NG CHIU MUI AND ANOTHER v. ROBERTSONS (a firm of Solicitors)

HCA 1166/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1166 OF 2010

____________

____________

________________

J U D G M E N T

________________

Introduction

1.  This is an action in negligence brought by the plaintiffs (“Connie” and “Yee”) against their former solicitors (“Robertsons”) who was retained to advise and represent them at a review hearing in application number SFAT 7/2007 and SFAT 8/2007 before the Securities and Futures Appeal Tribunal (“Tribunal”) on 15 and 16 April 2008.  They claim special damages in the amount of $20,699,096.65 and general damages to be assessed.

Dramatis personae

2.  Hantec Holdings Investment Ltd (“Hantec Holdings”) is a company listed on the Hong Kong Stock Exchange, stock code 111.  It is the holding company of Hantec International Ltd (“Hantec International”) and Hantec Bullion Investments Limited (“Hantec Bullion”).  Hantec Holdings and its subsidiaries are collectively referred to as “the Hantec Group”.  The Hantec Group was acquired by China Cinda Asset Management Corporation (“China Cinda”) in late 2008.  Hantec Holdings changed its name to Cinda International Holdings Limited in January 2009, together with a change in its management.

3.  Hantec International is a registered foreign exchange broker licensed by Securities and Futures Commissions (“SFC”) and other entities to carry out Type 3, ie leveraged foreign exchange trading and other regulated activities.  Following the acquisition, Hantec International changed its name to Cinda International FX Limited together with a change in its management.

4.  Hantec Bullion owned 30% interest in Cosmos Hantec Investment (NZ) Limited (“Cosmos Hantec”).  Cosmos Hantec was incorporated in New Zealand and carried on business in leveraged foreign exchange trading.  It was not registered with SFC.

5.  The 1^st Plaintiff, Connie, is the wife of the chairman of Hantec International.  At the material times, she was a director of Hantec Holdings, Hantec International, Hantec Bullion and Cosmos Hantec and a responsible officer of a licensed corporation approved by SFC (“Responsible Officer”) in respect of Hantec International.  Upon the acquisition of the Hantec Group, she ceased to be a director of Hantec International.

6.  The 2^nd Plaintiff, Yee, was a director of Hantec Holdings and Hantec International.  He was also a Responsible Officer in respect of Hantec International.  He was responsible for business development of the Hantec Group in the People’s Republic of China.  He travelled a lot and seldom stayed in the office.  After the acquisition, he ceased to be a director of Hantec International. 

7.  Shum Lik Keung Phil (“Shum”) and Lo Cho Yan Jasper (“Lo”) were marketing directors of Hantec International. 

8.  Andrew Law & Franki Ho (“A&F”) is a firm of solicitors which acted for the Plaintiffs during the aforesaid investigation by SFC before Robertsons were retained by the Plaintiffs.

9.  Mr Barry Hoy (“Barry”) and Ms Li Chung Nam (“Nam”) are partners of Robertsons and handling solicitors for the Plaintiffs in SFAT 7/2007 and SFAT 8/2007.  At the material time, Nam was an assistant solicitor working under the supervision of Barry.

The background

10.  In 2005, SFC was investigating into a complaint that representatives of Hantec International had been inducing the public to open accounts with Cosmos Hantec to trade in leveraged foreign exchange contracts.  On 2 March 2005, SFC conducted a raid on Cosmos Hantec’s premises and seized some documents.  At the time, Cosmos Hantec maintained a liaison office in the same building as Hantec International.  Following the raid, Cosmos Hantec moved its operation to Macau.  In May 2005, a cocktail party was held in Macau to celebrate the opening of Cosmos Hantec’s Macau office. Senior management and department heads of Hantec International, including the Plaintiffs, attended the party. 

11.  In May and June 2005, SFC interviewed a number of witnesses, including Shum and Lo.  Shum and Lo alleged in their records of interview that following the cocktail party, officers of Hantec International had a meeting in the office of Cosmos Hantec (the “Macau Meeting”).  They further alleged that at that meeting the Plaintiffs informed the department heads that Cosmos Hantec had been established as an additional line of business for the Hantec Group and that staff of Hantec International might solicit clients for Cosmos Hantec and receive commissions from Cosmos Hantec through a nominee. 

12.  Connie was interviewed by the SFC twice in July and August 2005.  Yee was interviewed by SFC in September 2005.

13.  SFC formed the view that Cosmos Hantec had been carrying on the business of leverage foreign exchange trading within Hong Kong without licence; and that the Plaintiffs were guilty of misconduct and were not fit and proper persons to be licensed as Responsible Officers.  On 5 July 2007, SFC issued Notices of Proposed Disciplinary Action (“Notices”) to the Plaintiffs, proposing a life ban against Connie and a three years suspension against Yee from being a Responsible Officer. 

14.  The Plaintiffs engaged A&F to represent them at the hearing of the Notices before the SFC.  However, A&F failed to file the Plaintiffs’ two written Chinese statements responding paragraph by paragraph to SFC’s allegations in the Notices (the “Chinese Statements”) and A&F’s submission or explanation on behalf of the Plaintiffs (“A&F’s Submission”) with SFC. There was no representation on behalf of the Plaintiffs before SFC.  As a result, SFC entered Notices of Final Decision (“Decisions”) against the Plaintiffs on 7 September 2007 confirming the penalties stated in the Notices. The Decisions set a deadline for the Plaintiffs to submit application for review to the Tribunal on 27 September 2007.  In the meantime, the investigation against Hantec International was stayed pending the outcome of the action against Connie and Yee. 

Chronology of this action

15.  The Plaintiffs decided to engage a fresh firm of solicitors to represent them.  They contacted Hantec Investment’s in-house counsel who referred the matter to its solicitors, Richards Butler.  Because of potential conflict of interest between Hantec Investment and the Plaintiffs, Richards Butler referred them to Robertsons on 18 September 2007.  Among the documents handed over to Robertsons were the Plaintiffs’ two Chinese Statements and A&F’s Submission.

16.  An urgent meeting was held at the office of Robertsons on 19 September 2007 between the Plaintiffs, Barry and Nam.  Connie explained the circumstances in which A&F failed to submit the Plaintiffs’ two Chinese Statements and A&F’s Submission to SFC which resulted in the issue of the Decisions. It is the Plaintiffs’ case, which is disputed by Robertsons, that at this meeting Connie instructed Robertsons to file the Plaintiffs’ two Chinese statements and A&F’s Submission.

17.  On 20 September 2007, each of the Plaintiffs signed retainers formally instructing Robertsons.  As the proceedings then stood, the Plaintiffs only left Robertsons with eight days to view the voluminous documents and prepare and file the grounds of review by 27 September 2007.  Thus, the first step Robertsons had to take was to apply to the Tribunal for an extension of time to file the notices of review and grounds of review.  On 25 September 2007, Nam appeared on behalf of the Plaintiffs at the hearing of the applications.  The Chairman of the Tribunal, Mr Justice Stone, granted an extension of 21 days until 16 October 2007 for the Plaintiffs to file notices of review.  

18.  At the same time, Barry and Nam started drafting the grounds of review.  Barry formed the view that A&F’s Submission and the two Chinese Statements in response to the Notices were inappropriate for the purpose of the review as the Decisions had already been issued.  He was of the opinion that the Plaintiffs had to identify to the Tribunal areas where SFC had fallen into error or had been unfair either in the process of its investigations or in the conclusions it drew from the investigations.  In particular, Barry considered A&F’s Submission which contained strong and emotive language making allegations of bad faith and improper motives on the part of SFC were unlikely to find favour with the Tribunal and that the allegations of bad faith was unsupported.  On 11 October 2007, Barry and Nam finalised the grounds of review containing nine separate grounds.  As shown in the contemporaneous correspondence, the Plaintiffs, particularly Connie, actively participated in the drafting exercise with the help of Hantec International’s in-house counsel.  The notices of review and grounds of review were duly filed on 16 October 2007.

19.  On 22 October 2007, Robertsons had a second meeting with the Plaintiffs during which they discussed strategy in the review.  With the Plaintiffs’ agreement, Robertsons wrote to Mr Yeung of counsel seeking quotation of his fees and provided him with documentations, including the Decisions, the application for review, the grounds in support, the two Chinese Statements and other witness statements.  The parties are in dispute as to whether during this meeting Barry had advised the Plaintiffs whether to testify at the review hearing and whether the Plaintiffs confirmed that they did not wish to testify. 

20.  On 24 October 2007, Robertsons instructed Interlink Translation Consultancy Services (“Interlink”) to prepare translation for seven Chinese statements, which did not include the two Chinese Statements.  On that day, the Plaintiffs agreed to Mr Yeung’s fees.  Mr Yeung was formally instructed to advise and represent the Plaintiffs at the review hearing.

21.  On 25 October 2007, Nam had a telephone conversation with Mr Yeung about the review.  Mr Yeung expressed his view that it would be difficult to succeed on the credibility point, ie disputing the evidence of witnesses of SFC, and suggested a possible argument based on jurisdictional ground.

22.  On 30 October 2007, Barry represented the Plaintiffs at a directions hearing before the Tribunal.  The possibility of consolidation of SFAT 7/2007, SFAT 8/2007 and SFAT 9/2007 was discussed.  SFAT 9/2007 was a review in respect of another account executive of Hantec International, Elke Tang. The Chairman gave directions for the conduct of the review, including a direction that witness statements, if any, were to be served on SFC and the Tribunal by 18 January 2008 and that the hearing bundle be served by 1 March 2008.  The Chairman made it clear that no weight would be given to any witness statement without its maker being called at the review hearing.  In reply, Barry informed the Tribunal that the Plaintiffs would call seven witnesses. This, Barry said, was to preserve the Plaintiffs’ right to give evidence and not to give away their litigation strategy to SFC.

