|
HCA 10844/1994
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO. 10844 OF 1994
____________
BETWEEN
| |
WILLIAM ALLAN |
PLAINTIFF |
| And |
| |
MESSRS NG & CO. (a firm) |
1st Defendant |
| |
CHRISTOPHER ERVING |
2nd Defendant |
____________
Before: Hon To J in Court
Dates of Hearing: 1-4, 7-11, 14-15 September 2009;
14-16 October 2009;
24-25, 27 November 2009;
8 January 2010; and
23-24 June 2010
Date of Judgment: 24 December 2010
______________
J U D G M E N T
______________
INTRODUCTION
1. This is an action by the Plaintiff against the solicitors who, after having been requested to act for him and having obtained confidential information relating to his case, and/or even agreeing to act for him, turned around to act for his opponent in the same set of proceedings whilst being in possession of such confidential information. The proceedings in question were the matrimonial proceedings in FCMC No 2766/1994 between the Plaintiff who is a barrister in criminal practice and his wife (the “Wife”) who is a medical practitioner. The 2nd Defendant (“Erving”) is the solicitor to whom such confidential information was allegedly imparted. The 1st Defendant was the firm of solicitors of which Erving was a partner. Essentially, the Plaintiff’s claim is for exemplary damages for Erving’s breach of duty of confidence for which the 1st Defendant would also be vicariously liable.
2. A Statement of Claim was filed and served together with the Writ on 28 October 1994. The claims endorsed on the Re-Amended Statement of Claim were:
(1) damages for breach of retainer and/or fiduciary duty as solicitors, including the duty not to place themselves in a position where their duties to the Plaintiff conflicted with their duties to the Wife, or might appear to conflict with those duties;
(2) damages for breach of confidence by continuing to act for the Wife whilst being in possession of confidential information personal to the Plaintiff and making use of such information to the Plaintiff’s prejudice;
(3) damages for assault and battery against Erving on 18 September 1994;
(4) an injunction to restrain the Defendants from acting for the Wife in the matrimonial proceedings; and
(5) an injunction to restrain Erving from further harassing or interfering or abusing the Plaintiff.
3. The confidential information is about:
(1) the Plaintiff and the Wife; their personal details; the Plaintiff’s assets and the means of their acquisition; the Plaintiff’s income; and the Wife’s income; and
(2) the Plaintiff’s approach to the divorce, custody of his daughter (the “Daughter”) and matrimonial settlement.
4. The Plaintiff’s application for interlocutory injunction was heard and dismissed by Sears J with costs on 10 November 1994. The matrimonial proceedings having been concluded, the injunction application is now academic. The claim for assault and battery and claim for breach of retainer are no longer pursued. The Plaintiff is seeking only:
(1) exemplary damages for breach of confidence;
(2) costs of the action; and
(3) costs of the Plaintiff’s “work involvement in the case”.
5. The matrimonial proceedings in FCMC No 2766/1994 was commenced on 29 April 1994 and was concluded on 17 January 2000. The proceedings were extremely acrimonious and were described by Deputy High Court Judge Gill, who handled almost the entire proceedings during those six years, as “an extreme example of a divorcing couple, each consumed by a righteous indignation against the other, to their mutual destruction”. That young couple of well-to-do professionals with a reasonable size of family assets containing cash and properties locally and overseas ended up in debts as a result of the ruinous costs. After the conclusion of the matrimonial proceedings, this action turned a new course in the ten years that followed with the Plaintiff suing the solicitors for exemplary damages.
The parties’ case and the issues
6. The Plaintiff’s case is that on 13 May 1994, his sister Alison made a phone call to Erving to consult him with a view to his representing and/or advising the Plaintiff in the matrimonial proceedings and during that call (the “1st Call”) she imparted confidential information to Erving.
7. The Defendants’ case is one of denial. Erving denied that any information given by Alison to him during the 1st Call was confidential. They further averred that if any information was confidential, it ceased to be so by reason of subsequent disclosure of the same by the Plaintiff in the course of the matrimonial proceedings. In any event, they denied that they had disclosed or made use of any alleged confidential information in their representation of the Wife in the matrimonial proceedings. Lastly, they denied that their alleged wrongful actions have caused any loss or damage to the Plaintiff.
8. The issues raised in this action are:
(1) was there a relationship of solicitors and client between the Plaintiff and the Defendants;
(2) independently of (1) above, what information was imparted to Erving during the 1st Call;
(3) whether the information was confidential;
(4) whether the Defendants were under a duty not to divulge, make use of or otherwise exploit the information;
(5) whether the Defendants were in breach of the above duty;
(6) whether the Plaintiff suffered damage as a result of the use of the confidential information; and
(7) whether an award of exemplary damages is appropriate.
The background
9. The Plaintiff met the Wife in late 1987 and married in June 1988. The Wife gave birth to their Daughter in February 1989. The marriage was breaking down between January and March 1994. The couple received marriage guidance counselling at St John’s Cathedral, but the counselling was not fruitful.
10. On Friday, 29 April 1994, the Wife filed a petition for divorce based on unreasonable behaviour and obtained an ex parte non-molestation order against the Plaintiff. The petition and non-molestation order were served on the Plaintiff on the same day. The Wife was then represented by Messrs Hampton Winter and Glynn (“HWG”). On the same day, HWG wrote to the Plaintiff indicating that the Wife was prepared to take no further steps in connection with the matrimonial proceedings if the Plaintiff was willing to attend a settlement meeting; that if the Plaintiff would attend such meeting it may be possible for all matters to proceed by consent and that the Wife wanted the Daughter to live with her.
11. Apparently, some progress was made during the weekend. On 2 May 1994, HWG wrote to the Plaintiff informing him that following the intensive discussions between the couple, HWG were to take no further steps in the matrimonial proceedings unless otherwise instructed by the Wife. The Wife also wrote to the Plaintiff:
“I am sorry for the embarrassment that recent events have caused you. It was not my intention to hurt you. I would like to tell you that I have hated the proceedings and do not intend to take things further at the moment. I hope we can have a cooling off period and consider if a reconciliation is possible. I hope we can keep our communication channels open.”
The situation appeared to be hopeful and a reconciliation or amicable settlement was possible.
12. It was under those circumstances that Alison spoke with Erving during the 1st Call on 12 or 13 May 1994. The information imparted to Erving is at the heart of the trial of this action. A meeting between the Plaintiff and Erving was scheduled for Saturday, 14 May 1994. But the meeting was postponed on the morning of 14 May 1994 by the Plaintiff who suddenly felt a resolution was hopeful.
13. In the meantime, the Wife was concerned about her costs in the proceedings. On 17 May 1994, she approached Erving, who was recommended to her by a friend, for general enquiry and advice. She attended a further meeting with Erving on 19 May 1994.
14. On 19 May 1994, HWG wrote to the Plaintiff repeating the Wife’s intention to take no further steps in connection with the matrimonial proceedings and suggested disposal of the non molestation injunction on return date on 24 May 1994 by way of consent summons.
15. On 24 May 1994, by consent, HH Judge Surman continued the non molestation order and granted the Wife leave to take the Daughter for holiday in Vietnam from 11 to 15 June 1994 and to England for three weeks commencing from 9 July 1994 to see the Wife’s mother. On the same day, the Wife orally instructed Erving to act for her in place of HWG.
16. On 26 May 1994, the 1st Defendant filed a Notice of Change of Solicitors on behalf of the Wife. On the following day, the Plaintiff received the Notice of Change of Solicitors and immediately called Alison. Alison immediately telephoned Erving and demanded him to cease acting for the Wife (the “2nd Call”). Erving refused.
17. Later the same day, the Plaintiff called Erving and protested (the “3rd Call”). This was the first time the Plaintiff ever spoke to Erving.
18. Still later the same day, Alison called Erving again to protest (the “4th Call”). This conversation was recorded by Erving. A transcript of that conversation was prepared (the “Transcript”) by Erving’s secretary, Santos. Thereafter, Alison lodged an oral complaint with the Law Society. During the course of her evidence in these proceedings, Alison made an edited version of the Transcript, filling in gaps and correcting alleged mis-transcriptions based on her recollection (“Exhibit P-1”)
19. On 27 June 1994, the Wife received a phone call from England informing her that her mother who was suffering from terminal cancer was very ill and was hospitalized. She informed the Plaintiff of the situation and told him that she wanted to take the Daughter to England the next morning to see her mother. As a follow up, Erving requested the Plaintiff to sign a consent summons to vary the consent order made on 24 May 1994 so as to advance the date of the Daughter’s departure. The Plaintiff told Erving that he did not accept Erving as the Wife’s solicitor and refused to sign the consent summons. That evening, the Plaintiff told the Wife that the only way to solve the problem was for her to go to the District Court with him the next morning to see a judge and if she did not agree to that course, she might have to wait another three weeks before the District Court would hear the application. The Wife agreed and they spent three hours that evening over the wordings of the variation sought.
20. At 7 am on 28 June 1994, the Wife was informed that her mother had passed away. She did not tell the Plaintiff for fear that he would be obstructive about the Daughter’s trip to England. She went with the Plaintiff to see HH Judge Surman for the variation order. That episode took one and half hours. Then the Wife returned to her clinic. That evening the Plaintiff drove the Wife and Daughter to the airport but they missed their flight. The Wife did not return home but stayed with a friend for the night for fear that the Plaintiff would stop the Daughter going to England. The Wife and Daughter flew on the next morning. I think the events on 27 and 28 June 1994, which I call the “Variation Order Incident”, changed the course of the matrimonial proceedings.
21. On 8 July 1994, the Wife sent the Plaintiff a registered letter from England. At the same time, the 1st Defendant also sent a letter to the Plaintiff. The theme of those two letters was similar. The 1st Defendant wrote that the Wife had instructed that she found it most difficult to cope with the death of her mother and that the Plaintiff’s unfortunate behaviour over the Variation Order Incident had not helped and the Wife decided to proceed with the divorce. The 1st Defendant also informed the Plaintiff that the Wife had instructed that despite the non molestation order, the Plaintiff had continued to harass her and asked that he vacate the matrimonial home at Greenery Gardens before her return to Hong Kong. Then on 12 July 1994, the Plaintiff instructed Messrs Haldanes to act for him in the divorce petition.
22. On 8 September 1994, the 1st Defendant wrote to Messrs Haldanes advising that they had instructions from the Wife to proceed with the divorce petition and enclosed a Notice of Intention to Proceed with the Wife’s ancillary relief application. They also advised that the situation in the matrimonial home was intolerable and asked the Plaintiff to agree to vacate the premises and to make proposal for the Wife’s and Daughter’s maintenance. The Plaintiff told the Wife that he would not leave.
23. At about 10:30 am on 14 September 1994, the Plaintiff’s parents went to the matrimonial home. The Wife’s father, who had accompanied the Wife on her return to Hong Kong and since lived in the matrimonial home, was also there. There was some argument between the two camps. In the evening, the Plaintiff’s parents took away two crystal vases, candlesticks and a print, which were wedding gifts to the Plaintiff and the Wife. The Plaintiff was very upset on the following two days.
24. On 16 September 1994, the Plaintiff issued an originating summons against the 1st Defendant in HCMP 2593/1994 with a return date fixed for 30 September 1994 seeking an order that the 1st Defendant to cease acting for the Wife. That summons was subsequently dismissed by consent due to some procedural irregularities.
25. On 17 September 1994, the Wife caused the front door lock of the matrimonial home to be changed. On that day, the Plaintiff, the Wife and their fathers had a meeting to discuss among other things, finances and custody of the Daughter. The meeting was unpleasant and lasted about three hours. After the meeting, the Plaintiff discovered the door lock had been changed. He called his father, Alison and his other sister, Trudi, whose husband is a District Judge.
26. At about 9 am on 18 September 1994, the Plaintiff’s father arrived at the matrimonial home. The Plaintiff accused the Wife’s father of changing the door lock. Later, Alison and her friend, Coleman, also arrived. Eventually, the Wife’s father gave the Plaintiff a key to the new lock. After things calmed down, there was another meeting which concluded on the note that the parties would go for mediation. Then, the Plaintiff’s father, Alison and Coleman left.
27. About an hour or so after, the Wife overhead a telephone conversation in which the Plaintiff asked his father and brother, Hugh, to go to the matrimonial home. For fear of another confrontation, the Wife left with her father. At about 4:30 pm, the Wife returned with her father and Erving. The Plaintiff, his father and Hugh were there. There was a confrontation. Erving read out the terms of the non molestation order and asked the Plaintiff and his family members to leave. At some point, the Plaintiff’s head of chambers, Barry Sceats, Trudi and the police arrived. The Plaintiff and his camp refused to leave. Then the Wife, her father and Erving left the matrimonial home.
28. On 29 September 1994, the Wife applied ex-parte on notice for an ouster order against the Plaintiff. The application was adjourned to be heard inter-partes on 4 October 1994 with 5 October 1994 reserved. The proceedings could not be concluded on 5 October 1994 and was adjourned to 1 November 1994 with 2, 3 and 4 November 1994 reserved.
29. On 28 October 1994, the Plaintiff issued the Writ in this action accompanied by an ex-parte application for interlocutory injunction to restrain the Defendants from acting for the Wife in the divorce and other proceedings. The ex-parte hearing initially fixed before Keith J and then Rogers J, as they then were, was further adjourned to 4 November 1994 for an inter-partes hearing before Mayo J, as he then was.
30. The ouster proceedings between the Plaintiff and the Wife resumed on 1 November 1994. On 2 and 3 November 1994, Messrs Deacons representing the Defendants and Messrs Haldanes negotiated on the terms of adjournment of the Plaintiff’s application for interlocutory injunction against the Defendants. Messrs Haldanes indicated that they would agree to an adjournment of the injunction application on the Defendants’ undertaking not to act for the Wife after the ouster proceedings. The Defendants refused giving the undertaking but indicated that they would apply for an adjournment of the interlocutory injunction application because the 2nd Defendant had to be present for the hearing of the ouster proceedings. On 3 November 1994, the Plaintiff through his counsel applied to adjourn the hearing of the ouster proceedings to enable the Plaintiff to attend the interlocutory injunction application on 4 November 1994, but the application was refused by HH Judge Gill.
31. On 4 November 1994, upon the application of the Defendants, Mayo J adjourned the hearing of the interlocutory injunction application to 10 November 1994 with costs against the Defendants. In a dramatic turn of events during the ouster proceedings, the Plaintiff confessed his infidelity whilst in the witness box. Then during counsel’s final submission, he capitulated and agreed to the terms of the ouster order sought and to move out of the matrimonial home. The petition was amended and a decree nisi was pronounced based upon the Plaintiff’s admitted adultery.
32. On 9 November 1994, the Plaintiff’s parents applied by summons to be joined as third parties to the ancillary relief proceedings.
33. On 10 November 1994, Sears J dismissed the interlocutory injunction application with costs to the Defendants.
34. On 12 November 1994, the Wife obtained an ex-parte order to freeze the Plaintiff’s account with the Hong Kong & Shanghai Banking Corporation. On 15 November 1994, she obtained a further ex-parte order to freeze all the Plaintiff’s bank accounts.
35. On 15 November 1994, the Plaintiff attended Dr Hong’s clinic. He was diagnosed to be suffering from a long-standing drug dependence and depression which had its onset since April 1994. According to Dr Hong, there was initial improvement, but that was reversed and the Plaintiff’s condition was exacerbated after he heard that his case might be published in an article in a newspaper called “Target”.
36. On the same day, the Plaintiff wrote to Messrs Deacons informing them that he was acting in person and offered to withdraw the present action against the Defendants. He wrote:
“In addition, having considered the above matter carefully over the last few days, as I indicated in the Supreme Court on 10th November 1994, I am going to withdraw the above action.”
37. On 18 November 1994, Messrs Deacons replied that the Defendants would consent to a dismissal of the action with no order as to costs save the costs orders of Mayo J and Sears J and invited an agreement on the costs of the hearing before Sears J. Alison was authorised by the Plaintiff to negotiate with Messrs Deacons on the costs issue. On 25 November 1994, Messrs Deacons sent a draft consent notice of dismissal of the action to the Plaintiff for his execution and return. The Plaintiff never signed.
38. On 27 November 1994, the Plaintiff was admitted to Canossa Hospital under the care of Dr Hong to tide him over the “Target crisis” and to prevent an impulsive suicide.
39. On 28 November 1994, in an inter-partes hearing which the Plaintiff did not attend, HH Judge Gill continued a Mareva injunction against the Plaintiff and ordered him to explain the movements in his bank account with hearing returnable on 13 December 1994.
40. On 29 November 1994, the Plaintiff was discharged from Canossa Hospital. He was accompanied by Hugh to the Castle Medical Hospital Treatment Facility in Hawaii for drug and behavioural treatment from December 1994 to April 1995. The Plaintiff returned to Hong Kong on 25 April 1995.
41. On 29 November 1995, the Defendants’ costs of the hearing before Sears J after discounting the costs order of Mayo J was agreed in the sum of $375,000 and made the terms of a consent judgment. On 27 March 1996, a charging order nisi was made against the matrimonial home for the payment of the above judgment debt.
42. On 2 April 1996, Messrs Deacons accepted Alison’s offer on behalf of the Plaintiff to pay the judgment sum by monthly instalments of $10,000. A week later, Alison reneged on that agreement and said that the Plaintiff could only pay $5,000 per month. The new offer was rejected by Messrs Deacons. On 16 April 1996, by consent, the charging order against the matrimonial home was made absolute.
43. On 14 May 1996, Messrs Deacons wrote to Alison repeating that the Plaintiff’s offer of monthly payment of $5,000 was unacceptable and threaten to institute bankruptcy proceedings against the Plaintiff.
