itself is a common-law crime of assisting and encouraging a party in litigation by another who has neither an interest in the suit nor lawful justification.  Champerty is an aggravated form of maintenance where a part of or percentage of any award gained as a result of the litigation is taken as consideration for the maintenance of the suit.

11.  Lord Denning MR in 1963 in Re Trepca Mines Limited (No. 2) [1963] 1 CH 199 gave a definition and an explanation why champerty is a criminal offence:

“Maintenance may, I think, nowadays be defined as improperly stirring up litigation and strife by giving aid to one party to bring or defend a claim without just cause or excuse.

Champerty is derived from campi partitio (division of the field). It occurs when the person maintaining another stipulates for a share of the proceeds. The reason why the common law condemns champerty is because of the abuses to which it may give rise. The common law fears that the champertous maintainer might be tempted, for his own personal gain, to inflame the damages, to suppress evidence, or even to suborn witnesses.”

12.  What Lord Denning describes succinctly is the mischief targeted by champerty.  The arrangement may lead to a perversion of justice; there is a real danger.  Where the champertor is an officer of the court, there is a real danger a champertous agreement may give rise to conflicts between his interest in financial gain and his duties to the court as well as his lay client.  Justice may be undermined by such real conflicts.

13.  Prosecution counsel has helpfully taken the court through the history of this common-law offence and authorities dating back over two centuries.  The most recent authority in Hong Kong, Winnie Lo v HKSAR [2012] 1 HKC at paragraphs 10 to 17 reviews the ingredients of maintenance and champerty, and I will quote paragraph 10:

“In the fairly recent case of Unruh v Seeberger [2007] 2 HKC 609, (2007) this court held that maintenance and champerty, whether sued upon as torts or prosecuted as crimes, were still a part of the law of Hong Kong. Both as crimes and as torts, maintenance and champerty have been abolished in England and Wales. In Massai Aviation Services v Attorney General of the Bahamas [2007] UKPC 12 at paragraph 12 the Privy Council referred to the Law Commission’s recommendations leading to such abolition. The Law Commission defined maintenance as ‘the giving of assistance or encouragement to one of the parties to an action by a person who has neither an interest in the action nor any other motive recognised by the law as justifying his interference’ and champerty as ‘a particular kind of maintenance, namely maintenance of an action in consideration of a promise to give to the maintainer a share of the subject matter or proceeds thereof, if the action succeeds.”

Paragraph 11:

“Those definitions are consistent with the meanings which Mr Justice Ribeiro PJ gave in Unruh v Seeberger.”

14.  Mr Justice Bokhary PJ sets out the approach a court should adopt to determine if the ingredients of the offence of maintenance and champerty are established by the prosecution.

15.  The first question to ask is whether the defendant officiously intermeddled with someone’s litigation which no way concerns or belongs to him.  If the answer is no, then there is no maintenance.  But if yes, there could be maintenance.  Mr Justice Bokhary PJ asks if the defendant’s motives were charitable, and if they were, then his involvement may not be maintenance.

16.  At this stage, if the answer is yes, there is still the possibility the defendant’s conduct comes within a category that excludes such conduct from being an offence of maintenance or champerty.  There are exceptions.  Mr Justice Ribeiro PJ deals with those categories in detail in paragraphs 91 to 98 of his judgment in Unruh v Seeberger.

17.  Whether these categories are relevant will depend on the facts of each case, and in this case, they do not arise.  The defence do not rely on such categories.  I did not find it necessary to discuss them in length.  The exceptions do not apply here.

18.  If the answer to the first question is yes, the second question is on the totality of the circumstances, did the defendant’s conduct pose a genuine risk to the integrity of the court’s process?  If yes, the defendant should be convicted of maintenance.  Where the offence is champerty, there is one further ingredient that must be proved; the defendant must be entitled to by agreement to a share of the proceeds of the litigation maintained and ultimately successful.

19.  There are a line of authorities helpfully submitted by the prosecution that pertain to officers of the court, usually solicitors entering into champertous agreements with lay clients.  The same principles, however, will apply to barristers as officers of justice.

20.  In Wallersteiner v Moir No. 2 [1975] 1 QB 373 at 393, Lord Denning MR held:

“English law has never sanctioned an agreement by which a lawyer is remunerated on the basis of a ‘contingency fee,’ that is that he gets paid the fee if he wins, but not if he loses. Such an agreement was illegal on the ground that it was the offence of champerty. In its origin champerty was a division of the proceeds (campi partitio). An agreement by which a lawyer, if he won, was to receive a share of the proceeds was pure champerty. Even if he was not to receive an actual share, but payment of a commission on a sum proportioned to the amount recovered - only if he won - it was also regarded as champerty. Even if the sum was not a proportion of the amount recovered, but a specific sum or advantage which was to be received if he won but not if he lost, that too was unlawful. It mattered not whether the sum to be received was to be his sole remuneration, or to be an added remuneration (above his normal fee), in any case it was unlawful if it was to be paid only if he won, and not if he lost.”

21.  The prosecution allege that the defendant’s conduct here in respect to all five lay clients falls squarely in what Lord Denning describes as unlawful.

22.  In Pittman v Prudential Deposit Bank [1896] 13 TLR 110, Lord Esher MR said:

“In order to preserve the honesty of the profession it was a rule of law which the court had laid down and would always insist upon that a solicitor could not make an arrangement of any kind with his client during the litigation which he was conducting so as to give him any advantage in respect of the result of the litigation......The responsibility of persons engaged in the profession of the law was very great, and their conduct must be regulated by the most precise rules of honour. The court thought that, unless the rule was carried out to the fullest extent, there would be a temptation to solicitors which they should not be subjected to. It was useless to say that in the particular case the solicitor was not tempted and that he acted from the most honourable motives. The law was universal that, without considering the motives of the particular solicitor, a solicitor must not persuade his client, or indeed accept from his client a voluntary offer, so as to obtain any advantage dependent upon the result of the litigation he was then conducting.”

23.  Both Masters of the Rolls quoted above place great measure on the responsibility of persons engaged in the law as a profession.  Lawyers cannot enter into a champertous agreement even if their motives were altruistic in origin.

24.  In Wallersteiner, Buckley LJ discusses the obvious risk to the integrity of the court’s process when a lawyer enters a champertous agreement.  He says at page 402 at F:

“First, in litigation a professional lawyer’s role is to advise his client with a clear eye and an unbiased judgment. Secondly, a solicitor retained to conduct litigation is not merely and adviser to his client, but also an officer of the court with a duty to the court to ensure that his client’s case, which he must, of course, present and conduct with the utmost care of his client’s interests, is also presented and conducted with scrupulous fairness and integrity. A barrister owes similar obligations. A legal adviser who acquires a personal financial interest in the outcome of the litigation may obviously find himself in a situation in which that interest conflicts with those obligations.”