23.  On 31 October 2007, Nam wrote to the Plaintiffs to report about the directions hearing.  The Plaintiffs disputed that Nam had informed them of the Chairman’s directions that if they did not testify, their witness statement would be given no weight. 

24.  On 6 November 2007, Robertsons wrote to the Plaintiffs about consolidation of SFAT 7/2007, SFAT 8/2007 and SFAT 9/2007, enclosing a transcript of the directions hearing. 

25.  On 13 December 2007, Mr Yeung issued a written legal advice on the merits of the review.  The advice was very comprehensive  consisting of 28 pages.  His conclusions were:

(1)   it was reasonably arguable that SFC has committed a clear error when concluding that Cosmos Hantec had carried on a business in leveraged foreign exchange trading in Hong Kong;

(2)   it was not unarguable that the evidence of Shum and Lo, taken as they stood, do not support the conclusion that the Plaintiffs had been aiding and abetting any unlicensed activities of Cosmos Hantec; and

(3)   the Plaintiffs have a reasonably arguable case on penalty.

Mr Yeung suggested removing two of the grounds of review and expressed that he was not optimistic about another two grounds.  He proposed inclusion of a jurisdictional ground that Cosmos Hantec had not actively marketed leverage forex trading to Hong Kong public and hence Hantec International, was not in breach of section 115, which governs the application of section 114 to conduct or activities outside Hong Kong (the “section 115 ground”).  A copy of the advice was forwarded to the Plaintiffs on 24 December 2007.

26.  On 14 December 2007, Mr Yeung and Barry agreed on a final draft amended grounds of review containing the section 115 ground.  The draft amended grounds was circulated to the Plaintiffs on 8 January 2008.    

27.  Between 11 January 2008 and 4 February 2008, there was some debate between Connie and Nam about the desirability of including the section 115 ground which led to Connie requesting on 17 January 2008 a conference with Mr Yeung.  However, after some discussion, the Plaintiffs agreed to include the section 115 ground.  Subsequently, no conference was held. 

28.  On 1 February 2008, SFC wrote to Robertsons and A&F in relation to Elke Tang’s application for review, enclosing a draft index of the agreed bundle of document and copies of 32 new documents.

29.  On 20 February 2008, Robertsons filed the amended grounds of review for the Plaintiffs including the section 115 ground.

30.  On 27 February 2008, Nam drew Barry’s attention to the 32 new documents inserted into the agreed bundle of documents by SFC which had not been relied upon by SFC in their Decision.  Those new documents concerned Cosmos Hantec’s unlicensed activities in Hong Kong.  Despite repeated objections from Robertsons, SFC insisted to include the new documents in the bundle for the Tribunal.

31.  On 7 March 2008, Robertsons reported to Connie and Yee about the 32 new documents and noted:

“We are in the meantime liaising with the SFC with regard to their intent to include additional documents to the Hearing Bundles. Under section 219 of the SFO, [the Tribunal] is entitled to consider any materials related to the case …”

32.  On 20 March 2008, Connie wrote to Nam asking for updates from SFC or Mr Yeung.  She also enquired if she and Yee need to attend the review hearing on 15 and 16 April 2008 and if Mr Yeung had thought about what to ask Elke Tang.

33.  On 9 April 2008, Connie, Yee, Barry and Nam had a meeting to discuss about the review hearing, in particular about the written submission on behalf of Elke Tang.  In discussing about Elke Tang’s decision not to give evidence at the review, Barry mentioned that the Tribunal would attach no weight to her witness statement.  Connie and Yee indicated that they were happy with Robertsons’ preparatory work and said nothing about wanting to give evidence themselves.

34.  The review was heard on 15 and 16 April 2008.  On the first day, the Chairman dealt with the section 115 ground as a preliminary issue, but remarked that irrespective of the legal arguments he expected the Plaintiffs on a review to give evidence.  He also admitted the 32 new documents and offered Mr Yeung an adjournment to take instruction if necessary.  But Mr Yeung declined the offer.  On the second day, Mr Yeung consented to Shum’s witness statement to be admitted without requiring him to be tendered for cross-examination.  The Chairman made some remarks about the Plaintiffs’ decision not to testify and not to cross-examine Shum.  The Plaintiffs complain that at that stage Robertsons should have sought an adjournment to take instruction and reconsider whether to advise the Plaintiffs to testify. 

35.  While the preparation and the hearing of the application for review was on-going, senior management of the Hantec Group, including Connie’s husband, was in active negotiation with China Cinda for the sale and purchase of the Hantec Group.  The sale and purchase was completed towards the end of 2008 after the review hearing but before the issue of the determination of the Tribunal (“Determination”).  At that time, the investigation against Hantec International was still pending.

36.  On 15 May 2009, the Tribunal issued the Determination. The Chairman dismissed the review but reduced the sentences imposed on Connie to a suspension of 10 years from being a Responsible Officer of a licensed corporation and that imposed on Yee to a suspension of 2 years and 3 months. By the time of the issue of the Determination, the acquisition of the Hantec Group by China Cinda was completed.

37.  On 20 May 2009, at Connie’s request, Robertsons instructed Mr Yeung to advise on the merits of appealing the Determination to the Court of Appeal. 

38.  A week later, a meeting was held between the Plaintiffs, Barry, Nam and a representative of the Hantec Group, now under the management of China Cinda.

39.  On 12 June 2009, Messrs Lawrence KY Lo & Co took over the case from Robertsons and filed notices of appeal against the Determination.

40.  On 22 June 2009, Lawrence KY Lo & Co formally informed Robertsons that they had taken over the appeal.  On the same day, Connie sent a email to Barry and Nam thanking them for Robertsons’ work for the past two years and hoping that they could understand the Plaintiffs’ position, by which she must be referring to the change in management of the Hantec Group and instructing Lawrence KY Lo & Co in the appeal.

41.  The Plaintiffs’ appeals to the Court of Appeal were dismissed on 26 May 2010.  Two months later, they commenced the present action.

42.  On 2 August 2010, SFC issued an announcement that it resolved the compliance issues with Hantec International by issuing reprimands and a fine of $4 million.  The announcement noted the acquisition of the Hantec Group by China Cinda and attributed the non-compliance to the failure of the former management of the Hantec Group which had been replaced.

SFC’s case against the Plaintiffs

43.  SFC’s case against Connie was that she aided and abetted the unlicensed activities of Cosmos Hantec.  The evidence relied on by SFC was her control of the transfer of the funds of Cosmos Hantec under the Overseas Investment Management Department of Hantec Holdings; two emails seized at the office of Cosmos Hantec involving her; and the allegations of Shum and Lo of what she said at the Macau Meeting.

44.  In her record of interview with SFC, Connie said that her main duty with Hantec International was strategic coordination, discussing credit facilities with banks, managing quotation systems of the dealing room and attending seminars.  As for Cosmos Hantec’s fund transfer, she explained that as one of Cosmos Hantec’s director she was appointed to watch over its fund clearance matter.  She just followed Cosmos Hantec’s instructions to sign the documents to effect the fund clearing work and had no knowledge of the nature of the underlying transfer.  As for the emails, she said what she did was to amend the minutes of a meeting for the management of Cosmos Hantec at the request of Chan Kwok Sung, presumably representing management of Cosmos Hantec. As for the Macau Meeting, Connie said that after attending the cocktail party, she and staff of Hantec International attended a meal gathering organized by Cosmos Hantec, after which she left for Hong Kong.  She denied there was the Macau Meeting.

45.  SFC’s case against Yee was that he encouraged licensed representatives of Hantec International to participate in the unlicensed activities of Cosmos Hantec.  The sole evidence against him is the allegations of Shum and Lo of what he said at the Macau Meeting.

46.  In his record of interview with SFC, Yee admitted attending the cocktail party in Macau.  He said that, at the suggestion of Connie, he introduced his business in the Mainland to his colleagues but mentioned nothing about the business of Cosmos Hantec.

The Determination of the Tribunal

47.  The Chairman expressed interest in the section 115 ground and dealt with it as one of the preliminary issues, but in the end dismissed it.  The Chairman admitted the 32 new documents, ruling that the sole benchmark for admissibility is intrinsic fairness of the procedure.  He offered Mr Yeung an adjournment to take instruction, if he wished, but Mr Yeung declined. The Chairman dismissed all the grounds of review as unsubstantiated attacks on the allegedly unfair methodology and incorrect inferential conclusions drawn by the SFC.  He dismissed the review but reduced Connie’s suspension to ten years.

48.  The Chairman commented adversely on the Plaintiffs’ failure to respond to the Notice as if he had no knowledge of the default by A&F.  He also drew adverse inference against Connie’s failure to testify in the review.  The Chairman said at §83-84:

“83. After carefully considering all the arguments, however, and despite the obvious effort which has been put in by the legal advisers, I am unable to see anything of substance in these arguments, bearing in mind particularly my earlier observation to the effect that, in the absence of viva voce evidence by the applicant, who is in the best position to know what did or did not occur and to testify to the same on oath, I see no reason to construe such material as was available in a manner favourable to the applicant, and, perhaps more significant, I can see no basis whatever for the criticism lavished upon the regulator in coming to the view that it did.

84. It seems to me that in this situation, unless it can be shown – which in my view in these two instances it cannot – that the regulator is plainly wrong in coming to its conclusions in light of the available materials, bearing in mind that such conclusions are untrammelled by any positive contrary testimony on behalf of the applicant, or that the material which has been evaluated cannot reasonably support the inference/conclusion as drawn, then in my view there is and can be no proper basis for review intervention by this Tribunal; to the contrary, for what it be worth, the clear probability is that the SFC, qua reasonable regulator acting in good faith, in fact drew wholly appropriate conclusions/inferences from the data available to it, including the various records of interviews.”

