TSE LAP FU LAWRENCE - A PROFESSIONAL ACCOUNTANT v. DISCIPLINARY COMMITTEE OF HONG KONG SOCIETY OF ACCOUNTANTS

CACV 91/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 91 OF 2000

(ON APPEAL FROM THE ORDER OF THE

DISCIPLINARY COMMITTEE OF THE HONG KONG SOCIETY OF
ACCOUNTANTS DATED 16 FEBRUARY 2000)

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J U D G M E N T

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Hon Mayo VP (giving the judgment of the Court):

1. The appellant appeals from an order of the Disciplinary Committee ("the Committee") convened in accordance with the provisions contained in the Professional Accountants Ordinance ("the Ordinance"), Cap. 50. The Committee made a finding:

"That, as a professional accountant, Mr. Tse Lap Fu, Lawrence has refused or neglected to comply with a direction lawfully given by the Council of the Society as contained in paragraph 20 of Practice Review Statement 1.401, in that despite various attempts since June 1999 having been made by the Society's practice reviewer to organise a second practice review of Mr. Tse Lap Fu, Lawrence's practice, as directed by the Practice Review Committee pursuant to Section 32D(3) of the Ordinance, Mr. Tse Lap Fu, Lawrence had, up to 8 November 1999, the date of the complaint, failed to return the completed Practice Review Questionnaire and the relevant declaration forms to the Society for the purpose of the second practice review."

2. In consequence of this they made an order under s. 35(1)(a) of the Ordinance that the appellant's name be removed from the Register of Professional Accountants for 18 months from 1 April 2000.

3. It would appear that failure to comply with a Practice Review Statement is regarded by the Accounting Profession as quite a serious matter as the purpose of the Review is to ensure that accountants practise in a satisfactory manner.

4. The questionnaire was first sent to the appellant on 4 June 1999. He failed to respond to it in the required time. Two reminders were sent to him to no avail.

5. On 13 January 2000 a notice was served upon him informing him that there would be a disciplinary hearing on 16 February 2000 in relation to this. The appellant wrote to the Committee on 17 January 2000 seeking an adjournment of the hearing on the grounds of his ill-health. Enclosed with the letter were various informal medical documents. He said that he would attend to the Practice Review after he had recovered from an operation he claimed was going to be performed upon him.

6. At this point it is significant to note that no opinion of any medical practitioner was included in the documentation we have referred to. This was notwithstanding the fact that the Clerk to the Committee informed the appellant that the Committee were not satisfied with the medical evidence which had been tendered to them. The request for the adjournment was refused.

7. The appellant then informed the Committee that he would be unable to attend the hearing due to his poor health.

8. There is now some medical evidence concerning the appellant's condition. In a note addressed to "to whom it may concern" dated 22 October 2000 Dr J. S. Liu certified that the appellant had suffered from "chest pain and discomfort with neck pain since May 1999." An examination did not reveal anything of much significance. However it would appear that the doctor referred to the material which the appellant had sent the Committee and that this indicated that he "most probably" was suffering from ischaemic heart disease and that cervical spondylosis had been confirmed. The report also made reference to the fact that an operation was performed on the appellant at St Teresa's Hospital. This was a cardiac catheterisation.

9. It should be observed that a note is appended to a number of the documents which were submitted to the Committee which read "This report is only intended for the Doctor's Reference." For example that is on p. 173 of the appeal bundle.

10. It is not a simple matter to glean from the material in the medical records whether the appellant is or was suffering from a serious condition.

11. More importantly than this it certainly would not have been possible without advice from a medically qualified person to be able to make any decision as to whether the appellant would have been able to either complete the Practice Review or attend upon the disciplinary hearing.

12. It also has to be borne in mind that when Dr Liu presumably examined the appellant in October 2000 he would have been placing reliance upon what the appellant told him about his symptoms. As it appears that this was the first time the doctor saw the appellant he would have had no direct personal knowledge concerning his condition at the relevant time.

13. The main complaints made by the appellant are that the Committee did not sufficiently consider his medical condition and that they were "reckless" to proceed without full details of this. Following on to this complaint is made that the penalty imposed is excessive in all the circumstances and that the Committee were lacking in compassion.