44. On 16 May 1996, the Plaintiff wrote to Messrs Deacons stating that at that point he could only pay $5,000 and enclosed a cheque. He invited Messrs Deacons to enforce the charging order as in any event the matrimonial home would have to be sold. At that time, the Wife and the Daughter were living in the matrimonial home.
45. On 25 June 1996, the Defendants instructed Messrs Horvath & Giles (“H&G”) to issue bankruptcy proceedings against the Plaintiff in respect of the judgment debt. The Plaintiff opposed, pleading an agreement with Messrs Deacons that no bankruptcy proceedings would be instituted if the Plaintiff agreed to the charging order to be made absolute.
46. On 22 July 1996, at the hearing of the Plaintiff’s application for stay of the bankruptcy proceedings before Patrick Chan J, as he then was, his Lordship remarked that he wished the Wife “to have independent advice before making conscious decision to retain solicitor”, i.e. the Defendants, and to bear in mind the “interest of child”. It was only after that Messrs Susan Liang & Co. replaced the 1st Defendant as the Wife’s solicitors.
47. On 30 May 1997, Master O’Donnell made an order for examination of judgment debtor against the Plaintiff. The examination was conducted before Master Chu, as she then was, on 12 November 1997.
48. On 10 March 1998, the Plaintiff was granted limited legal aid for applying for a stay of this action pending the final outcome of the ancillary relief proceedings. Messrs Fairbairn Catley Low & Kong was assigned as solicitors for the Plaintiff. H&G withheld taking further steps in the bankruptcy proceedings until after Deputy High Court Judge Gill’s judgment on the ancillary relief proceedings dated 17 January 2000. The proceedings had by then been transferred to the High Court. The ancillary relief proceedings nevertheless continued until 27 July 2001 with the costs hearing and the Wife’s application for adjustments.
49. In the meantime, the Plaintiff applied for further legal aid. His application was refused on 20 March 2001. On 31 May 2002, Registrar Chan allowed the Plaintiff’s legal aid appeal on merits. On 7 May 2004, the Plaintiff’s legal aid appeal on means was also allowed. HWG, who once acted for the Wife, was assigned as solicitors for the Plaintiff.
50. Hearing commenced on 1 September 2009. The trial became long drawn and was adjourned and continued into June 2010 to accommodate counsel’s diaries. By its conclusion, the 1st Call which formed the basis of this action was 16 years ago and the Daughter has now reached 21.
WITNESSES AND THEIR CREDIBILITY
51. The fundamental issues in this case are factual issues: what information was imparted to Erving during the 1st Call, what loss was suffered by the Plaintiff and causation. The Plaintiff’s case is supported by the evidence of the Plaintiff and Alison. Erving and Santos gave evidence for the defence. The single most important factual issue is what was the content of the conversation during the 1st Call. This is principally a dispute between Alison and Erving. Their credibility is of crucial importance. The Plaintiff’s evidence provided the background leading to the 1st Call.
52. All witnesses were asked to recount events which happened and words which were said 16 years ago. Lots of documents were generated during those 16 years. Only the Transcript can really be regarded as a contemporaneous document as far as Alison is concerned. It is a piece of important documentary evidence against which to test the credibility of Alison and Erving and the reliability of their evidence. Many other documents were generated at about the same time of certain particular events. They were created with a purpose, such as complaints, affidavits and judgments. Though I do not regard them as contemporaneous, they, nevertheless, provide a source of evidence on which inference may be drawn and against which a witness’ credibility may be tested.
53. Hereunder, I give my general view of my assessment of the credibility of witnesses including an analysis of some collateral issues. I shall deal with my analysis of their credibility on the pertinent issues more fully in the appropriate sections.
The Plaintiff
54. The Plaintiff is a practising barrister in criminal law. He came from a very close family. His sisters and brother were all supportive of him and were involved in helping with his matrimonial problem. His brother, Hugh, accompanied him to Hawaii for treatment. Alison is the godmother of the Daughter. She has virtually assumed the role of the Plaintiff’s solicitor and counsel in the matrimonial proceedings when he was suffering from a mental condition. His other sister, Trudi, also helped to mediate in, at least, one of the disputes with the Wife.
55. There is incontrovertible evidence that the Plaintiff was suffering from polydrug dependency induced by the Wife at the time the matrimonial proceedings commenced in April 1994. He suffered from drug withdrawal symptoms, if the Wife did not provide him with drugs. He was suffering from tremendous pressure caused by the matrimonial proceedings and his conditions aggravated as the matrimonial proceedings progressed. It was at about that time he commenced this action. Following the dismissal of his application for interlocutory injunction against the Defendants, he exhibited suicidal tendency and was admitted to Canossa Hospital for treatment in November 1994 followed by a comprehensive drug and behavioural treatment programme in Hawaii from December 1994 to April 1995.
56. The Plaintiff was shown to be lying under oath in the ouster proceedings before HH Judge Gill when he denied he had a relation while the Wife was in England. He fought that issue to the very end until when incontrovertible evidence of a letter from the woman with whom he had a relation was produced. He had even tried to prevent production of that letter. Then, in the words of HH Judge Gill, he capitulated. He was asked by Ms Lau, counsel for the Defendants, if he accepted that he had lied under oath. He denied. He said he was honest and faithful as he had confessed the adulterous relation to the Wife. When pressed further by Ms Lau as to why then he apologised to the court, he avoided answering the question by saying that he could not recall what he meant. One has to take what he said with not just a grain of salt.
57. In the ancillary proceedings before Deputy High Court Judge Gill, the Plaintiff produced what he alleged to be the term of a concluded settlement written and signed by the Wife in December 1995. According to the Wife, the Plaintiff told her to write down her proposed terms of settlement and after she had so written and signed, the Plaintiff snatched it from her. She said that the document was incomplete and there were blanks left to be filled in after negotiation. There was no agreement. She never saw the document again until four years later at the hearing of the ancillary relief proceedings. According to Erving who was then the Wife’s solicitor, the Plaintiff had never referred to the document in his negotiations with the Wife. The document produced by the Plaintiff contained substantial alterations and additions, which according to the Wife, were written by the Plaintiff and which she was unaware of. Across the top of the document were added the words “To Willie. My Terms for Settlement”. In the blank were added the words “I Willie Allan agree the above in full and final settlement”. The Plaintiff’s evidence was rejected by Deputy High Court Judge Gill as improbable. Put simply, he was demonstrably lying and fabricating evidence.
58. There were other issues raised in the ancillary relief proceedings which were found against the Plaintiff. In support of his parents’ claim to a share in the matrimonial home, the Plaintiff gave evidence that the deposit of $233,300 paid by his parents for the purchase of their first joint property in Greenery Gardens was a joint 50-50% percent investment by his parents and himself which was then sold and reinvested in other properties and ultimately in a property in Millbank, Oadby and the present matrimonial home. The Wife’s case was that the deposit was a wedding present to launch the couple into their first family home. The Plaintiff’s and the Wife’s evidence were rejected by Deputy High Court Judge Gill who found the deposit was an interest free loan repayable on demand. This finding reflected adversely on the honesty of the Plaintiff. It also reflected adversely, but to a lesser extent, on the honesty of the Wife, but the Wife’s honesty is not an issue before me.
59. Another issue found against the Plaintiff was the funds in a multi-currency account in the Plaintiff’s name which the Wife had stumbled across. The Wife recalled there was a significant credit balance of about $2 million. Subsequent inquiry revealed that the account had been closed in August 1994 with the majority of funds transferred to Alison’s account in Switzerland opened for that purpose in May 1994. That was within a month of commencement of the divorce petition by the Wife. The Plaintiff’s parents claimed to be owner of the funds in the account. Their claim was supported by the evidence of the Plaintiff and Alison. They all gave different accounts as to how and why that came about. Deputy High Court Judge Gill found that the Plaintiff gave varied accounts depending on the time and occasion and rejected his evidence, another adverse finding of his credibility. I should add that was another act of dishonesty in removing matrimonial property out of reach of the Wife.
60. The above incidents demonstrate not only the Plaintiff’s propensity to lie on oath but to fabricate false documentary evidence. He was demonstrably dishonest. At this hearing, he gave irrelevant answers on a number of occasions. That is unusual for a practising barrister and man of intelligence. Those incidences suggest to me that he was trying to avoid answering questions. He is a dangerous witness. I shall consider his evidence with extreme caution. But fortunate for him, his evidence is not of crucial importance in this case.
Alison
61. Alison is the principal witness for the Plaintiff. She is a dentist by profession. She then gave up dental practice and engaged in property investment. She is a spontaneous speaker who apparently has problem stopping once she has started. She described herself as a runaway train when she spoke. She was emotional in the witness box and proffered many irrelevant answers. When asked why she had a vivid recollection of what was said on 13 May 1994, she put it thus: “if your child was murdered you would recall it”. Ms Lau criticised such emotive extremism permeated the tenor of most of the evidence and her documents as to reveal her as an insincere, evasive and exasperating witness. Her relation with the Plaintiff was particularly close. If indeed she honestly felt deeply aggrieved by Erving’s turning around to act for the Wife to the detriment of the Plaintiff, her reaction could be well understood. Such reaction does not make her demeanour insincere, evasive and exasperating. The test of credibility is always that of inherent credibility and whether the evidence of a witness is consistent with contemporaneous documents and so much of the evidence which is not in dispute. Of those answers which I consider relevant, they are supported by documents and accords with logic and common senses.
62. Ms Lau criticises Alison’s answer that she did not consider the Plaintiff had perjured when he testified on the infidelity issue during the ouster proceedings. Alison’s opinion is one which I certainly differ. However, Alison was not testifying as to facts personally known to her. She did not even have the full facts which were only known to the Plaintiff. Her answer should best be viewed as her own opinion misguided by her unquestioned loyalty to her brother. I do not consider that as demonstrating bias or dishonesty on her part. Suffice it is to say that I shall be careful in assessing her credibility as she should be treated as an interested and not independent witness.
63. Ms Lau finds fault in Alison’s letter dated 4 July 1994 to Erving asking him to cease acting for the Wife in which Alison repeatedly alleged that the 1st Call took place on 13 June 1994. That mistake was permeated into Messrs Haldanes’ letter dated 12 July 1994 to the 1st Defendant. If that was an honest mistake, Ms Lau queries the reliability of Alison’s evidence. If that was a deliberate mistake, she queries Alison’s honesty and motive. She suggests covering up the delay in making complaint and concern about accuracy of her recollection as possible motives. In the letter, Messrs Haldanes referred to the 1st Call as having taken place on Friday 13 June 1994. That day was a Monday. Even Messrs Haldanes were mistaken. It is clear that Alison was talking about an incident on Friday and reference to June was an indisputable mistake. It was not made to achieve any purpose or advantage. The mistake was so obvious that it does not even impinge on her honesty and credibility. It is just one of those mistakes which people make without knowing, without any motive and without any advantage. This is precisely the kind of mistake which proves human nature is not what it is not - not infallible. The mistake is being blown out of all proportion by Ms Lau’s eloquent submission.
64. Alison described the conversation during the 1st Call in her 1st and 2nd affidavits given on 28 October 1994 and 4 September 2004 respectively. Her 1st affidavit was short and devoid of details, but her 2nd affidavit was comprehensive. Ms Lau submits that it was remarkable to see how her evidence changes with time and the amount of details contained in her 2nd affidavit. For reasons as explained in paragraphs 114 and 115, I accept Alison’s explanation that she did so for tactical reasons and on legal advice. I do not consider the two affidavits have any impact on Alison’s credibility.
65. There was an adverse finding of credibility against Alison by Deputy High Court Judge Gill in the ancillary relief proceedings in respect of the multi-currency account. That finding was in relation to the ownership of the funds in the Plaintiff’s multi-currency account which formed the subject matter of a freezing order. While the Plaintiff gave conflicting and inconsistency about the ownership of the funds, Alison was also caught by Deputy High Court Judge Gill to have made two inconsistent affidavits: one in December 1994 to the effect that the funds no longer belonged to the Plaintiff and another in February 1995 that the funds were the only asset available to meet the Plaintiff’s living expenses. The funds were transferred to her bank account in Switzerland. She must be a party to removing the funds out of reach of the Wife and in that connection had acted in concert with the Plaintiff in his dishonest design. That weighed against her in my assessment of her credibility. That was the only adverse comment made by the learned judge.
66. On the totality, I consider Alison credible. She is a much more reliable witness than Erving. I accept most of her evidence.
Erving
67. Erving is a difficult witness to assess. He is a very smart and cautious witness. He said he had difficulties recalling recent events but had good memory of distant events, a phenomenon which is not unusual for people of his age. He said that was why he did not give a full witness statement, but adopted his two affidavits filed in connection with the hearing of the interlocutory injunction. He said he was only able to recall by refreshing his memory from his affidavits. That insulated him from adverse comments in respect of his evidence in Court, which is inconsistent with contemporaneous documents. His evidence is quite equivocal.
68. The way Erving handled Santos’ evidence about the Transcript demonstrated the equivocal nature of his evidence and his irresponsible attitude in preparing Santos’ witness statement. He drafted a statement for the present proceedings for Santos to sign on 25 August 2009. Though admittedly not knowing when he gave the tape recording of the 4th Call to her for transcription, he wrote in the statement that it took place in May 1994 to give the event a contemporaneous appearance. When criticised during cross-examination, he said the details were not important. When asked what Santos said to him when he showed her the Transcript and the witness statement he asked her to sign, he said that Santos told him that she remembered the Transcript very well. But immediately after that, he withdrew and said that he did not remember Santos had said “very well” or what if anything she had said to him that gave him the impression that she remembered the Transcript very well. The Transcript contained obvious typographical errors and mis-transcriptions, which a party to the conversation could have easily picked up by merely reading the Transcript. Obviously, he did not even take the trouble to read the Transcript before filing it as his evidence. Anyway, this is now unimportant, as Alison did not dispute the accuracy of the Transcript subject to her amendments, which was also not challenged. But the Transcript and the preparation of Santos’ witness statement demonstrated Erving’s irresponsible attitude in presenting the evidence.
69. Erving gave a short affidavit (“Opposition Affidavit”) and then a supplemental affidavit (“Supplemental Affidavit”) on 9 November 1994 in opposition to the Plaintiff’s application for interlocutory injunction. The events of 13 and 27 May 1994 were then six months old and were still fresh in his mind. He did not have problem of recollection at that time as he claimed he now had. I shall deal with the contents of those affidavits in the appropriate section. My finding is that there were blatant inconsistencies between what he said in those affidavits with incontrovertible evidence as to support a finding that he was deliberately dishonest. What he said in those affidavits was deliberately false for the purpose of procuring Sears J to refuse the Plaintiff’s application for interlocutory injunction. It was gross dishonesty and unbecoming of a solicitor as an officer of the Court. He is a disgrace of the legal profession.
70. Whether Erving was given confidential information is at the heart of this trial. His proven dishonesty in relation to this issue as demonstrated in his two affidavits must gravely damage his credibility. I do not find him a credible witness. Having regard to the totality of the evidence, the documents and common sense, where his evidence is inconsistent with Alison’s, I prefer Alison’s.
Santos
71. Santos is Erving’s secretary. She prepared a transcript from the recording of the 4th Call. She agreed that the Transcript contained omissions as there were words that she could not hear or there were interruptions. She did not seriously challenge the additions and alternations suggested by Alison. Her evidence is not in dispute. I accept her evidence.
THE 1st CALL
The Plaintiff’s motive in this action
72. Ms Lau made a very lengthy and forceful submission that the Plaintiff’s motive in these proceedings was to de-rail the Wife’s ouster proceedings. The Plaintiff was informed about the Defendants acting for the Wife on 27 May 1994. But, Ms Lau submits that it was not until 8 July 1994, some 40 days after, that the Plaintiff and Alison complained to their then solicitors, Messrs Haldanes; but Messrs Haldanes did nothing except writing a few letters to the Defendants and the Law Society and threatening making an application to court for an order that the Defendants to cease acting for the Wife. Ms Lau submits that there was no action but just a lot of false posturing and that inaction on the Plaintiff’s part was particularly poignant given the Defendants had repeatedly and categorically told the Plaintiff over the 4th Call and in many letters exchanged between them that if the Plaintiff was not happy with Erving acting for the Wife, the Plaintiff should apply for a court order. Despite the divorce proceedings continued to elevate progressively with the Wife serving her Notice of Intention to Proceed with her ancillary relief application on 8 September 1994 and requesting the Plaintiff to leave the matrimonial home followed by the unpleasant events starting from 14 to 18 September 1994, the Plaintiff took no legal action to restrain the Defendants from representing the Wife.
73. There was indeed the originating summons in HCMP 2593/1994 taken out by the Plaintiff on 16 September 1994 requiring the 1st Defendant to cease acting for the Wife. However, that summons was not served pending the Law Society’s adjudication of the complaint by Messrs Haldanes. Ms Lau suggests the reason for not proceeding with that summons was related to the incident on 18 September 1994 which ended with the Wife leaving the matrimonial home, as a result the Plaintiff saw no need to proceed with that summons. I respectfully disagree as the correspondence showed that Messrs Haldanes sought to have the summons dismissed by consent because of procedural irregularities pointed out by the 1st Defendant in their letter of 14 October 1994.
