A

CACV 20/2014
and CACV 78/2014
(Heard together)

IN THE HIGH COURT OF THE

D

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 20 OF 2014

F

(ON APPEAL FROM AN ORDER MADE BY THE SOLICITORS

DISCIPLINARY TRIBUNAL DATED 17TH DAY OF JANUARY 2014)

IN THE MATTER of Disciplinary

Proceeding against a Solicitor

and

IN THE MATTER of the Legal

Practitioners Ordinance, Cap 159

BETWEEN
L

A SOLICITOR

and

THE LAW SOCIETY OF HONG KONG

Appellant

Respondent
N

IN THE HIGH COURT OF THE

P

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 78 OF 2014

R

(ON APPEAL FROM AN ORDER MADE BY THE SOLICITORS

DISCIPLINARY TRIBUNAL DATED 17TH DAY OF JANUARY 2014)

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IN THE MATTER of a Solicitor

and
C

IN THE MATTER of Section 13(1)

of
the
Legal
Practitioners
Ordinance, Cap 159

BETWEEN
THE LAW SOCIETY OF HONG KONG

Appellant

and

A SOLICITOR

Respondent

(Heard together)

Before : Hon Lam VP, Barma and McWalters JJA in Court

Date of Hearing : 3 March 2015

Date of Judgment : 2 April 2015

L

________________

JUDGMENT
________________

Hon Lam VP (giving the Judgment of the Court)

1.
Q

There are two appeals before us in respect of the decision of

the Solicitors Disciplinary Tribunal [the Tribunal] on 17 January 2014.

That was a decision on two complaints against a solicitor [the Solicitor],

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who practised at the time of the incidents in question as the principal

S

partner of a firm of solicitors. The two complaints arose in two different

time frames.
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2.
B

The first complaint was in relation to the Solicitors handling

of the conveyancing transaction of a property owned by two co-owners

under the Home Ownership Scheme. The relevant facts and background

were set out by the Tribunal at 12 to 20 of their Statement of Findings of

D

6 June 2013.

Instead of reciting the same at length in this judgment,

bearing in mind that there is no appeal against the finding of guilt by the

Tribunal on this complaint, for present purposes it suffices for us to

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summarise it as follows:

(a)
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The two co-owners were originally husband and wife when

they acquired the property in 1994 as joint tenants. In 1996,

they divorced in Canada but no step was taken in those

proceedings in terms of the disposition of the property.

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(b)
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In 1999, they reached agreement to have the property to be

transferred to the sole name of the husband. They instructed

the Solicitor to handle that on their behalves in May 1999. At

that time, the other co-owner, the ex-wife, was in Canada.

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(c)

As it is a property acquired under the Home Ownership

Scheme, the consent of the Hong Kong Housing Authority

[HA] was required.

On 2 November 1999, approval in

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principle was given by the HA subject to some conditions set

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out in a letter of the same date. One of the conditions was that
the draft Assignment had to be approved by the HA.

(d)

A draft assignment was submitted by the Solicitor to the HA

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for approval on 6 December 1999. The Solicitor also prepared

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a will for the husband and he executed the same on that date.

Under that will, the father of the husband was the sole
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executor of his estate.

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-4-

(e)
B

the husband went to the office of the Solicitor on 20 December

1999 and signed the draft Assignment which had yet to be

The ex-wife came back to Hong Kong in December. She and

B

approved by the HA.

D

(f)

On 28 December 1999, the husband passed away.

(g)
F

The Solicitor did not inform the HA of the demise of the

husband.

On 17 January 2000, the HA returned the draft

Assignment with extensive amendments. The HA required the

assignee to endorse his agreement to the conditions imposed

H

by it upon the letter of 17 January 2000 and the registration of

that endorsed letter at the Land Registry before the assignment.

(h)

In view of the extensive amendments, the Solicitor replaced

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pages in the copy of the Assignment signed by the parties on

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20 December 1999 except the signature page and the

backsheet. He kept the date at 20 December 1999. He then

registered the replaced version of the Assignment at the Land

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(i)

Registry.

Since the husband had already passed away, the Solicitor

procured his father to endorse on the HA letter of 17 January

2000 in the fathers own name and had it registered at the

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Land Registry.

3.
R

The Solicitor gave evidence before the Tribunal that when he

arranged for the signing of the draft Assignment on 20 December 1999, he

had told the parties that there would probably be amendments from the HA.
S

He asked them to give him the authority to change the draft by

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incorporating whatever amendments from the HA into the final version and

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they orally gave him authority to do so. The Solicitor regarded this as
B

execution in escrow.

4.
D

The Tribunal rejected the contention that there could be

execution in escrow in such circumstances in view of the conditions laid

down by the HA and the implications of s17B of the Housing Ordinance.

E

The Tribunal further referred to the implications of the demise of the

F

husband whereupon his interest in the property devolved to the ex-wife by

reason of the right of survivorship. As such, the transaction could not

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proceed further lawfully after the death of the husband.

H

5.
I

It is not very clear from the Tribunals Statement of Findings

whether they accepted or rejected the evidence of the Solicitor in respect of

his explanation of the situation to the parties on 20 December and the

giving of their authority to him to incorporate the amendments. On the one

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hand, the Tribunal commented adversely at 33 on the explanations by the

Solicitor on why it was essential to have the assignment executed on that

date and that the parties could not withdraw from it. They described these
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as odd set of explanations for his actions and contradictory and

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nonsensical statement. On the other hand, at 38 the Tribunal appears to

have accepted that the Solicitor had informed the parties of the likelihood
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of amendments by the HA.

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6.
Q

In the end, the Tribunal found that in the transaction the

Solicitor had acted in breach of Principle 6.01 of the Hong Kong Solicitors
Guide to Professional Conduct and Rule 2(a), (c) and (e) of the Solicitors

st

Practice Rules, which was the 1 Complaint in the Complaint Sheet. The
S

Tribunal imposed a fine of $40,000 by way of penalty in respect of this

complaint.

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7.
B

Though there had been an appeal by the Solicitor against the

finding of guilt on this complaint, it had been abandoned by the time of the
hearing before us. The appeal in CACV 20 of 2014 by the Solicitor is

nd

confined to the appeal against the finding of guilt under the 2 complaint.
D

8.

There is, however, an appeal by the Law Society in CACV 78

of 2014 in respect of the penalty. Leave was granted by another division of

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this court for that appeal to be brought. The Law Society said the penalty

imposed by the Tribunal was manifestly inadequate. The Law Society

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submitted that the proper sentence is the striking off, or alternatively the
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suspension for a substantial period, of the Solicitor.

9.

The second complaint is about events in late 2006 to early

2007. Those events stemmed from the transaction in the first complaint.

On 22 November 2006, another solicitors firm [WFC] acting for the

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father wrote to the Solicitor complaining about the latters handling of the
matter in 1999 to 2000. Believing the assignment to be valid and that he

had inherited the property as part of the estate of the deceased husband, the
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father paid off the mortgage over the property. Subsequently, due to the
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defects in the assignment, the father could not sell it in 2003.