14. What emerges from perusing the transcript of the proceedings is that the Committee were very concerned about the difficulties they were experiencing in communicating with the appellant. He was not responding to letters and notices which had been addressed to the address which he had given to the Hong Kong Society of Accountants.

15. It is implicit from the transcript that the Committee did have in mind the claims which the appellant had made concerning his health.

16. Evidence was adduced that at the relevant time the appellant had given advice under a duty scheme which had involved interviewing two clients.

17. Also at the same time the appellant had together with three other accountants attempted to form a corporate practice with limited liability.

18. It would seem that the reason for referring to this evidence was to rebut the suggestion that the appellant's ill health had prevented him from complying with the requirements relating to the Practice Review.

19. As indicated earlier the Accounting Profession attaches importance to these Reviews. The appellant did not comply with the repeated requests made to him to comply with their requirements. Although vague reference was made to his health problems no evidence was tendered to the respondent in a clear and satisfactory manner which would enable them to conclude that the appellant was not in a fit condition to comply with their requirements.

20. It is not possible to say that the respondent did not afford the appellant every reasonable opportunity to make appropriate representations to them.

21. There is one matter which causes us some concern. No reasons have been given by the Committee for their decision or for the penalty imposed.

22. It used to be the case that it was not strictly speaking necessary to give reasons for decisions of informal tribunals such as the present one.

23. There have however been developments in the law over the last few years and there is undoubtedly a trend towards the necessity to give at least a short explanation for the decision which is made and the penalty imposed.

24. One of the main reasons for this is that a person who is the subject of proceedings which have an important impact upon his life is likely to harbour a sense of injustice if he does not know exactly why he has been found guilty and been punished. It is also of course relevant to the question of determining the feasibility of prosecuting an appeal.

25. Stock J (as he then was) considered the law as it then stood in Deloitte Touche Tohmatsu v Hong Kong Society of Accountants unreported being HCAL 97/1999. His judgment included an analysis of the position. Since that case was heard there is a report in the London Times of 26 October 2000 of the Privy Council case of Selvanathan v General Medical Council which would seem to support the trend now apparent for the necessity of giving sufficient reasons.

26. It is not possible to lay down any hard and fast rules. As might be expected much depends upon the circumstances of each case.

27. The present case is a fairly straight forward one. The complaint made against the appellant is that he refused or neglected to comply with the requirement of completing particulars of the Practice Review. Also it can readily be implied from the transcript of the proceedings that the Committee were not impressed with the extremely scant nature of the medical evidence adduced before them by which the appellant attempted to justify his default.

28. In such circumstances the absence of reasons for the decision would not seem to be fatal to the proceedings.

29. So far as the reasons for the imposition of the penalty is concerned it would undoubtedly have been helpful if some reasons had been given particularly bearing in mind the severity of the penalty. Some help in this connection can be derived from the judgment of Keith JA at p. 464 of Re a Solicitor [1999] 4 HKC 455:

"I think that there is a very considerable difference between the finding that a solicitor has been guilty of unprofessional conduct and a finding as to what the appropriate disciplinary sanction should be. Reasons may well be required for the former but not the latter. Take this case as an example. If the Tribunal had been required to give reasons for its view that the appellant's conduct merited suspension from practice for six months, I rather doubt whether the Tribunal would have been able to do much more than state that, taking into account the appellant's personal circumstances, and the circumstances in which the contraventions occurred, the seriousness of what he did merited his suspension from practice. That is in fact what the Tribunal stated when it announced the orders which it made. No reasons needed to be given because the reasons emerged from the Tribunal's recitation of the agreed facts of the case. I accept that there may be a need to give reasons if a penalty is apparently out of tune with the usual penalty imposed for particular example of unprofessional conduct. In such a case, it may be necessary for the Tribunal to explain why it is taking an exceptional course. But in view of my conclusion on the merits of the appeal, that need did not arise in the present case."

30. It must however be borne in mind that experienced accountants must be best qualified to assess the seriousness of a default of this nature. We would not be disposed to interfere with the findings of the Committee on this score. This being the case this appeal is dismissed and the Committee are entitled to their costs.