74. Next, Ms Lau referred to the ex-parte ouster proceedings taken out by the Wife on 29 September 1994 which was then heard inter-partes on 4 and 5 October 1994 and then adjourned to 1 with 2 to 4 November 1994 reserved. Ms Lau submits that it was in the course of the ouster proceedings that the Plaintiff took out the present proceedings on 28 October 1994 and applied for an interlocutory injunction restraining the Defendants from acting for the Wife in the matrimonial proceedings. Thus, Ms Lau submits that in the light of those incidents, the Plaintiff’s motive was to de-rail the ouster proceedings by these proceedings.
75. The hearing of the interlocutory injunction against the Defendants was adjourned to 4 November 1994. Messrs Deacons, acting on behalf of the Defendants, requested the Plaintiff to adjourn the hearing of the interlocutory injunction as Erving had to attend the ouster proceedings on behalf on the Wife. Messrs Haldanes replied that they would agree to the adjournment only if the Defendants would undertake not to act further for the Wife after the conclusion of the ouster proceedings. Messrs Deacons refused to give that undertaking on behalf of the Defendants. Then on 3 November 1994, through his counsel, the Plaintiff applied for an adjournment of the ouster proceedings to enable him to attend the interlocutory injunction hearing before Mayo J on 4 November 1994. That application was refused by HH Judge Gill.
76. If Ms Lau was to suggest that the Plaintiff’s delay in taking action against Erving was because Alison’s allegation of retainer and imparting of confidential information was a fabrication, that must be dismissed for the simple reason that there was no dispute that the Plaintiff and Alison had made a timely protest to Erving on 27 May 1994.
77. As for Ms Lau’s submission of the Plaintiff’s illicit motive, I think there are ample explanations by the Plaintiff. The initial delay was the result of acting on Messrs Haldanes’ legal advice to complain to the Law Society rather than to resort to court. If Alison’s complaint was true and if Erving would react as expected of any reasonable solicitor, such a course would probably have been quicker and more cost efficient. Messrs Haldanes did take up the matter with the Law Society but as the progress was unsatisfactory, the Plaintiff had to resort to legal proceedings. That summons was dismissed at the invitation of Messrs Haldanes because of procedural irregularities. In any event, I am unable to see any nexus between the Plaintiff’s failure in that summons and the alleged motive of de-railing the ouster proceedings, which had not even commenced before the summons was taken out.
78. Furthermore, Messrs Haldanes agreed to adjourn the application for interlocutory injunction if the Defendants would undertake not to act for the Wife after the conclusion of the ouster proceedings. Messrs Haldanes might have been a little too aggressive, because by giving the undertaking, the Defendants would be conceding the action and effectively giving up acting for the Wife. But their offer to adjourn clearly indicated that there was no such ulterior motive of de-railing the ouster proceedings as suggested by Ms Lau.
79. Ms Lau submits that it was underhanded for the Plaintiff on the one hand to instruct his solicitors to refuse Messrs Deacons’ request on behalf of the Defendants for an adjournment of the hearing of the interlocutory injunction on the ground that there was no reason why Erving could not attend that hearing as it was not essential for him to be present at the hearing of the ouster proceedings, but at the same time instruct his counsel to apply for an adjournment of the ouster proceedings for the reason that the Plaintiff had to attend the hearing of the interlocutory injunction. The Plaintiff acted unreasonably, but that does not support Ms Lau’s submission of an intention to de-rail the ouster proceedings. If Sears J had thought otherwise when he refused the Plaintiff’s application for interlocutory injunction, I would respectfully differ.
80. It is true that the Plaintiff’s application for interlocutory injunction was dismissed with costs by Sears J. There was no official transcript available at the time and no written decision was given. It is not clear what was the reason for the dismissal. But in any event, I am not bound by any interlocutory decision. It is my duty to reach my own decision independently. Whether to grant an interlocutory injunction is an exercise of discretion which is subject to considerations very different from those applicable to the grant of remedies in an action for breach of confidence. Most importantly that discretion may be exercised without any finding of fact or just based on some provisional finding of fact. That was precisely the situation before Sears J. According to the notes of proceeding taken by Morris of Messrs Deacons, who was then acting for the Defendants, Sears J criticised the Plaintiff’s delay in taking out the application and lack of evidence as to the bottom line. Sears J refused to hear evidence from Alison, contrary to what was indicated by Mayo J at the last hearing. He seemingly dismissed the application based on his provisional finding that there was no retainer and no confidential information imparted to the Defendants. These are precisely issues which I would have to make finding on. I do not consider the dismissal of the interlocutory injunction application by Sears J indicative of improper motive on the part of the Plaintiff or his provisional finding of fact binding on me in any way.
81. After the application for interlocutory injunction was dismissed before Sears J on 10 November 1994, the Plaintiff capitulated and indicated that he would withdraw the action. Ms Lau submits that is evidence that the Plaintiff knew there was no substance to his case and as his ploy to de-rail the ouster proceedings failed, there was no point to pursue the action further. On the other hand, the Plaintiff’s explanation is that at the time he was very ill and at the verge of mental collapse. He capitulated because he could not bear the pressure any longer. Ms Lau argues that that could not be true as the Plaintiff was ready to attend Court on 10 November 1994 in the full expectation of going into the witness box and to be cross-examined by the late Charles Ching QC, as he then was. I respectfully differ. A mentally sick person in anticipation of success before being confirmed a failure may have the will power to fight his case. His condition may even reverse if he proves to be successful but may wholly collapse when his failure is confirmed. There is no dispute that the Plaintiff was admitted to Canossa Hospital in November 1994 with suicidal tendency soon afterwards and later into Castle Medical Hospital Treatment Facility in Hawaii for drug dependency treatment from December 1994 till to April 1995. The seriousness of his mental condition was supported by the evidence of Dr Hong and Dr Mee Lee in the ancillary relief proceedings before Deputy High Court Judge Gill. I have no reason not to believe the Plaintiff was seriously ill mentally at the time. I accept that the Plaintiff capitulated due to a collapse of his mental condition and not because he knew there was no substance in the action.
82. In conclusion, for all the above reasons, I reject Ms Lau’s submission that this action was commenced by the Plaintiff with the ulterior motive of de-railing the ouster proceedings.
The circumstances leading to the 1st Call
83. Alison was introduced to Erving by her boyfriend in early 1994. She instructed Erving to act for her in a small legal matter regarding the quantum of estate agent fees. She was quite impressed with Erving’s services. She learned that Erving had experience in matrimonial matters. In particular, she learned that Erving had acted for the husband in a divorce petition in which the wife was represented by Sharon Ser of HWG, who incidentally also acted for the Wife in the matrimonial proceedings against the Plaintiff.
84. The Plaintiff had a number of discussions with Alison about the matrimonial proceedings. On 13 May 1994, the Plaintiff asked Alison if she knew of any family lawyer comparable with the experience of Sharon Ser. Alison offered to speak with Erving on the Plaintiff’s behalf. The Plaintiff was anxious that the conversation, its contents and information given to Erving would be kept confidential. As a result of Alison’s strong recommendation, the Plaintiff asked her to speak to Erving urgently on his behalf with a view to instructing Erving for his divorce and in any event obtaining legal advice to settle the proceedings with the Wife in a fair manner. The Plaintiff authorised Alison to tell Erving everything she felt necessary in order to brief Erving fully, including the Plaintiff’s views on custody of the Daughter and financial issues, the parent’s likely involvement, the Plaintiff’s “bottom line” on the various aspects of the Wife’s claims, his concerns on the drugs administer to him by the Wife and the tactics he was proposing. The Plaintiff asked Alison to negotiate a good hourly rate and to stress that her conversation with Erving and contents were to be kept strictly private and confidential and that the situation with the Wife was at a very critical stage. He also asked Alison to arrange an urgent meeting with Erving on the following morning. With that authority, Alison made the 1st Call to Erving.
85. I note Sears J’s comment that it was improper for a barrister to get his sister, a lay person, to tell everything about his own case to a solicitor to obtain legal advice. I also note Ms Lau’s argument that in his position as a barrister, the Plaintiff could have properly obtained legal advice from or through his chamber mates. What the Plaintiff said he did was most extraordinary. But having regard to the totality of the evidence, I am satisfied that for reasons which I do not wish to speculate the Plaintiff chose to do what a reasonable lawyer would consider as extraordinary and improper.
An overall view of the 1st Call
86. It is common ground that Alison and Erving had a telephone conversation on either 12 or 13 May 1994. Whichever date it was does not matter for there is no dispute that they were referring to the same occasion and the subject matter of the conversation was the same.
87. According to Alison, the 1st Call lasted for about 45 minutes during which a lot of confidential information was imparted to Erving. But Erving said that the call just lasted about 15 minutes in which he gave some general advice only. The parties are in dispute as to what information was imparted to Erving during the 1st Call and if the information was confidential. There were no contemporaneous documents in support of the allegations of Alison or Erving except the Transcript. The recording was lost during the years. There were gaps in the Transcript which Alison sought to fill in with her recollection. Her recollection was not seriously challenged and ran consistently with the flow of the conversation as recorded in the Transcript. It is possible to reconstruct the major part of the conversation during the 4th Call against which to test Alison’s and Erving’s evidence about the 1st Call.
88. According to Alison, she was a little apprehensive and cautious when she commenced the conversation. She told Erving that she was calling on behalf of a very close friend and that she and her friend were very concerned about confidentiality especially as the case was at a delicate stage because the divorce was on hold with the parties trying to resolve the matters themselves. She stressed the delicate situation and the fact that her friend’s wife was an expatriate doctor with friends in the legal profession. She emphasised that if the confidential information and specific information on the parties were leaked out in casual conversation or became known to her friend’s wife, the divorce would escalate. According to Alison, Erving was extremely reassuring and reassured her that he was aware of the sensitivity of the situation and that the contents and specifics of the conversation which related directly to the parties would be kept strictly confidential, saying “of course the conversation and contents would be kept confidential” and that it was in fact “only proper anyway for a solicitor to do so”. Erving said that he would be happy to take on the instruction from her friend. In the course of the conversation, Alison revealed that her friend referred to was her brother as it was not possible to discuss the case intimately without revealing the names and identities of the parties. She said Erving indicated that he had heard of the Plaintiff’s name from a newspaper and was happy to act for the Plaintiff. Erving had no dispute that was the way how the conversation developed and that he was informed that the Plaintiff was a barrister and the Wife was a doctor, but denied that he was informed of their names.
89. According to Alison, she told Erving that the Wife was represented by Sharon Ser of HWG whom the Plaintiff believed were experts in family law, that the Plaintiff was concerned about costs and was anxious to settle and that the case might not be a big case for Erving. Then Erving laughed and joked with her and encouraged her to appoint him on the Plaintiff’s behalf for he knew how “to handle Sharon Ser” as he had done a case successfully against her. By that, Alison understood Erving to mean the divorce case of a pilot of Cathay Pacific which Erving had told her previously. She then expressed the Plaintiff’s concern if Erving was experienced enough as he was relatively unknown in Hong Kong. Erving told her that he had experience in divorce matter in England and was also becoming “big in Hong Kong”. She felt very assured and scheduled an appointment for the Plaintiff to have a meeting with Erving at 9:30 am on Saturday 14 May 1994. Though Erving denied having boasted about being able to handle Sharon Ser and becoming big in Hong Kong, he did not deny he had handled the divorce case of the pilot. It is unlikely that Alison could have made up what was allegedly said by Erving. Those matters are not even peripheral and there was no dispute about the meeting scheduled on 14 May 1994.
90. Then Alison negotiated the hourly rate with Erving. Erving said his normal rate was $3,000 per hour. Alison asked for a reduction to $2,500 as the Plaintiff was a member of the legal profession. Eventually, they agreed at an hourly rate of $2,800 and that this first conversation was a “freebee”. After that, Alison disclosed certain information to Erving, which I shall deal with in the appropriate section.
91. While it is common ground that the hourly rate was discussed, Erving’s evidence is that he only said he might be prepared to do the case at the rate of $2,800 but would have to discuss with the Plaintiff first and it was in that context that the meeting on 14 May 1994 was scheduled. On Erving’s case, there was no agreement to act for the Plaintiff until at least he had discussed the matter with him first at the meeting.
Duration of the 1st Call
92. Alison said that the 1st Call took about 45 minutes. In the Transcript, she said that the 1st Call took about one hour in which 30 minutes were spent discussing about the privilege information. In Messrs Haldanes’ two letters of complaint to the Law Society dated 14 July 1994 and 26 August 1994, it was mentioned that the 1st Call lasted for 45 minutes. Alison has all along been very consistent as to the duration of the 1st Call.
93. Erving said that the 1st Call was just about 15 minutes. He said that he cut Alison’s conversation short on a number of occasions as he did not want to engage in detailed discussion with her about the Plaintiff. He said that it took him 15 minutes or so to get her off the phone. However, despite that four letters were written to Messrs Haldanes and the Law Society in response to the complaint, the 1st Defendant never even alleged that the 1st Call lasted as short as 15 minutes. In his letter dated 14 September 1994, Erving only wrote that the 1st Call “did not last as long as 45 minutes”. It was only in his affidavit that he said “the conversation did not last 45 minutes but more like 15 minutes.” In the earlier part of his testimony, he said that the conversation lasted for no more than about 15 minutes. In the later part of his testimony, he said “the conversation wasn’t that long actually, lasted about 15 minutes, I think.” Mr Mok SC, counsel for the Plaintiff, submits that those expressions carried with them an air of uncertainty. With respect, I think counsel is reading too much into Erving’s cautious phraseology. But, what is more important is that despite Erving was aware that the 4th Call was recorded, he did not correct Alison’s assertion that a lot of information had been imparted during that long conversation by saying that the 1st Call only lasted about 15 minutes.
94. Alison devoted 14 ½ pages in her witness statement describing what was discussed during the 1st Call, which is almost a reproduction of the relevant part of her 2nd affidavit. She discussed about the grounds of divorce raised by the Wife, her merits on those grounds, 12 topics of confidential information, bottom lines, tactics and the Plaintiff’s character. If she were to cover all those areas it would take at least half an hour, allowing for some background introduction and responses from Erving. Depending on the amount of details she had gone into, it could even take an hour and more.
95. Erving agreed that Alison liked talking a lot and it was often quite difficult to get a word in when she was speaking. She has demonstrated in Court her inability to stop a conversation. I accept her evidence that having told Erving that the Wife was a bad and unfit mother, she did not stop without giving examples about the Wife’s behaviour during the holiday in Holland, the third Christmas she had with the Plaintiff without the Daughter and how the maid was acknowledged by the neighbours as the Daughter’s mother and so on. I find that the 1st Call did take as long as 45 minutes, if not more.
Whether the 1st Call was made by Alison on behalf of the Plaintiff
96. It is Erving’s case that the 1st Call had nothing to do with the Plaintiff. Hence, the Plaintiff was not his client and he owed no duty of confidence to the Plaintiff. He testified at the trial that during the 1st Call he had the impression that Alison was making the inquiry without the knowledge of the Plaintiff. In paragraph 3 of his Opposition Affidavit, Erving alleged that at no time did Alison say during the 1st Call that she was having the discussion on behalf of the Plaintiff or at his request and Erving had the impression that she was making the call without the Plaintiff’s knowledge. This is inconsistent with paragraph 2 of his affidavit, in which he said that Alison told him during the 1st Call that she was calling on behalf of a friend who, as the conversation progressed, was revealed to be the Plaintiff. Under cross-examination, Erving explained that the language was a little loose and he should have used the word “about” rather than “on behalf”.
97. Ms Lau advanced some very strong arguments in support of the proposition that the 1st Call was not triggered by the Plaintiff asking Alison to talk to Erving but by Alison acting out of her own initiative, with or without the Plaintiff’s knowledge. She submits that this proposition explains why the scheduled meeting on 14 May 1994 was cancelled. The reason was that the meeting was never made at the Plaintiff’s request but was just Alison’s idea, believing that it was in the Plaintiff’s interest to see Erving and hoping that she could persuade him to go.
98. On Alison’s evidence, the meeting was arranged on Friday 13 May 1994 and cancelled on the following morning. The reason given by the Plaintiff for the cancellation was that on Friday evening he had a discussion with the Wife who indicated that she was prepared to settle for joint custody, care and control of the Daughter and was happy to move out of the matrimonial home and would revert to him soon with more specific requests regarding distribution of assets. Thus, the Plaintiff wanted to wait for the Wife’s further feed back before seeing Erving. On the other hand, the Wife never reverted within any time that may be described as “soon” after 13 May 1994. It is also common ground that the parties were having intensive discussions all along since service of the divorce papers. It was against that background the Plaintiff felt he should in any event seek legal representation and/or advice for the divorce proceedings and to be advised on what should reasonably be offered to the Wife in a fair settlement and whether his bottom line and thinking were reasonable. The then situation as disclosed by Alison to Erving during the 1st Call was that the Wife accepted the Plaintiff’s parents’ involvement in paying for the purchase of the matrimonial home and ownership of the funds in the multi-currency account; was wanting to move out and was looking at other properties, in particular the University Heights. As submitted by Ms Lau, under the circumstances, the outcome of the discussion with the Wife on the evening of 13 May 1994 should not have affected the Plaintiff’s need for advice on what he should offer and whether his bottom line and thinking were reasonable. I think under those circumstances, there was all the more reason to attend the meeting and obtain legal advice, determine and adjust, if necessary, the bottom line and to be prepared when the offer came. I certainly agree with Ms Lau that the reason advanced by the Plaintiff was not the true reason, but that does not necessarily lead to the conclusion that the 1st Call was not made with the consent and authority of the Plaintiff. There could be many possible reasons and I would not wish to speculate. As commented by Sears J, it was improper for a barrister to get his sister, a lay person, to tell everything about his own case to obtain legal advice.