On

27 November 2006, WFC wrote another letter informing the Solicitor that
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due to concerns for the limitation period, legal proceedings had been
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initiated.
10.

The Solicitor then reported the matter to the Hong Kong

Solicitors Indemnity Fund Ltd [the Insurer] on 5 December 2006. The

crux of the second complaint is in respect of the Solicitors dealing with the
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Insurer over this claim. As the Solicitor is appealing against the finding of
guilt in respect of this second complaint, we need to go into greater details

regarding the relevant facts.

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11.
B

On 6 December 2006, the Insurer replied and highlighted the

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obligation on the part of the Solicitor as insured:

Please note that you should always act as a prudent uninsured and
take no steps which might prejudice Insurers position. Please
keep us informed of any future developments.

Please provide Managers with a draft of all letters for approval

before they are sent.

On 6 December 2006, the Solicitor wrote back to the Insurer

12.

setting out his comments on the claim by WFC.

G

Then on

7 December 2006, the Solicitor sent a draft reply to WFC to the Insurer for

their approval before it was sent.

13.

Then there was a series of without prejudice correspondence

between the

Solicitor and

WFC

from 11

December

2006

to

25 January 2007 which the former did not copy or disclose to the Insurer
K

(whether for approval beforehand or later, except the letter of 15 December

from WFC which the Solicitor copied to the Insurer on 25 January 2007).

In the letter of 15 December 2006, WFC set out an offer for settlement of
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their client (viz the Father) in the sum of $644,707.60 with breakdown
showing this to be the total amount of costs and expenses incurred by the

Father in respect of the property.

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14.

On 27 December 2006, the Solicitor made a counter-offer

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which he had not previously discussed or obtained approval from the

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Insurer. In view of the significance of that counter-offer in the context of

the 2nd Complaint, we set out the terms of counter-offer in full:

We summarise the proposed settlement as follows:

S

On condition that your client or any third party has not in any
manner created any incumbrances or charges whatsoever on the
Property from 23rd April 2004 onwards to date, we are prepared

-8-

to fully and finally settle the above matter with your client (Mr
Chan Yam Ping) on the following terms:
1. Without admission of any fault on our part or Mr Wan Hok
Wai, Henrys part, we are to pay to you HK$540,000 upon
your clients execution of the requested Deed/documents as
herein mentioned. The amount of HK$540,000 is for the
assignment of all your clients interest in the amount spent on
the discharge on the mortgage/legal charges registered by
memorial no. TM657667. Your client shall execute a Deed of
Assignment to give effect of such assignment in favour of our
Mr Wan and/or his nominees.

3. Forthwith upon receipt of our said HK$540,000, your client

shall

deliver up the keys to and title documents and vacant

possession of the Property to us (for the benefit of our
Mr Wan Hok Wai, Henry);

ii)

deliver to us the original duly signed and attested

Power of Attorney in the form and substance as the
Appendix hereto;

iii)

not by himself or any third party raise any objection

whatsoever to our Mr Wans dealing with the Property
howsoever;

iv)

deliver to us the Deed of Assignment as stated above;

and

v)

deliver to us a written acknowledgement/confirmation

to be signed by your client and all your clients
immediate family members that they do not have any
further claim/interest whatsoever in the Property nor
in the redemption money spent on the Discharge of
legal charge memorial no. TM657667. The contents
of this acknowledgement/confirmation is to be agreed
between the parties.

i)

2. Your client shall use his best endeavour and provide his full
reasonable assistance/co-operation to us in procuring Ms Ma
Suk Ching to liaise with us for further handling of the
Property.

In return of your clients favouring our Mr Wan with the said

Power of Attorney and the Deed of Assignment, our Mr Wan
hereby agrees and undertakes to your client that he shall fully
indemnify your client and keep him harmless for any loss or
consequence arising out of or occasioned by Mr Wans
exercising of any of the powers therein contained.

-9-

i)

ii)

iii)

iv)

whatever interest, legal and/or equitable, he or any

other person, including without limitation, any of his
family members, may have in the Property and/or the
redemption money paid for the Discharge of
mortgage/legal charge with memorial no. TM657667
and/or other money pay in respect of the Property
shall cease belonging to him and those persons (if
applicable) and shall forthwith be treated as if the
same has been transferred or assigned or conveyed to
our Mr Wan Hoi Wai, Henry and/or his nominees;
he or his immediate family members or any third party
whosoever shall have no further interest or claim on
us or our Mr Wan Hoi Wai, Henry whatsoever directly
or indirectly in the Property and/or on any of the
issues or alleged loss stated in your letter to us dated
22nd November 2006;
he will disclaim all future income, whether in the
nature of capital income or rental or licence fee arising
out of or in relation to the Property and agrees and
declares that the same shall belong to Mr Wan Hoi
Wai, Henry absolutely; and
he will not cause any incumbrance on the Property nor
dispose of the same by Will nor grant any further
Power of Attorney to any other third party.

Mr Wan Hok Wai, Henry shall in return bear all future taxes
and outgoings whether capital or recurrent in nature relating
to the Property.

4. Receipt of payment of the said HK$540,000 signifies and

represents
your
clients
irrevocable
agreement,
acknowledgement and declaration that:

15.

A draft power of attorney was attached to that letter. That

power of attorney was to be executed by the father in favour of the Solicitor

in relation to the property.

Q

16.

WFC replied on the same date, 27 December 2006. Again, it

is necessary to set out at some length their response:

S

th

We refer to your letter dated 27 December 2006 and its

enclosure.

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We wish to reiterate that the Housing Authority has

expressly drawn our attention to s17B of the Housing Ordinance,
Cap 238 that the Assignment registered without their prior
approval is void. Our client is therefore neither the legal owner
nor beneficially entitled to the Property. He has no right to
appoint Mr Wan to do and perform acts and things in respect of
the Property as stipulated in your draft Power of Attorney. We
would like to further draw your attention to s27A of the Housing
Ordinance. Any one enters into an agreement which relates to
land commits an offence and is liable to a fine of HK$500,000
and to imprisonment for 1 year. In the light of the nature of this
case, we do not consider it appropriate for our client to execute
the said draft Power of Attorney.

For the purpose of reaching a settlement, our client is

willing to accept the terms subject to the following:-

1.

Clauses 1, 2, 3(i) and 3(iv) are acceptable to our client;

2.

Clause 3(ii) is not acceptable to our client.

3.

Our client agrees to Clause 3(iii) on the condition that our

client does not execute the Power of Attorney in favour of
Mr Wan.

4.

Clause 3(v) is acceptable to our client. Our clients

spouse and children will sign the acknowledgement.

5.

Apart from Mr Wans undertaking to indemnity our client,

Mr Wan shall comply with the Housing Ordinance, Cap
283 when exercising the rights under the Deed of
Assignment.

6.

Clause 4(i) has the same effect as Clause 3(v).

7.

Clause 4(ii) is acceptable to our client.