49.  In respect of the fund transfer, the Chairman said at §85:

“85. …However, as Mr Beresford has pointed out, the unchallenged evidence is that Connie Ng, as director of [Cosmos Hantec] and head of the Overseas Management Department of Hantec Holdings, was approving these transactions on a daily basis, and the hard fact remains that as a Director and Responsible Officer of [Hantec International] she clearly failed to stop the unlicensed activities.

86. Ms Ng appears to have been the only person in Hong Kong responsible for its activities (her husband, Y L Tang, the Chairman of the Hantec Group, having disclaimed all knowledge of CHI’s operations subsequent to its establishment), and I think it fair to conclude, as Mr Beresford submitted, that taken as a whole the available evidence – including that of Mathew Ng and YH Lee, together with the documents as were seized on 2 March 2005 – tend clearly to demonstrate that her involvement in CHI’s business affairs indeed was substantial, and that it certainly was open to the SFC to find that her claim that she did not know about and was uninvolved in CHI’s unlicensed activities not to be credible.”

50.  In respect of Yee’s review, the Chairman said at §§115-117:

“115. I have carefully considered all of these matters, and, absent representation in response to the [Notice], and evidence from the applicant himself, I am wholly unable to conclude that the SFC has acted incorrectly in coming to the view that it has in terms of liability.

116. With respect, the forensic strategy as implemented in Mr Law’s application struck me as doomed to failure. In my judgment it was open to the regulator to take the view that it took, and it is not the function of this Tribunal to second guess the conclusions of the SFC on the issues of concern that were raised on the basis of the assembled evidence.

117. It seems to me, with respect, that the content of the Amended Grounds as filed to underpin Mr Law’s application for review may have contained possibilities for further inquiry, and possibly even potential for success given the nature of the evidence adduced against him, but in the absence of any response whatever from Mr Law, whether sworn or unsworn, at any time subsequent to the [Notice], I fail to see how the Tribunal now can act on these grounds without, in effect, second guessing the SFC, which over the past years is a course this Tribunal consistently has declined to adopt – save, of course, in instances in which it can be shown, and shown clearly, that the regulator is in error or is plainly wrong, which in my judgment is not the case in this instance; in fact, looking at this matter largely and liberally I should have been surprised if the SFC had not pursued this case after assembling the evidence that it did in the course of its inquiries into the activities of CHI.”

The Plaintiffs’ case against Robertsons

51.  The Plaintiffs’ case against Robertsons is that Robertsons breached their duty of care and/or the retainer in three ways: (1) by rendering negligent advice; (2) by acting negligently in their handling of the review; and (3) by failing to disclose relevant information to the Plaintiffs.  They made a myriad of allegations against Robertsons as particularised and repeated in paragraph 19 of the Amended Statement of Claim. These are summarised as follows:

(1)     failing to file the two Chinese Statements and A&F’s Submission;

(2)     failing to locate and interview all available witnesses who were present at the Macau Meeting to rebut the evidence of Shum and Lo;

(3)     failing to give proper advice to the Plaintiffs as to the significance of attending and testifying at the review;

(4)     failing to inform the Plaintiffs the consequence of not filing the Chinese Statements and A&F’s Submission and not testifying at the review after a decision was made not to call the Plaintiffs and failing to advise the Plaintiffs the comments of the Chairman at the directions hearing;

(5)     failing to arrange conference with counsel in order to clarify instructions pertaining to the review;

(6)     failing to keep the Plaintiffs informed of the directions of the Chairman made at the directions hearing on 30 October 2007;

(7)     failing to prepare and file the Plaintiffs’ witness statements with the Tribunal on or before 18 January 2008;

(8)     failing to require SFC to tender Shum and Lo for cross-examination; and

(9)     failing to inform the Plaintiffs the adverse criticisms of the Chairman during the review hearing and failing to seek an adjournment in order to consider whether to call the Plaintiffs to testify.

52.  The Plaintiffs’ claim is for loss of chance.  They contend that because of Robertsons’ negligence, they lost the review before the Tribunal; or in the alternative, a chance (or a higher chance) of prevailing. They further contend that they had lost a better chance of reversing the Determination at the Court of Appeal.  

A solicitor’s standard of care

53.  The Plaintiffs’ allegations are allegations of fact on which their claims for breach of duty of care are based.  Apart from disputing the factual basis of the Plaintiffs’ claim, Mr Dawes, leading counsel for the Defendants, argues that the Defendants had discharged their duty of care to the required standard.  The following legal principles are well established principles applicable to the standard of care of solicitors.

54.  First, the standard of care required of a solicitor is that of a reasonably well-informed and competent solicitor.  The law does not impose liability for damages for a solicitor’s error unless no reasonably well-informed and competent member of that profession could have made that error: see Saif Ali v Sydney Mitchell & Co[1] ; Arthur J S Hall & Co v Simons[2].

55.  Second, the court is only concerned with the appropriate standard of care at the date on which the relevant actions took place and without the benefit of hindsight: see Argyll v Beuselinck[3].  Thus, even if the choice actually made by a solicitor can be shown to have turned out badly that is not in itself proof of negligence: see Wilsher v Essex Area Health Authority[4]; Feerni Development Ltd v Daniel Wong & Partners[5];and Foshan Hua Da Industrial Co v Johnston Stopkes & Master (a Firm)[6].

56.  Third, it is much harder to show breach of duty by proof of error of judgment as opposed to basic mistakes.  As was said by Lord Hoffman in his article, The Reasonableness of Lawyers’ Lapses[7]:

“I think that the inherently risky and unpredictable nature of litigation is the reason why judges are more generous to solicitors in fixing the standard of care than they are in conveyancing.”

57.  Fourth, in the absence of a specific agreement, a solicitor does not warrant to obtain a particular result.  As was said by Lord Denning in Greaves & Co (Contractors) Ltd v Baynham Meikle & Partners[8]:

“The surgeon does not warrant that he will cure the patient. Nor does the solicitor warrant that he will win the case.”

See also Wilsher[9] and Matrix Securities v Theodore Goddard[10]

58.  Fifth, if a solicitor acts in accordance with the advice of counsel, whom he has properly instructed he will not be held to be liable even if it turns out that the counsel’s advice is wrong: see John Powell, Roger Stewart, Jackson and Powell on Professional Liability[11].

59.  Sixth, in respect of counsel’s advice, a solicitor’s duty only extends to recording reservations or rejecting counsel’s advice where it is obviously or glaringly wrong: see Langsam v Beachcroft LLP[12],or seriously wrong: see Matrix Securities[13].

An overall view of the evidence and credibility of witnesses

60.  Connie is the principal witness of the Plaintiffs.  Their communication with Robertsons was conducted mainly by Connie on behalf of herself and Yee.  She was the principal speaker at the meetings with Barry and Nam.  The meetings were conducted in English with Nam providing translation or in Chinese.  Connie actively participated in the drafting of the grounds of review and arguments to be presented at the review. She was assisted by the in-house counsel of the Hantec Group.  She communicated with Nam on behalf of Robertsons by emails and telephone.    

61.  Yee played a much minor role in the discussion at the meetings and in the drafting of the grounds of review and arguments.  At trial, he adopted Connie’s evidence. 

62.  Barry was Robertsons’ litigation partner in charge of the review.  He was assisted by Nam.  He attended three of the four meetings with the Plaintiffs.  Nam attended all the four meetings and was the person to communicate with Connie.  Their meetings and oral communications were supported by contemporaneous attendance notes and emails.

63.  The bulk of the evidence in this case is documentary, consisting of attendance notes of Barry and Nam, and emails and letters issued by Robertsons which were also copied to Yee.  The authenticity of these attendance notes, emails and letters is not disputed.  These are contemporaneous documents against which Connie’s, Nam’s and Barry’s evidence may be tested. 

64.  Mr Chan, counsel for the Plaintiffs, took issue with the inadequacies of the attendance notes.  He quoted Deputy High Court Judge Gill’s observation in Delhaise v Ng & Co[14], in which the learned judge said at §51:

“Where it is disputed as to what advice was given on the merits of a client’s case, a strong indication against the proposition that proper and appropriate advice was given is the absence of an attendance note or other written communication.”

65.  In further support of that proposition, Mr Chan also quoted the following passage from Jackson & Powell[15]:

 “However admirable and comprehensive the advice which a solicitor gives, it is of no benefit to his defence unless it can be proved what advice was given.  The solicitor is unlikely to recall after a period of several years what advice he gave to his client on a routine matter.  The best he can do is to describe his usual advice in the particular circumstances or to speculate as to what he “must” have said, which is unlikely to carry as much weight.  There is no substitute for a proper attendance note, recording the gist of the advice that was given.   The lack of attendance notes has materially increased the number of successful claims that are brought against solicitors.”

These are certainly words of wisdom.  But these words are far from saying that absence of attendance notes recording the advice given must necessarily be fatal. 

66.  One cannot ignore the reality of what happens in a conference with client.  The solicitor listens to his client, takes instructions, considers the law, formulates his advice, and writes down his notes at the same time.  There are certainly some matters which one readily takes for granted, matters which appeared unimportant or trivial, things that go without saying and trite principles of law which a solicitor prefers to leave out of his notes than to take down the obvious and interrupt the flow of the conference or his conversation, especially if he is working under pressure of time.  He may equally leave those matters out when perfecting his attendance note from his manuscript later.  Such matters could be easily picked up in a post mortem exercise by another solicitor advising that former client, now turned a claimant.  The lack of recording of an advice is, in my view, one of the negative elements to be weighed against the solicitor’s evidence.  But the ultimate issue is a question of fact which has to be resolved on the basis of the totality of the evidence and inherent probability, taking into account the explanation for the absence of such recording, the nature and significance of the advice, what is recorded as compared with what is omitted, and the frequency of such omissions.  Having regard to the totality of the evidence, I do not consider the few omissions damage the credibility of Barry and Nam.  