99. Ms Lau referred to the Plaintiff’s evidence given in the ouster proceedings. There, the Plaintiff gave evidence that since service of the divorce paper and non molestation order on him on 29 April 1994, he had made every effort to stop his family getting involved in his divorce and domestic problems. He had asked his family not to interfere, not to get involved, not to call him and not to go to his home. His family hardly ever phoned him and he hardly ever phoned his family. If ever he had to phone his family, he did so at the caretaker’s office. Based on this evidence, Ms Lau submits that Alison’s evidence that the frequency of her contacts with the Plaintiff were about the same as before the service of the divorce paper and they discussed among other things including seeking legal advice was incredible. I think Alison’s evidence is logical and credible. She and the Plaintiff came from a very close family. There is no reason not to believe in their evidence that they somehow maintained contact, while the Plaintiff was at his office or in the way as described by the Plaintiff.
100. Ms Lau argues the fact that Alison sought no advice from Erving about the non molestation order which had been served on the Plaintiff together with the divorce petition and did not send or fax the divorce papers to Erving after the 1st Call suggest that Erving was never retained as the Plaintiff’s solicitor. I think those facts are neither here nor there in view of the meeting scheduled on Saturday which was either the immediately following day or the day after. Had the meeting been held, the Plaintiff could have discussed, among other things, the non molestation order with Erving. At the time of the 1st Call, there was no urgency to deal with the non molestation order as the Plaintiff and the Wife were still living together and were in earnest negotiation to resolve the problem.
101. Ms Lau referred to the fact that the Plaintiff had filed an acknowledgement of service on 5 May 1994, settle the terms of a consent summons with HWG in May 1994 about the terms of the non molestation order, spoke to Erving on 27 June 1994 about the consent summons for the Wife to take the Daughter to England and eventually taking the Wife to see HH Judge Surman to vary the consent order. Ms Lau further argues that if the Plaintiff needed legal advice on family law, he could have informally consulted some chamber mates or other colleagues at the Bar and from his brother-in-law who was a District Judge as he had so imposed upon him in connection with the Variation Order Incident. Ms Lau submits that all these were indications that the Plaintiff neither needed nor wanted to formally retain any divorce lawyer or consult anyone for advice before instructing Messrs Haldanes on 8 July 1994.
102. Ms Lau argues that according to Alison’s evidence, Alison had very little of the details about the divorce petition as at 13 May 1994 which was why she could only tell Erving that the divorce petition was based only on “name calling and one incident”. Despite Erving was unsuccessful with discovery of the divorce petition, Ms Lau was able to refer to some of the particulars of the petition as read out by the Wife’s counsel in the course of examining the Wife when she gave evidence in the ouster proceedings. Some of the pleaded behaviour of the Plaintiff was very serious. It included badgering the Wife for money, not paying but half of the Wife’s hospital bill for the birth of their Daughter; verbal and physical attack on the Wife; embarking upon a campaign of terror against the Wife and being a misogynist suffering from morbid pathological jealousy. Hence, Ms Lau submits that Alison knew very little about the case. Based on this and what was submitted in the above paragraph, Ms Lau submits that it was obvious that Alison was not asked by the Plaintiff to seek legal advice from Erving but did so out of her own initiative. I admire counsel’s thoughts put into this submission in support of the proposition. But, with respect, I disagree.
103. Erving’s evidence in Court and in his Opposition Affidavit and Supplemental Affidavit as well as the ingenuity of his counsel are readily destroyed by his own admission a number of times in the Transcript that he was prepared to take the Plaintiff on as a client and that the contents of the conversation during the 1st Call was confidential or privileged. Erving has no dispute that Alison began the conversation saying that she was making enquiries in relation to her friend but eventually disclosed that that friend was in fact his brother the Plaintiff and then discussed fees and scheduled a meeting on 14 May 1994. While what Erving said in the Opposition Affidavit may not be strictly inconsistent with his evidence in Court, against the above background, I think what he said in paragraph 3 of that affidavit and his evidence in Court was rather artificial and incredible. Under cross-examination, it was put to him that there was no basis to support his belief that during the 1st Call Alison was talking about his brother and not on behalf of his brother, he replied that there must have been or else he would not have said so. But he was unable to say what that basis was. I find him evasive. He had no basis for his belief that Alison was talking about the Plaintiff and not on behalf of the Plaintiff. I have no difficulty to find that Alison had made it clear to Erving that she was making the enquiry on behalf of the Plaintiff and not relating to or about the Plaintiff.
Had Erving been retained by the Plaintiff during the 1st Call
104. One of the causes of action is breach of retainer and/or fiduciary duty as solicitors. The parties are in dispute as to whether Erving had been instructed by the Plaintiff as his solicitor during the 1st Call through Alison. It seems in the course of this trial, the Plaintiff’s focus has switched to the alternative cause of action, i.e. breach of confidence. It appears that the retainer issue has been abandoned. Be that as it may, I shall deal with this issue.
105. A retainer exists when a client agrees to engage a solicitor to act for him generally or in relation to a specific matter or matters and the solicitor agrees to accept the engagement: Halsbury’s Laws of England, Fourth Edition, Volume 44(1), paragraph 99. Ultimately, this is a question of fact.
106. The Plaintiff’s case is that he asked Alison to speak to Erving urgently on his behalf with a view to retain Erving as his legal representative and advisor, to negotiate the charging rate and to arrange an urgent meeting with Erving. Then in the course of the 1st Call, Alison, on behalf of the Plaintiff, reached agreement to retain Erving as his solicitor at the hourly rate of $2,800 and that the Plaintiff would attend a meeting with Erving to give him full instruction on 14 May 1994. Because of the retainer, Alison briefed Erving by giving him confidential information in preparation for the meeting. The conversation took about 45 minutes. Erving’s case is that the discussion during the 1st Call was of the nature of a general enquiry by Alison about divorce law and his explanation of the general principles. He had not accepted instruction. He only indicated his hourly rate, his willingness to act for the Plaintiff but that he would probably act for the Plaintiff subject to his obtaining more details about the case during the meeting on 14 May 1994. That meeting never took place. He had not even seen the Plaintiff. He had not accepted instructions to act for the Plaintiff. Alison just volunteered some information unsolicited. The whole conversation lasted for about 15 minutes.
107. The Plaintiff’s case is based on an oral agreement. The conversation during the 1st Call was not recorded. This is a case of one person’s word against another. Despite Ms Lau’s submission of late complaint and motive, the Plaintiff’s case has all along been very consistent. One day after the Plaintiff received the 1st Defendant’s Notice of Change of Solicitors, he and Alison immediately protested to Erving. Those conversations, including the 4th Call, can be regarded as a contemporaneous. A contemporaneous document or conversation is one which is made at or about the same time as a relevant event and under circumstances which make it more likely than not that its content is true. The alleged oral agreement was made on 13 May 1994, Alison was informed of Erving’s acting for the Wife on or about 27 May 1994 and she made a protest to Erving on 27 May 1994 during the 4th Call. She was unaware of the recording of the conversation. Whatever she said during that conversation which is consistent with her other evidence may be taken as evidence of consistent conduct in support of that other evidence. On the other hand, Erving switched on the recorder. He obviously did so for the purpose of collecting evidence or at least for his own protection. He must have been very watchful of his words. As regards him, whatever he said during that conversation has lost its character and nature as a piece of contemporaneous evidence. Whatever he said against his interest which is consistent with Alison’s evidence may be treated as evidence of truth just as in the case of an admission. Whatever he said in his favour has to be considered as a self-serving statement which carries little weight by itself and has to be weighed in just the same way as his other evidence. This is the way I would analyse the conversation during the 4th Call. I have compared the Transcript with Exhibit P-1. I consider the alterations and additions made by Alison consistent with the tenor and flow of the conversation as recorded in the Transcript and makes sense. I accept Exhibit P-1 as a true record of the conversation during the 4th Call. It provides the best objective evidence against which to test the evidence of Alison and Erving.
108. According to Exhibit P-1, Erving did not dispute that certain confidential or privileged information relating to the Plaintiff was imparted to him and he gave certain advice during the 1st Call. He also admitted in no uncertain terms that he understood he was under an obligation not to repeat the information to anybody. He said or admitted on a number of occasions that he was prepared to take on the Plaintiff as his client. But he denied he had agreed to the retainer because the Plaintiff cancelled the appointment and never made another. The following conversation is pertinent:
“Alison: You are going to bluff out what I said to you and pretend that it never happened? And you are going to say that I never said that you are going to act for my brother? You agreed to me. My understanding was that you agreed to represent my brother at a reduced rate of $2,800 because you are in the profession or you were both in the same position.
Erving: I agreed to see him.
Alison: You agreed to take on the case. We didn’t spend all the time talking for nothing. Why we want to negotiate fees? You don’t negotiate fees for nothing.
Erving: I might have spent half an hour with your brother and you brother might have walked out in my office and said ‘my goodness I don’t want to instruct him’. And then that would have been it. Over, finished with.
Alison: You have told me that you were prepared to take my brother on as a client, is that correct?
Erving: Yes, I entirely agree with that.
Alison: Yes, you agree that you were prepared to take on as my client.
Erving: Yes.”
109. Put fairly, Alison’s evidence is that after Erving said he was prepared to take on the Plaintiff as his client, she discussed with Erving about the Plaintiff’s divorce proceedings in some details and in confidence, agreed the hourly rate with Erving and scheduled a meeting. But, even according to Alison’s evidence, the parties had not used clear expressions to the effect that the Plaintiff was to retain the Defendants or the Defendants were to accept the retainer. On the date scheduled for the meeting, the Plaintiff telephoned Alison saying that it seems the matter might be resolved amicably and he wanted to postpone the meeting. Then Alison cancelled the appointment with Erving.
110. A retainer exists when a client agrees to engage a solicitor to act for him generally or in relation to a specific matter or matters and the solicitor agrees to accept the engagement. In the absence of unequivocal language of offer and acceptance of a retainer, I do not think too much could be read into the statement that a solicitor was prepared to take on someone as a client at an agreed hourly rate. Such expression could easily be misinterpreted by a layman as an agreement to act, when in fact there is none. A retainer could not be formed in vacuo. In technical terms, I think when a solicitor says that he is willing to take on someone as a client, without more, is most probably an invitation to treat. Erving was willing and ready to keep his door open to hear from this potential client and consider whether to accept his retainer. In fact that appears to be the case. The parties scheduled a meeting for Erving to meet the Plaintiff and to take instructions from him. Had that meeting been held, the parties would have discussed terms of the retainer and formally agreed the hourly rate. Offer and acceptance would then have completed with a concluded agreement. The meeting was postponed indefinitely. Nothing was heard further from either the Plaintiff or Alison for two weeks. In fact, the Plaintiff was free to walk out anytime just as he did by cancelling the appointment without commitment and postponing the meeting indefinitely saying that the Plaintiff would get back to Erving to make another call sometime latter when necessary. This suggests, if it turned out to be unnecessary, that was the end of the matter. Had the Plaintiff reached settlement agreement with the Wife, he would be under no obligation to the Defendants, except as a matter of politeness to thank Erving for the freebee. I think on a proper analysis of the evidence, even on Alison’s evidence, there was no concluded oral retainer during the 1st Call. I do not think this finding has any adverse impact on Alison’s credibility as I consider her assertion of a concluded retainer an understandable misinterpretation of the evidence on her part and not misrepresentation of facts.
Undertaking as to confidence
111. Erving’s case is that he had only agreed to keep the fact of the conversation confidential but not its content. In paragraph 3 of his Opposition Affidavit, Erving said that when Alison told him during the 1st Call that the conversation was confidential, he took her to mean the fact that the discussion was taking place was confidential as opposed to the information which was conveyed to him during the discussion which was not of a confidential nature. He even filed the Supplemental Affidavit on the same day to reiterate the point that he had not received any confidential information from Alison.
112. However, he had to capitulate under cross-examination when his attention was drawn to various parts of the Transcript which showed every time when the question of confidentiality was put to him by Alison, he acknowledged that what was said to him would be kept strictly confidential and privileged. He also reassured Alison that the solicitor-client’s relationship had been honoured. He was specifically referred to the following conversation at page 2 of the Transcript:
“Alison: You gave specific advice on custody and financial relief. You said you were prepared to take my brother on as a client and did you not say to me. What’s my first word to you? My very first word to you was “this would be in absolute strictest confidential and everything I told you was never to go beyond what I’ve said between the two of us.”
Alison: That’s absolutely correct, is it?
Erving: Yes.
Alison: But then, you are in breach of solicitor-client relationship, if that is absolutely correct. That what I told you was not to be repeated or used or not to be repeated to anybody.
Erving: Absolutely correct.”
and at page 4:
“Alison: And you don’t think that is privileged information?
Erving: I am not saying that is not privileged information, but in the sense that I should (something missed).
Alison: How do you think that you can act for my sister-in-law. That’s the point, of course, I’m upset. I went to you, you’re my lawyer, I went to you in good faith and I’m your client.
Erving: Yeah and that solicitor client relationship has been honoured, I have not said anything to anybody about what you said to me.”
113. What Erving said was utterly artificial and what he did was very dishonest. On 27 May 1994, he must have vivid recollection that he had undertaken to keep the content of the conversation during the 1st Call confidential and had in fact received privileged information from Alison. He had that 4th Call recorded. Yet, when he gave the two affidavits, he had the audacity to say under oath that he had not received confidential information. He even withheld from Sears J the fact that he had recorded the conversation during the 4th Call and had prepared the Transcript. What he said in this part of his Opposition Affidavit and evidence in Court is deliberately false and he was deliberately dishonest.
The information imparted during the 1st Call
114. What transpired during the 1st Call is again one person’s words against another. Alison gave a brief account of that conversation in her 1st affidavit dated 28 October 1994 in support of the Plaintiff’s application for interlocutory injunction against the Defendants and a much more detailed account in her 2nd affidavit dated 4 September 2004 for the purpose of this action. Ms Lau is sceptical as to how the account given in the 2nd affidavit differed from that given in the 1st affidavit.
115. The 1st affidavit consists of six pages only. Alison described the events of 13 and 27 May 1994 in just a little over three pages. That was short but the gist and the essential topics were there, though not in any great detail. According to Alison, her 1st affidavit was prepared according to legal advice. It was intended to be brief and it was anticipated that she would be called to give live evidence at the hearing to make good the points. At the time, the divorce petition was on-going. The Plaintiff’s complaint was about confidential information, including bottom lines and tactics imparted to Erving who was then acting for the Wife. It makes good sense not to disclose the confidential information in the affidavit lest it might remind Erving of what he might have missed and lest it might be used by the Wife if the injunction application was unsuccessful. If the information, which was what the action sought to protect, was spell out in great detail in the 1st affidavit and made available to the Wife, it would defeat the whole purpose of the action. Alison had placed markers in the 1st affidavit and anticipated she would have the opportunity to expand by giving live evidence at the injunction hearing, which unfortunately did not materialise. When the 2nd affidavit was given, the matrimonial proceedings had been concluded. The information has lost its confidentiality. Alison was therefore able to give detailed account of what transpired during the 1st Call. I have compared the two affidavits. Though the 2nd affidavit contained a lot of details not disclosed in the 1st affidavit but it cannot be said to be a departure from the 1st affidavit. I am satisfied that Alison had placed markers in her 1st affidavit as to what she intended to say in evidence in Court. Her evidence is corroborated by the Transcript and Erving’s answer recorded therein. I accept Alison’s reasons for the brevity. I do not think there is any substance in Ms Lau’s complaint.
116. In her 3rd affidavit, Alison produced a note, identified as AA-1, in support of her 2nd affidavit. AA-1 is a photocopy of the note which Alison allegedly made during her meeting with McDonagh of Messrs Haldanes on 8 July 1994. The original of the note could not be produced. According to Alison, the note was a contemporaneous note prepared by her during the meeting with McDonagh, which was somehow misplaced. She said that she took a long time to prepare her 2nd affidavit which was completed on 4 September 2004. That affidavit was prepared independently of the note or AA-1 which was not discovered until 2September 2004. After discussing with the Plaintiff’s solicitors, she was advised to produce AA-1 as evidence in support of her 2nd affidavit, which she did in her 3rd affidavit dated 7 September 2004.
117. Ms Lau is very critical about AA-1 as it was not the original note and there was no way its authenticity could be tested. She drew my attention to Alison’s evidence that a copy of the note had been left with McDonagh, but HWG could not find the copy in Messrs Haldanes’ file handed over to them. She also found it remarkable that AA-1 contained so much more information and advice than McDonagh’s own attendance note. I do not agree. The two notes contain more or less the same topics. It is not surprising that McDonagh and Alison might place different weight on different issues which would be reflected in the difference between the two notes. I do not think much arise out of that. The 2nd affidavit was a very carefully drafted affidavit. A lot of thoughts and time must have been used in drafting it. If Alison wanted to concoct corroborating evidence in support of her 2nd affidavit, she would have concocted AA-1 and annexed it to her 2nd affidavit and would not have produced it by a 3rd affidavit as to suggest to the Defendants that it was an afterthought. Because of the proximity in time between the filing of the 2nd affidavit and 3rd affidavit, I have no doubt that AA-1 was in existence at the time of Alison’s drafting of her 2nd affidavit. If indeed it was a document concocted for the purpose of supporting the 2nd affidavit, she would have annexed it in her 2nd affidavit.
118. The most compelling evidence, however, is that two of the items contained in AA-1 are supported by the attendance notes taken by McDonagh. Those are the drugs issue and the stolen medical record issue. If these issues had not been mentioned during the meeting with McDonagh on 8 July 1994, they could not have found their way into McDonagh’s attendance note. I accept Alison’s account that AA-1 was a genuine copy of the note she took during the meeting of 8 July 1994.