25.  Mr Justice Ribeiro PJ in the Winnie Lo authority is sure a lawyer who enters a champertous agreement does depart from his proper professional role and is committing champerty.  He says at paragraph 104 of that judgment:

“But by far the most common instance of a solicitor incurring liability in respect of litigation which he is conducting involves his committing champerty. In such cases, the solicitor plainly departs from his proper professional role and is held liable for that ‘particularly obnoxious form’ of maintenance ‘when the maintainer seeks to make a profit out of another man’s action - by taking the proceeds of it, or part of them, for himself.’”

The Evidence

26.  Much of the prosecution’s evidence, in particular the documentary evidence, was agreed and could not be challenged. The defendant was counsel and on the face of it instructed by solicitors to represent all five lay clients, PW1 through to PW5.  The defendant does not dispute he received money from PW2 to PW5 upon the success of their litigation and receipt of their respective awards.  PW2 to PW4’s payment amounted to at least 25 per cent of these awards.  The defendant does not dispute the prosecution witnesses’ money to him was dealt with through a third party’s bank account, not the defendant’s own personal accounts.  Where PW2 to PW4 is concerned, this was upon the instruction of the defendant himself.

27.  The movement of moneys and the bank accounts used were not challenged. 

28.  The admitted facts were set out in Exhibits P1, P65, P70 and P71.  

29.  What is in issue and challenged is whether or not the moneys concerned paid by PW2, 3, 4 and 5 were paid according to a champertous agreement proposed by the defendant.

30.  The credibility of the prosecution witnesses are at issue.  This will require some regurgitation of their evidence for the purpose of demonstrating my findings.  However, I will condense their evidence as a verbatim account is not necessary or helpful.  Suffice it to say I have carefully considered all of their evidence when considering credibility.

Charge 1

31.  PW1, Mr Pang Mo-fung, was arrested in December 1997 during a domestic dispute, remanded in a psychiatric ward of a hospital and then convicted in the magistracy court of assaulting a police officer during the course of his arrest.  His conviction was subsequently overturned upon appeal.  He applied for legal aid to sue the police force as well as the Hospital Authority.  This application was rejected.  He went on to appeal the Director of Legal Aid’s decision and his appeal was dismissed by the High Court in September 1999.

32.  His evidence was that one month later he received an unsolicited call from the defendant who knew he had failed to get legal aid for his civil suits.  Mr Pang at that stage had never met the defendant nor had solicited an introduction to him.  He went to the defendant’s chambers in the absence of any solicitor.  He referred to the defendant as “Lawyer Mui” and saw the defendant’s name on the door to his chambers in Central.  The defendant told him he used to be a police officer and could help him sue the police force as he was familiar with these matters.

33.  Mr Pang told the defendant that he had no money to pay for legal fees as he was on public assistance.  The defendant said it did not matter that he had no money.  He would help and if they won, the defendant would have 30 per cent and Mr Pang 70 per cent of all awards received.  If Mr Pang lost, he would not have to pay any fees, not even the other side’s fees.  Mr Pang was told he would not have to pay “one cent” towards the litigation and ultimately did not.  Mr Pang agreed to the 30/70 per cent arrangement proposed.

34.  Mr Pang’s evidence was that he then met the defendant on a further 10-odd occasions, always in his chambers. He had taken his ex-wife and his father to see the defendant on two occasions.  He met a doctor arranged by the defendant in the defendant’s chambers who interviewed him there.  On each of these occasions, he recounts there was no solicitor present.  He did meet a Mr Mak in 2002 at the request of the defendant in an office in Lippo Centre, Admiralty.  Thereafter he met him on approximately two further occasions, he recalls being in 2003 and 2004.  This Mr Mak Hon-ming, a solicitor, was referred to by all five prosecution witnesses, PW1 to 5.  His firm was on record as representing all five witnesses at some stage during litigation. 

35.  On 12 October 2001, a writ was issued by Mr Mak’s firm, Messrs Lam, Lee & Lai on behalf of Mr Pang against the Secretary for Justice for and on behalf of the Hong Kong Police and Hospital Authority.  By then, the claim was already time‑barred.  Despite this, on 23 May 2002, a statement of claim drafted by the defendant was filed in the District Court.  On 27 January 2003, the defendant appeared for Mr Pang as his counsel in the District Court.  Mr Pang was present at the hearing but as the proceedings was conducted in English, he could not follow the hearing.  He was told after the hearing to go home and did not know that during the hearing, a costs order had been made against Messrs Lam, Lee & Lai, the firm.

36.  On 15 May 2003, a District Court judge granted leave to discontinue Mr Pang’s action against the Hospital Authority.  In September 2004, a District Court judge granted leave to discontinue Mr Pang’s action against the Secretary for Justice and Mr Pang was ordered to pay costs which he says he has not done to date.

37.  Subsequently, Mr Pang made a complaint to the Bar Association against the defendant, not because he had offered a champertous agreement of 30 per cent of any award but because he had been negligent and Mr Pang’s action was time-barred.

38.  Mr Pang’s evidence was that he was kept in the dark about the progress of his litigation.  When he was finally informed, he told Mr Mak that he would like to still proceed but had no money.  At that point, Mr Mak returned all files and papers to Mr Pang.

39.  As a result of Mr Pang’s complaint to the Bar Association, there were two briefs uncovered during the subsequent investigation.  They were both addressed to the defendant for the said hearing on 27 January 2003, were dated 20 January 2003 and signed by Mr Mak of Messrs Lam, Lee & Lai.  One was marked $50,000 with a daily refresher of $30,000.  The other was marked brief pro bono.  These were exhibited at 63A and 63B.

40.  The defence cross-examined Mr Pang and insisted Mr Mak of Messrs Lam, Lee & Lai was present at the first conference at the defendant’s chambers and that it was in October 2001, not 1999.  The defence case was that the defendant never offered to take up Mr Pang’s litigation for a fee of 30 per cent of any award received nor did he say he was an ex-police officer.  It was suggested to Mr Pang that he was framing the defendant because he was not able to proceed against the police.  He had to pay Mr Mak’s legal fees but instead made his ex-wife pay on his behalf in return for letting their son go and live with her.  Mr Pang denied all of the suggestions put to him but agreed his son did go and live with his ex-wife at a later stage because he chose to live with his mother.