67.  Having tested the witnesses’ evidence against the contemporaneous documents, I find Nam and Barry credible.  For reasons as I shall explain in my analysis of the evidence, I find Connie an exaggerating witness.  May of her allegations are absurd, non-sense and obviously concoctions. I do not accept her evidence.  Yee mainly adopted Connie’s evidence which I do not consider credible.

Failure to file the Plaintiffs’ Chinese statements and A&F’s Submission

68.  It is Connie’s evidence that she had instructed Barry and Nam to file the Plaintiffs’ two Chinese statements and A&F’s Submission at the first meeting on 19 September 2007.  She said that the extension of time sought by Nam was for the purpose of filing those documents.  Barry and Nam denied Connie had given such instruction. 

69.  This complaint must be understood in the light of the retainer the Plaintiffs signed on 20 September 2007 and the state of the proceedings at the time.  Those documents were to be filed with SFC in response to the Notices issued by SFC.  Those documents had not been filed and SFC issued their Decisions and sentence.   Then the proceedings moved to a different stage.  The Plaintiffs have to seek a review of SFC’s Decisions by the Tribunal.  According to the retainer, Robertsons was retained “to give [the Plaintiffs] legal advice and to act on [their] behalf in relation to the disciplinary action under the Securities and Futures Ordinance”. At that stage of the proceedings, the Plaintiffs were required to file applications for review and grounds of review with the Tribunal and not A&F’s Submission or the two Chinese Statements which were intended to be filed with SFC in response to the Notices issued by SFC.  

70.  Assuming that Connie had unequivocally instructed Robertsons to file A&F’s Submission and the two Chinese Statements with the Tribunal, it is incredible that Barry or Nam would not have there and then corrected Connie of her misapprehension that A&F’s Submissions and their two Chinese Statements were inappropriate documents to be filed whether with the SFC or with the Tribunal for the review.   Furthermore, Robertsons was retained as solicitors to act for the Plaintiffs in relation to the disciplinary action.  It was not retained as a couriers to deliver what another courier had failed to deliver for the Plaintiffs.  It is incredible that Barry and Nam would have accepted the instruction to file those documents prepared by another firm of solicitors in discharge of Robersons’ obligation under the retainer and thereby assumed liability under the retainer in respect of work done by another firm of solicitors.  If Connie had so instructed, Barry and Nam must have explained that it was inappropriate to file those documents.  Clearly, she had not so instructed.

71.  The illusory nature of Connie’s assertion can be demonstrated by asking the question “with whom were the documents to be filed, SFC or the Tribunal?”  Those documents were intended for SFC, but SFC had already made its Decision.  What were to be filed were the notices of review and grounds of review of SFC’s Decision to be filed with the Tribunal.  A&F’s Submission and the Chinese Statements were not appropriate documents to be filed for the review.

72.  Connie’s assertion that the extension of time was sought to enable Robertsons to file those documents demonstrates the non-sense she made out of her concoction.  If what was needed was to file those documents, there was no need for any extension of time.  The documents were ready and could be filed any time.

73.  As submitted by Mr Dawes, this complaint is curious.  The allegation is inherently incredible and makes no sense.  This allegation was patently and badly concocted.  It demonstrates how desperate Connie was in concocting a case of negligence against Robertsons.  It seriously damages her credibility. I reject her evidence that it was her instruction to Robertsons to file A&F submission and the Plaintiffs’ two Chinese statements and that Robertsons was in breach of her instruction.

Failing to prepare witness statements to cover the Macau Meeting

74.  The Plaintiffs complain that Robertsons was negligent in failing to locate and interview all available witnesses present at the Macau Meeting in order to rebut the allegations of Shum and Lo.  It appears from Connie’s evidence under cross-examination that her real grievance was that she had shown some photographs taken at the Macau cocktail party to Nam, but Robertsons never advised her or Yee to look for other witnesses, presumably from among those who appeared in the photographs.  Connie also mentioned for the first time that there was another witness called Tung Shun Shun who should have been called.

75.  Common sense would suggest it to be the client’s duty to identify and inform his solicitor the identities of all potential witnesses who are in the position to testify as to what happened in an incident and to make them available to his solicitor.  What Connie said about Tung Shun Shun precisely demonstrates the point.  Without her identifying a potential witness, how could Robertson know from whom to take a witness statement?  Connie’s suggestion that by showing Nam photographs of the Macau cocktail party, then Nam should advise her who were to be called as witnesses and to take statements from them is plainly ridiculous.

76.  Robertsons took the following steps to prepare and file three witness statements to cover the Macau Meeting.  On 19 September 2007, Robertsons received from A&F ten witness statements, including the two Chinese statements.  Before the directions hearing, Connie drew Nam’s attention to the fact that two of those witnesses had been warned by SFC in relation to cold calls and that they and Hantec International were being sued by clients for loss incurred in the trading.  Barry considered it appropriate to exclude those two witnesses because of integrity issues.  Another witness statement was that of Elke Tang who was the applicant in SFAT 9/2007 to be heard together with the Plaintiffs’ review.  Excluding those three witnesses and the Plaintiffs who would not be giving evidence, Robertsons had five witness statements to consider.  One statement was in English and four were in Chinese. 

77.  One of the witnesses was Tang Siu Chung, an account executive who spoke about the tension between Shum and Lo on the one part and Hantec International on the other.  Barry considered his evidence somewhat “over the top” and that he would not make a good witness.  It was therefore decided not to call this witness and to have him replaced by another one to be identified by the Plaintiffs.  Connie took some time to identify Static Lau who was the head of the Error! Not a valid link.ompliance and Internal Audit Department.  Nam duly prepared a witness statement for Static Lau.

78.  In reviewing the witness statements, Barry discovered that the timing of the speeches given by Connie and Yee as stated in the remaining four witness statements did not reconcile.  The amended statements of these four witnesses together with the above observation were sent to the Plaintiffs for their comment on 19 November 2007.  Despite repeated reminders to the Plaintiffs, it was not until 8 January 2008 that Connie responded. Connie said she had no comment on the statements and suggested Nam to send them to Mr Yeung for consideration. 

79.  In the end, Barry and Nam considered the evidence of Laurie Ng irrelevant.  Tang Mei Yee could not be located to sign her witness statement.  Thus, ultimately Robertsons was left with only three statements given by Tsui Luen On (“Tsui”), Law Ming Lap (“Law) and Static Lau.  They were not interested parties and would present themselves as more credible witnesses than the Plaintiffs who would be interested in the outcome of the review.  They would cover the evidence intended to be given by Connie and Yee.  Given the time constraint and the delay on the part of the Plaintiffs, nothing could be said against Robertsons for not looking for witnesses for them. 

80.  Connie was actively involved in the process of screening witnesses to cover the Macau Meeting.  There was never any suggestion in the pleading or in her or Yee’s witness statements that there were any other useful witnesses identified by them whom Robertsons failed to approach.  Tung Shun Shun’s name had never been mentioned by Connie or Yee until Connie gave evidence in the witness box. 

81.  As for Connie’s complaint that Robertsons failed to file witness statements for her and Yee, that must be viewed in the context of their decision not to testify (see §§83-99 below).  Furthermore, whatever evidence they could have given about the Macau Meeting was covered by two independent and more credible witnesses, namely Tsui and Law.  The Plaintiffs would have nothing to gain by testifying, but would have to perjure themselves or putting Hantec International at risk if they did (see §§90-99 below).   

82.  In the end, the Chairman was of the view that the evidence of witnesses who were present at the Macau Meeting were of “little, if any weight or probative significance”.  It appeared from the transcript of the hearing of the review that Tsui and Law did not come up to proof under cross-examination.  That is not anything Robertsons could warrant.  On the facts, Robertsons did what a reasonably competent solicitor would have done in the circumstances in preparing statements for three witnesses to testify about the Macau Meeting.  They exercised reasonable care in the selection of witnesses and in the preparation of their statements.  Even if their choice turned out to be wrong, which I do not think it was, it would only be an error of judgment and not a basic mistake as would constitute negligence.  There is no substance in the Plaintiffs’ claim under this head.

Advice on whether to testify and the Plaintiffs’ decision not to testify

83.  These heads of complaints could conveniently be dealt with together.  The main thrust of the Plaintiffs’ complaint is that they were never advised of the pros and cons of giving or not giving evidence and were even discouraged from giving evidence because Barry and Nam told them it was a time consuming exercise.  They were not informed of the Chairman’s view expressed at the directions hearing that their witness statements would be ignored if they did not give evidence.  They were not explained that if they did not testify their stories could not be advanced and the risk of losing the review would be higher.  Connie relied on Barry’s reply to the Chairman’s question at the directions hearing that their witness statements would be filed as evidence of her instruction and her intention to give evidence.  She said that despite some initial concerns about being subject to cross-examination, they were not afraid to testify.  Indeed, they were ready to do so and had asked Nam if they should attend the hearing or to standby on the date of hearing.  

84.  Robertsons’ case is that when they discussed strategy with the Plaintiffs during the second meeting on 22 October 2007 Barry and Nam had explained what giving evidence entailed and the Plaintiffs decided not to testify at the review hearing.  

85.  The parties’ respective case should be considered against the background that all along the Plaintiffs had been advised by their own in-house counsel and took a very active role in drafting the grounds of review and supporting arguments.  Even before the strategy meeting on 22 October 2007, the Plaintiffs were wary of testifying lest they might be asked anything beyond the Macau Meeting and might have to disclose negative information.  In commenting on the draft grounds of review prepared by Robertsons, Connie already indicated her and Yee’s reluctance to testify at the review hearing.  She wrote:

“Before going into details, please see if it is necessary/inevitable to put me or [Yee] to the witness stand. Pls pay special attention to the fact that [Yee] is the China head and FX dealing in China is heavily regulated including personal criminal liabilities. We don’t want to incriminate [Yee] in any aspect.