119. Despite the above finding, the note or AA-1 has no evidential value at all. It is a contemporaneous note of the meeting with McDonagh but not of the 1st Call. As far as its use as corroborating evidence of what Alison told McDonagh, it is irrelevant and is of no better value than her 2nd affidavit. As far as its use as corroborating evidence of what transpired during the 1st Call, it is a self serving statement and not a contemporaneous statement. I give no weight to the evidence contained in AA-1. Inherent credibility and the Transcript remains the best test of Alison’s evidence as to what was said during the 1st Call.
120. The Plaintiff’s and Alison’s evidence is that the Plaintiff told Alison to tell Erving everything about the divorce proceedings she was comfortable to tell and to get as much free legal advice as possible from Erving. According to Alison, the following 12 topics were canvassed during the 1st Call:
(1) the custody of the Daughter;
(2) the Wife’s drug dependency;
(3) the Wife was an uncaring unfit and bad mother;
(4) the Wife was very sensitive on her baldness which might be the effect of her drug dependency and which might be related to a complaint made to the medical council in England;
(5) the Wife’s behavior towards the Daughter during a holiday in Holland;
(6) the Daughter calling her maid “mother”;
(7) the Plaintiff was given lots of drugs by the Wife;
(8) the locations of the assets, how they were acquired and contribution by the Plaintiff’s parents;
(9) the Plaintiff’s parents’ interest in the matrimonial property;
(10) the Plaintiff’s parents’ intention to stay out of the divorce and to forgo their investment in the matrimonial home;
(11) the Plaintiff’s bottom line on financial distribution; and
(12) the multi-currency account.
Besides the above 12 topics, Alison briefed Erving that the Wife’s petition in the divorce was based on unreasonable behaviour and name calling. The Wife accused the Plaintiff as a bully. Alison and Erving discussed about the merits of those grounds of divorce and about using the Wife’s drug dependency and her giving of drugs to the Plaintiff as a tactic, the Plaintiff’s concern in avoiding to raise that issue as it might affect the Wife’s career and the divorce. Erving advised that the medical issue was a very strong weapon and could be used tactically if necessary. Referring to the Wife’s accusation that the Plaintiff was a bully, Alison also told Erving that the Plaintiff was mostly “hot air” and “bluff” but was extremely gentle and vulnerable like a jellyfish.
121. According to the Transcript, when Erving started recording, he was talking about his acting for the Wife. He was arguing with Alison whether a fee had been agreed, what Alison had told Erving and whether he had agreed to take on the Plaintiff as his client. The three properties held in the Plaintiff’s name were mentioned. They argued whether Alison volunteered information about the Plaintiff or that Erving solicited the information from her. Then they digressed and talked about solicitor-client relationship in the context of the legal work for which Erving was then retained by Alison. Then they reverted and argued about the information imparted to Erving and the Wife’s salary. Erving explained why he considered he had not been retained by the Plaintiff. The parties then turned to argue about the Plaintiff’s telephone conversation with Erving earlier, i.e. the 3rd Call, in which Erving called the Plaintiff “puerile”. Then they continued arguing about what was said during the 1st Call. The parties then went all over their arguments again. At some stage, Erving asked Alison if the conversation was being recorded. At another stage, Alison accused Erving of calling her bully and demanded a written apology. The conversation eventually ended with Erving agreeing to think about the written apology over the weekend. In summary, during the 4th Call Erving admitted that he had agreed to keep the content of the conversation during the 1st Call confidential and acknowledged that certain information about the Plaintiff and the divorce petition were imparted to him. He also admitted having agreed to take the Plaintiff on as a client and arranged a meeting with the Plaintiff on 14 May 1994. Some of the advice given during the 1st Call was mentioned but no mention was made of the Plaintiff’s bottom line and tactics given during the 1st Call.
122. According to Alison, the drugs issue and the stolen medical record issue were raised during the 1st Call. Those issues were noted in McDonagh’s attendance notes. Erving denied that those issues were discussed during the 1st Call. At one stage, he argued that those problems only emerge as issues much later in the divorce petition, suggesting Alison’s evidence was a fabrication. However, he later admitted that the drug issue in fact took place before May 1994. According to an affidavit dated 17 August 1995 made by the Plaintiff’s maid, Gloria, which was referred to by Deputy High Court Judge Gill in the ancillary relief proceedings, Gloria confirmed that she was told by the Wife to return the medical records to the clinic before the Wife started her employment at Anderson and Partners which was April 1994. Hence, the stolen medical record incident took place prior to April 1994. These evidence suggest that these two issues could have been raised by Alison during the 1st Call and I found that they have indeed been so raised.
123. In the Transcript, Alison mentioned that Erving had told her previously, which must be during the 1st Call, that he was “hotting up” and would really enjoy taking Sharon Ser of HWG “to the cleaners”. That was immediately denied by Erving as absolute nonsense. I would prefer Alison’s evidence. The inference to be drawn from this rather innocuous piece of conversation is that Sharon Ser’s name would not have been mentioned, if Alison had not told Erving during the 1st Call that the Wife was represented and the divorce petition was then current but on hold. I accept Alison’s evidence on this issue and that she had told Erving that the divorce was at a very critical stage at that time, that the parties were attempting to resolve the matter and her stress for confidentiality.
124. It is common ground that Erving’s fees had been discussed and the figure of $2,800 per hour mentioned by Erving, though whether there was agreement was in dispute. The following conversation is recorded at page 1 of the Transcript:
“Alison: But for my brother which you told me, you told me you were prepared to do so. We negotiated the fees, you said so.
Erving: We have not negotiated fees.
Alison: Oh! you said we didn’t negotiate fees!
Erving: We have not negotiated fees, you are …(something missed)
Alison: You, you never said to me that we were going to negotiate the fees from $3,000 down to $2,800 which is your hourly fee?
Erving: No, you said to me, you said to me, what were your fees, and I said that something over $3,000 an hour and you said would I,
Alison: I said, I said would you give my brother a reduction because he is a member of the bar. And what did you say?
Erving: And I said that I would probably be prepared to do that and I may have mentioned $2,800 but I needed to know more about the case when I saw your brother.”
125. In view of the somewhat scanty information available to Erving at that stage of the conversation, I prefer Erving’s evidence that there was no agreement as to fee but an indication that he would probably be prepared to charge an hourly rate of $2,800 but needed to know more about the case after seeing the Plaintiff. My choice is based on logic and inherent credibility. It is not difficult to imagine that different people may have different perception of what was said. My finding here has no impact on Alison’s credibility and honesty. I accept Alison’s evidence that the 1st Call was a “freebee”.
126. According to the Transcript, Alison put to Erving that she had told him about the Wife’s salary as a doctor. That was repeatedly denied by Erving. That was not put to Erving by Alison in contemplation of litigation, but in an attempt to persuade him to cease acting for the Wife, whereas Erving’s denial in the conversation which he deliberately recorded must be considered with a self-serving element. In her 1st affidavit, Alison specifically mentioned that she recalled Erving expressing surprise at the level of salary which the Wife earned. I have no doubt that what Alison put to Erving was true. She had during the 1st Call mentioned to Erving the Wife’s income for the purpose of seeking his advice on financial issue.
127. The Transcript showed that in answer to Alison’s question, Erving admitted having been informed that the Plaintiff wished to have custody of the Daughter, about the two properties in England, about the matrimonial home in Hong Kong and the Plaintiff’s concern about his position as regards the properties. This corroborated what Alison said in her 1st affidavit that she told Erving the properties, how they were acquired, the contributions from the Plaintiff and the Wife.
128. It must go without saying that when those issues were raised so too would issues as to grounds of the divorce petition and distribution of family asset, one’s bottom line for settlement and some related confidential information. Bottom line and name calling as a ground of divorce were also mentioned in Alison’s 1st affidavit. In her 2nd affidavit, Alison gave further particulars about the bottom line and other serious issues mentioned in her 1st affidavit. Erving chose not to respond but to rely on his Opposition Affidavit and Supplemental Affidavit. In his two affidavits, Erving denied certain information was passed to him and that the information imparted to him during the 1st Call was confidential or privileged which was manifestly demonstrated to be false. He chose to put all his eggs in one basket. I can only reject his evidence in its entirety except that which is consistent with what is said in Alison’s 1st and 2nd affidavits and which I accept.
129. As for advice and bottom line, Alison said that Erving stated he would give her some general advice on settling the divorce based on the information she had given him during the 1st Call. Then Erving mentioned the one-third rule and Alison told him the Plaintiff’s bottom line was that he would not give up the matrimonial home. The following conversation is recorded at page 1 of the Transcript:
“Alison: We did agree $2,800. And you agreed to take my brother’s case on and we had fairly a lengthy discussion and you also gave me some advice.
Erving: Well? What advice did I gave you?
Alison: I think a matter for what will happened in the future.
Erving: No, no, you tell me what advice,
Alison: You did, are you saying that I never said anything to my brother about? Ah.
Erving: You are saying that I gave you advice about your brother’s case, you tell me what advice I gave.
Alison: When I spoke to you, I made no mention of what my brother told me? What did we actually discuss when I called you up and said would you be prepared to help my brother?
Erving: Ah, you told me that your brother had got matrimonial problems.
Alison: Yes.
Erving: You told me that you thought he ought to go for divorce.
Alison: Yes.
Erving: You told me I believe that as far as your brother was concerned and as far as you were concerned, in fact, that his wife wasn’t fit to look after the child.
Alison: Yes.
Erving: And that he should finish up with custody and you also told me that there was a property in Hong Kong and that there were two properties in England and what was the contribution of parents and parties.
Alison: So am I not to mention anything else? That’s a fair amount of knowledge that I have been passed over to you.
Erving: And you told me, you ask me what the position would be with the properties. And I said that I couldn’t say until I went into more detail and talk to your brother about this.”
and at page 9:
“Alison: Impression given to me was I gave you confidential information but you agreed what confidential … if would they never get passed your office and we discuss certain fees regarding my brother, certain matters of facts about their marriage breakdown and how are you … (something missed) … and the advice that you have given subsequently which you said you could come up going confirm to obviously without talking in more details with my brother.
Erving: Well, I don’t recall discussing any facts about your brother’s marriage.
Alison: You did, you said that there were certain rules of thumb. You ask me that if you ask me if Dr Berry had in any way contributed to the marriage apart from financially and you, you ask me this question, is that true or not?
Erving: I don’t recall that, but if you say that I asked you that question then I won’t argue, I won’t dispute that.
Alison: Well, that’s already one piece of advice you are giving me.
Erving: But again that’s ... (something missed)
Alison: If I said you gave me advice, you told me that there’s various ways of deciding (something missed) about money, you know if my brother property was in his sole name, if she has contributed was nothing to the matrimonial home and in fact actually remember discussing with you salary, is that correct?
Erving: I don’t recall that.
Alison: You don’t recall that?
Erving: No.
Alison: You don’t recall me mentioning to you what I understand Sue’s salary was and what her contribution was?
Erving: Why is that privilege information?
Alison: Well, I believe that that’s part of your advising. You told me that, you advise that my brother had to go on was dependent on: 1. whether Sue was unfit mother an adequate mother who contributed in other ways like I don’t know, could she cook spaghetti, for example, and if she could do other things apart from financially contribute to the house and: 2. what was her financial contribution on your advice.”
130. From page 1 of the Transcript, it can be seen that Erving asked Alison three times what advice he had given her, but Alison avoided answering. On the third occasion, Alison answered with a question asking Erving what they had actually discussed. Then Erving told Alison that she told him about the Plaintiff’s matrimonial problems, the Plaintiff’s concern about custody of the Daughter, the two properties in England, the matrimonial home and the Plaintiff’s parents’ contribution to the purchase of the properties. Erving ended that topic saying that he could not give any advice until he went into more detail and talked to the Plaintiff. This is corroborated by what Alison said at page 9 of the Transcript about Erving “talking in more details” with the Plaintiff. Then, Alison mentioned about the rule of thumb which Erving had told her during the 1st Call. Erving replied that he could not recall but would not dispute with her. Then Alison talked about the Wife’s salary in the context of her contribution to the family assets.
131. In her witness statement as well as in her testimony, Alison said that the rule of thumb was the so called one-third rule. In his evidence in Court, Erving denied he had ever mentioned anything about the one-third rule contending that the rule had fell into disuse and was not applicable by 1991 when he left England and the rule was also inapplicable in Hong Kong in 1994 as the position in Hong Kong was governed by C v C, which basically is reasonable need. Ms Lau submits that Erving is an experienced family law practitioner and would not have erred about such basic legal principles and hence what Alison said was a plain lie.
132. Mr Mok SC argues that though the one-third rule was disapproved in Preston v Preston [1982] Fam 17, it is not maintainable to suggest that it was not capable of being used as a guideline. He referred to the following dicta of Ormrod LJ in Preston v Preston at paragraph 25:
“It is, therefore, wrong in principle to adopt a purely arithmetical approach by considering what proportion of the total assets should be allocated to the wife. The judgments in all three of the cases are agreed on this point. The suggestion in Wachtel v Wachtel [1973] Fam. 72, of one half or one third of the total assets is, therefore, no more than a guideline, though it may be a useful check on the tentative figure which emerges from working through the considerations set out in the section.”
I agree with Mr Mok SC. What was disapproved in Preston v Preston was the arithmetical approach by considering what proportion of the total assets to be allocated to the wife but not the use of one-half or one-third as a convenient starting point or guideline to check on the reasonableness of the tentative figure which emerge from working through the considerations set out in the statute. The one-third rule is not a rule of law but has not ceased to be a rule of thumb, particularly for the purpose of negotiating a settlement.
133. On the evidence, Alison never said that Erving advised her that the rule was to be applied arithmetically. She said that Erving told her that it was not a rule of law but a rule of thumb which people followed in England and similarly in Hong Kong. In the Transcript, Alison also mentioned the phrase “rule of thumb”. To that assertion, Erving’s response was that he did not recall having so advised her but he expressly said he would not argue or dispute. He did not deny, as he did in his testimony, that he never mentioned that rule of thumb. Quite on the contrary, his response suggests to me that he had in mind this convenient rule of thumb and had mentioned it during the 1st Call, hence, he did not wish to argue with Alison.
134. I accept Alison’s evidence. Based on the Transcript, I have no doubt that she had given Erving some information about the family assets, in particular the two properties in England, the matrimonial home, the Plaintiff’s parents’, the Plaintiff’s and the Wife’s contribution to the purchase of the properties and the Wife’s salary. In view of her and the Plaintiff’s concern over the properties, it was most likely that she had told Erving the Plaintiff’s bottom line about the properties. From the tenor of the conversation, it does not appear to me that any case specific advice had been given by Erving. Indeed on the scanty information then available, it was difficult for Erving to give any case specific advice. No reasonable solicitor would have so advised a third party without actually talking to the client. These observations also explain why Alison avoided or was unable to mention any particular advice given to her despite repeated prompting by Erving. The advice on the rule of thumb was just general advice.
135. Alison said that during the 1st Call, Erving asked her what would the Plaintiff ultimately settle for. She told Erving that the Plaintiff’s bottom line was that he would never move out of the matrimonial home and would be prepared to give the Leicester property to the Wife and keeping the London property to himself. She said that the Wife seemed to have accepted that as the Plaintiff’s parents had contributed to the purchase of the properties and the Plaintiff paid the remaining instalments and hence the Wife was looking for alternative accommodation. Erving denied having so asked for or been given the information. Ms Lau argues that there was no truth in Alison’s evidence because if the arrangement was accepted by the Wife, there was no reason why she would have sought an order for transfer of the matrimonial home in her petition. In my view, an application for transfer of the matrimonial home is almost a standard relief sought if there is a matrimonial property. Besides, there were plenty of reasons for the Wife to change her mind, even if she had accepted the arrangement previously. The most obvious one was the acrimony created by the Plaintiff in being obstructive in the Variation Order Incident. Another reason must be the costs which had occasioned had greatly diminished the size of the family pot and her own personal assets and there was a need to look for more resources. Though Alison did not put down “bottom line” or about Erving asking for what the Plaintiff would settle for in AA-1, these were recorded in McDonagh’s attendance note two months after the 1st Call. Alison had also mentioned the words “bottom line” in her 1st affidavit filed 28 October 1994. I accept that as a marker that this piece of information had been disclosed to Erving. Alison has demonstrated her inability to control her speech. She had told Erving the three properties and it was most likely that she had told him about the bottom line. I accept her evidence.
136. Alison also said that she told Erving about the $2 million in the multi-currency account and Erving advised that as the Wife knew the funds belonged to the Plaintiff’s parents, the Plaintiff should have nothing to worry returning the money to his parents. This was denied by Erving. According to the judgment of Deputy High Court Judge Gill in the ancillary relief proceedings, the Wife had stumbled across the passbook and noted a significant credit balance but was taken aback that this account was not disclosed in the Plaintiff’s affidavit of means. Then Erving applied for Mareva order to freeze the Plaintiff’s bank account. A substantial amount of the funds in that account was transferred to Alison’s account in Switzerland in May 1994. It is not clear whether the transfer took place before or after the 1st Call. Again according to Alison, the Wife knew the funds belonged to the Plaintiff’s parents. Ms Lau argues that there was no reason for the Wife’s sudden changed of mind and decided to renege on her earlier acceptance of the return of the $2 million to the Plaintiff’s parents. I think there were plenty of reasons. But, this time, I tend to agree with Ms Lau. There was nothing to prompt Alison to disclose this account. If the Plaintiff wanted to take the money out of reach of the Wife, it would have been a most stupid thing to tell anybody, including his own solicitor. Alison’s evidence about the ownership of the funds was not accepted by Deputy High Court Judge Gill. By way of contrast with the bottom line mentioned above, the disclosure of this account was not mentioned in either AA-1 or in McDonagh’s attendance notes. The likelihood is that Alison exaggerated and put the blame for the Mareva order on Erving. Be that as it may, this multi-currency account is a non-issue. If Alison has not disclosed it, Erving could not have been in breach of confidence in relation to this matter. If Alison has disclosed this account to Erving, on her evidence, the Wife actually knew about the account. The Plaintiff suffered no loss as a result of the breach.