41.  The prosecution sought to show there was a relationship between the defendant and Mr Pang’s ex-wife.  His ex‑wife is a Madam Chan Yuk-fong.  It is part of the admitted facts Madam Chan had an account at the Bank of China and two accounts at Hang Seng Bank.  The defendant, according to the records, was a signatory to these Hang Seng Bank accounts.  It was further admitted that PW2 deposited by way of cheque what amounted to 25 per cent of his successful award into one of Madam Chan’s Hang Seng Bank accounts as requested by the defendant. The defendant said that Madam Chan was his mother.

42.  PW3 also paid what amounted to at least 25 per cent of his award into Madam Chan’s Hang Seng account again at the direction of the defendant who told him she was his wife.

43.  PW4 also paid what amounted to 25 per cent of his award into Madam Chan’s Hang Seng account again at the direction of the defendant.

44.  The prosecution also exhibited travel records of Madam Chan and the defendant between 12 April 2007 and 14 February 2009.  They travelled to mainland China and Macau together on numerous occasions.

45.  The defendant was arrested on 13 March 2012 at 7 o’clock in the morning by the police when he was located in the home of Madam Chan.

46.  The amounts paid by PW2, 3 and 4 pursuant to a champertous agreement were channelled through accounts that were not in the defendant’s name but an account the defendant could access as a signatory.

Charge 2

47.  Mr Fung Kwok-ming, PW2, was injured in a car accident in March 1999.  A relative introduced a solicitor, a Mr Liu from Messrs Li, Chow, Pang & Chan, to Mr Fung.  They then in turn instructed the defendant to represent Mr Fung.  During a conference in the defendant’s chambers, Mr Fung had a disagreement with Mr Liu, and subsequently Messrs Li, Chow, Pang & Chan as a result of that disagreement withdrew their representation of Mr Fung.  The defendant then told Mr Fung that he could in any event continue to represent him for a fee of 25 per cent of any award received.  Prior to this conference, Mr Fung had yet to pay any legal fees on account.  The defendant told him that he would take care of Mr Liu’s fees to date and suggested Messrs Lam, Lee & Lai represent Mr Fung.  Mr Fung did not meet any lawyers from that firm during the course of the litigation.  They came on the record in October 2003.  Mr Fung agreed to pay for any medical appointments and expert reports obtained from his own pocket.  Mr Fung was interviewed by a doctor for such a report in the defendant’s chambers as arranged by the defendant. 

48.  In October 2004, the lawsuit was settled at HK$1.7 million and costs awarded.  The defendant gave Mr Fung a cheque for $1.7 million in his chambers in person and gave him an account in the name of Chan Yuk-fong with an account number in order for Mr Fung to transfer 25 per cent, $445,000, into this account.  Mr Fung was told that this was the defendant’s mother’s account.  $20,000 of that $445,000 was for a doctor’s report that the defendant had paid for in advance.

49.  Mr Fung was completely unaware that the defendant of his suit paid $488,000 to Messrs Lam, Lee & Lai as costs who in turn paid the defendant $175,000 as his brief.  He described it as unreasonable that the defendant had been paid double legal fees.  Like PW1, Mr Pang, Mr Fung was in the dark during the course of the litigation and said he had put his trust in the defendant to represent him.

50.  Approximately six months after paying this $445,000 into the account, Mr Fung received a receipt for this amount directly from the defendant.  This was exhibited as P57.  It was issued by the defendant in his capacity as a barrister.  Mr Fung had prior to that made a request for such a receipt and a breakdown.  The defendant also gave Mr Fung a breakdown of his fees dated September 2004 presented to Messrs Lam, Lee & Lai.  That is exhibited at P58.

51.  Mr Fung was shown two other fee notes relating to his case: P16 which was from the defendant to Messrs Li, Chow, Pang & Chan and P17 from the defendant addressed to Messrs Lam, Lee & Lai. Mr Fung had not seen these fee notes before and they were substantially different in content to P58 which he received from the defendant directly.

52.  Page 2 item 2 of P17 refers to a conference with the defendant, Mr Fung and the instructing solicitor present but Mr Fung was very sure he had never met this Mr Mak.  He was sure he had only met certain persons of Messrs C M Li, Chow, Pang & Chan and the defendant in relation to his legal proceedings.

53.  Mr Fung disagreed that the $445,000 was not 25 per cent of his award as the defendant’s legal fee but a bonus he had promised the defendant if the defendant obtained a settlement of more than $1.5 million.  He was sure it was not a bonus or a gift from him but consideration for the defendant conducting his legal proceedings to fruition and success.

Charge 3

54.  PW3, Mr Kong Ka-sing, lost his wife and mother to his two daughters when she died in March 2003 in an accident during the course of her employment as a waitress.  A colleague of his deceased wife introduced Mr Kong to the defendant because he wanted to sue her employer.  This colleague took Mr Kong to the defendant’s chambers soon after the accident to get some legal advice.  At this first meeting, Mr Kong agreed to engage the defendant to act on his behalf and agreed to the defendant’s legal fees of 25 per cent of the damages awarded.  He was specifically told by the defendant that if no damages were recovered, he would not have to pay a cent of legal fees.  The defendant told him that he could expect to recover about a million dollars and that he would handle the legal action and proceedings.

55.  Mr Kong experienced financial difficulty after his wife died and told the defendant.  Over a period of time the defendant lent him on three occasions a total of $25,000, or at least not more than $30,000.

56.  Like PW1 and PW2, Mr Kong was mostly in the dark where his litigation and its progress was concerned.  He did not pay Messrs Lam, Lee & Lai any legal fees and is sure he only met Mr Mak of this firm once whereas he met the defendant about 10 times, always in his chambers and alone.

57.  There were two claims commenced by Messrs Lam, Lee & Lai in the name of PW3 and his family members: an employee’s compensation action and a claim for damages in the District Court.

58.  The employee’s compensation action was settled by consent, and PW3 and his two daughters received $841,563, and PW3’s costs were provided for.  PW3 received the award by instalments.  He first received $420,781.50 by cheque handed to him by the defendant in his chambers a month after the award was made in July 2004.  At the same time the defendant gave Mr Kong a piece of paper with Madam Chan Yuk-fong’s name, bank account number and a figure of 120,000 written on this document.  The defendant told him to deposit 120,000 into this account of his wife.  This sum was made up of a repayment for a $15,000 loan from the defendant and 25 per cent of this part of his award as his legal fees as agreed.  This piece of paper was exhibited at P60.