…

which candidates are you having in mind?  Any concerns that such witness, if put on witness stand, may be asked something more than the cocktail party and have to disclose negative info?  Situations may be more sensitive if [Responsible Officers] are called to testify, ...”

Connie was assisted by her own in-house counsel when commenting on the draft grounds.  Presumably, she had been so advised by her own in-house counsel that giving evidence would risk prejudicing Hantec International which was being investigated by the SFC at the time. 

86.  Then, on 18 October 2007, Nam wrote to Connie setting out the various issues to be considered at the meeting which was subsequently held on 22 October 2007.  She specifically asked Connie if she would be giving evidence.  This email strongly suggests that the issue of whether the Plaintiffs would be giving evidence must have been discussed at the meeting on 22 October 2007 or even earlier.  

87.  As at the date of that meeting, Barry entertained the possibility that the review could proceed by way of a paper submission together with witness statements but without calling the makers of the statements.  Hence, he suggested that the review could proceed by way of a paper submission which would be more time and cost effective, and Connie agreed.  This part of his evidence is not disputed.  It is also supported by Barry’s attendance note of that meeting in which Barry noted that he had “talked about the substantive hearing and his opinion that it would be a paper hearing, rather than oral submission.”  However, according to Barry, he had made it clear that the procedure was subject to the decision of the Chairman who may require witnesses to be called.  He also told the Plaintiffs that unless SFC consented, their witness statements could not be tendered as evidence without their testifying. He explained what giving oral evidence entailed and that they should be prepared to be cross-examined on anything if they chose to give evidence.  The Plaintiffs said they knew what cross-examination entailed and indicated their preference not to give evidence.  Nam corroborated Barry’s evidence and also recalled that Connie or Yee said words to the effect that “who would want to be cross-examined”.

88.  Barry told the Plaintiffs that based on the grounds as then drafted and the evidence from the available witnesses he did not envisage a need for Connie and Yee to give evidence.  This was because the evidence to be given by them had already been given to SFC in their records of interview which SFC relied on in reaching its Decision and which SFC would also rely on at the review hearing.  In addition, the Plaintiffs’ evidence about the Macau Meeting would be covered by other witnesses.  At the end of that meeting, the Plaintiffs confirmed that they preferred to conduct the review by way of paper submission and not to give oral evidence. 

89.  Barry’s advice is supported by Nam’s manuscript notes and typed attendance note.  In her manuscript  notes, she wrote:

“Giving evidence, prefer to have submissions on paper but SFC may want to XX witness(es). Tribunal may suggest to XX witness(es).”

In her typed attendance note, the above was expanded to read as follows:

“Clients also confirmed that they would prefer to [make] submission on paper. [Barry] however explained that SFC and/or the Tribunal may want to cross examine witnesses and to hear oral evidence.”

Though brief, the note indicated that the topics of giving oral evidence and cross-examination were discussed.  A solicitor would not find it necessary to record down every detail of his advice for trite issues such as the consequence of not giving evidence, etc.  If what cross-examination entails had not been explained, it would be pointless to make note of these topics.

90.  Connie argued that Barry’s indication to the Chairman at the directions hearing that the Plaintiffs would testify is evidence of their instruction to him of their intention to give evidence at the hearing. Barry’s explanation is that his indication to the Chairman was made to preserve the Plaintiffs’ option and for the tactical reason of not disclosing his litigation strategy to SFC.  In the pre-hearing note for the directions hearing prepared by Nam for Barry, she noted that neither Connie nor Yee were going to give evidence.  Had Connie and Yee not confirmed their decision not to testify, Nam would not have made such a note.   Thus, it is obvious that what Barry told the Chairman was just a tactical move.  What Barry said does not support the Plaintiffs’ case that they had not instructed Robertsons that they would not testify.

91.  No particular reason was given by the Plaintiffs at the meeting on 22 October 2007 for not giving evidence.  However, as matters progress, the Plaintiffs’ reason became clear.  The Plaintiffs instructed Mr Yeung to advise and represent them at the review.  Subsequently, Mr Yeung opined that it was difficult to succeed on credibility point, ie disputing the evidence of SFC, including Shum and Lo, and advised raising the section 115 ground.  Despite some initial reluctance on the part of the Plaintiffs, after some discussions they agreed to raise that ground subject to some toning down of the arguments[16]. During those discussions, Barry and Nam became aware in mid January 2008 that Hantec Investment was also under parallel investigation by SFC and that as Responsible Officers of Hantec Investments the Plaintiffs knew SFC had obtained evidence of active marketing by account executives of Hantec Investment on behalf of Cosmos Hantec.  Thus, in advancing the argument on the section 115 ground, the Plaintiffs could not testify that there had been no active marketing or that they were unaware of any active marketing without perjuring themselves.  But the absence of active marketing was the essential premise on which the section 115 ground was based.  Being the Plaintiffs’ solicitors, Barry and Nam could not advise the Plaintiffs to lie on oath.  As Mr Yeung was optimistic on the section 115 ground but considered it very difficult to succeed on credibility point, which was essentially what the other grounds were about, the best course was to argue on the section 115 ground without calling the Plaintiffs to give evidence to avoid the risk of their being cross-examined on active marketing issue; and to cover the evidence to be given by the Plaintiffs’ by calling some other witnesses.  Thus, it was clear to Barry and Nam, as it was to the Plaintiffs, that it was impossible for them to give evidence before the Tribunal without either perjuring themselves or risk losing the review by failing to establish the section 115 ground, and prejudicing Hantec International in the on-going SFC investigation.  With that knowledge in mind, there could not be any truth in Connie’s evidence that she and Yee were ready and wanting to testify.

92.  Connie denied having made the decision not to testify. She said even before the review hearing she was asking Nam if she and Yee were required to give evidence or standby.  She was referring to her email dated 20 March 2008 in which she sought an update from Nam.  She asked various questions, including:

“… [Yee] and I will not attend, I assume? Is Elke Tang bound to attend and subject to a cross-examination because she has submitted witness statement?”

To that, Nam replied:

“The attendance of yourself and [Yee] is not required. …

Counsel will on behalf of the parties put forward technical arguments on the interpretation of laws and the application of the material facts for the case.  Yourself and [Yee] can in any event attend the hearing if you so wish.”

93.  These emails should be read against the background set out in the preceding paragraphs.  The strategy agreed on 22 October 2007 and the development since January 2008 explain why in response to Connie’s email Nam told her that her and Yee’s attendance at the review hearing was not required.  The Plaintiffs had agreed not to testify and they knew, for tactical reasons and in the interest of Hantec International, they could not testify.  That also explains the tone of Connie’s email.  She was not asking when she and Yee would be called to testify but seeking a confirmation of her understanding that they were not required to.  Her words are not the words of someone who was expecting to testify.  This email suggests that she was very familiar with the concept that any statement filed by the parties will be ignored, if he chose not to testify; and that she was well aware that as her statement had not been filed she was not going to testify.  This email supports Robertsons’ case that Barry and Nam had properly advised the Plaintiffs of the pros and cons of giving or not giving evidence.  This is another example of Connie combing through the documents to search of anything on which to raise an inference to support a case concocted as result of an afterthought.

94.  Robertsons maintained close contact with the Plaintiffs and updated them of the progress.  On 8 April 2008, Robertsons was informed that Elke Tang would not be giving evidence at the hearing and informed Connie and Yee of the same.  Nam wrote to Connie:

“You will note that in his Submissions, it has been made clear that Madam Elke Tang will not be giving evidence at the review Hearing.

In these circumstances, the Tribunal will not give any weight at all to consider her Witness Statement since no one will be able to cross examine her as she is not going to go into the Witness Box.”

This email suggests that the consequence of not giving evidence had been explained previously, ie during the meeting on 22 October 2007.  As submitted by Mr Dawes, in the light of this email, there is simply no scope to suggest that there was any misunderstanding about the use of witness statements and that no weight will be attached to them if the makers chooses not to testify. 

95.  Furthermore, Barry was concerned if the Plaintiffs were comfortable with their agreed strategy not to testify.  He instructed Nam to call a meeting with the Plaintiffs on 9 April 2008.  At that meeting various matters were discussed, including Elke Tang’s decision not to testify and that as a result the Tribunal would attach no weight to her evidence.  At the conclusion of the meeting, the Plaintiffs indicated that they were happy with Robertsons’ preparatory work for the hearing and said nothing about wanting to give evidence or renewed their request to have conference with Mr Yeung.  The above email and this meeting reaffirm that the pros and cons of giving or not giving evidence had been explained to the Plaintiffs.  For reasons as stated above, Robertsons understood the Plaintiffs stood by their decision not to testify.

96.  Connie’s concern for the interest of Hantec International was a very real one.  This thread of concern could be seen running throughout the Plaintiffs’ preparation of the review.  Even on 10 April 2008, just a few days before the hearing, Connie instructed Nam in an email to put Hantec Investment’s interest before the Plaintiffs’.  She wrote:

“If, at any point of the preparation/hearing process, you find our arguments may prejudice [Hantec International] to a great extent, for example, our arguments may save our individuals but make it sound like a company policy to commit misconducts, please do let us know. If for any reason you don’t have time to let us know the disadvantages to be caused on the end of [Hantec International], please make company interest top your strategy list. We appreciate very much your understanding.”

Connie, in particular, is the wife of the chairman of Hantec Holding, the holding company of Hantec International and the entire the Hantec Group.  At the time, not only was Hantec International under investigation by SFC, Connie’s husband was negotiating the sale of the Hantec Group to China Cinda.  Besides the need to protect the good name of Hantec International, there was a lot of financial interest involved in putting the interest of Hantec International before her own in the review.  There must be lots of truth in Barry’s and Connie’s evidence that the Plaintiffs chose not to give evidence in order not to put Hantec International at risk.