8.

Clause 4(iii) is acceptable to our client save that he has no

right to declare any capital income or rental or licence fee
generated from the Property shall belong to your Mr Wan
absolutely as Ms Ma is the beneficial owner.

We are given to understand that Ms Ma will come to

Hong Kong soon to discuss this matter with our client. As
previously mentioned, our client will made his best endeavours to
bring Ms Ma to the negotiating table.

17.

In the meantime, the Insurer indicated it had no comment on

the draft open reply to WFC and the Solicitor issued the same on

8 January 2007.
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18.
B

On 8 January 2007, the Solicitor also wrote another without

prejudice letter to WFC to reiterate his demand for a power of attorney in

view of his case that the assignment in 1999 was valid. He further said:

The Power of Attorney is the only hindrance to the proposed

settlement. Given our view as stated above, there is reasonable
ground for your client to grant the necessary power to [the
Solicitor]

Please re-consider the matter so that a speedy and amicable

settlement can be reached.

As mentioned, this without prejudice letter was not disclosed

19.

to the Insurer.
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20.

There was another letter dated 17 January 2007 in which the

Solicitor urged WFC to reply to his offer.

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21.

In addition to the correspondence, the Solicitor called

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evidence from a junior partner in his firm and Cheng, a solicitor in WFC,
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with regard to the settlement negotiation during that period. We have to

consider their evidence in our analysis of the appeal on the 2nd Complaint
M

because a major ground of appeal is the failure of the Tribunal to assess the
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evidence of Cheng. The up-shot of her evidence was that by mid-January

2007, the negotiations in December had come to an end because the terms

offered by the Solicitor were simply not acceptable. The negotiation in the
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latter part of January 2007 was conducted on a different footing.

22.
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On 25 January 2007, the Solicitor wrote to WFC stating that

his firm was seeking approval from the Insurer to settle. He also said:
In the meantime, could you please provide us with [the ex-wife]s
(or her solicitors) contact details. Alternatively, we shall be
grateful if you would be kind enough to ask [the ex-wife] or her
solicitors to contact us with a view to make some efforts to
resolve the matter in the best interest of all parties concerned.

- 12 -

23.
B

On the same date, 25 January 2007, the Solicitor wrote to the

Insurer asking for approval to settle the case at $540,000. Again it is an

important letter in the context of this complaint, and the relevant parts are

as follows:
D

D
th

On 15 December 2006, Mr Chan Yam Pings (the

Complainants) solicitors in response to our enquiry indicated
that the Complainant was prepared to settle for HK$644,707.60.
A copy of the Complainants solicitors letter dated
15th December 2006 is enclosed.

On a without prejudice and subject to contract basis, and without

compromising your position at all, we managed to bring the
settlement amount down to HK$540,000.

We now seek your approval to settle for HK$540,000 and

indemnify us this amount pursuant to Rule 10 of the Solicitors
(Professional Indemnity) Rules.

In the interest of the fund, your prompt reply is requested because

the Complainant has indicated that he was to put up a further
claim for interest on the basis of his loss. This could be
considerable because of the long lapse of time and the high
judgment rate. In order to avoid this additional claim, a prompt
deal with the Complainant is desirable.

24.
M

The Insurer made a complaint to the Law Society on

22 December 2008. In respect of the dealings between the Solicitor and the
Insurer, it summed up its allegation against the Solicitor as follows at p.5 of

that letter:
O

By selective disclosure to the [Insurer], the [Solicitor] attempted

to broker a deal in which they asked the [Insurer] to pay the
Claimant HK$540,000 to settle the claim but did not disclose to
the [Insurer] that as part of the proposed settlement [the
Solicitor] would take a personal interest in the Property under
the proposed terms of settlement.

25.
S

Based on these facts, the Law Society laid a complaint against

the Solicitor for breach of Principle 13.01 of the Guide and Rule 2(a) of the
Solicitors Practice Rules by concealing or failing to disclose to the Insurer

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that in a proposed settlement, the Solicitor would obtain a personal interest

B

in the matter.

26.
D

After a contested hearing, the Tribunal found the complaint

established. The Tribunal imposed a fine of $80,000 in respect of this

complaint.
E

27.

The Solicitor appealed against the finding of guilt under this

complaint in CACV 20 of 2014. With the leave of another division of this

G

court, the Law Society appealed against the penalty imposed on this
complaint in CACV 78 of 2014.
The finding of guilt under the 2nd Complaint: CACV 20 of 2014

We will deal with the Solicitors appeal first.

29.

28.

Before we consider the evidence and the reasoning of the

Tribunal in finding guilt established, we must examine the charge in the

Complaint Sheet. The Solicitor was charged with the complaint as framed

and it was on that basis that the case was conducted before the Tribunal.
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Had a different charge been laid, the conduct of the defence case may well
O

have been different and the evidence might have taken a different course.

Hence, it is not open to the Law Society to support a finding of guilt in

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respect of a charge that had not been laid, whether before the Tribunal or
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this court.
30.

The main allegation of the 2nd Complaint was stated in the

Complaint Sheet as follows:

2nd Complaint

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That you, Wan Hok Wai, Henry, have been in breach of Principle
13.01 of the Hong Kong Solicitors Guide to Professional
Conduct (the Guide), Volume 1, 2nd Edition and Rule 2(a) of
the Solicitors Practice Rules by concealing or failing to disclose
to the Hong Kong Solicitors Indemnity Fund Limited (the Fund)
that as part of your proposed settlement with the Claimant, you
would obtain a personal interest in the Property.

31.

Then in the particulars, a series of events and the course of

correspondence between the Solicitor and WFC as well as his non-

disclosure of some of the correspondence to the Insurer were recited. We

shall not set out those particulars at length here. We however note the
G

following:
H

(a)
I

Solicitor in the letter of 27 December 2006 as your proposed

Under (12), the complaint referred to the offer of the

(b)

settlement terms;

Then at (17), referring to the letter of 25 January 2007 to the

Insurer, the case of the Law Society was put this way,
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By this letter, you claimed on a without prejudice and subject

to contract basis, and without compromising [the Funds]
position at all, we manage to bring the settlement amount
down to HK$540,000 and urged the Fund promptly to
settle for HK$540,000 and indemnify [you] this amount
pursuant to Rule 10 of the Solicitors (Professional Indemnity)
Rules. You deliberately concealed or failed to notify the
Fund that as part of this settlement, you would obtain a
personal interest in the Property, thereby concealing or
would have the effect of misleading the Fund as the true
extent of your loss for which the Fund was liable to
indemnify. (our emphasis)

(c)

We placed emphasis on the words underlined because they

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highlight two elements of the complaint which are essential

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for the proper understanding of the charge;

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(i)
B

recommended the Insurer to accept on 25 January 2007. As

explained below, this is significant in light of the defence case

The relevant settlement was the one which the Solicitor

B

that there had been a substantial change in the settlement

D

negotiations after mid-January and by 25 January 2007, the

terms offered by the Solicitor in the letter of 27 December

2006 were no longer viable;

F

(ii)
G

An important component of the charge (which, as set out at

(18), contains an allegation of fraud and deceit) is that the
Solicitor would obtain a personal interest in the property under

the settlement.
I

(d)

personal interest in the property.