59.  PW3, Mr Kong, received a further $205,108 from this award in October 2004 again by cheque and from the defendant personally.  He then drew a cheque for $105,000 and deposited it into Madam Chan’s account, again at the instruction of the defendant.  The balance of the award was put into an AXA Insurance Company policy for his two daughters.  He paid a total of $225,000 into the account of Madam Chan. It comprised of the defendant’s 25 per cent of $841,563 and the repayment of the balance of the loans of $15,000.

60.  For this action, the employer according to the order paid costs of $70,000 to Messrs Lam, Lee & Lai, unbeknownst to PW3, Mr Kong.

61.  P61 was a document Mr Kong signed in February 2006 in the defendant’s chambers, authorising Messrs Lam, Lee & Lai authority to start an action for damages against his deceased wife’s employer.  In August 2006, solicitors on record were changed to Messrs S H Chan & Co, again unbeknownst to Mr Kong.  He never met anybody from Messrs S H Chan & Co.

62.  This action was settled at $100,000 awarded to PW3, Mr Kong, and costs provided for by the defendant of that action on January 2007.  In late 2008, PW3 was given a cheque for $100,000 from the defendant drawn on the account of Messrs S H Chan & Co and was told the sum was the amount of damages recovered.  As a result, PW3, Mr Kong, paid into Madam Chan’s account 25 per cent of this amount pursuant to the agreement he made with the defendant.  In addition, he had to repay a further loan of $10,000.  Therefore, a deposit of $35,000 was made.  This payment-in was at the request of the defendant.

63.  The costs paid by the defendant of the action was agreed at $89,300 and paid to Messrs Lam, Lee & Lai in April 2007.  Mr Kong again did not know his costs were covered by the defendant and long before he received his $100,000 compensation.

64.  In cross-examination, it was suggested to the prosecution witness PW3, Mr Kong, that the defendant did not ask for nor receive 25 per cent of all awards.  He, Mr Kong, was framing the defendant and the moneys which were paid in by him were all repayments of loans made to him by the defendant during the course of this litigation.  They did not represent legal fees.

65.  PW3 was shown Exhibit D1, two photocopies of debit notes for $160,000 and $95,000 respectively.  PW3, Mr Kong, said the signature on the second note did look like his signature but not on the first note.  In any event, he had not seen these documents before.  He was sure he had not signed them and had not asked the defendant to loan him that amount of money.  He rejected this version of events put to him in cross-examination.

66.  Exhibit P27 and P32 were two bills-of-costs documents of Messrs Lam, Lee & Lai relating to both PW3’s actions.  P32 refers to five conferences PW3 had with Mr Mak of Messrs Lam, Lee & Lai.  P27 refers to 10 conferences PW3 had with Mr Mak, all of which he denied took place.  He only recalled one short meeting with Mr Mak in his office.  These bills of costs, like that received by PW2, Mr Fung, referred to events or items not true, according to the witnesses.  PW3 was sure he had only met Mr Mak on one occasion.

Charge 4

67.  PW4, a Mr Chan Chak-ki Jacky, was only 16 years old when he was knocked down by a KMB bus in March 2005 and suffered injuries.  A relative introduced Mr Chan to the defendant some two months after the accident.  Mr Chan, his mother and his uncle met the defendant as a result of this introduction in the defendant’s chambers in the absence of a solicitor.  In this meeting the defendant told PW4, Mr Chan, that he could pursue damages against KMB on his behalf and if he was successful, PW4 would pay him 25 per cent of that award as his legal costs.  PW4 agreed.

68.  Mr Chan did not know his solicitors were Messrs Lam, Lee & Lai but had spoken on the telephone to a solicitor surnamed Mak on about 10 occasions in total.  He saw a doctor in Jordan at the defendant’s request who examined him and his injuries sustained in the accident.  During the course of this litigation, Mr Chan, PW4, went to the defendant’s chambers on a couple of occasions but never met any other lawyers at the same time.  The defendant knew PW4 was temporarily unable to work and lent him a total of $8,000 over a period of a few months between August and October 2006.

69.  Ultimately, KMB agreed to pay Mr Chan HK$360,000 plus costs.  Exhibit P35 is a form of discharge signed by PW4.  He recalls signing this in the defendant’s chambers but the witness, Mr Mak, as stated, was not present.  PW4 was told it meant he would receive a final payment of $360,000.  He was in the dark during the course of the litigation as to its process, progress and negotiations.

70.  A cheque dated 18 October 2006 was issued by KMB to Messrs Lam, Lee & Lai payable to Mr Chan for that amount, 360,000, and he collected it from the defendant’s chambers as directed.  P36 is a copy of this cheque.  P37 is a pay-in slip for $108,000 transferred to Madam Chan’s account as directed by the defendant.  $108,000 represents a repayment of the $8,000 loan, payment of $10,000 for a doctor’s medical report and 25 per cent of $360,000 which was $90,000.

71.  PW4, Mr Chan, did not know that KMB in February 2007 also paid $77,000 costs to Messrs Lam, Lee & Lai and would not have agreed to giving up 25 per cent of his own award if he had known.  P40 is a copy of a cheque of $9,000 dated 22 February 2007 payable to the defendant by Messrs Lam, Lee & Lai from client’s account to settle counsel’s fee for this litigation.  It is a note signed by Mr H M Mak, a solicitor of Messrs Lam, Lee & Lai.

72.  Exhibit P38 is a bill of costs submitted by Messrs Lam, Lee & Lai to the defendant’s solicitors to claim costs as provided for.  Interestingly, like those same documents for PW2 and PW3’s litigation, they include conferences between Mr Mak and the plaintiff, that is the prosecution witnesses, that these witnesses say never took place; in this case, four conferences that PW4 was sure did not take place as described and calculated for the purposes of claiming costs.

73.  In cross-examination, it was suggested to PW4, Mr Chan, that the defendant did not propose taking 25 per cent of his award for his legal fees.  He was, like PW3, framing the defendant and moneys he did deposit into Madam Chan’s account, $108,000, were all repayments of loans made to him and his uncle by the defendant during the course of the litigation.

74.  Defence counsel showed PW4 three photocopied debit notes purporting to be loans to PW4 of $68,000 of which $60,000 was stated to be for an investment in a bicycle business.  There was also an amount of $40,000 the defendant loaned PW4’s uncle.  All these were to be repaid by PW4.