97.  Mr Chan questioned the credibility of Barry’s and Nam’s evidence because the advice whether to give evidence was not subsequently confirmed in writing and the attendance notes did not set out the pros and cons of giving or not giving evidence.  I have no reason to doubt the authenticity of the manuscript notes and typed attendance notes.  Neither is comprehensive nor were they intended to be comprehensive.  In criminal cases, it is the practice of solicitors to obtain a written confirmation not to give evidence from their defendant clients.  But this is not a common practice in civil proceedings.  I note the absence of a written advice from Robertsons or confirmation from the Plaintiffs not to testify.  This is a negative factor to be weighed against Barry and Nam.  But Connie’s emails quoted above clearly indicates that she had been properly advised of what giving evidence and cross-examination entail and the consequence of not testifying.

98.  In conclusion, I accept Barry’s and Nam’s evidence and reject the Plaintiffs’.  I find that at the strategy meeting on 22 October 2007 Barry and Nam had given adequate advice on the pros and cons of testifying or not testifying and the Plaintiffs unequivocally indicated their choice not to testify.  That was the Plaintiffs’ agreed strategy.  The undisclosed reasons of their choice were that Hantec International was under investigation by SFC; that the Plaintiffs were wary of being cross-examined on sensitive information which might prejudice Hantec International; and they were prepared to sacrifice their chance of success in the review in the interest of Hantec International.  It was a considered decision deliberately made to protect Hantec International and not the result of any failure on the part of Robertsons in properly advising them.  It then became clear that the Plaintiffs could not give evidence without committing perjury and prejudicing the interest of Hantec International.  The Plaintiffs, Barry and Nam all understood that was the position the Plaintiffs found themselves in and that they could not testify.  Robertsons was placed in a difficult position.  To advise the Plaintiffs to testify might induce them to perjure themselves and risk the section 115 ground which was what counsel assessed to be the best chance of success.  To adhere to the agreed strategy was obviously the preferred course any reasonably competent solicitor in their position would have taken.  If Robertsons was wrong, I do not think it was, it was an error of judgment which a solicitor should not be held liable. 

Failure to inform the Plaintiffs of the Chairman’s comment given at the directions hearing about witness statements

99.  The Plaintiffs allege that they had never been informed of the Chairman’s comment that no weight would be given to any witness statement if its maker did not testify.  They argued that even if a decision had been reached not to give evidence, Robertsons should have informed them of the Chairman’s comment and reconsidered the strategy.

100.  According to Nam, shortly after the directions hearing she informed Connie orally of the Chairman’s directions and various other matters discussed at the hearing including the Chairman’s comments about witness statement.  On the following day, she followed up with a letter to Connie confirming what she had told her and enclosing a copy of the Order made by the Chairman.  However, neither her letter nor the Order mentioned the Chairman’s comments about witness statements.

101.  Despite that, from Connie’s email of 20 March 2008 (see §§ 92 and 93 above), it is clear that she had no misunderstanding that a witness statement would be given no weight if its maker chose not to testify. This suggests she had been clearly advised about the effect of testifying or not testifying, and the Chairman’s comments about witness statement.  In Nam’s email of 8 April 2008, she was obviously repeating the Chairman’s comments about witness statement.  This email suggests that the comment had already been brought to Connie’s attention before (see §94 above). I accept Nam’s evidence. I find that Nam had informed Connie orally of the comments of the Chairman and the Plaintiffs decided to adhere to their decision not to give evidence.  There is therefore no factual basis to support a claim of breach of duty against Robertsons on this ground.

Failure to prepare and file witness statement for the Plaintiffs

102.  The Plaintiffs alleged that Robertsons negligently failed to arrange translation for their two Chinese Statements or prepare new statements for them and eventually failed to file the statements with the Tribunal.  Nam’s explanation was that as the Plaintiffs decided not to testify, she took no steps to draft witness statements for the Plaintiffs or to improve or finalise the Plaintiffs’ two Chinese Statements drafted by A&F or to send them for translation. 

103.  Nam sent seven witness statements to Interlink for translation.  Connie reviewed those statements and suggested to Nam 30 October 2007 to exclude two statements from two witnesses who had been warned by SFC for making cold calls.  Nam accepted her suggestion, leaving only five witness statements about the Macau Meeting to be sent to the SFC.  Connie, if not also Yee, had been participating in reviewing the witness statements.  They had all along been advised by the Hantec Group’s in-house counsel.  They knew their two Chinese Statements were not among the statements to be reviewed and filed subsequently. They did not raise any question about their two Chinese Statements with Robertsons. The only reasonable inference is that they had decided not to give evidence. Had they decided to change their decision and to testify, they would surely have raised the issue about their own witness statements with Robertsons.  But they did not.  This complaint is another example of Connie combing through the facts looking for every possibility to concoct a case against Robertsons.  There is no factual basis to support an allegation of breach of duty on this ground. 

Failure to arrange conference with counsel

104.  The Plaintiffs alleged that despite Connie had made repeated requests for conference with counsel to clarify instructions pertaining to the review, Nam told her that under the new rules counsel could not see lay client and prevented her from seeing and discussing her case with Mr Yeung. 

105.  Mr Chan relies the solicitor’s obligation to arrange conference with counsel under principle 12.01 of The Hong Kong Solicitors’ Guide to Professional Conduct and the commentary which reads:

“Obligations when instructing a barrister

Where necessary and practicable, a solicitor should arrange conferences with the barrister to enable him to clarify his instructions by direct discussion with the solicitor and the lay client, to discuss the facts, evidence and law with the solicitor; and to give advice more directly than is possible in writing.”

He argues that as early as 25 October 2007 when Mr Yeung gave his views that it was difficult to succeed on the credibility point and suggested the section 115 ground, Barry instructed Nam to issue a follow up letter to the Plaintiffs advising them of Mr Yeung’s opinion. However, what Nam did was simply to forward Mr Yeung’s written advice to them. Mr Chan submits that it is hard to imagine lay clients would be able to digest and understand satisfactorily the various legal points in the advice.  He argues that it was against this background that Connie requested conference with counsel on at least three occasions, namely, 11, 15 and 17 January 2008 and that the request was a standing request. 

106.  Robertsons does not dispute that Connie had requested to have a conference with Mr Yeung.  Robertsons’ case is that the Plaintiffs had been fully explained of the Mr Yeung’s advice, fully participated in drafting the arguments to be advanced and agreed to the strategy to be adopted in the review such that there was no need to have the conference. 

107.  The request arose out of Connie’s concern about the impact the argument on the section 115 ground might have on Hantec International which was under investigation and against which a Notice had been issued.  Without going into details, the section 115 ground would raise the issue whether Cosmos Hantec had carried on any unlicensed regulated activities in Hong Kong by “actively marketing” its services to the Hong Kong public.  Connie was concerned that it would be disingenuous to suggest to the Tribunal that SFC had no evidence of active marketing when she and Yee, as directors and Responsible Officers of Hantec International, were aware of the evidence collected by SFC in the investigation of Hantec International.  Connie’s concerns were documented in Nam’s attendance notes of the telephone conversation with Connie and with Mr Yeung on that very day in which Nam noted Connie’s concern that the section 115 ground might affect Hantec International and her wish not to prejudice Hantec International in Robertson’s conduct of the review.

108.  As instructed by Barry, Nam arranged a meeting with the Plaintiffs on 17 January 2008.  At the meeting, the Plaintiffs explained to Nam that in their capacity as Responsible Officers of Hantec International they were aware that SFC had obtained evidence on the active marketing which had taken place by or on behalf of Cosmos Hantec in Hong Kong by way of cold calls by account executives of Hantec International.  They were concerned that their credibility would be challenged if they try to argue that SFC failed to take into account the section 115 ground, while they were aware that SFC had obtained such evidence.  They were worried that by pointing out to SFC the importance of active marketing prohibited by section 115, they would be indirectly building SFC’s case against Hantec International.  They repeated their request to have conference with Mr Yeung to discuss about avoiding argument on the section 115 ground. 

109.  After the meeting, Nam reported to Barry.  Barry was not convinced that the Plaintiffs’ case would be improved by dropping the section 115 ground because SFC already had evidence of active marketing anyway. Barry was particularly worried that the Plaintiffs were more concerned to protect Hantec International than their own interest in the review.  He even expressed the view that in the light of the Plaintiffs’ stance they might have to consider withdrawing the review based on merit but to concentrate on mitigation instead.  In conclusion, Barry and Nam agreed to tone down the argument based on the section 115 ground. 

110.  On the next day, ie 18 January 2008, the Plaintiffs sent Nam a facsimile with their thoughts on how the argument on the section 115 ground could be toned down.  Nam took into consideration the points raised in the facsimile and revised her draft argument on the section 115 ground. Pursuant to the Plaintiffs’ request, Nam discussed with Mr Yeung on the same day about having a conference with the Plaintiffs.  

111.  On 21 January 2008, Nam wrote to Mr Yeung renewing the request for the conference.  She wrote:

“As discussed last week, the clients would like to have a meeting with you to discuss the reference to Section 115 in the Amended Grounds of Application for review.

Could you let us know details as to your availability for a conference with the clients.”

This is a contemporaneous document.  It is an incontrovertible piece of evidence.  Though the letter was addressed to Mr Yeung and not Connie, it accurately reflects that at the time Nam was actively arranging the conference and not putting it off.  This letter conclusively proves Connie’s allegation of Nam putting up the “new rule” as an excuse to prevent her from having a conference with counsel was just a piece of non-sense.

