Lee Siu Hong t/a Hong Lee & Co (A Firm) v. The Law Society of Hong Kong and Others

CACV 155/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 155 OF 2014

(ON APPEAL FROM HCA NO. 2216 OF 2013)

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J U D G M E N T

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Hon Kwan JA (giving the judgment of the court):

1.The plaintiff, who is a solicitor acting in person, appealed against the judgment of Deputy High Court Judge Seagroatt given on 23 June 2014 striking out his claim in negligence against the Law Society of Hong Kong (the 1^st defendant), Ng Siu Wing Ludwig (the 2^nd defendant) and ONC Lawyers (the 3^rd defendant).

2.The plaintiff was and is the sole proprietor and principal of Messrs Hong Lee & Co (“the Firm”).  The 2^nd defendant, who is a partner of the 3^rd defendant, was appointed by the 1^st defendant to intervene in the practice of the Firm at the material time under section 26A(1)(d) of the Legal Practitioners Ordinance, Cap 159 (“LPO”).  The plaintiff’s claim was struck out as vexatious and an abuse of the process of the court.

The background

3.For present purposes, the background matters, taken largely from the judgment below and the judgment of the Court of Appeal in CACV 188/2012, 28 February 2014, may be stated as follows.

4.In February 2004, a bankruptcy petition was presented against the plaintiff by a former staff for unpaid commission.  It was only on 6 October 2008 that a bankruptcy order was made on the petition.  The Official Receiver took charge of the plaintiff’s office and, in effect, the practice.  By virtue of section 6(7) of LPO, the plaintiff’s practising certificate was automatically determined when he became bankrupt.

5.On 8 October 2008, the Council of the 1^st defendant passed a resolution that in accordance with section 26A(1)(d) of LPO, the practice of the Firm be intervened and an intervention agent be appointed to conduct the intervention subject to supervision by a monitoring committee comprising three Council members.  It was further resolved that in accordance with the Second Schedule to LPO, the client and office accounts of the Firm be vested in the Council and all the documents in the possession of the plaintiff, the Firm or the Official Receiver in connection with the plaintiff’s practice be delivered to the intervention agent, and authorisation was given to the intervention agent, if necessary, to apply to court on behalf of the Council under section 7(6) of the Second Schedule to LPO, to enter any premises to search for and take possession of any document to which the order relates.  The plaintiff was notified of the resolution and the appointment of the 2^nd defendant as the intervention agent on 9 October 2008.

6.On 5 November 2008, the bankruptcy order was annulled with the consent of the petitioner.  The defendants became aware of this shortly afterwards.  The plaintiff alleged that at a meeting with the 1^st defendant’s representatives and the 2^nd defendant on 17 November 2008, the defendants acknowledged that the intervention should cease following the annulment of the bankruptcy order.

7.On 20 November 2008, the plaintiff submitted his formal applications to the 1^st defendant for a practising certificate in 2008 and in 2009.  On 25 November 2008, the 1^st defendant reissued the 2008 practising certificate to the plaintiff, but the intervention continued.  The plaintiff was allowed to return to the office premises of his practice on 12 December 2008 but was not allowed to contact clients or deal with any file.  On 15 December 2009, the 1^st defendant issued the 2009 practising certificate to the plaintiff.  The plaintiff resumed control of the Firm’s bank accounts on 3 January 2009 and on 5 January 2009, the 1^st defendant issued a circular announcing that the Firm was free to resume its practice.

8.One of the two major heads of complaint in the action brought by the plaintiff is that the defendants failed to terminate the intervention within a reasonably short time upon the annulment of the bankruptcy order.

9.The other complaint in the action related to the alleged failure of the defendants to handle with care a file relating to Sinoearn International Ltd (“Sinoearn”), for which outstanding fees were owed to a barrister.  The salient facts are as follows.

10.The Firm acted for Sinoearn in a High Court action, which was set down for trial for eight days commencing on 25 February 2008.  Senior and junior counsel were instructed to appear.  The junior counsel caused a letter to be sent by his clerk to the Firm dated 12 September 2007, in which he recorded the agreement with the Firm as to his fees: a brief fee of $80,000 to be paid in three instalments, the latest by 26 November 2007, and a refresher of $30,000 per day.  And if there was a settlement in the three weeks immediately prior to the first day of trial, half the refreshers were to be paid, whereas full refreshers were to be paid if the hearing date was vacated or adjourned on or after the first day of trial.