Lastly, at (18) the gravamen of the complaint was

By reason of the matters set out above, and in particular your

selective disclosure of your proposed terms of settlement with
the Claimant, you acted towards the Fund in a way which is
fraudulent, deceitful or otherwise contrary to your position as
a solicitor and/or you committed acts which compromises or
impairs or is likely to compromise or impair your
independence or integrity.

32.

And the benefit is couched in terms of a

summarized:

As the charge had been brought by reference to Principle

13.01 of the Guide and Rule 2(a) of the Solicitors Practice Rules, we need
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to analyse how those rules are applicable in the present circumstances. The
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Guide is binding on every solicitor in Hong Kong by reason of a Practice

Direction issued by the Law Society on 1 June 1995.
33.

Principle 13.01 of the Guide reads:

13.01

Fair dealing

- 16 -

A solicitor must not act, whether in his professional capacity or

otherwise, towards anyone in a way which is fraudulent, deceitful
or otherwise contrary to his position as a solicitor, nor must he
use his position as a solicitor to take unfair advantage either for
himself or another person.

34.

A solicitor shall not, in the course of practising as a solicitor, do

or permit to be done on his behalf anything which compromises
or impairs or is likely to compromise or impair his independence
or integrity.

Rule 2(a) of the Solicitors Practice Rules says:

35.

The Rules were made under s 73 of the Legal Practitioners

Ordinance Cap 159.

Under that section, the Council may make rules

providing for, amongst other things, the professional practice, conduct and

discipline of solicitors, see s73(1)(a)(i).

36.

In the context of the dealing between the Solicitor and the

Insurer (which, as discussed earlier, is the focus of the 2nd Complaint), it is

debatable whether the Solicitor acted in a professional capacity when he, as

L

an insured person, urged the Insurer to accept the recommended settlement.

The Insurer was advised by another firm of solicitors and the Solicitor did

not give any legal advice to the Insurer. Though the Solicitor was only able
N

to make a claim under the Solicitors (Professional Indemnity) Rules

because he incurred liabilities in his practice as solicitor, and as such one

may say that the making of a claim under the professional indemnity
P

scheme falls within the scope of acting in the course of practising as a

solicitor, it is difficult to see how the Solicitor owed a duty to act

independently under Rule 2(a) in his dealing with the Insurer.

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37.

Likewise, it is difficult to see how for the purpose of Principle

13.01 the Solicitor could be said to have made use of his position as a
T

solicitor to take unfair advantage for himself since he did not act as the

- 17 -

legal advisor, or in his professional capacity in anyway, when he dealt with

B

the Insurer.

38.
D

But we accept that a solicitor acting in a capacity other than

his professional capacity can be found guilty for acting in breach of

Principle 13.01 if he acted towards anyone in a way which is fraudulent or

E

deceitful.
F

39.
G

We also accept that the Solicitor could be found guilty for

acting in breach of Rule 2(a) if he had done anything in his dealings with
the Insurer which compromises or impairs or is likely to compromise or

impair his integrity.

I

40.

Obviously, fraud and deceit requires proof of dishonest intent

J

on the part of the Solicitor. For compromise or impairment of integrity, in

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our view something more than negligence, breach of contractual duties or

error of judgment has to be shown.
41.

The Tribunal correctly

nd

settlement which the 2

understood that the

proposed

settlement which the Solicitor recommended to the Insurer on

25 January 2007.

Complaint focused upon was the proposed

They expressly said so at 40 of the Statement of

Findings.
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42.

The Tribunal also correctly appreciated that fraudulent intent

has to be proved in respect of the 2

R

nd

Complaint.

Though they only

referred to the failure to act fairly and with integrity at 49 of their

Statement of Findings, at 3 of the Reasons and Order of 17 January 2014,

the Tribunal said the concealment was necessarily fraudulent.

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- 18 -

43.
B

properly assessed the evidence and the defence case before they came to

this view.

44.

The crucial issue in this appeal is whether the Tribunal had

B

The defence case was that though the Solicitor had reported

the potential claim to the Insurer on 6 December 2006, he initially intended

E

to settle out of his own pocket and he would only claim for indemnity from
F

the Insurer if he failed to reach a settlement on his terms 1. Thus between

end of December 2006 and mid January 2007 he pursued settlement

G

negotiations without reference to the Insurer. Later, when he understood

H

matters could not be settled on his terms, he put forward a settlement on

other terms which did not give him any personal benefit for the Insurer to
I

consider on 25 January 2007. In support of his case that the terms of

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settlement had changed, he called Cheng to testify on the settlement

negotiations.
45.

In that respect, the evidence of Cheng, the solicitor of WFC

who acted for the father at that period, is of great significance as she had no
M

apparent personal interest in helping the Solicitor in his defence. On the

whole, her evidence supports the defence case.

46.

In her affirmation, she gave evidence to the effect that the

negotiations regarding the terms set out in the letter of 27 December 2006

had been terminated in early January 2007. She stated at 10 and 11.
Q

10.
R

To the best of my recollection, following my letter of reply,

I told Mr Yuen over the phone that the parties could not
settle as our firm would not advise our client to agree to
sign the Power of Attorney and I urged him to drop the
terms proposed in the said letter. I told him Ms Ma would
come to Hong Kong soon. Messrs HWY should sort out the

T
1

See his evidence at D729I to Q

- 19 -

matter with Ms Ma and simply paid us compensation and

our client would be cooperative to sort out the mess.

11.
C

47.

Some time in early January 2007, the negotiation had come

to a halt as my clients son started to interfere with the
proposed settlement. He demanded that we should claim in
full plus interests albeit the claimant agreed to accept
HK$540,000.

She then said that the subsequent negotiation about $540,000

was one without conditions at 13:

F

13.
G

48.

To the best of my collection, on or about 24 or

25th January 2007, I telephoned Mr Yuen again and told
him to offer HK$540,000 without conditions, as otherwise
no settlement would be reached and the Claimants son
would demand interests and the original sum claimed. I
urged him to make an offer for HK$540,000- without
imposing any conditions as soon as possible. This was the
last offer made to HWY. However, I did not receive any
offer. On 30th January 2007, I had no further instructions to
act for the Claimant.

In her oral testimony, she confirmed the evidence in her

witness statement. She further corroborated the Solicitors evidence that at

L

the initial stage, she was told that the Solicitor intended to pay out of his
M

own pocket 2. She confirmed that the initial negotiations ended in early
January 2007 and the term proposed on 25 January 2007 was the

unconditional payment of $540,000 and the son of her client was pressing
O

for more 3. She stood firm on such evidence under cross-examination 4.