75.  PW4 said the photocopied signature looked like his, should be his but he never signed this debit note nor had he seen it before.  He said he was at a total loss about this debt.  He denied that the $108,000 deposited was repayment of loans and not 25 per cent of his award as legal fees.  He denied he was given the original copies of these documents after the payment had been made.  These photocopied debit notes were not admitted into evidence.

Charge 5

76.  PW5 was a Mr Wong Wui-sing.  In June 1999, he was injured during the course of his employment at an engineering company. His back was injured.  He had been working with the same employer for about eight years.  He was given as a result of this back injury two years’ sick leave.

77.  In April 2000, PW5, Mr Wong, was granted legal aid to claim against his employer, a Mr Ma.  In June, solicitors were appointed by the Director of Legal Aid to commence an employee’s compensation claim in the District Court on behalf of Mr Wong, PW5.

78.  In June, Mr Wong met the defendant through a District Councillor at a legal seminar arranged in his neighbourhood. Mr Wong told the defendant about his injury and accident.  The defendant then invited him to discuss it in his chambers.  At this subsequent meeting, Mr Wong met the defendant alone and the defendant offered to conduct his case, his litigation for 25 per cent of any damages ultimately received.  PW5 agreed to this arrangement.  In July 2000, the legal aid certificate was discharged at the instigation of PW5.  In August 2000, Messrs Karbhari & Cham filed a notice to act for PW5 in action number DCEC549/2000.  Mr Wong said he had not met anyone from this solicitors’ firm nor had heard of them.  The defendant also assisted Mr Wong to claim against his own insurance company.

79.  As a result of that, in October 2001, the employee’s compensation claim was settled at $279,718 and Mr Wong’s costs were to be provided for.  Mr Ma, the employer, had in advance paid Mr Wong $120,000, so Mr Wong received the balance of $160,000-odd. He also agreed to accept $130,000 from his insurance company.  Mr Wong said he paid 25 per cent of both sums of money as the defendant’s legal fees to the defendant.  Mr Wong confirmed he had never paid any fees to Messrs Karbhari & Cham.

80.  Mr Wong’s personal life fell apart somewhat after this accident.  His marriage failed, leading to his divorce in 2003.  His son lived with his ex-wife and in an accident in 2003, his daughter died.  He gambled away the damages he received and had to apply for CSSA, public assistance, in 2001.  He gave evidence that he tried to start a business but failed and got into debt.  He had to borrow money as he got into financial difficulties and did borrow some from the defendant.  He says he borrowed approximately $20,000 whereas the defendant says it was $109,750.  A debit note, D9, is apparently evidence of the debt.  In 2003, Mr Wong ended up receiving treatment in a psychiatric ward of a mental hospital for seven to eight months.  This was after the death of his daughter and is still to date on psychiatric medication.

81.  In 2002, a personal injuries claim was commenced against the employer, Mr Ma, by Messrs Lam, Lee & Lai.  Mr Wong gave evidence that he did not meet anyone from this firm nor pay this firm any fees.  This action was transferred up to the High Court in February 2004.  In January 2005, the High Court ordered by consent an award of $1,764,718 to Mr Wong.  After deducting the employee’s compensation and some advance payments made by Mr Ma, the sum of $1.43 million was paid to Messrs Lam, Lee & Lai.  Costs were also ordered to be paid by Mr Ma.  Mr Wong did not know that Mr Ma had paid his costs.

82.  In October 2003, the defendant and Mr Wong, PW5, had opened a joint bank account at the Bank of China.  Mr Wong said this was at the suggestion of the defendant.  He had told his ex‑wife he thought the defendant’s fees of 25 per cent were too high and he did not want to pay it.  His wife, he says, in turn told the defendant.  As a result, the defendant took Mr Wong to open a joint bank account.  The defendant told Mr Wong it would be used to facilitate the flow of money he received.  This account was controlled by the defendant.  His chambers was the contact address.  The ATM card and bank statements were sent to the defendant. PW5, Mr Wong, did not utilise this account once.  P47 are the bank documents account-opening forms.  The defendant told him the award when received would go into this account.  Mr Wong gave evidence that he trusted the defendant.

83.  When the action in the High Court was settled, $1.43 million was deposited on 21 January 2005 into the joint account of the defendant and PW5.  A copy of the cheque is exhibited at P49.  It is agreed and admitted that six days later, on 27 January 2005, at 1.56 pm, the defendant transferred $550,250 from this joint account into PW5’s own account with the Bank of China.  At 1.58 pm, the defendant withdrew $879,750 in cash from this joint account.  On the same day, this amount was deposited into Madam Chan’s account at the Bank of China.  On the same day, the same amount was withdrawn from Madam Chan’s account in the Bank of China, and a cashier order in the sum of that same amount payable to Madam Chan was purchased and paid for in cash.  This cashier order was then deposited into Madam Chan’s Hang Seng Bank account.  On 30 March 2005, some two months later, the defendant closed the joint account and withdrew the balance of $5,000-odd remaining.

84.  Mr Wong was aware that he only received 38 per cent of his award but was told by the defendant he owed the defendant 25 per cent as his legal fees.  This should be $357,500.  He was also told he owed the defendant other legal fees that were incurred where the defendant represented him when arrested for a criminal assault offence, an investigation into an allegation of child neglect as well as representing him, Mr Wong, in his divorce proceedings.  He also agreed that the defendant could take from his award $100,000 for his ex-wife’s maintenance.  He also had to repay the debt of $20,000.  However, he was never told what the breakdown for these fees entailed.  The defendant took 62 per cent of this award, and this is not challenged.

85.  The defence rely on Exhibit D9 to say that PW5, Mr Wong, owed $109,750 to the defendant and $100,000 was taken for his ex-wife’s maintenance.  That totals $209,750 which is 14.6 per cent of the total award of 1.43 million.

86.  In cross-examination, it was not challenged that the defendant did tell PW5, Mr Wong, that he had deducted legal fees for various other legal matters and loans, adding up to 62 per cent of the 1.43 million award.

87.  Mr Wong gave evidence over the course of a day and when he returned to the witness-box after lunch, his demeanour had obviously and visibly changed.  He looked and sounded visibly slower and distracted.  He insisted on continuing to give evidence even though he was offered an opportunity to rest or adjourn his evidence. 