112.  On 28 January 2008, Mr Yeung responded with a suggestion to have a conference with instructing solicitors to discuss the legal and technical aspects of the section 115 ground first and, then if necessary, with the Plaintiffs.  Nam reported the suggestion to Connie who agreed.  In that telephone conversation, she also discussed with Connie the prospective risks of the strategy.  In her attendance note, she wrote:

“[Connie] also agreed that before scheduling any meeting with Counsel, Robertsons may discuss the issue with [Mr Yeung] first and see if it is really necessary for lay clients to have a meeting with Counsel.”

In a letter dated 29 January 2008, Robertsons informed the Plaintiffs, inter alia, that Nam was going to meet with Mr Yeung at 5 pm that afternoon.  This letter and Nam’s attendance note support Nam’s evidence that Connie accepted the arrangement to defer the conference until after Mr Yeung had discussed with Nam. 

113.  On 29 January 2008, Nam had a meeting with Mr Yeung. They discussed about the Plaintiffs’ concern and how the argument on the section 115 ground could be further toned down.  Mr Yeung opined that it would be almost practically impossible to conduct the review without going into section 115 which was linked to section 114.  He thought it unrealistic to assume that the Chairman and counsel for SFC would not be able to make the connection between the two sections.  Even if the argument on the section 115 ground was toned down, Mr Yeung expected the Chairman would invite his submissions on section 115 at the review hearing.  At the end of the conference, Mr Yeung agreed to revise the amended grounds of review to reduce the extent of the submissions made in relation to section 115.  The Plaintiffs’ concern as perceived by Mr Yeung and Nam was conveniently summarised in the penultimate paragraph of Nam’s attendance note dated 29 January 2008 in which she noted Mr Yeung’s comment as follows:

“Nevertheless [Mr Yeung] appreciated the clients’ concern that if we run their case on the basis that Section 115 is part of Section 114, it will invite the SFC and the Tribunal to evaluate all evidence available to determine if there was actively marketing conducted in Hong Kong. While they should be able to survive in their individual review Applications due to lack of evidence, same application will apply to the Company’s case with more evidence available which the SFC may be entitled to adduce and rely upon.”

Nam’s evidence of the Plaintiffs’ concern and of their intention to put the interest of Hantec International before their own in this review is supported by other emails coming from Connie, for example her email of 10 April 2008 shortly before the review hearing.

114.  On the following day, Barry discussed with Nam about the conference.  He felt it important for the Plaintiffs to understand that it would be potentially detrimental for them to interfere with the approach advised by Mr Yeung and Robertsons and instructed Nam to write to the Plaintiffs.  Nam sent a three page letter to the Plaintiffs on 1 February 2008 explaining in some details the situation, including the above implications, and agreeing to tone down the argument on the section 115 ground.

115.  In her email dated 4 February 2008, Connie confirmed that she and Yee agreed to include the argument on the section 115 ground but raised concern about the proposed argument that Cosmos Hantec’s service might have been sought out by customers on their own initiative.  The next day, after discussing with Mr Yeung, Nam replied that Robertsons were prepared to remove that argument which Connie and Yee were not happy about.

116.  Thereafter, Nam worked closely with Mr Yeung, Connie and Yee in finalising the draft amended grounds of review.  The Plaintiffs took an active part in finalising the amended grounds as can be seen from their manuscript handwriting on the draft amended grounds.  The finalised amended grounds was served on the Tribunal, SFC and A&F as solicitors for Elke Tang on 20 February 2008.

117.  When Connie’s and Nam’s evidence is tested against the contemporaneous attendance notes, letters and emails, including those from Connie, it is manifestly clear that Connie’s evidence is incredible.  Against these incontrovertible documents, it lies ill in Connie’s mouth to accuse Nam of not arranging the conference and preventing her from presenting her views and concern to counsel.  I could have no reason to doubt the truthfulness of Nam’s evidence.  In any event, at the latest by 20 February 2008 when the finalised amended grounds was served on the Tribunal, the stage had clearly reached when the conference became redundant and Connie’s request for conference was deemed abandoned.  It just begs belief that a solicitor would for no good reason refuse to arrange conference with lay client which would only have the effect of increasing his billable hours chargeable against his client.  The alleged excuse of the “new rule” was just non-sense.  Connie’s accusation was obviously an afterthought which was badly concocted.  It shows how readily this woman would lie for her own ends.  It badly dented her credibility.  I reject her evidence.

118.  As for Mr Chan’s submission on the law based on principle 12.01 of The Hong Kong Solicitors’ Guide to Professional Conduct, I have point out that that principle is not intended to be a straight jacket requiring a conference to be arranged in all cases for a barrister to clarify his instructions with client, to discuss the facts, evidence and to give further advice.  The principle applies, as the opening words of the commentary say, only where necessary and practicable; or as its concluding phrase suggests, when written advice is not possible.  Here, the evidence is clear that written correspondence was effective in conveying counsel’s advice to the Plaintiffs and vice versa the Plaintiffs’ concern to counsel.  Connie took an active role in drafting the section 115 ground and supporting argument.  She never complained she could not understand counsel’s advice or that counsel did not understand her concern.  The Plaintiffs were assisted throughout by in-house counsel.  As viewed by Mr Yeung, a conference was neither necessary nor practicable.

119.  In summary, there is no dispute that the Plaintiffs had requested conference with counsel because of their concern of the adverse impact the argument on the section 115 ground might have on Hantec International.  It was then agreed at the suggestion of counsel to have a conference between solicitors and counsel discussing the legal issues first and then with the Plaintiffs, only if necessary.  The Plaintiffs agreed to that suggestion.  They were kept updated about the progress of Nam’s conference with Mr Yeung and the further development.  Mr Yeung was of the view that the section 115 argument was unavoidable.  After much discussion and careful consideration, Mr Yeung agreed to tone down the argument on the section 115 ground and to remove some of the argument which the Plaintiffs were concerned.  The Plaintiffs participated fully in the finalisation of the amended grounds of review and supporting arguments with the help of Hantec Investment’s in-house counsel.  They expressed their satisfaction with the approach.  Since then, they never renewed their request to have conference with counsel.  Obviously, their concern about the argument on the section 115 ground which created the need for the conference had been addressed and a conference was no longer necessary.  They were contented with the amended grounds of review and the toned-down argument.  As Nam said, the request for conference was a moving target. As matters progressed, Connie did not find the conference necessary and did not pursue her request any further upon finalisation of the amended grounds and tone-down argument.  There is no factual basis to support an allegation of any breach of duty in failing to arrange conference with counsel.  Connie’s allegation is another obvious example of concoction. 

Handling of Shum’s and Lo’s evidence

120.  SFC relied on the evidence of Shum and Lo about the Macau Meeting in their Decision.  Particularly in the case of Yee, that was the only evidence against him.  According to the Plaintiffs, the allegations of Shum and Lo about the Plaintiffs’ role in the Macau Meeting were false; they were tainted witnesses as they had grudges with the Hantec Group and had labour disputes and litigation with the Hantec Group in the Small Claims Tribunal.  The Plaintiffs’ case against Robertsons is that they had given specific instructions to Robertsons to require SFC to tender Shum and Lo for cross-examination in order to destroy their credibility; but in breach of those instructions, Robertsons admitted their witness statements without cross-examination.  Connie even said she and Yee were ready and prepared to testify on the Macau Meeting.

121.  Mr Chan submits with well established authorities[17] that when a defendant does not call evidence on crucial issues, a court is entitled to be bold and to draw from the facts which have been disclosed all reasonable inferences as to what are the facts which the defendants have chosen to withhold.  What was allegedly said by the Plaintiffs at the Macau Meeting was one of the basis of SFC’s Decision.  It was a crucial issue in respect of which the Tribunal was entitled to draw adverse inference against the Plaintiffs for not testifying.  Mr Chan argues that it was therefore wrong to advise the Plaintiffs not to testify.  He further argues that the evidence of Tsui and Law called by the Plaintiffs to cover the Plaintiffs’ case of the Macau Meeting was proved to be unreliable under cross-examination.

122.  This complaint consists of three grounds: failure to advise the Plaintiffs to testify; inadequacy of the witness statements of Tsui and Law and failure to require Shum and Lo to be tendered for cross examination.  The complaint has to be viewed against the context that the Plaintiffs decided not to give evidence because they were afraid that they might be cross-examined on other matters, might prejudice their section 115 ground which was their main ground of review, or might prejudice Hantec International which was under investigation by SFC.  Thus, Connie’s assertion that she and Yee were ready and willing to testify can be immediately dismissed as not genuine or a groundless afterthought.

123.  It may well be the case that Tsui and Law did not come up to proof.  But a party cannot hold his solicitor as an insurer that a witness will come up to proof and is liable if he does not.  Tsui’s and Law’s statements had been reviewed by Connie.  There is nothing to suggest that their statements were inadequate or that Nam had been negligent in drafting them. That a witness does not come up to proof is a well recognised uncertainty of litigation which a client could not hold his solicitor responsible.  Besides, it was the Plaintiffs’ agreed strategy not to give evidence for reasons as explained earlier but to have Tsui and Law to cover them in respect of the Macau Meeting.       

124.  On the issue of not requiring Shum and Lo to be tendered for cross-examination, as submitted by Mr Dawes, this complaint is obviously unsustainable.  On the instruction of the Plaintiffs, Mr Yeung was instructed to represent them in the review.  Counsel had conduct of the review. Whether to cross-examine a particular witness is usually a matter of judgment for counsel.  It is something that counsel would discuss with solicitors and client but it is not common for solicitors to question counsel’s judgment on such matters, especially that of an experienced counsel.