49.
Q

In light of the charge laid against the Solicitor in respect of the

2nd Complaint as analysed above and the evidence before the Tribunal, in

our judgment in order to establish that the Solicitor acted with fraudulent or
R

deceitful intent, it is necessary to resolve the following factual issues:

S

S
2
3
4

See her evidence at D796E

D797K to 799A
D805 to 807; D812 to 813

- 20 -

(a)
B

Whether there had been a breakdown in negotiations in respect

of the terms offered by the Solicitor in the letter of
27 December 2006 and the negotiation in the end of

January 2007 was conducted on a separate footing that there

D

had to be unconditional payment of $540,000 to the father for

settlement;

(b)

At the earlier stage of the negotiations based on the terms in

the letter of 27 December 2006, whether the Solicitor intended

G

to pay out of his own pocket without resorting to any

indemnity from the insurer.

50.

Further, there was also a question of law in terms of whether

the Solicitor could be said to have obtained any personal interest in the
J

property from the settlement (even assuming that the terms of settlement
K

include the execution of documents by the father to assist the Solicitor in

his subsequent negotiation with the ex-wife). This has to be considered

L

against the background that by that stage, the HA had confirmed to WFC
M

and the father that the 2000 Assignment was invalid (thus the father could
not have assigned any interest in the property to the Solicitor), and this

stance was reiterated by WFC in their letter of 27 December 2006.

O

51.
P

On the factual issues, the Tribunal should have had regard to

the evidence of Cheng in making the necessary findings of fact.

52.
R

With respect to the Tribunal, we do not think the Tribunal had

properly grappled with these issues in their Statement of Findings. The

Tribunal did not reject the evidence of Cheng.

At 44, the Tribunal

referred to her evidence that by 24 or 25 January 2007, the term of

T

- 21 -

settlement on the table was $540,000 unconditional payment. Then they

B

dealt with the matter in this way at 47 and 48:

47.

48.

53.

The evidence before the Tribunal shows that the deadlock

between the Respondent and the Claimant through WFC
was the Power of Attorney requirement. The final written
position of the Claimant was set out in WFCs letter dated
27th December 2006 on acceptance of which the
Respondent would gain personal interest in the matter. It
does not seem to the Tribunal that the Claimant ever
changed that position to one which would extinguish the
Respondents proposed personal interest.
That the Claimant might be persuaded to go along with all
except one (relating to the Power of Attorney) of the terms
set out in the Respondent dated 27th December 2006 to
WFC appeared to be possible to the Respondent on
25th January 2007. This is seen from his letter that day to
WFC indicating the possibility of settlement on the basis of
earlier correspondence. In other words, he considered it
possible for him to acquire personal interest in the matter if
the Fund acceded to his funding request and the Claimant
agreeing to the terms set of in the letter dated
27th December 2006. What Ms Cheng said to Mr Yuen over
the telephone on 24th or 25th January 2007, if at all known to
the Respondent, did not seem to affect the Respondent,
given the way he wrote the two letters dated
25th January 2007. If, as he claimed in his testimony before
the Tribunal, when he wrote the letter to the Fund dated
25th January 2007, he was looking at having the Claimant
paid without anything in return, there would be no point in
getting in touch with Ma. Also, he did not make it clear that
he anticipated that with funding from the Fund, he would
simply pay a settlement sum to the Claimant without
obtaining the personal interest he had been bargaining on.

In several respects, the reasoning in these paragraphs is

unsatisfactory:
Q

(a)

The reference to the final written position of the Claimant as

per WFCs letter of 27 December 2006 could not have taken

S

the matter further in light of Chengs evidence about what

happened afterwards.

Unless the Tribunal rejected her

- 22 -

evidence, that written position had been overtaken by

B

(b)

subsequent events;

Yet, the Tribunal did not discuss her evidence about these

intervening events in the Statement of Findings and it did not

give any reason for rejecting such version of events;

E

(c)
F

It is not clear at all why the Tribunal said at 47 that the father
had not changed his position since 27 December 2006. That
was directly contradicted by the evidence of Cheng and her

explanation how this came about and the intervention of the

H

son. It appears that the Tribunal had, with respect, utterly

failed to assess such evidence;

(d)

The Tribunal seems to have cast doubt at 48 5 on whether the

J

Solicitor had been apprised of the intervening events between

K

27 December 2006 and 25 January 2007. But given that the

junior partner was given the responsibility to negotiate on

behalf of the firm against the background that the Solicitor (as
M

principal) intended to pay out of his own pocket, it would be

most unlikely that the Solicitor had not followed closely all the

developments. There is no rational basis for such a doubt;

O

(e)
P

Further at 48, the Tribunal had put the cart before the horse
by referring to the subjective belief of the Solicitor in terms of
what he might be able to achieve as opposed to making the

necessary finding of facts. What had actually happened in the

R

negotiations must have a direct bearing on the extent to which

the Solicitor could have believed as to the agreement he might

ultimately achieve. Thus, the Tribunal should have made a

T
5

By the use of the phrase if at all known to the Respondent in relation to the conversation between
Cheng and the junior solicitor.

- 23 -

finding on what were the actual terms for settlement on the

B

table as at 25 January 2007 in light of the evidence of Cheng

and the Solicitor before they proceeded to consider the

subjective belief of the Solicitor;

D

(f)
E

In any event, we are of the view that the Tribunal had read too
much into the last paragraph in the letter of 25 January 2007
from the Solicitor to WFC. It is not possible to infer from the

request for having the contact details of the ex-wife that the
G

Solicitor still believed that the settlement with the father

would be on the terms set out in the letter of 27 December

2006 despite the intervening developments;

I

(g)
J

Also, the crucial issue is what were the terms of settlement as

opposed to what the Solicitor could have achieved by means
of his efforts extraneous to the proposed settlement.

Negotiation with the ex-wife and whether it could lead to the

L

Solicitor acquiring some interest in the property were

extraneous to the settlement with the father. The charge as

framed, as we have seen, put the case of the Law Society on

N

the basis that the Solicitor would acquire an interest in the

property by the terms of the settlement;

(h)

The Tribunal had not dealt with the defence case that at the

earlier stage, the Solicitor intended to pay out of his own

Q

pocket without resort to indemnity from the Insurer and

simply proceeded on the basis that the character of the

negotiation had not been changed. This issue has a bearing on

S

whether the Solicitor acted with a fraudulent or deceitful intent

when he did not disclose that earlier correspondence to the

Insurer; and
U

- 24 -

(i)
B

fully addressing the issues in the evidence as discussed in the

preceding sub-paragraphs) to be what the Solicitor might have

The Tribunal unduly focused on what they found (without

B

obtained as a possibility instead of what he would have

D

obtained under the settlement, see also 49 of the Statement of

Findings. In so doing, the Tribunal had not properly analysed

what would be the interest in the property that he could obtain

F

from the father upon the payment of $540,000 despite the

fathers lack of title in the property. As discussed above, it is

an element of the charge that the Solicitor would obtain a

H

personal interest in the property under the settlement.