137. Alison said that she told Erving that the divorce petition was based on behaviour and name calling which Erving did not feel was serious in relation to custody or financial issues. Then she went on, as she said like a runaway train, to talk about the Wife’s drug problem and giving a lot of drugs to the Plaintiff, that the Plaintiff was reluctant but would have no hesitation to raise this medical issue if he had to and that Erving advised that this medical issue was a very strong weapon in the Plaintiff’s favour and could be used tactically, if necessary. But Erving denied.
138. Ms Lau submits that unless Alison had given details of the behaviour and name calling, Erving could not have expressed any view one way or the other about the strength of the Wife’s case and whether they were relevant to or would seriously affect the question of custody or finance. It is of course unlikely that any reasonable solicitor could have formed a view one way or the other on such vague allegation.
139. But the drug and medical issues were noted down in AA-1 as well as McDonagh’s attendance note. In AA-1, Alison wrote down:
“serious matters – drugs/custody, S’s [i.e. the Wife’s] job (GMC?) don’t want to use unless no choice”
McDonagh noted down in her attendance note as follows:
“Told him you did not think original case had any basis – only name calling and one incident but would attack back and drinking problem, problem with pregnancy and child and that for 1st 4 years had problem with accepting child, drug problem and that you understood she stole records from old to new practice and [Plaintiff] thought she unfit mother and unstable & that she hated your family.”
AA-1 and the attendance note suggest that Alison had informed Erving about the Wife’s drug issue, the Wife’s giving a lot of drugs to the Plaintiff and that the Plaintiff would use these issues as a weapon in contesting the custody issue. There was also a marker in Alison’s 1st affidavit where she said that she told Erving that the Plaintiff had many more serious issues which could be raised but was reluctant to do so unless absolutely necessary. But there was no mention of any approval or otherwise of such tactic by Erving. I think most probably Alison had volunteered all those information while Erving just listened without comment as he was anticipating that he would be taking full instructions from the Plaintiff and giving full advice on the following day.
140. I am satisfied that all, except the last, of the 12 topics of information listed in paragraph 120 had been passed to Erving during the 1st Call. I am satisfied that the Plaintiff’s tactic of using the Wife’s drug problem and the Plaintiff’s medical issue as a weapon in contesting the custody issue had been disclosed to Erving. I am also satisfied that Alison had told Erving the Plaintiff’s bottom line on the financial distribution. But I am not satisfied that Erving had given any case specific advice.
Whether the information imparted was confidential to the Plaintiff
141. Ms Lau argues that none of the information imparted by Alison to Erving during the 1st Call was confidential, except the fact that Alison had made that call and that was because Erving had promised to keep that fact confidential. This is because if the information was true, it could not be confidential to the Plaintiff vis-à-vis the Wife and if it was untrue, it would have been misinformation provided by Alison and could not be information confidential to the Plaintiff. The Plaintiff’s true stance on issues of the divorce itself, issues of custody, care and control and issues of ancillary relief could not have been information confidential to the Plaintiff as it would have become known in the course of the divorce proceedings. Information which did not reflect the Plaintiff’s true stance on those issues could not have been confidential information but was misinformation or hot air. She further argues that most of the information imparted was in fact untrue. She quoted, as example, the Plaintiff’s parents’ alleged trust interest in the matrimonial home and in the $2 million in the multi-currency account and the Wife’s acceptance of their interest. She argues that the information about the Plaintiff’s parents’ intention to forgo their interest in the matrimonial home was false as that issue was fought to the bitter end. She also argues that the Plaintiff’s bottom line or stance on custody was untrue because at the ouster hearing the Plaintiff made no claim for custody or interim custody of the Daughter.
142. It is true that some of the information was found to be untrue by Deputy High Court Judge Gill as a matter of evidence and based on the burden of proof. But the information does not cease to be confidential information at the time it was imparted which may affect the parties’ conduct of the proceedings. The Plaintiff’s parents’ stance may not be untrue as that was their stance in the case of an amicable settlement but not if the ancillary proceedings had to be contested. The Plaintiff’s equivocal stance about the custody of the Daughter at the ouster hearing was neither here nor there. At that stage, he had to move to cheaper accommodation but in the end he maintained his stance on custody.
143. The information in this case included the stance, bottom line and tactics. Stance, bottom line or tactics are just a statement of intention at a particular point in time. Intention may change with circumstances and time. This is not the type of case where it is appropriate to fine comb the information and subject it to the sort of analysis as applied by Ms Lau. There are, of course, other cases in which Ms Lau’s approach is unreproachable, but this case is not one of those. The information in this case has to be viewed as a whole. These stance, bottom line or tactics are only known to the mind of the creator and to those to whom he confides. Their disclosure would provide a peep hole into the mind of the Plaintiff. They are confidential. In British American Tobacco Australia Services Ltd v Blanch 1753/03, 2004 NSWSC 70, Young CJ of the Supreme Court of New South Wales held that matters involving a client’s forensic tactics and strategies are confidential information.
Whether the Defendants were under a duty not to disclose the information
144. It was not seriously argued, if not accepted, by the Defendants that they are under a duty of confidence to the Plaintiff in respect of confidential information imparted to them by Alison on behalf of the Plaintiff.
145. The law is very clear. As a general rule, where information which has the necessary quality of confidence is imparted by one person to another under circumstances which create an obligation of confidentiality and the recipient knows about the confidential nature of the information, the recipient of the information owes a duty to the owner of the information not to disclose or use that information otherwise than for the purpose for which the information was imparted to him especially when it would be to the detriment of the owner of the information.
146. A solicitor owes the duty of confidence to his client during the subsistence of the solicitor-client relationship. That relationship comes to an end with the termination of the retainer. But the duty of confidentiality survives the termination to protect the confidentiality of the information imparted during the subsistence of that solicitor-client relationship: see Prince Jefri Bolkiah and KPMG (a firm) [1999] 2 AC 222 at 235C-F, per Lord Millett. That duty had been extended by Parker LJ in re A Firm of solicitors [1992] 1 QB 959 to cover confidential information imparted by persons who may conveniently be called a “quasi-client” to a solicitor in a quasi-solicitor-client relationship.
147. Thus, when a solicitor receives confidential information from someone short of being a client for the purpose of advising him in a matter which subsequently becomes the subject matter of a litigation and that information would not have been imparted to the solicitor otherwise than for the purpose of advising the owner of the information, it creates an obligation of confidentiality. The solicitor is under a duty not to disclose or use that information otherwise than for the purpose for which the information was imparted to him. Though the Defendants had not been formally retained by the Plaintiff, they nevertheless owed him the duty not to divulge, make use of or otherwise exploit the information imparted to them by Alison on his behalf during the 1st Call.
Whether the Defendants were in breach of the duty of confidentiality
148. In his opening speech, Mr Mok SC concedes that he cannot prove disclosure or misuse of the confidential information, but submits that once the Court is satisfied that information of a confidential nature has been imparted and that information is relevant to the divorce proceedings, the burden shifts to the Defendants to satisfy the Court that they had not made use of the confidential information or disclose the same. Ms Lau seizes upon this concession and submits that in view of the concession the issue of breach is not a live issue. Mr Mok SC advances two reasons for the reverse burden of proof. Firstly, he argues that a solicitor is under a duty to pass to his client all relevant information even if that constitutes a breach of his duty of confidentiality owed to another person. Secondly, only the solicitor would know if such information was used or disclosed.
149. A solicitor owes a duty of confidentiality to his client. This duty is owed forever and survives the death of the client when the duty would be owed to the personal representative of the client. At the same time, the solicitor is also under a duty to pass on to his client and use all information which is material to the subject matter of the retainer regardless of the source of that information. This duty arises from the solicitor’s duty as agent of his client. He is under a duty to act to his client’s best interest. All information coming into his possession relating to the client’s affairs must be disclosed to the client. These duties are set out in paragraphs 8.01 and 8.03 of The Hong Kong Solicitors’ Guide to Professional Conduct, Vol 1 as follows:
“8.01 A solicitor has a duty to hold in strict confidence all information concerning the business and affairs of his client acquired in the course of the professional relationship, and must not divulge such information unless disclosure is expressly or implied authorized by the client or required by law or unless the client has expressly or implied waived the duty.
8.03 A solicitor is under a duty to pass on to his client and use all information which is material to the subject matter of the retainer regardless of the source of that information. There are, however, exceptional circumstances where such duty does not apply.”
150. These duties may conflict if a client who has acquired information from a former client acts for another against the former client. It is therefore important that a solicitor should avoid putting himself in a position of potential conflict. If a conflict does arise, his duty owed to his present client would require him to breach the duty of confidentiality owed to his former client, a fortiori the duty of confidentiality owed to a quasi-client. But that does not mean his breach is of no consequence. Breach or not is largely a matter of a mental exercise. Even if a solicitor acts in extreme good faith to his former client to the extent of deliberately breaching his duty to his present client, by consciously not using the information, there is still the very real risk that his subconscious mind might steal a glimpse into the peep hole of his former client’s mind. The solicitor would not even know about this peep. It is indeed very difficult, if not impossible, to prove breach. Sometimes, the circumstances may allow for inference to be drawn, but not always. In my view, Mr Mok SC is plainly right, at least as regards the evidential burden is concerned. Even if the legal burden of proving breach is on the Plaintiff, once he has proved that to the satisfaction of the Court that information of a confidential nature has been imparted and that information is relevant to the proceedings which the solicitor is acting for another client, the burden shifts to the solicitor to adduce sufficient evidence to show that he had not made use of the confidential information or disclosed the same.
151. On the fact, I have found that confidential had been imparted to Erving. Under cross-examination, Erving also admitted that he regarded the information confidential and were relevant to the divorce proceedings. In his letter to the Law Society dated 15 September 1994 in response to the Plaintiff’s complaint, he wrote in very strong and affirmative language:
“If I thought for one moment that by continuing to act for Dr Berry I would be disadvantaging Mr Allan, I would cease to act immediately and I would go further and say that had I been possessed of any confidential information from Mr Allan, I would not even have seen his wife let alone agree to act for her.”
152. Under cross-examination, Erving admitted, as he was bound to by reason of the assertion in his above letter, that assuming that the information had indeed been imparted to him by Alison, he would have considered the information of interest to him representing the Wife and that it would have been relevant to the divorce proceedings when acting for the Wife. He was asked whether he would have gone on to act for the Wife, if Alison’s account of the 1st Call had been correct. He had the decency to answer “no”. He said that if he had been told by Alison information about the Plaintiff’s position on financial matters, he would not have acted for the Wife because he considered there was a potential conflict of interest. He was also asked whether, if he had been imparted the information, he would have passed it on to the Wife. He said that he would as he was duty bound to as the Wife’s solicitor. Likewise, information concerning the Plaintiff’s parents’ involvement in the divorce proceedings and the way that they are dealing with or have dealt with the properties were the more important matters which would gravely disadvantage the Plaintiff if Erving were to act for the Wife. He also agreed that the Wife would have been advantaged if the case would be settled.
153. All the issues raised in the 1st Call were heavily featured in the divorce proceedings. On these answers, I am satisfied that the Plaintiff has discharged the legal burden of proving breach.
Whether the Plaintiff suffered damage as a result of the use of the confidential information
154. Though it was alleged in the voluntary particulars of the Plaintiff’s Amended Statement of Claim and in his Answers to the Request for Further and Better Particulars of the Amended Statement of Claim that the Defendants made use of the information in shaping the course of the divorce proceedings to the detriment of the Plaintiff, in his opening speech, Mr Mok SC has very fairly made clear that he is not relying on matters arising from the conduct of the matrimonial proceedings. He admits that there is no way the Court will know how knowledge of the information would have affected the course of the matrimonial proceedings. He recognises the difficulties of proving compensation because that depends on evidence of how the confidential information had been used and that, he concedes, is difficult to fathom. The Plaintiff abandoned the claim for compensatory damages, but pursues the claim for exemplary damages.
155. Ms Lau submits that the Defendants could only presume from the above concession that the basis for the Plaintiff’s failure to prove breach and damage is that his claim for exemplary damages is completely baseless. I think Ms Lau’s argument is based on a misunderstanding of the Plaintiff’s or rather counsel’s position. I have dealt with the issue of breach in paragraphs 148 to 153 above. I have found that breach may be presumed in a case such as this and has in fact been proved on the evidence. I think what Mr Mok SC is conceding in his opening speech is not failure to prove breach or damages but only failure in proving quantum of compensatory damages. If, as I have found, the Plaintiff has proved breach, he is entitled, at least, to nominal damages, even though he could not prove actual damage or compensatory damages. Exemplary damages is damages over and above that of compensatory damages.
156. Ms Lau made a lengthy submission that the Plaintiff’s story about why the divorce proceedings took an acrimonious and protracted course changed over time. She referred to the Plaintiff’s 3rd affidavit made on 17 May 2000 in which the Plaintiff attributed that to Erving’s misconduct such as assisting the Wife to mislead the court and breach court orders, encouraging the Wife to raise the temperature of the divorce, making everything more acrimonious and prolonging everything, the ouster proceedings and Mareva applications and alleged that the motive was because Erving had a personal vendetta against him. Ms Lau also referred to the Plaintiff’s evidence in Court that when he summed up his position at various points. The Plaintiff said that he did not rely on the impact of Erving’s refusal to step down on the course that was taken in the divorce proceedings but relies on the acrimony in this action. He relied upon the fact that he was made to spent and waste a huge amount of time taking out these proceedings, the time his practice and career suffered and the impact on his Daughter. He said that he was forced to initiate this action against Erving and Erving had placed himself in conflict with the Wife and Daughter by initiating the bankruptcy proceedings knowing that it could push him to the edge.
157. Mr Mok SC has repeatedly said during the course of the Plaintiff’s evidence that he is not bound by the Plaintiff’s evidence regarding what matters he relied on and what he did not to justify an award of exemplary damages because the Plaintiff is not a civil lawyer. In my view, the Plaintiff is legally represented and counsel has the conduct of the proceedings. As far as facts are concerned, whatever the Plaintiff said in the witness box is binding on his counsel. On question of law, what facts to rely on and what not is a matter for counsel. It makes no difference that an issue involves mixed questions of law and fact. Once counsel has abandoned proving compensatory damages, much of what Ms Lau submits above is irrelevant and unnecessary.
158. However, on the facts of the present case, damage could be readily presumed. Had the information not been disclosed to the Wife, the divorce proceedings would have, at least, proceeded more smoothly incurring less time and costs. The Plaintiff could have put the matter behind him at a much earlier time and started his new life. Moreover, had there been no breach, this action and the interlocutory injunction application, at the very least, would not have been necessary. Those costs would not have been wasted and incurred. The Plaintiff would not have suffered the anxiety and indignation of the bankruptcy proceedings and examination etc. Compensatory, aggravated and exemplary damages are also available for breach of duty of confidence: China Light & Power Co Ltd v Ford [1996] 2 HKC 23 at 30D-E per Godfrey JA; 34H-I per Liu JA and 38G-H, per Bokhary JA, as he then was. Suffice it is to say, the Plaintiff has proved breach. Though he has abandoned the claim for compensatory damages, he is entitled, at least, to nominal damages and exemplary damages which he now seeks.
EXEMPLARY DAMAGES
The legal principle
159. Mr Mok SC has referred me to a line of authorities from the House of Lords and Privy Counsel. The authoritativeness of these decisions is not in dispute. The leading authority was Rookes v Barnard (No 1) [1964] AC 1129 in which Lord Devlin said at p. 1226 that an award of exemplary damages is permissible where:
“The defendant’s conduct has been calculated by him to make a profit for himself which may well exceed the compensation payable to the plaintiff.”
This is often referred to as Lord Devlin’s second category. In Broome v Cassell & Co Ltd (No 1) [1972] AC 1027, Lord Hailsham added guilty knowledge for the motive as an additional ingredient. He held at p. 1079:
“What is necessary is that the tortious act must be done with guilty knowledge for the motive that the chances of economic advantage outweigh the chances of economic or perhaps physical penalty.”
Of course, where the conduct has been calculated to make a profit exceeding the compensation payable, such guilty knowledge or motive could be readily inferred.
160. In the latest House of Lords decision in Kuddus v Chief Constable of Leicestershire Constabulary [2002] 2 AC 122, the House of Lords adopted the approach of focusing on the behaviour giving rise to the wrong rather than the cause of action. Lord Nicholls said at p. 144:
“... The availability of exemplary damages has played a significant role in buttressing civil liberties, in claims for false imprisonment and wrongful arrest. From time to time cases do arise where awards of compensatory damages are perceived as inadequate to achieve a just result between the parties. The nature of the defendant's conduct calls for a further response from the courts. On occasion conscious wrongdoing by a defendant is so outrageous, his disregard of the plaintiff's rights so contumelious, that something more is needed to show that the law will not tolerate such behaviour. Without an award of exemplary damages, justice will not have been done. Exemplary damages, as a remedy of last resort, fill what otherwise would be a regrettable lacuna.
...