125.  Mr Dawes also draws my attention to the Plaintiffs’ refusal to waive privilege and consent to Robertsons’ calling Mr Yeung to testify in these proceedings.  Under cross-examination, Connie admitted that the reason of her refusal was that she did not want Mr Yeung to give evidence to assist Robertsons in their defence to the Plaintiffs’ claim.  By her answer, it is obvious that the Plaintiffs were determined to withhold evidence which would assist Robertsons.  What Mr Chan argues about adverse inference for not calling a witness equally applies to the Plaintiffs’ refusing to make a witness available.

126.  Even without reliance on Mr Yeung’s evidence, it is clear that Robertsons were entitled to rely on counsel’s advice and conduct in the litigation, unless what counsel advised or did was obviously, glaringly or seriously wrong.  In Langsam v Beachcroft LLP[18], Arden LJ cited with approval the following dicta from  Locke v Camberwell HA[19]:

“(1) In general, a solicitor is entitled to rely upon the advice of counsel properly instructed.

(2) For a solicitor without specialist experience in a particular field to rely on counsel’s advice is to make normal and proper use of the Bar.

(3) However, he must not do so blindly, but must exercise his own independent judgment.  If he reasonably thinks counsel’s advice is obviously or glaringly wrong, it is his duty to reject it.”

These principles apply equally to a solicitor instructing counsel to have conduct of the litigation.

127.  Barry explained that the decision to admit the witness statements of Shum and Lo without cross-examination was a considered decision which was not negligently made.  As noted by Connie, they were hostile towards the Plaintiffs and were engaged in litigation with the Hantec Group.  If put in the witness box, there could be no control as to what additional damaging evidence beyond that contained in their witness statement they would give.  The Plaintiffs’ case on the Macau Meeting was covered by other witnesses as well as the Plaintiffs’ record of interview.  The main thrust of the Plaintiffs’ case in the review was the section 115 ground.  It was not worth risking this ground by cross-examining Shum and Lo on the Macau Meeting.  Any drop from their mouths about active marketing would easily prejudice their section 115 ground. The decision to admit their witness statements without cross-examination was a tactical decision by a very experienced counsel who had conduct of the litigation.  That was a decision made with good sense, in my view.  It certainly was not obviously, glaringly or seriously wrong.  There was no reason why Robertsons should intervene.  Even if the decision not to intervene was wrong, which I do not think it was, it was just an error of judgment for which Robertsons could not be held liable in negligence. 

Failure to seek an adjournment of the review hearing to take instructions

128.  Mr Chan argues that in the light of the Chairman’s criticism of the Plaintiffs’ failure to give evidence, Robertsons should have sought an adjournment to inform the Plaintiffs of the criticism and re-consider whether to advise them to testify. 

129.  There is no dispute that Robertsons did not seek an adjournment, nor did they inform the Plaintiffs of the criticism from the Chairman.  It was their and counsel’s considered opinion that it was difficult to succeed on the credibility point, which was what the Plaintiffs’ testimony was designed to achieve.  They considered the best chance of success was the section 115 ground.  Robertsons knew well that the Plaintiffs could not testify without perjuring themselves or risking the section 115 ground.  They could not advise the Plaintiffs to perjure on oath.  Even if the Plaintiffs were to perjure by denying active marketing or knowledge of active marketing, such evidence would be utterly incredible as the Plaintiffs were Responsible Officers and SFC had evidence of active marketing.  Furthermore, if the Plaintiffs were to testify, they would be asked sensitive questions which might prejudice Hantec International in the pending SFC investigation.  The Plaintiffs had given clear instructions not to testify.  Shortly before the hearing they gave unequivocal instruction to Robertsons to put the interest of Hantec International before their own personal interests in the review.  In the circumstances, an adjournment would serve no purpose.  The Plaintiffs would adhere to their decision not to testify and to their latest instruction to sacrifice their personal interest in favour of the interest of Hantec International.  On the other hand, the evidence which the Plaintiffs intended to give was already in evidence.  Connie’s denial of her knowledge of the fund transfer, her denial of having encouraged account executives to promote the business of Cosmos Hantec, her denial of her role in Cosmos Hantec as evidenced by the two emails, and the non-existence of the Macau Meeting were contained in her two records of interview which formed part of SFC’s case against her.  The same applies to Yee’s denial of his involvement in the Macau Meeting.    There was not much evidence that the Plaintiffs could give, but much prejudice they could cause to the section 115 ground and to Hantec International.  At the time counsel had conduct of the hearing.  Mr Yeung saw no reason to seek an adjournment to take instruction.  That was a tactical decision and there was no suggestion that he was wrong.  There was therefore no reason for Robertsons to intervene.  Even if Robertsons were wrong not to intervene, and I do not think they were, it was only an error of judgment.  There was no breach of duty of care.

 Causation and damage

130.  On the basis of the above finding, there was no factual basis to support an allegation of breach of a solicitor’s duty or care or standard of care on the part of Robertsons.  That is the end of the Plaintiffs’ claim.  I now turn to consider very briefly what would have been the Plaintiffs’ position had my finding of fact been otherwise.

131.  It is trite principle that in an action in tort, a plaintiff must establish that the loss he suffered was caused by the defendant and that the loss was foreseeable at the time of his entering into the contract or at the time of breach[20]. As stated in Flenley and Leech[21], there is a two-stage approach to the question of causation and damages.  The first stage is a factual enquiry to determine whether but for the defendant’s conduct, the plaintiff would not have suffered the loss.  The second stage depends on whether it is fair and reasonable to hold the defendant liable. This stage requires the court to ask whether the kind of loss that the plaintiff is claiming is the kind of loss for which the defendant’s breach of duty ought to render the defendant liable, and whether the extent of loss claimed ought to be as much as the plaintiff contends.  This depends on a value judgment to be made by reference both to the purpose of the rule imposing liability and to the detailed facts of the particular case.

132.  At the first stage analysis, at the highest, Robertsons would have filed the Plaintiffs Chinese Statements and A&F’s Submission in addition to the amended grounds of review prepared by Mr Yeung; and would have fully advised the Plaintiffs of the pros and cons of giving or not giving evidence and the comments of the Chairman at the directions hearing and at the review hearing.  What would the Plaintiffs have achieved?

133.  In my view, the outcome would have been exactly the same.  Connie is the wife of the chairman of the Hantec Group.  At the time, China Cinda was negotiating the acquisition of the Hantec Group.  A lot of financial interest was at stake for the Hantec Group as well as for Connie and her husband.   As indicated in the contemporaneous emails, particularly Connie’s email of 10 April 2008, the Plaintiffs’ strategy was to put the interest of Hantec International before their personal interest in the success of the review.  They knew if they testify they would be cross-examined beyond the scope of their testimony and would be asked questions on sensitive issues which might help to build up a case against Hantec International which at the time was subject to investigation by SFC.  As Responsible Officers, they were aware that SFC had evidence of active marketing.  They could not perjure. Event if they do, in the light of the totality of the evidence, the chance of their evidence being believed is very flimsy.  They have little evidence to give to save themselves but lots of risk to create for Hantec International by testifying.  In all probabilities, Connie would opt not to testify and Yee would just toe the party line.  The point by point response in their Chinese Statements would for the same reasons as given by the Chairman be dismissed if the Plaintiffs choose not to testify.  Even if my decision on the facts were otherwise, the outcome would be the same.  They would have failed to prove causation.     

134.  Even if the Plaintiffs were to testify regardless of the interest of Hantec International, the result would also be the same.  Though the Chairman criticised the Plaintiffs for not testifying, it does not necessarily follow that by giving evidence their chances of success would have improved.  Robertsons had not overlooked any potential witnesses about the Macau Meeting.  The Plaintiffs had not referred them to Tung Shun Shun.  They agreed to exclude the other potential witnesses who were not called.  Thus, the Plaintiffs could have nothing to add except their own testimony.  The evidence they were able to give was contained in their records of interview.  There was no suggestion that the evidence could be improved by the Plaintiffs testifying.  In the light of the Chairman’s comments at §§ 85 and 86 of the Determination, it is difficult to speculate the outcome would be otherwise. Connie was the only director of Cosmos Hantec in Hong Kong.  She was a Responsible Officer and she signed the documents authorising the fund transfer on a daily basis.  In addition, the 32 new documents suggest that Hantec International was heavily involved in the marketing by Cosmos Hantec.  Similar consideration would apply to her two emails.  As for the Macau Meeting, her two witnesses were unhelpful.  It is difficult to speculate how Shum and Lo would have performed under cross-examination.  Their allegations were very straight forward.  They were hostile to the Plaintiffs and were likely to come up to proof.  As for Connie, she has not proved herself to be an impressive witness before me in these proceedings.  Having regard to the totality of the evidence, the likelihood is that Connie would be disbelieved just the same.  She has utterly failed to prove she had lost a real and substantial chance of doing better at the review.

135.  The position of Yee is slightly different.  The Chairman’s comment against him is less critical.  The only evidence against him was the Macau Meeting.  While the two witnesses called by the Plaintiffs were unhelpful, had he given evidence, the Tribunal would have to weigh his evidence against that of Shum and Lo and the totality of the evidence.  Against the incontrovertible evidence of active marketing and fund transfer and the fact that Yee was a director and Responsible Officer, I doubt if the Determination of the Tribunal would have been any different. 

136.  SFC’s case against the Plaintiffs was very strong, while the Plaintiffs’ defence is very flimsy.  Even if Robertsons were negligent, the Plaintiffs would not be able to prove causation in respect of the damage they suffered.  Any damages to be awarded to them would at best be nominal.

Conclusion

137.  In conclusion, I accept Barry’s and Nam’s evidence and reject Connie’s and Yee’s.  The Plaintiffs’ claims were mostly concocted.  They have utterly failed to prove any factual basis of breach of duty of care and standard of care on the part of Robertsons.  Their action must be dismissed with costs.  I make an order nisi that the Plaintiffs shall pay the Defendant’s costs.  Such costs are to be taxed, if not agreed.