54.
J

From the way in which the Tribunal referred to the evidence

of Cheng at 44 and 48, it seems to us that the Tribunal was minded to

accept her evidence. Having reviewed her evidence, including her oral

evidence and the cross-examination by the representative of the Law

L

Society, and in view of her role in the whole incident, we cannot find any
cogent reason for rejecting her evidence.
55.

In our judgment, the Tribunal failed to consider the defence

case adequately. The reasons given in the Statement of Findings do not

O

address the crucial issues properly. Though we do not expect a Statement

P

of Findings in proceedings of this kind to be as sophisticated or well-

written as a judgment of the High Court, in view of the serious

Q

consequences that the proceedings might have on the career of a

R

professional man, it must at least deal with the major issues in the

proceedings cogently and make the necessary findings on material factual

S

disputes.
T

- 25 -

56.
B

not below), defended the finding of guilt under the 2nd Complaint by the
following contentions:
(a)

Mr Karas, appearing for the Law Society in these appeals (but

The Solicitor acted in breach of the directions of the Insurer in

failing to disclose the letters from 27 December 2006 to 17

E

January 2007;
F

(b)
G

(c)

Chengs evidence was irrelevant to the charge against the

Solicitor because she had never spoken with the Solicitor;

The Tribunal was entitled to give little weight to the evidence

of Cheng because what she said around 25 January 2007 did

I

not affect the Solicitor;

J

(d)

Even on Chengs evidence, the Solicitor was hoping to have

the assistance of the father in the negotiation with the ex-wife;

and
L

(e)
M

The 2

Complaint is not about the viability of the proposed

settlement but about the concealment of some of the terms of

nd

57.

the proposed settlement which might or might not be realized.

In his oral submissions, Mr Karas further identified the interest

in the property that the Solicitor would acquire under the proposed

settlement as an equitable interest emerging from the fathers payment of

Q

the mortgage and other expenses in relation to the property. He submitted

that the interest need not be a perfect title. He cited the judgment of the

Court of Final Appeal in Cheuk Shu Yin v Yip So Wan (2012) 15 HKCFAR
S

344 to support his argument that the Solicitor could acquire an interest in
the property from the father.

- 26 -

58.
B

We do not accept these submissions could support the finding

of guilt by the Tribunal. Chengs evidence is important for the reasons we

have given above. Unless the Tribunal properly assessed the evidence of

Cheng, it could not have reached a proper conclusion on the defence case
D

that the settlement proposed to the Insurer on 25 January 2007 did not
include any term for the father to transfer any rights to the Solicitor as a
condition for the payment of $540,000.

If there was a break in the

continuity in the negotiations, whilst the non-disclosure of the earlier

correspondence could be a breach of the Solicitors contractual obligations

towards the Insurer, they could not be evidence of fraudulent or deceitful

H

intent on the part of the Solicitor when he communicated to the Insurer the
offer according to the terms on the table as at 25 January 2007. The charge

is not established simply because the Solicitor had concealed the earlier
J

correspondence.

59.
L

We do not think the uncertain prospect of the intended

negotiations with the ex-wife can be elevated into an interest in the

property.

The charge specified acquisition of an interest in the

property from the settlement. The co-operation of the father in the intended
N

negotiations with the ex-wife was not an interest in the property. And
according to the evidence of Cheng, whilst the Solicitor might have a hope

in procuring the co-operation of the father, that was not a term for the
P

payment of the $540,000.

60.
R

The Tribunal did not reach any conclusion on the interest in

the property stemming from the various payments by the father towards it.

We do not have the full picture in that regard and we are not going to
S

speculate whether the father could have claimed an equitable interest in the
T

- 27 -

property by reference to Cheuk Shu Yin v Yip So Wan (2012) 15 HKCFAR

B

344.

61.
D

For these reasons, we do not find ourselves able to uphold the

finding of guilt in respect of the 2nd Complaint. We shall allow the appeal

by the Solicitor on this complaint. We have considered whether we should

E

remit the matter to a differently constituted tribunal for retrial. However in

F

light of the following, we do not think we should make such order:

(a)

As we have said above, it appears to us that the Tribunal had

no reason to disbelieve Cheng. Having reviewed her evidence

and the cross-examination of her and the extent she was

I

challenged, the fair course to take in the circumstances is to

(b)

regard her evidence on the facts as being accepted as true;

On her evidence, and in view of what we said about the

unlikelihood of the Solicitor being ignorant of her discussion

L

with the junior partner, the Solicitor knew that the only offer on
the table as at 25 January 2007 was the unconditional payment

of $540,000;
N

(c)
O

recommended to the Insurer on 25 January 2007 was an offer

with those conditions set out in the letter of 27 December 2006;

We do not see any cogent basis for holding that the offer he

(d)

In our judgment, the Solicitor would not derive any personal

benefit in terms of interest in the property from the offer he

R

(e)

commended to the Insurer on 25 January 2007;

Thus, it would be futile to remit the case back to the Tribunal;

and

- 28 -

(f)
B

Another consideration is the lapse of time between the events

in question and now, though this is not conclusive in view of
the seriousness of the charge. Yet, the weakness in the case of

the Law Society under the 2

D

nd

Complaint strongly militates

against the remitting of the case after such lapse of time.

62.

We shall allow the appeal in CACV 20 of 2014 and set aside

the decision of the Tribunal in respect of the 2nd Complaint. We will also

dismiss the 2nd Complaint. In view of the abandonment of the appeal on

the 1st Complaint at the time when the Solicitor lodges his skeleton
submissions, we shall order the Law Society to pay 85% of the costs of the

Solicitor in this appeal.

I

63.

We do not find it necessary to deal with the 2 summonses of

26 February 2015 taken out on behalf of the Solicitor. We make no order

K

on them and there shall be no order as to costs in respect of the same.

L
st

Penalty under the 1 Complaint: CACV 78 of 2014

M

64.

In view of our decision on the 2nd Complaint, we shall confine

st

ourselves to the question of penalty on the 1 Complaint.

O

65.

We have summarised the facts of this complaint at the

beginning of this judgment.

Q

66.
R

As regards the ambiguity in the Tribunals finding over the

Solicitors evidence on his explanation to the parties on 20 December 1999,

bearing in mind that the Tribunal manifestly eschewed making a finding of

fraudulent or dishonest intent on the part of the Solicitor in relation to the

T

1st Complaint, and the nature of the appeal before us (being an appeal

- 29 -

against penalty but not against finding of guilt), we think the proper course
B

for us to take is to proceed on a basis more favourable to the Solicitor, viz

that his evidence in that respect was accepted by the Tribunal.

67.

Even on that basis, we are of the view that the penalty

imposed by the Tribunal was clearly wrong. Though this court will give
E

recognition and attach great weight to a penalty imposed by a disciplinary

F

tribunal, the scope for intervention is no longer restricted to those where a

very strong case for doing so is established. In Salsbury v Law Society

G

[2009] 1 WLR 1286, Jackson LJ said at p.1296:

H

It is now an overstatement to say that a very strong case is

required before the court will interfere with the sentence imposed
by the Solicitors Disciplinary Tribunal. The correct analysis is
that the Solicitors Disciplinary Tribunal comprises an expert and
informed tribunal, which is particularly well placed in any case to
assess what measures are required to deal with defaulting
solicitors and to protect the public interest. Absent any error of
law, the high Court must pay considerable respect to the
sentencing decisions of the tribunal. Nevertheless if the High
Court, despite paying such respect, is satisfied that the sentencing
decision was clearly inappropriate, then the court will
interfere.