88.  In cross-examination after lunch, he did contradict himself and sound confused.  He agreed he met Mr Mak at the defendant’s chambers when he had said in-chief that he had not.  In re-examination, he took time to think over this contradiction and others and corrected himself.  He agreed that he signed Exhibit D9 but did not know it said the loan he received was $109,000.  He said he had lost the original document of D9 but later said he was not sure if the defendant had ever given it to him.  He said it was possible he did borrow up to $100,000 but then retracted that and said it was only $20,000.  These contradictions I will deal with later.

89.  PW6 was a Mr Wong Wai-ma, a solicitor instructed by the Bar Council to investigate and prosecute disciplinary proceedings against the defendant following the complaint made by PW1.  This complaint was of the defendant’s negligence in the conduct of PW1’s litigation.

90.  In November 2009, Mr Wong went to Messrs Lam, Lee & Lai to investigate and looked at the file for the action DCPI 303 of 2001 relating to PW1.  He took copies of the two briefs that I referred to earlier that are for the same hearing issued to the defendant but one was for a fee with a refresher and the other pro bono.  He took copies as they were conflicting briefs.  Mr Wong did ask Mr Mak about these briefs and his answers were imprecise and non-committal.

91.  Later, in the actual disciplinary hearing, Mr Mak told the tribunal that the real brief was the pro bono brief and the other was a mistake made by Mr Mak’s secretary.  That is the extent of the details of a disciplinary hearing referred to during the course of this trial.

92.  There were two defence witnesses called.  The first was a Mr Chan Chi-cheung who is the 21-year-old son of PW1 and Madam Chan Yuk-fong.  In 2009, Mr Chan changed his surname, dropping his father’s surname.  He clearly disliked his father immensely.  When asked about his father’s legal cases, he without prompting said he recalled a telephone conversation in 2004 where he heard his father say over the telephone “there is no advantage in suing the police but someone taught him to get it back from the lawyer.”  Mr Chan was disgusted and found it disgraceful which is why he recalls this sentence so vividly.  He understood his dad was deliberately framing someone, a lawyer.  He knew no more details than that and denied fabricating this.

93.  Mr Chan said his father told him one day in 2005 to pack his bags because he was going to live with his mother.  His mother arrived and handed his father, PW1, some deposit slips and said she had paid lawyers’ fees.  His father, PW1, then said he could go and live with his mother.  His mother told him later that what he had given to PW1 were banking deposit slips.

94.  Mr Chan was asked about the relationship between the defendant and his mother.  He described them as friends.  He had no idea if they travelled together out of Hong Kong or whether they operated bank accounts together.  He said the defendant came around to their home once a year and never spent the night there.  He agreed the defendant was at his home at 7 in the morning on 13 March 2012 when the police came to the door.  He said that the defendant was there that early to ask his mother to go out for breakfast.  He agreed it was a coincident that the police had found the defendant at his home when they were looking for him.

95.  The second defence witness, Madam Lai Sau-fun, was the ex-wife of PW5, Mr Wong.  She gave evidence that directly contradicted PW5.  She said she attended the defendant’s chambers with PW5 and Mr Mak, the solicitor, on more than one occasion.  She gave evidence that she saw Mr Wong, PW5, pay cash directly to Mr Mak in the defendant’s chambers.  She knew that Mr Wong owed the defendant a debt of over $100,000.  She said the defendant also obtained on her behalf $100,000 as maintenance from PW5 even though during the divorce the defendant represented PW5 and not her.  She said he did this as a friend.  The defendant gave her Exhibit D11 as a receipt for this $100,000 maintenance obtained from PW5. She does not know where the original is now but Exhibit D11 is a photocopy she has kept for many years.

96.  She was shown a provisional exhibit, D8, and said she did sign this document in front of Mr Mak and the defendant.  She denied that this document and Exhibit D11 were documents fabricated by the defendant.

97.  She had D11 and D12, which is a copy of Provisional Exhibit D8, in her handbag and produced in the course of her evidence.  She said she had kept Exhibit D12 for 13 years and it is in pristine condition.  Exhibit D12 retains Messrs Lam, Lee & Lai and the defendant to represent PW5 in, as it states in the document, “any District Court and/or any subsequent High Court proceedings.”  It is dated 30 August 2000.

98.  She did say in answer to a question from the court that this document, the retainer document, D12, does refer to legal fees that she knew they could not pay.  When asked did she think how they would pay, she replied that they would only pay for it after the action was successful. She was then asked who mentioned that, to which she replied, “Both lawyers mention it.”  She was then asked did she ask how much to pay if successful, to which she replied, “My former husband asked and I heard him say 25 per cent.”  She was then asked when did she hear this, to which she replied, “When I got home, he told me.”

99.  In short, according to PW1 to 5, they gave evidence that the defendant offered to conduct their civil suits in return from 25 per cent of any award if successful, 30 per cent where PW1 was concerned.  It was a case of no win no fee.  The defendant met or knew PW1’s ex-wife and she opened bank accounts which he could access and use. According to prosecution witnesses’ evidence, no solicitors were actively involved with the prosecution witnesses except in name.  PW2, 3 and 4 paid the defendant 25 per cent of their successful award and deposited the money and other expenses they were told they owed into PW1’s ex-wife’s account, thinking she was either the defendant’s mother or his wife.  They did this because this was the agreed legal fee for representing them.  PW5 had to open an account with the defendant.  The defendant took PW5’s ultimate award and dealt with it, giving PW5 38 per cent of it.  PW5 believed he owed the defendant the balance because that is what he was told.

100.  DW1, the 1st defence Witness, obviously disliked his father immensely, lives with his mother who is very close to or in a relationship with the defendant.  He gives evidence that PW1 plotted in 2004 to frame a lawyer with no further detail or substance.  It is based on a one-way one-line telephone conversation he overheard. 

101.  PW5’s ex-wife gave evidence as the second defence witness, considers the defendant a friend, contradicted her ex‑husband to some extent but ultimately said PW5 did tell her the legal fees would be 25 per cent if the action was successful.  25 per cent of the amount awarded is the crux of PW5’s evidence and contrary to the defendant’s case.  

102.  The defence proceed on the basis that PW1 lied about a 25 per cent agreement, thereby framing the defendant.  PW2 only paid the defendant $445,000 as a bonus for getting an award higher than 1.5 million.  PW3 and 4 only deposited over 25 per cent of their awards because that money were actually loans repaid, not agreed legal fees. PW5 was repaying loans of over $100,000, $100,000 maintenance to his ex‑wife and legal fees for various legal matters totalling 62 per cent of his award.  These amounts were not in dispute.  There was no agreement, according to the defence, to pay 25 per cent categorised as legal fees.  Hence, why I say credibility is the main issue here. 

