JOHN DAVID ANDREW IP AND ANOTHER v. NGO TAI HONG

FAMV No. 40 of 2007

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 40 OF 2007 (Civil)

(ON APPLICATION FOR LEAVE TO APPEAL FROM

CACV No. 12 of 2006)

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 D E T E R M I N A T I O N

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Mr Justice Ribeiro PJ:

1.  The claim against the solicitors is a personal claim for unliquidated damages or compensation for breach of contract, negligence and breach of fiduciary duty.  It is plainly not a claim or question to or respecting property within s 22(1)(a) of the Court’s statute and leave is not as of right.

2.  The first ground advanced for leave to be granted on a discretionary basis involves the complaint that the Court of Appeal failed to consider whether there was informed consent on the plaintiff’s part.  It appears that the conflict of interest issue was raised at a late stage before the Court of Appeal and unclear whether, if at all, any issue of informed consent was raised.  This uncertainty is in large measure due to a certain procedural laxity in identifying the operative issues.  It is plain, however, that this criticism is wholly case-specific and raises no question of law of great general or public importance.

3.  The second discretionary ground has two aspects:

(a)

First, complaint is made of the Court of Appeal’s proactive approach in deciding, on its own initiative, to inspect the sale and purchase agreement to see if it contained terms necessary to bring the case within rule 5C of the Solicitors Practice Rules (which deals with when solicitors can act for both vendor and purchaser).  This, the firm contends, was inconsistent with the burden of proof lying on the plaintiff.

(b)

Secondly, complaint is made of the Court of Appeal expressing in apparently strong terms the view that there had been breaches of duty on the part of the firm notwithstanding that it was ordering a re-trial, thereby undermining the fairness of such re-trial.

4.  So far as the burden of proof is concerned, Rule 5C(1) of the relevant rules makes it clear that solicitors are not permitted to act for both vendor and purchaser unless one of the exceptions applies.  The firm obviously bore the burden of showing that they fell within rule 5C(4).  There was, however, no evidence to show this.  That the Court of Appeal took it upon itself in such circumstances to verify from the documents that the firm was not within the exception is not a ground for complaint.

5.  It is important to note that the Court of Appeal ordered a new trial of the entire action to take place before a different court.  Thus, while it is true that the Court of Appeal expressed its views relating to liability for breach of fiduciary duty in apparently uncompromising language, it is apparent, as will no doubt be appreciated by the Judge at the re-trial, that such comments were intended to be merely interlocutory and that the retrial is to proceed de novo and independent of any views previously expressed.  A judgment will be reached on the evidence and submissions there presented.

6.  In any event, the second ground advanced is again entirely case-specific and provides no basis for the grant of leave under s 22(1)(b).  And in the light of discussion in the course of this application, Mr Anthony Ismail has indicated on behalf of his clients that he would not pursue the present application.  The application is accordingly dismissed.   The respondent is to have the costs of this application.