68.
N

This has been cited with approval by Fok JA (as he then was)

in Hong Kong in Chan Cheuk Chi v The Registrar of the Hong Kong
Institute

of

Certified

Public

Accountants

CACV

38

of

2012,

8 February 2013. In that case, the court adopted the clearly wrong test.
P

69.

In A Solicitor v Law Society of Hong Kong [2004] 2 HKLRD

490, at 61 the Court of Appeal distilled the following principles from

R

earlier decisions on penalty in solicitor disciplinary matters:

1

.An order that the solicitor be struck off the Roll of Solicitor
is appropriate where dishonesty is involved.

- 30 -

2.
B

3.

Although a striking off is almost invariably the penalty for

dishonesty, there may be cases where a suspension is the
appropriate penalty when dishonesty is involved.
Where a solicitor has not acted dishonesty but has fallen
below the required standards of integrity, probity and
trustworthiness, then suspension is the appropriate sentence.

4.
E

5.

It is only in the most exceptional cases that orders other

than suspension should be imposed in cases covered by
paragraph 3 above.
The rationale for these heavy sentences is four-fold:

(a) To punish the solicitor.

G

(b) To deter others from acting in the same way.

H

(c) To ensure that the offender will not have the opportunity to
repeat the offence.

(d) To maintain the reputation of the profession and to sustain

public confidence in the integrity of the profession.

6.
K

7.

70.

If suspension is the appropriate remedy then it will not be

an objection to impose it even though the solicitor may be
unable to re-establish his practice when the period of
suspension is past.
Each case has to be determined on its own facts. The
professional body entrusted with the task of professional
discipline is in an uniquely advantageous position to
discharge its duty.

We would make the following observations with regard to

these principles. Subject to the question whether striking off could be the

appropriate sentence in a case not involving dishonesty (which we shall

P

elaborate below), we are in general agreement with these guidelines. As

Q

for the rationale for these sentences, for our part we would place more

emphasis on the need to protect the public and to maintain public

R

confidence in the profession. We respectfully reiterate what was said by

S

Sir Thomas Bingham MR in Bolton v Law Society [1994] 1 WLR 512

concerning the purpose of these penalties. In particular, what His Lordship

T

said at p.519B to E is illuminating and bears repetition:

U

- 31 -

Because orders made by the tribunal are not primarily punitive, it

follows that considerations which would ordinarily weigh in
mitigation of punishment have less effect on the exercise of this
jurisdiction than on ordinary run of sentences imposed in criminal
cases. It often happens that a solicitor appearing before the
tribunal can adduce a wealth of glowing tributes from his
professional brethren. He can often show that for him and his
family the consequences of striking off or suspension would be
little short of tragic. Often he will say, convincingly, that he has
learned his lesson and will not offend again. All these matters
are relevant and should be considered. But none of them touches
the essential issue, which is the need to maintain among members
of the public a well-founded confidence that any solicitor whom
they instruct will be a person of unquestionable integrity, probity
and trustworthiness. Thus it can never be an objection to an order
of suspension in an appropriate case that the solicitor may be
unable to re-establish his practice when the period of suspension
is past. If that proves, or appears to be likely, to be so the
consequence for the individual and his family may be deeply
unfortunate and unintended. But it does not make suspension the
wrong order if it is otherwise right. The reputation of the
profession is more important than the fortunes of any individual
member. Membership of a profession brings many benefits, but
that is a part of the price.

71.

Further, the principle at (7) in A Solicitor v Law Society of

Hong Kong, supra, should now be read together with what we said above

on the scope for intervention by this court.

M

72.

Mr Karas submitted on behalf of the Law Society that we

should re-visit the question whether striking off should be confined to cases
O

involving dishonesty. He referred to the case cited in A Solicitor v Law

Society of Hong Kong, supra, and rightly pointed out that in none of them

was such restriction laid down. In Bolton, supra, the Master of the Rolls
Q

said at p.518D to E:
If a solicitor is not shown to have acted dishonestly, but is shown
to have fallen below the required standards of integrity, probity
and trustworthiness, his lapse is less serious but it remains very
serious indeed in a member of a profession whose reputation
depends upon trust. A striking off order will not necessarily
follow in such a case, but it may well. The decision whether to
strike off or to suspend will often involve a fine and difficult

- 32 -

exercise of judgment, to be made by the tribunal as an informed

and expert body on all the facts of the case. Only in a very
unusual and venial case of this kind would the tribunal be likely
to regard as appropriate any order less severe than one of
suspension.

73.

There are cases in England where striking off was deemed to

be appropriate even without any finding of dishonesty on the part of the

E

defaulting solicitor.

(Admin), Moses LJ said at 25 and 26:

25.
... The essential principle is that which was identified by
Sir Thomas Bingham MR in Bolton v Law Society [1994] 1 WLR
1286. The profession of solicitor requires complete integrity,
probity and trustworthiness. Lapses less serious than dishonesty
may nonetheless require striking off, if the reputation of the
solicitors' profession "to be trusted to the ends of the earth" is to
be maintained.

In Law Society v Emeana [2013] EWHC 2130

74.

26.
The principle identified in Bolton means that in cases
where there has been a lapse of standards of integrity, probity and
trustworthiness a solicitor should expect to be struck off. Such
cases will vary in severity. It is commonplace, in mitigation,
either at first instance or on appeal, whether the forum is a
criminal court or a disciplinary body, for the defendant to contend
that his case is not as serious as others. That may well be true.
But the submission is of little assistance. If a solicitor has shown
lack of integrity, probity or trustworthiness, he cannot resist
striking off by pointing out that there are others who have been
struck off, who were guilty of far more serious offences. The
very fact that an absence of integrity, probity or trustworthiness
may well result in striking off, even though dishonesty is not
proved, explains why the range of those who should be struck off
will be wide. Their offences will vary in gravity. Striking off is
the most serious sanction but it is not reserved for offences of
dishonesty.

Mr Karas also referred us to the judgment of the President of

the Queens Bench Division in Iqbal v Solicitors Regulations Authority

R

[2012] EWHC 3251 (Admin), where His Lordship said at 21-23:

S

21. In those circumstances I accept that it must be right for

us to consider again the penalty on the basis that there was no
dishonesty.