103.  I will add, in Charges 2 to 5 the total damages received by prosecution witnesses was $4,431,563 and $1,629,750 was the amount received by the defendant from PW2 to PW5.

My Findings

104.  The prosecution has the burden of proof and must prove all the elements of champerty beyond reasonable doubt.  The charges must be considered separately.  They do not stand or fall together.

105.  The defendant is a man of clear record and I warned myself of the likelihood and propensity of a man with a clear record committing these offences.

106.  I reminded myself that all prosecution witnesses bar PW6 gave evidence under immunity as they too could be guilty of champerty. I had to take into account that the evidence of a witness in this situation must be considered carefully.  Their evidence must be scrutinised as they have a vested interest and will not want to themselves face prosecution; such witnesses will endeavour to preserve the immunity offered.

107.  The defendant elected not to give evidence as was his right.  The failure of an accused to call evidence is no evidence of his guilt.  It proved nothing one way or the other.  The fact an accused elects not to give evidence, however, could strengthen the adverse inferences to be drawn against him on the prosecution case.

108.  I considered the evidence of all witnesses carefully and heard full and final submissions from both parties.

109.  Mr Li for the defendant submitted as he did after the close of the prosecution case that the prosecution could not prove the elements of champerty in Charge 1 because PW1 did not pay the defendant any percentage of any award as legal fees due under a champertous agreement.  No money exchanged hands.  He submitted there must be a share of proceeds for this offence to be complete.

110.  He relied on paragraph 16 of the judgment of the Winnie Lo authority where Mr Justice Bokhary PJ said:

“If the charge is of champerty, then the directions would of course have to cover one more ingredient, namely a share of the proceeds of the litigation maintained.”

111.  With respect, it was a misguided submission. The gravamen of the offence is the champertous agreement, a request for a share of the proceeds of the litigation.  It cannot be that the offence is only complete if a suit is successful, an award made, received and then physically shared.  If an agreement is made and a suit maintained in consideration of a share of the proceeds, that is champerty.  For that reason, I rejected that submission.

112.  Mr Li also submitted that the prosecution witnesses, PW1 through to PW5, were not reliable or credible.  Their evidence contained inconsistencies so serious that their evidence should be in doubt.  I do not intend to address each inconsistency referred to in final submissions.

Mr Pang Mo Fung’s evidence (PW1)

113.  PW1 is a simple, not highly educated man who I found came across as honest.  I am sure he received an unsolicited call from the defendant who somehow knew PW1 wanted to pursue civil claims but was rejected by legal aid.  What transpired after that call had a ring of truth and I was convinced that PW1 accepted a champertous agreement without knowing it was a crime.  The same applies to the other prosecution witnesses.  None had any experience in the legal profession or previous litigations indicating they would necessarily know or be familiar with the procedure of instructing a solicitor who may brief counsel as well as how fees are normally charged and collected.

114.  The first defence witness, Mr Chan, gave evidence of a remark he heard his estranged father utter some nine years ago when he was 14 when he knew nothing of its context nor of his father’s legal issues or lawsuits.  He tried to suggest his father wanted to frame a lawyer, but I found his evidence far‑fetched and clearly selective.  I placed no weight on his evidence.

115.  I am sure PW1 was credible.  I saw no reason for him to lie about the champertous offer made to him.  A layman would see it as a win-win situation where he pays nothing if his litigation is unsuccessful.  I am sure that is what the defendant told PW1.  PW1 did feel aggrieved his actions were time-barred and unsuccessful.  He made a complaint to the Bar Association to make it known.  When asked what he complained about, interestingly enough, it was not the champertous agreement but the defendant’s negligence.

116.  There are two conflicting briefs (P63A and 63B) addressed to the defendant relating to PW1’s civil action.  One says it was pro bono.  That I do not believe would have been the case.  PW1 did not ask for help pro bono and the defendant did not know PW1 prior to his unsolicited cold call.  The other states a brief and refresher for a significant amount, an amount PW1 did not pay to either the solicitors, Messrs Lam, Lee & Lai, or the defendant.  PW6, the investigating solicitor appointed by the Bar Council Disciplinary Committee, was rightly suspicious upon sight of these two conflicting briefs.

Mr Fung Kwok Ming’s Evidence (PW2)

117.  PW2’s evidence was clear and unequivocal when describing the champertous agreement offered to him.  I believed his evidence. He remained unshaken in cross-examination.  He scoffed at the suggestion the money he paid the defendant was a bonus for a job well done.  He was adamant it was 25 per cent of his award paid as legal fees to the defendant.  I believed he chased up the defendant for a receipt for the amount he had paid him and a breakdown (P57 and P58) which lends support to his evidence that what he paid was legal fees and not a bonus.  The breakdown he says is inaccurate insofar as he never attended conferences with solicitors of Messrs Lam, Lee & Lai as stated.  I saw no reason for him to lie and frame the defendant; he has no motive.  His evidence is credible and supported, for example, by bank documents exhibiting a deposit that corresponds with his evidence.

Mr Kong Ka Sing’s evidence (PW3)

118.  PW3’s evidence similarly was described as unreliable and unsupported by any written records.  Exhibit D1 was a document produced to cast doubt on his evidence.  He paid money into Madam Chan’s account to repay a debt to the defendant, not to settle legal fees totalling 25 per cent of his award.  The defence would have the court accept the defendant lent a stranger and a client $160,000 because he was in financial difficulty.  I found it hard to believe.  I am sure the defendant did make small loans to PW3, PW4 and PW5 to keep them sweet and grateful but not more than that.  Exhibit D1 is a photocopy of a document which PW3 had not seen before.  I believe his evidence.  He looked puzzled to see the signature was similar to his on one of the two debit notes.  To fabricate a document and copy a signature onto a photocopy document would be easy.  I suspect the document is a fabrication.  I believe PW3 did not sign such a document or borrow such a large amount.  I believe his evidence that he paid money as directed by the defendant as legal fees agreed under a champertous agreement.  There is no reason I can see for hiding the fact he had a loan from the defendant if it was true. 

119.  The defence tried to suggest the bill of costs prepared by Messrs Lam, Lee & Lai, which include many conferences held in Mr Mak’s presence and attended by PW3, are documentary proof PW3 is lying.  I disagree.  The document was prepared for Deacons, the defendant’s solicitor in PW3’s litigation for the sole purpose of claiming costs.  I believe PW3’s evidence he only met Mr Mak once which means this bill of costs is wholly inaccurate.  