Nor, I may add, am I wholly persuaded by Lord Devlin's formulation of his second category (wrongful conduct expected to yield a benefit in excess of any compensatory award likely to be made). The law of unjust enrichment has developed apace in recent years. In so far as there may be a need to go further, the key here would seem to be the same as that already discussed: outrageous conduct on the part of the defendant. There is no obvious reason why, if exemplary damages are to be available, the profit motive should suffice but a malicious motive should not.
As I have said, difficult questions arise here. In view of the limited scope of the submissions made by the parties on this appeal, this is not the occasion for attempting to state comprehensive conclusions on these matters. For the purposes of the present appeal it is sufficient, first, to express the view that the House should now depart from its decision in Broome v Cassell & Co. Ltd [1972] AC 1027, in so far as that decision confirmed the continuing existence of what has subsequently been described as the “cause of action” condition and, secondly, to note that the essence of the conduct constituting the court’s discretionary jurisdiction to award exemplary damages is conduct which was an outrageous disregard of the plaintiff’s rights.”
Lord Scott had reservations about awarding exemplary damages at all, but that was short of a dissenting opinion.
161. In A v Bottrill, [2002] UKPC 44, 6th September 2002, which was an appeal from New Zealand, Lord Nicholls of Birkenhead in delivering the majority judgment of the Privy Council explained the conventional basis for the award of exemplary damages based on intentional conduct in the following terms:
“[23] ... in the nature of things, cases satisfying the test of outrageousness will usually involve intentional wrongdoing with, additionally, an element of flagrancy or cynicism or oppression or the like: something additional, rendering the wrongdoing or the manner or circumstances in which it was committed particularly appalling. It is these features which make the defendant's conduct outrageous …
…
[25] It is not surprising, therefore, that when describing conduct meet for an award of exemplary damages Judges have often used adjectives or phrases primarily, or even solely, aimed at advertent conduct. These include: malicious, vindictive, high-handed, wanton, wilful, arrogant, cynical, oppressive, and contumelious disregard of the plaintiffs rights.”
162. Thus, in order to claim exemplary damages, a plaintiff has to prove that compensatory damages are perceived as inadequate to achieve a just result between the parties by showing that the defendant’s conduct is so outrageous or such a contumelious disregard of the plaintiff’s right that it would be an affront to the court’s sense of justice if it does not show its disapproval by awarding damages over and above that which would in an ordinary case have been adequate to compensate the plaintiff for his loss. It is a punishment.
163. As for quantum, I was referred to the decision of the Supreme Court of Canada in Whiten v Pilot Insurance Company [2002] SCC 18. The circumstances when exemplary damages are available are so varying that it is not possible to lay down any other than broad principles of the kind of factors to be taken into account when assessing quantum. At paragraphs 112-126, the Court took into account proportionality by reference to: (1) the blameworthiness of the defendant’s conduct; (2) the degree of vulnerability of the plaintiff; (3) the harm or potential harm directed specifically at the plaintiff; (4) the need for deterrence; and (5) the advantage wrongfully gained by the defendant from the misconduct. The above factors are case sensitive. These factors may have different impact on different factual situations. Ultimately, quantum remains a matter of good sense and discretion of the court.
164. As the basis for the award of exemplary damages is based on intentional conduct, the more reprehensible the conduct, the higher is the award. In assessing the blameworthiness of the defendant, the court is entitled to take into consideration whether the misconduct was planned and deliberate; the motive of the defendant; the length of the period over which the conduct persisted; whether the defendant concealed or attempted to conceal its misconduct; the defendant’s awareness of the wrong he was doing to the plaintiff; and the nature of the interest violated by the misconduct.
165. There is little guidance available from local decisions on quantum. As a matter of principle, exemplary damages are punitive and not compensatory. A traditional function of exemplary damages is to ensure that the defendant does not treat compensatory damages merely as licence fee to get its way irrespective of the plaintiff’s right. The defendant should not be allowed to profit from his own breach of duty. Another function is deterrence. Exemplary damages is also a punishment to show public disapproval and condemnation of the conduct of the defendant. Thus, exemplary damages consist of a profit element which represents the profits made as a result of the wrong committed on the victim and a penal element as an additional punishment for the reprehensible conduct if deprivation of profit is not a sufficient punishment. Usually deprivation of profit would be a sufficient punishment and provides a convenient starting point for assessment of exemplary damages. If that is inadequate, the court may consider imposing an additional penal element in the starting point.
166. Very often, a defendant may be insured in respect of certain risks, such as professional negligence, which forms the cause of action for which exemplary damages are awarded. Subject to the terms of his insurance policy, the defendant would be indemnified against any award made against him. In that case, this indemnity would be passed onto the public by way of increased premium in the following year. In effect, the plaintiff would receive a windfall award which has no bearing to the loss he suffered, but the public would have to contribute to the award, through no fault of their own except their prudence in insuring themselves against such risks. In such cases, the court should consider other forms of sanction and keep the exemplary damages to the minimum. To the extent a defendant has suffered or is likely to suffer other forms of retribution, such as reprimand or disciplinary proceedings from a disciplinary or relevant body, the penal element may be reduced or eliminated.
The conduct - Erving’s Opposition Affidavit
167. Mr Mok SC relies on the Opposition Affidavit and Supplemental Affidavit filed by Erving in resisting the Plaintiff’s application for interlocutory injunction as one of the conducts against which exemplary damages should be assessed. Erving said in the Opposition Affidavit that when Alison told him that the information she was about to impart was confidential, he took it to mean that the fact of the 1st Call was confidential and not its contents. He admitted under cross-examination that was misleading. He also reinforced his Opposition Affidavit with a Supplemental Affidavit reinforcing his assertion that what he said in paragraph 2 of the Opposition Affidavit was an account of the entirety of his conversation with Alison during the 1st Call and that he was not in possession of confidential information relating to the Plaintiff’s assets or his thinking on financial issues. Based primarily on the Transcript, I have found that both affidavits were deliberately and knowingly false in material particulars.
168. In his Opposition Affidavit, Erving said that he had the impression that Alison was talking to him about the Plaintiff but not on behalf of the Plaintiff. He said that he had basis to support that belief. But when asked what that basis was, his only reply was that there must have been or else he would not have said it. That was just evasion and exaggeration. He must know it was false at the time he wrote the affidavit.
169. Erving said in his Opposition Affidavit that he did not agree to act for the Plaintiff. But there were numerous occasions in the Transcript which showed that he must have said during the 1st Call that he agreed to act for the Plaintiff. He must know what he said in the affidavit was untrue, though I accept that he had not been retained.
170. In his Opposition Affidavit, Erving said that Alison did not tell him how the properties had been acquired but only how they were owned and did not tell him about the Wife’s salary. The Transcript showed that he admitted Alison had told him about the Wife’s salary in the context of her contribution to the properties. So he must know that the whole series of the above assertions were false.
171. Erving also said in the Opposition Affidavit that the conversation only lasted about 15 minutes and that there were no mention of more serious issues or bottom line in reply to Alison’s affidavit. In the light of Alison’s affidavit and the undoubted falsity of his own affidavits, those matters must have been raised by Alison and he must know his assertions above were false.
172. Erving admitted that back in 1994 he had no problem with his memory. He said in evidence that he took care in preparing the affidavits and even saw fit to review the correspondence with the Plaintiff’s then solicitors, Messrs Haldanes, and with the Law Society. He said that when he drafted those correspondence, he was sure that he was able to remember quite accurately what he said in May 1994, which was then only six weeks after the event. He had possession then of the recording of the 4th Call and the Transcript. He could also have referred to those and cross checked whether or not what he said in those correspondence and the two affidavits were correct. Had he done so, he could have no difficulties recalling that the information was imparted to him in confidence, that Alison was talking to him on behalf of the Plaintiff and he agreed to act for the Plaintiff, etc. Despite he was fully aware of the existence of the recording and the Transcript, he deliberately withheld them from the Court and did not disclose them in his affidavits. His two Opposition Affidavit and Supplemental Affidavit were knowingly and deliberately false.
173. Erving prepared the Opposition Affidavit and Supplemental Affidavits for the purpose of objecting to the Plaintiff’s application for interlocutory injunction against him. He deliberately prepared them and knowing that they were false in material particulars. He knew it was wrong to do so. This is not by inference but by his own admission under cross-examination. He admitted that if what Alison said in her affidavits was true, and they were, he would not have acted for the Wife and if acted would have ceased to act. It was with all these knowledge that he submitted his two affidavits before Sears J, knowing that they were false but hoping that Sears J would act upon them to his benefit but to the detriment of the Plaintiff. He prepared the two affidavits in his capacity as a solicitor and officer of the Court. He must have realised that as such his affidavits would be given special weight by the Court. All these were done for the purpose of enabling him to continue to act for the Wife, which he knew was in breach of the solicitor’s code of conduct and would put him in the impossible position of conflict and breach of his duty of confidentiality owed to the Plaintiff as quasi-client. The inference which I may draw from his own evidence is that he had so used the information in breach of the duty of confidentially to assist the Wife. He must have known that the Plaintiff had a right to restrain him from so acting. He refused to cease to act for the Wife. He declined his insurers’ offer of a counsel of appropriate competence to represent him, but specifically incurred $250,000 instructing the late Mr Charles Ching QC, as he then was, to represent him to fight for such an unworthy cause. That reflects his real worry that his illicit motive may be exposed as well as his determination to achieve his unlawful end.
174. In summary, Erving committed a knowing breach of confidentiality against the Plaintiff with a view for gain. He covered up that breach with two false affidavits. He withheld the recording and the Transcript from the Court. He demonstrated his resolve in pursuing that breach by instructing super-weight counsel to defend his unworthy cause. He is an officer of the Court. He perjured and practised a fraud on the Court. If such conduct is not outrageous and contumelious disregard of the Plaintiff’s right, what else can? His conduct fits any of Lord Nicholls’ description in A v Bottrill.
The conduct - the bankruptcy proceedings
175. Naturally, Sears J acted on Erving’s affidavits, dismissed the Plaintiff’s application for interlocutory injunction with costs exceeding $375,000. The Defendants continued to act for the Wife. On the other hand, the Defendants commenced action against the Plaintiff in enforcing the costs order. Mr Mok SC seems to have regarded the Defendants’ conduct in enforcing the costs order as part of the outrageous conduct to justify an award of exemplary damages. If that is the purpose of his submission, I respectfully differ. A line must be drawn between what was done which constituted breach of duty of confidentiality and those acts which had nothing to do with that breach. The enforcement action had nothing to do with the breach of confidentiality. Nevertheless, it shows the resolve of the Defendants in perpetrating their ill-gotten gain. For that purpose it is relevant to take into account for the purpose of assessing the quantum of exemplary damages.
176. The Plaintiff was unable to pay the costs. Then Messrs Deacons, on behalf of both the insurers and the Defendants, obtained a charging order nisi over the matrimonial home. By obtaining the charging order, the Defendants placed themselves in a position of conflict of interest because, on the one hand, they owed duties as the Wife’s solicitors to protect her and the Daughter’s interest with respect to family assets but, on the other, they asserted their own interest in the matrimonial home by way of the charging order over it. Erving’s answer was that he had given an undertaking to the Wife not to enforce the charging order until after the conclusion of the ancillary relief proceedings.
177. On 2 April 1996, Messrs Deacons accepted Alison’s offer, on behalf of the Plaintiff, to pay the judgment sum by monthly instalments of $10,000. However, a week later, she reneged on that agreement as the Plaintiff could only pay $5,000. Messrs Deacons rejected the new offer on behalf of the Defendants, though the insurers were prepared to accept.
178. Then on 25 June 1996, the Defendants commenced bankruptcy proceedings against the Plaintiff. That was despite the insurers’ readiness to accept the monthly instalment of $5,000. The insurers did not support the institution of bankruptcy proceedings. Thus, the Defendants instructed their own solicitors, H&G in place of Messrs Deacons, to issue proceedings. Erving’s explanation was that there was no circumstance he would on behalf of himself or his partners forgo the $250,000 counsel fee paid and that the bankruptcy proceedings were a tactical move discussed and recommended by counsel.
179. With respect to his counsel, whoever he was, the bankruptcy proceedings further placed the Defendants in a position of conflict of interest because on the one hand, the Defendants were pursuing their own interest by trying to bankrupt the Plaintiff, but at the same time, any bankruptcy and the publicity of it would jeopardize the Plaintiff’s reputation and position as a barrister, preventing him from earning a livelihood as a barrister and affecting his continued ability to provide for his family, in particular the Daughter. Erving’s main reason for taking out bankruptcy proceedings was that it was nowhere expected the Plaintiff would allow himself to be made bankrupt and he had never considered the question of conflict of interest at the time.
180. Despite his dire financial situation, the Plaintiff pleaded with Messrs Deacons for the Defendants to accept payment of $5,000 per month. He tendered his first cheque of $5,000 on 16 May 1996 which was banked and then another. The bankruptcy notice was issued on 25 June 1996. Messrs Deacons rejected the Plaintiff’s third cheque on 15 July 1996. Then the Plaintiff succumbed to the threat of bankruptcy on 2 March 1997 and offered to pay $10,000 per month. The Defendants did not respond. In Court, Erving gave a very legalistic explanation that if the offer was made and it was not accepted, it was not acceptable and he did not have any recollection. That was ruthless. While in law Erving must be right that a counteroffer rejects the original offer, his attitude showed that he was not concerned with recovering the debt but with inflicting suffering and the indignation of bankruptcy to the Plaintiff.
181. On 22 July 1996, at the hearing of the Plaintiff’s application to stay the bankruptcy proceedings before Patrick Chan J, as he then was, his Lordship remarked that he wished the Wife to have independent advice before making conscious decision to retain the Defendants and to bear in mind the interest of the Daughter. It was only until then that Messrs Susan Liang & Co. replaced the Defendants as solicitors for the Wife. It was then revealed that even the Wife did not support the bankruptcy proceedings. In her affidavit dated 28 April 1998, the Wife said at the time she owed Erving costs to the tune of some $2 million. She had no money to pay and Erving was going to lien on the papers so it was impossible for her to change to another firm of solicitors but had to agree to Erving instituting bankruptcy proceedings.
182. Thus, on his own admission, Erving’s main reason for taking out the bankruptcy proceedings was to recover the $250,000 counsel fee paid for the purpose of resisting the Plaintiff’s application for interlocutory injunction which the Plaintiff would have been entitled to succeed had Erving not perjured in his two affidavits. Not only was Erving not entitled to be reimbursed those fees, he ought to have ceased to act for the Wife and paid the Plaintiff’s costs of the application and hearing before Sears J. Erving’s conduct was like that of a robber who, having robbed and wounded his victim, took exceptional steps to invoke the process of the court to recover the costs of the bullet used in inflicting the wound on his victim. Erving knew at the time he took out bankruptcy proceedings that the Plaintiff’s mental health condition was quite unstable. His conduct was extremely outrageous. The bankruptcy proceedings were taken out in blatant conflict of the Defendants’ own interest with that of the Wife who was their client. They were in fact not even supported by the Wife, the insurers and by one of the other partners of the 1st Defendant. This reflected the utterly unreasonable attitude of the Defendants. Mr Mok SC said that Erving embarked on a vendetta as vengeance for the Plaintiff’s application for interlocutory injunction. That is not precisely correct as Erving was the wrong doer in the first place and had no cause for revenge. It was persecution.
Whether Erving was responsible for the change in the course of the divorce proceedings
183. In his opening speech, Mr Mok SC suggested strongly that the Defendants made use of the confidential information in shaping the course of the divorce proceedings to the detriment of the Plaintiff. He said that since the Wife’s change of legal team, the Wife abandoned her previous stance of being prepared to vacate the matrimonial home and to resolve her differences with the Plaintiff, but embarked on a tactic of harassment by issuing the ouster proceedings and immediately demanding the Plaintiff to leave the matrimonial home in extremely acrimonious circumstances. He said knowing that the Plaintiff’s parents’ stance not to assist the Plaintiff in the divorce proceedings, the Wife’s legal team became more aggressive and demanding resulting in an extremely acrimonious, bitter and protracted court batter between the Wife and the Plaintiff. Having learned that the Plaintiff’s vulnerability lied with his prime concern for and devotion to the Daughter, the Wife’s team repeatedly exploited that by insisting on sole custody as a weapon to increase pressure on the Plaintiff to accede to the Wife’s demands and by obstructing the Plaintiff’s access to the Daughter in the course of the divorce proceedings as a tactic to create stresses and strain on the Plaintiff, dissipating his energy, attention and resources and distracting him from focusing on more important issues. He submits that the Defendants’ conduct contributed to the destruction of the Plaintiff’s health, incurring of medical expenses, substantial loss of income in the course of and consequential upon the protracted divorce proceedings and the depletion of the Plaintiff’s wealth through the loss of income, the burden of having to fund part of the divorce proceedings and the legal aid charge over his assets in respect of costs incurred when he became legally aided.
184. While Mr Mok SC is not relying on the course which the matrimonial proceedings took in support of a claim for compensatory damages, he relies on it as prove of Erving’s misconduct and the gravity of such misconduct in support of a claim for exemplary damages. If the Plaintiff succeeds in showing that Erving was responsible for changing the course of the matrimonial proceedings, he is entitled to very substantial exemplary damages even without showing how the Erving had used the confidential information to achieve that result. But, I think the Plaintiff has the same difficulties in proving Erving was responsible for shaping the course of the matrimonial proceedings just as he had in proving Erving used the confidential information in shaping the course of the matrimonial proceedings. There was a total absence of direct evidence in support of Mr Mok SC’s proposition nor is there sufficient factual basis for such an inference to be drawn. On a proper analysis of the evidence, I think it was the Plaintiff’s unfortunate behaviour which changed the course of the matrimonial proceedings. Like Deputy High Court Judge Gill, I regret to say, I have never found the Plaintiff an honest and credible witness. I also do not agree with Alison’s opinion that the Plaintiff had a strong appearance but was extremely gentle, soft and vulnerable like a jellyfish.