- 33 -

22.
I turn to do so on an understanding as to the position of
the solicitor. It is not necessary to set out statements as to the
position and esteem in which the profession is held and the
importance of the highest professional standards. Those are set
out in the judgments of Sir Thomas Bingham MR, as he then was,
in the well-known case of Bolton v Law Society [1994] 1 WLR
512 and again in his decision in Weston v the Law Society
reported in the Times 15 July 1998, when Sir Thomas Bingham
spoke of standards of integrity, probity and trustworthiness.
In Western he made clear that trustworthiness did not merely
refer to honesty, but also the duty arising from holding someone
else's money.

75.

23.
It seems to me that trustworthiness also extends to those
standards which the public are entitled to expect of a solicitor,
including competence.
If a solicitor exhibits manifest
incompetence, as, in my judgment, the appellant did, then it is
impossible to see how the public can have confidence in a person
who has exhibited such incompetence. It is difficult to see how a
profession such as the medical profession would countenance
retaining as a doctor someone who had showed himself to be
incompetent. It seems to me that the same must be true of the
solicitors' profession. If in a course of conduct a person
manifests incompetence as, in my judgment, the appellant did,
then he is not fit to be a solicitor. The only appropriate remedy is
to remove him from the roll. It must be recalled that being a
solicitor is not a right, but a privilege. The public is entitled not
only to solicitors who behave with honesty and integrity, but
solicitors in whom they can impose trust by reason of
competence.

On the facts of A Solicitor v Law Society of Hong Kong, supra,

the complaints which were upheld on appeal related to incompetence.

There was no allegation of dishonesty.

For the charges which were

sustained on appeal, the sentence imposed by the tribunal was suspension

P

of 2 years and a fine of $30,000 respectively. On appeal, the Court of

Appeal reduced the sentence for the first complaint to a suspension of 1

year and there was no change to the sentence for the second complaint.
R

The court was of the view that the solicitor had fallen below the required
standard of integrity, probity and trustworthiness 6.

T
6

See 64 of the judgment.

- 34 -

76.
B

It is not clear from the report whether striking off was argued

as an option in that case. Since it was an appeal by the solicitor against the
penalty of 2-year suspension and the court reduced it to 1-year suspension,

it would appear that the proper criteria for ordering a striking off might not
D

have been subject to full arguments in that case. We therefore regard the
comments in those regards at 61 of that judgment as obiter. Even so, what

had been said in that paragraph deserved great respect.

F

77.

Though Mr McCoy SC submitted that we are bound by Hong

G

Kong authorities but not English authorities, counsel did not put forward
H

substantive arguments to challenge the submissions of Mr Karas in this

respect.
I

78.

With great respect, we are of the view that there is room for

flexibility in relation to the circumstances under which a striking off

K

penalty is appropriate and it should not be straight-jacketed to cases

involving dishonesty. We find the reasoning in the English cases cited

above compelling. Since what was said in A Solicitor v Law Society of

M

Hong Kong, supra, in term of striking off is, strictly speaking, only obiter,

we do not have to say that it is plainly wrong before we depart from it.

79.

Hence, we are of the view that in an appropriate case of a

solicitor being found to have fallen below the required standards of

integrity, probity and trustworthiness, the tribunal could impose a penalty

Q

of striking off from the roll of solicitors.

80.
S

However, on the facts of the present case, though we are of the

view that the penalty imposed by the Tribunal is clearly wrong, we do not

think it is appropriate to order a striking off. Instead, in our judgment, the

T

appropriate penalty should be a suspension for two years with the condition
U

- 35 -

that when the Solicitor resumes practice after the suspension, he is

B

prohibited from practising as a sole proprietor or partner or manager of a

solicitors firm until the Law Society is satisfied that he is fit to do so.

81.

In coming to this conclusion, we have taken account of the

mitigating circumstances set out in the submissions placed before the

E

Tribunal. However, we are of the firm view that the penalty of a fine of
F

$40,000 imposed by the Tribunal is clearly wrong. As we said, we are

dealing with the matter on the basis that there was no dishonesty on the part
G

of the Solicitor and he had indeed explained to the parties who executed the
H

assignment that there could well be amendments to the document by the

HA. Even so, it is a very serious matter to change the contents of the
I

assignment without first apprising the parties as to what those amendments

J

were. It is all the more serious when, at the time of the swapping of the
pages, one of the party had passed away. Moreover, the document was an

assignment which the Solicitor subsequently registered with the Lands

L

Registry. In doing so, the Solicitor had created a false impression in a

public registry as to the title of a property. It is a serious breach of the

public trust placed upon the Solicitor. As observed by the President in

N

Iqbal v Solicitors Regulations Authority, supra, the public is entitled not

only to solicitors who behave with honesty and integrity, but solicitors in

whom they can impose trust by reason of competence. What the Solicitor
P

did was also a gross dereliction of his duty towards the HA.

82.
R

If a solicitor can escape lightly with such a serious breach of

duties and gross incompetence, the public would lose confidence in our
conveyancing

system which

depends

substantially

on

high

and
S

uncompromising standards of both integrity and competence on the part of

T

the solicitors involved in such transactions.

- 36 -

83.
B

In our view, the fact that the Solicitor did not derive personal

benefit out of the transaction carries little weight in the circumstances. If

there was an element of personal benefit, it would be an aggravating factor

and most likely there would also be an element of dishonesty. However,

D

even without such elements, as in the present case, it is still a very serious
matter for a solicitor to swap pages in a conveyancing document and then

have it registered at the Land Registry. The Solicitor should appreciate that
F

there are other people who would rely on the document and the fact that it
was prepared and registered by a solicitor. It should have been obvious to

any solicitor that under no circumstances should this be done.

H

84.

Obviously, the errors of the Solicitor had caused the father to

I

suffer financial loss. He had also created problems in respect of the title to
J

the property which the ex-wife and the father had to go through litigation to
resolve (with costs and time engaged in the process as well). This is by no

means a minor victim-less infraction. Substantial public as well as private

L

resources had to be incurred as a result of his wrongdoing.

85.
N

For these reasons, we allow the appeal by the Law Society in

CACV 78 of 2014, set aside the penalty imposed by the Tribunal in respect

of the 1st Complaint and instead make an order of suspension as per 80

O

above. We also make a costs order nisi that the Solicitor shall pay the Law
P

Societys costs of this appeal, such costs to be taxed if not agreed.

86.

Before we leave this case, we wish to make an observation as

to the title of these proceedings. By reason of Order 106 Rule 12(1), the

Solicitor is not named in the title of the proceedings. However, there is no

S

similar restriction in respect of appeals from disciplinary tribunals of the

other professions like doctors, accountants, dentists. It is doubtful if the

- 37 -

restriction is in line with the current concept of open justice and the High
B

Court Rules Committee should review the position.

(M H Lam)
Vice President

(Aarif Barma)
Justice of Appeal

(Ian McWalters)
Justice of Appeal

Mr Gerard McCoy SC and Mr Albert NB Wong, instructed by Henry Wan

& Yeung, for the appellant (CACV 20 of 2014) and the respondent
(CACV 78 of 2014)
Mr Jason Karas, Solicitor Advocate of Stephenson Harwood, for the
appellant (CACV 78 of 2014) and the respondent (CACV 20 of 2014)