Mr Chan Chak Ki’s evidence (PW4)

120.  PW4, like PW2 and 3, has also been described as unreliable and having no written record of any champertous agreement.  It was suggested to him, like PW3, that he had borrowed a lot of money from the defendant after he met him.  The money he deposited into Madam Chan’s account was merely a repayment of such loans and some loans his uncle had incurred.  He too scoffed at such a suggestion.  He was a young man who came across in the witness-box as honest, credible and reliable.  Like PW3, he did admit he had borrowed some money from the defendant but only $8,000.  When shown Exhibits D5 and 5A, again photocopies of debit notes, he said the photocopied signature was his but he had never seen the documents, let alone signed them.  His reaction when he saw the document stating he had agreed to pay his uncle’s debts to the defendant was spontaneous and genuine.  He showed that the suggestion was incredulous.  I am sure these documents, like Exhibit D1, were fabricated as a desperate attempt to have the court believe that PW3 and PW4 were hiding the fact they had borrowed large sums of money from the defendant.  They did repay him but are still framing him by alleging the money was pursuant to a champertous loan; even though that lie implicates them in an offence at the same time.  I reject the defendant’s attempt to discredit PW4.  As I said, I found him reliable and accepted his evidence.

Mr Wang Wui Sing’s evidence (PW5)

121.  PW5 was a witness who was a simple man who on his own evidence was on psychiatric medication and had been hospitalised due to a mental condition at the material time.  This was at about the same time he was suing his employer for employee’s compensation and damages.  He was a witness who appeared confused later on in the day after having given evidence all morning.

122.  I repeat again that there is no dispute the defendant and PW5 opened a joint account which I believe the defendant instigated and controlled.  I am sure this was done because part of the award, if any, was to go to the defendant.  This way he made sure that he would control it and deduct from it before giving PW5 his award.  A share was to go to the defendant because it was pursuant to a champertous agreement.  PW5 described this clearly despite his confusion on some other issues.

123.  I believe PW5’s evidence that he engaged the defendant on the basis that he would not pay any legal fees unless he won an award, and if he did, the fee would be 25 per cent of it.  He had no ability to pay any legal fees, being a man of meagre means and relying on public assistance.  Even DW2, a defence witness, and his own ex-wife gave evidence that he mentioned to her that the fees were 25 per cent of an award.  She, I repeat, said both lawyers,  referring to the defendant and Mr Mak, said the fees were payable after the action was successful.

124.  PW5 did give evidence of the circumstances of how the defendant arranged a joint bank account and why, and I believe him.  I do not believe he could or did fabricate such an elaborate story with detail.

125.  He received $550,000 in his account when the defendant told him he had transferred it there.  He knew the defendant deducted some money for legal fees expenses and maintenance for his ex‑wife but was ignorant of the breakdown of these figures.  The defendant does not dispute this happened, that he kept 62 per cent of the $1.4 million awarded.  No explanation is given except for the debit note D9 and D11, both purportedly signed by PW5.  Both documents again are photocopies and it is not conclusive that PW5 signed them.

126.  PW5 did not ask for a breakdown and could not say in the witness-box why he did not ask for a breakdown.  He just accepted it.  Rather tellingly, he asked in court if he could ask the defendant now for a breakdown of the money he took.  He was a man easily malleable and taken advantage of.  That much was clear, having watched him and listened to him give evidence.

127.  I am sure he is not a man capable of framing the defendant for an offence he would not have known of or been able to fully comprehend.  I am sure he was an honest witness who gave evidence to the best of his abilities.  Any inconsistencies were not so material that I rejected his evidence.

128.  Having found all the prosecution witnesses’ evidence reliable and credible, I must question whether all the prosecution’s evidence amounted to champerty.  Are all elements of champerty proved to the requisite standard?

129.  Mr Li submitted that even if such an agreement is proved in each charge, there is no evidence of genuine risk to the integrity of the court process.  He submitted that the defendant’s actions, if proved, such as conferences with lay clients alone, lending lay clients money, proposing contingency fees and accepting a share as fees, will amount to disciplinary matters only, governed by the Bar Code.

130.  Mr Li suggested that the defendant properly represented the prosecution witnesses and there is no evidence their claims were not genuine.  There is no evidence statements were fabricated or evidence invented.  He pointed to the fact that PWs2, 3, 4 and 5’s litigation and suits were all settled without proceeding to trial.

131.  I find the authorities make it clear that the offence of Champerty was in place to make sure the legal profession and officers of the court were not tempted.  The risk is obvious and the integrity of the court process at stake if they were conducting litigation where their financial consideration depended on the award.

132.  This is not a scenario where a laudable solicitor accepts a case and offers his services but takes the chance whether he will be ultimately paid.  This should not be confused with an accused offering a champertous agreement.  I do not agree there must be evidence the prosecution witnesses were disadvantaged by a champertous agreement or the court’s process abused or brought into disrepute.

133.  The fact is a genuine risk exists where solicitors and barristers offer or accept a champertous agreement.

134.  I find that the Prosecution Witnesses 1 to 5 did not pay any legal fees upfront or in advance or on account to any solicitors’ firm such as Messrs Lam, Lee & Lai which is the norm because there was a champertous agreement in place for their litigation.  They met the defendant directly and dealt only with the defendant and not a solicitor who instructed the defendant on their behalf because there was a champertous agreement between the prosecution witnesses and the defendant.  They paid what they thought was their legal fee directly to the defendant’s designated account because they had a champertous agreement in place with the defendant.  All five prosecution witnesses knew very little about their litigation, the progress or the negotiations that led to settlements, and I am sure that was deliberate on the part of the defendant.  I am sure all were told they did not have to pay any fees if there was no win or award which is the rationale behind champerty.

135.  Having considered the evidence for each charge and each prosecution witness separately, I find the prosecution can prove beyond reasonable doubt the defendant offered each prosecution witness a champertous agreement to maintain their legal actions.  Those legal actions did not concern the defendant directly or personally.  He took up these actions for financial gain; a share of their proceeds if successful.

136.  All Prosecution Witnesses 1 to 5 accepted the offer and, as a result, PW2 to PW5 paid 25 per cent of their awards to the defendant pursuant to this illegal agreement.

137.  As a barrister and a member of the legal profession, the defendant’s conduct posed a genuine risk to the integrity of the court’s process.  It was pure champerty in each charge “in its most obnoxious form.” 

138.  Accordingly, despite the defendant’s clear record, he is convicted of Charges 1 through to 5.