185. It is true that shortly after the issue of the divorce petition, the Wife’s stance was reconciliatory and she put the petition on hold. The parties appeared to have made some progress in resolving their dispute as at 2 May 1994. What happened between then and 27 May 1994 is unknown. The Plaintiff said on one occasion that he sought Erving’s advice because it appeared that the situation had turned difficult. Then over the night, he said there was progress and he cancelled the appointment with Erving to wait for what the Wife had to offer. Then two weeks lapsed without the Plaintiff making arrangement for another meeting with Erving. For reasons I have given earlier, I have never found the Plaintiff a credible witness.
186. On the other hand, during those two weeks, the Wife contacted Erving twice and instructed him on 24 May 1994. According to the Wife, she switched out of her concern for HWG’s costs. I could not doubt that. But, if settlement was within sight, I doubt very much if the Wife would have changed her solicitors out of costs consideration. HWG incurred no costs in the negotiation. Costs for drafting a settlement agreement could not have been in the way of a settlement. It would have been insignificant and could have been easily assumed by the Plaintiff, if he was at all earnest for a settlement. The probability was that the parties had come to a deadlock, litigation was on the agenda and costs became a real concern for the Wife. The situation was not as pacified as the Plaintiff would have me to believe. On the contrary, I find that the situation was very unstable.
187. Then came the news of the Wife’s mother’s hospitalisation on 27 June 1994, a month later. That was the turning point. The Wife wanted to take the Daughter to England to see her mother for the last time and asked the Plaintiff’s agreement. Erving prepared a consent summons to vary the terms of the consent order obtained previously to enable the Wife to take the Daughter out of Hong Kong. But the Plaintiff was hopelessly and despicably obstructive. He said that he was unable to accept Erving acting for the Wife and would not wish to prejudice his objection by signing the consent summons prepared by the Defendants. He said that what he did was on proper legal advice from a judge of the Family Court which he obtained through his brother-in-law who is a District Judge. It is not known what story he told his brother-in-law, but I am utterly unable to believe the Plaintiff’s evidence. I, for one, would not have so advised. If the Plaintiff wanted to avoid prejudicing his objection to Erving’s acting for the Wife, he could have stated that in a letter to Erving or, better still, get Erving to sign an acknowledgement to that effect as a condition for his signing the consent summons. It must be the nature of any family law judge to keep acrimony in a divorce to the minimum. The mother-in-law was dying. The Wife was also “dying” to take the Daughter to see her mother for the last time. It would have been most unprofessional for a lawyer to advise his client to take advantage of the situation to hold a dying woman at a ransom. It is unthinkable that any family law judge could have advised him to take such a course. It was most inhumane even for a divorcing husband to add unnecessary burden to the wife at her time of grief. I think the Plaintiff did so just for the gratification that he was able to prevent Erving from acting for the Wife, an absolutely despicable motive. To justify what he did, he even put the Judiciary into disrepute by his exaggeration in Court. He is a hopelessly incredible witness.
188. The Plaintiff refused the very simple request of putting his signature on a consent summons. Instead, he made the Wife spend three hours with him over a draft agreement at the time of her extreme grief. I do not think that agreement was achieved happily without any dispute or any sense of grievance from the Wife. Then, on the following morning, while the Plaintiff was enjoying his triumph over Erving and dragging the Wife’s sorrowful soul as his prize into HH Judge Surman’s chambers to obtain the variation order, unknown to him, though known to the Wife, the Wife’s mother had passed away. Even if he had signed the consent summons, the Wife could not have seen her mother. But, what he did was extremely despicable and damaging to the unstable relationship. He said that he drove the Wife to the airport and kissed her goodbye in very amicable manner. Again, I do not believe that parting was a sweet one as he described. This is because when it turned out that the Wife could not fly that day, she dared not return home but stayed with a friend for the night for fear that the Plaintiff would not let the Daughter leave now that the mother-in-law had already died. That was what the Plaintiff was in the eyes of the Wife. That confirmed again that his relationship with the Wife was not as reconciliatory at the time as he had me to believe. It was very unstable and he made it worse. He cannot blame the Wife for being unforgiving and for changing her stance after that incident. The incident also revealed the Plaintiff’s true character as a very selfish, difficult and uncompromising person.
189. While still in England, the Wife instructed Erving to proceed with the divorce and wrote to the Plaintiff by registered mail informing him the same. That letter was not produced by the Plaintiff. But in the 1st Defendant’s letter to the Plaintiff, Erving wrote that he was instructed by the Wife that she decided to proceed with the divorce because she found it difficult to cope with the death of her mother and the Plaintiff’s unfortunate behaviour over the Variation Order Incident had not helped. The urgency with which the Wife instructed Erving to proceed and Erving’s letter said it all. The Wife must have had enough of this difficult and uncompromising man and turned her grief into anger. The proceedings were resuscitated and became acrimonious probably because of the Plaintiff’s unfortunate behaviour rather than Erving’s conduct. There was every reason for the Wife to change her stance of willing to vacate the matrimonial home, if ever that had been her stance. In the light of the circumstances, I am unable to draw any adverse inference against Erving. Had the Plaintiff not been obstructive, the adverse inference might be drawn. Perhaps, had the Plaintiff been more comforting to the Wife, accompanied her to England and lent her his shoulders to cry on, the divorce proceedings might have been saved or amicably resolved. If despite that, the divorce proceedings took the course it took, I would point my finger at Erving. But this is not the case.
190. Then, came the meetings on 14, 17 and 18 September 1994. The Plaintiff’s parents took away the Wife’s and Plaintiff’s wedding gifts on 14 September 1994. On 17 September 1994, the Plaintiff’s parents came and had three hours’ unpleasant argument with the Wife over finances and custody of the Daughter. There was another confrontation on 18 September 1994. Out of fear, the Wife left the matrimonial home. When she returned later that afternoon with Erving, there was another confrontation which resulted in the Wife leaving the matrimonial home, despite she had a non molestation order against the Plaintiff. On all those four occasions, the Wife was outnumbered by the Plaintiff’s family and friends. The Wife and Erving could not be said to be the aggressive party on those occasions. The Plaintiff with the support of his family and friends were responsible for raising the temperature of an already very unstable relationship. The Plaintiff’s conduct was not reconciliatory. The ouster order was the only appropriate remedy for the Wife to ask for.
191. The ouster proceedings were fought vigorously for six days to the bitter end but un-meritoriously as reflected by the Plaintiff’s capitulation during counsel’s closing submission. Why did he take six days to contest an application which he has no defence? He was responsible for the acrimony. The ancillary relief proceedings were fought even more vigorously and bitterly for seven weeks. The Plaintiff lost on all, except the medical issues. Any acrimony arising from the ouster proceedings and the ancillary relief proceedings was largely the Plaintiff’s own making. As for the custody issue, it had all along been the Wife’s intention to have custody and care of the Daughter before Erving entered into the scene. In the end, the Plaintiff cannot really blame Erving for the course the matrimonial proceedings took. He was the creator of his own misfortune. But, if Erving did not have the confidential information, it would have made some difference.
Whether Erving was responsible for the destruction of the Plaintiff’s health
192. As to the question whether the use of the confidential information has resulted in the destruction of the Plaintiff’s health and incurring of medical expenses, I think the answer lies in whether the divorce proceedings had become unnecessarily and disproportionately acrimonious, protracted and costly as to result in the destruction of the Plaintiff’s health. With or without Erving’s intervention, the Plaintiff had a divorce to deal with and a drug problem induced by the Wife. According to Dr Hong, the Plaintiff was suffering from drug dependency and depression in April 1994. His condition might have been aggravated by the divorce proceedings. But, the proceedings became unnecessarily and disproportionately acrimonious and protracted mainly because of the Plaintiff’s obstinate handling of the Variation Order Incident, his family’s confrontation with the Wife in September 1994, his un-meritorious defence in the ouster proceedings and his lies about the family assets in the ancillary relief proceedings. It would be unfair to hold Erving responsible for what the Plaintiff did to himself which resulted in the destruction of his health and occasioned medical expenses. Anyway, the Plaintiff had been awarded compensation for the medical issue in the amount of $497,000 by Deputy High Court Judge Gill against the Wife in the ancillary relief proceedings. There is no reason for a double award.
Loss of income and depletion of wealth
193. The Plaintiff claims loss of the time and income which he could have earned as a barrister in order to attend to the matrimonial and various other consequential proceedings. I find that ridiculous and reflective of the unreasonableness of the Plaintiff throughout his conduct of these proceedings. So far as the divorce proceedings are concerned, he had a divorce and had to deal with it. He cannot claim any loss of time for having to attend to those proceedings, even if he were successful and awarded costs, not to mention he was not. He had a non molestation order made against him. Then his family members confronted the Wife in September 1994. Those meetings were very confrontational. The Wife was outnumbered which made it necessary for her to quit the matrimonial home with the Daughter. Presumably, it was the cumulative effect of the Plaintiff’s conduct which necessitated the non molestation order, the Variation Order Incident and those confrontations in September 1994 which made it necessary for the Wife to apply for the ex parte ouster order and not Erving’s intervention. The ouster proceedings were fought bitterly for six days ending with the Plaintiff’s capitulation during the course of counsel’s final submission. That reflects the Plaintiff really had no reason to contest the application. It was he who caused acrimony and wasted costs. The ancillary relief proceedings were fought bitterly for seven weeks. The Wife lost on the medical issue, but the evidence of the Plaintiff and his whole family on financial matters was almost entirely rejected by Deputy High Court Judge Gill. The Plaintiff and the Wife were to blame for the time and costs in those proceedings, not Erving.
194. Taking an overall view, I do not think the Plaintiff is entitled to claim for his time wasted in the matrimonial proceedings and these proceedings other than costs which he is entitled and the exemplary damages which I shall award.
Quantum of exemplary damages
195. Erving was in clear and deliberate breach of duty of confidentiality owed to the Plaintiff with a view to gain for himself. His conduct, for which the 1st Defendant is also liable, was so outrageous and such a contumelious disregard of the Plaintiff’s right that the Court must show its disapproval by awarding damages over and above that which would have been adequate to compensate the Plaintiff for his loss. Despite my some unfavourable finding against the Plaintiff, he is, in my view, entitled to exemplary damages against the Defendants.
196. Mr Mok SC referred me to a number of decisions on quantum. In Choy Bing Wing v Ng Yat Chi HCA 6115/1988, Jones J awarded a combined award of compensatory and exemplary damages in the amount of $2.5 million for the defendant’s libel of the plaintiff engineer in the form of a letter that was widely published in Hong Kong and Beijing. In Warham v Cathay Pacific Airways HCMP 4400/2001, Reyes J awarded $3 million general damages for libel which cast aspersions on the plaintiff pilot’s professionalism and employment record, and an additional sum of $300,000 of aggravated damages for the defendant’s refusal to apologise. In Chu Sik Kuk Yuen v Apple Daily Ltd and others [2002] 1 HKLRD 1, a solicitor was awarded $3 million for being alleged to be a thief. As a result of the publication against her, she suffered depression and gave birth to a premature child. The factual circumstances in those decisions are wholly different from the circumstances in the present case. I shall approach the assessment from basic principles, adopting the considerations in Whiten v Pilot Insurance Company.
197. The conduct relating to the breach of confidentiality was outrageous. It was particularly blameworthy having regard to all the circumstances of this case. Erving is a solicitor and officer of the Court. He made two affidavits which were deliberately and knowingly false for the purpose of gain so that he could continue acting for the Wife. He pledged his status as a solicitor and officer of the Court. He desired his affidavits to be acted upon and was so acted upon by Sears J. He had already breached his duty of confidentiality owed to the Plaintiff by acting for the Wife thus far. He knew if he acted for the Wife, he would place himself in an impossible position of conflict and would be duty bound to commit further breaches of duty of confidentiality by using the confidential information in the course of acting for the Wife. He nevertheless presented the two affidavits knowing full well of the consequences. He knew full well the harm his knowledge and use of the confidential information would cause the Plaintiff. The solicitor is a person on whom the public impose trust and confidence. The trust and confidence which the public has in the legal profession should not be allowed to erode. With a view to gain, he breached his duty of confidentiality and in total wanton disregard of the Plaintiff’s right. He covered up that breach with his two affidavits. He perjured and practised a fraud on the Court. Then, in a most high-handed manner, he instituted bankruptcy proceedings against the Plaintiff in blatant conflict of interest with his client and knowing of the Plaintiff’s then unstable mental health condition. These facts cry out for deterrence.
198. On the facts of the present case, I consider the profits made by the Defendants plus an additional sanction element an appropriate starting point, if no other form of retribution is available. Erving is a solicitor. He perjured and practised a fraud on the Court. He was in serious and knowing breach of duty under the solicitors’ code of conduct. It is appropriate that the Law Society should take a very serious view against such misconduct and commence disciplinary proceedings against him. Having also regards to the conduct of the Plaintiff, I think the balance lies in favour of retribution by way of disciplinary proceedings more than a windfall award to the Plaintiff by including the additional sanction element in the exemplary damages award. I shall include the following three elements in determining the starting point: (1) the profits the Defendants made from acting for the Wife; (2) the costs the Defendants were awarded in successfully defending the interlocutory injunction application and the costs they should have paid the Plaintiff; and (3) the miscellaneous costs orders the Defendants were awarded in the bankruptcy proceedings and charging order over the matrimonial property. In lieu of the sanction element, I shall give direction to the Law Society to institute disciplinary proceedings against Erving.
199. According to the judgment of Deputy High Court Judge Gill, the wife spent $2.38 million in costs in the matrimonial proceedings. On a rough assessment, I assume half of those costs represented the Defendants’ gross profits while the other half represented counsel’s fees and disbursements. Part of the gross profit might have been properly earned by the Defendants in fighting the unreasonable part of the Plaintiff’s case. However, the Defendants should not have acted for the Wife in the first place and should not keep those profits which they might have earned without impropriety. Thus, the Plaintiff shall be awarded $1.19 million in respect of the costs which the Defendants earned from acting for the Wife. The Defendants might not have recovered those costs, but I am not going to take that into account.
200. The Plaintiff was ordered to pay $375,000 to the Defendants as their costs of the interlocutory injunction application. Presumably those costs have now been paid with interest. In addition, he was made to incur his own costs which had never been taxed. His own costs would have been much less as I do not think his counsel’s fees would be anywhere near those of the late Mr Charles Ching QC’s. To save time and costs of taxation, I would award the Plaintiff the like amount, any surplus would be treated as an additional element of punishment to the Defendants. I shall include in the exemplary damages an award of $750,000 with interest from 29 November 1995, the date of the order of Master O’Donnell ordering the Plaintiff to pay the agreed costs of the interlocutory injunction application. Had the Plaintiff wished to prove compensatory damages, he would have been able to prove the above damages at least as part of his loss. He did not. It is just as appropriate for me to include that in the exemplary damages to be awarded.
201. I shall also allow a notional sum of $200,000 for the Plaintiff’s costs in the bankruptcy proceedings and costs incurred in the charging order over the matrimonial home. Any surplus shall be treated as an additional element of punishment to the Defendants. Any deficit shall be borne by the Plaintiff as being the result of the obstructive way he conducted those proceedings.
202. For the above reasons, I arrive at a starting point of $2,140,000 (i.e. $1,190,000 + $750,000 + $200,000). I could find no mitigating circumstances in favour of the Defendants. I therefore assess exemplary damages in the amount of $2,140,000.
CONCLUSION
203. Accordingly, I make an award of exemplary damages in the amount of $2,140,000 together with interest in favour of the Plaintiff against the 1st and 2nd Defendants jointly and severally. The Defendants shall pay interest at judgment rate on the capital sum of $1,390,000 (i.e. $1,190,000 + $200,000) with effect from 28 October 1994 and on the capital sum of $750,000 with effect from 29 November 1995 until payment. The Defendants shall pay the Plaintiff’s costs in this action on indemnity basis, to be taxed if not agreed. The Plaintiff’s own costs shall be taxed in accordance with Legal Aid Regulations.
204. In addition, I give direction to the Law Society to commence disciplinary proceedings against the 2nd Defendant and to consider removing him from the roll of solicitors. The punishment might appear heavy for a first time and one off misconduct, but nothing less would have been adequate for misconduct of such a gravity involving perjury and fraud on the Court by its own officer. And after all, by some fortuitous events, he had the punishment suspended by 16 years already.
205. Lastly, I thank counsel for their well researched arguments as to the law and for their detailed analysis of the facts which they unearthed after 16 years. Both counsel were under tremendous pressure because of the seriousness of the case. They discharged their unenviable burden with outstanding competence and uncompromising vigour. I apologise for the time taken in deliberation.
|
( Anthony To )
Judge of the Court of First Instance |
Mr Johnny Mok SC, instructed by Messrs Hampton, Winter & Glynn assigned by Legal Aid Department, for the Plaintiff
Ms Selina Lau, instructed by Messrs Erving Brettell, for the Defendants
Please refer to CACV13/2011 for the relevant appeal(s) to the Court of Appeal.
Please refer to CACV13/2011 for the relevant appeal(s) to the Court of Appeal.
Please refer to CACV13/2011 for the relevant appeal(s) to the Court of Appeal.
|