11.On 27 September 2007, a brief signed by the plaintiff was sent by the Firm to the junior counsel, stating the brief fee at $80,000 with a daily refresher of $30,000.  There was no settlement of the action before the first hearing date, so the barrister was entitled to be paid all the refreshers.

12.The brief fee of $80,000 was paid by instalments by late December 2007.  A further $80,000 was paid by cashier order on 25 February 2008 on account of refreshers.  The remaining sum due for unused refreshers was not paid.  Nevertheless, the barrister continued to act for Sinoearn and appeared before the trial judge on 27 February 2008 when the trial was adjourned.

13.On 12 March 2008, the barrister sent a fee note to the Firm in the sum of $138,750, made up of the brief fee, one refresher for attending court on 27 February, six unused refreshers and one conference with leading counsel and lay client, less $160,000 already paid.

14.From April to July 2008, the barrister’s clerk sent reminders to the Firm for payment of the outstanding fees.  The plaintiff was reminded of an earlier circular issued by the 1^st defendant to all solicitors which stated that counsel’s fees must be paid or challenged promptly, and in any event within two months of the submission of the fee note.

15.On 1 August 2008, the barrister lodged a complaint with the Hong Kong Bar Association against the plaintiff for the non-payment of his fees and requested the assistance of the Bar Association including referring his complaint to the 1^st defendant.  The Bar Association wrote to the plaintiff on 4 August 2008 stating that unless the outstanding fees were paid by 18 August, further action would be considered including referring the complaint to the 1^st defendant as a disciplinary matter.  In response to the Bar Association, on 8 August the plaintiff sought the barrister’s forbearance in allowing Sinoearn to come up with funds to pay the outstanding fees before October 2008.  The barrister informed the Bar Association on 18 August he was prepared to allow indulgences for the Firm to pay in full before October 2008.  The Bar Association wrote to the Firm on 19 August stating that if the outstanding fees should remain unpaid by 15 October 2008, the barrister’s complaint would be referred to the 1^st defendant without further notice.

16.As stated earlier, the plaintiff was made bankrupt on 6 October 2008 and the 1^st defendant appointed the 2^nd defendant to intervene in the practice of the Firm on 8 October.  The bankruptcy order was annulled on 5 November but the intervention continued until 5 January 2009.  The outstanding fees of the barrister remained unpaid at all times.

17.On 22 October 2008, the new solicitors engaged by Sinoearn filed a notice of change of solicitors to replace the Firm in the High Court action.  On 11 November 2008, the new solicitors provided to the 2^nd defendant an undertaking signed by Sinoearn to pay any unsettled or unbilled costs and disbursements of the Firm in the High Court action and on 13 November the 2^nd defendant released the papers in that action to the new solicitors.

18.On 11 November 2008, the Bar Association referred the barrister’s complaint for non-payment of fees to the 1^st defendant.  Letters were exchanged between the plaintiff and the 1^st defendant between November 2008 and January 2009 regarding the non-payment of fees and to no avail, with the plaintiff suggesting that the barrister’s complaint should be referred to the 2^nd defendant and alleging that the latter had passed the file of Sinoearn to the new solicitors without first having secured payment of the barrister’s fees.  A letter of disapproval of the 1^st defendant dated 8 July 2010 requesting him to pay the barrister’s outstanding fees within 14 days was not complied with.  The 1^st defendant brought disciplinary proceedings against the plaintiff in March 2011.

19.The plaintiff asserted in the disciplinary proceedings there was reasonable excuse for his failure to pay counsel’s fees, by two distinct factors, each one of which sufficed in itself:

(1)  that he had entered upon an arrangement with the barrister that the brief would only be delivered on the understanding that he would assume no personal responsibility for the fees and that the barrister would have to look to Sinoearn for payment of his brief fee and daily refreshers prior to the start of the trial (“the Discharge Arrangement”); and

(2)  that in any event the negligence of the defendants had precluded him from securing payment of fees by Sinoearn in that after he had been adjudicated bankrupt, the 2^nd defendant as the intervention agent of the 1^st defendant had passed the papers in the case to the new solicitors, by reason of which act he was deprived of the lien which otherwise he would have enjoyed on the papers and therefore deprived of the security for his costs which that lien created.

20.On 5 March 2012, the Disciplinary Tribunal handed down its findings of facts rejecting both limbs of his defence.  As to the first defence, the Tribunal found that it was for the plaintiff to secure funds on account, that there was no privity of contract between counsel and lay client, and that on any view the plaintiff remained liable for the barrister’s fees.  For the second defence, the Tribunal took the view that the action of the 1^st defendant in appointing an intervention agent and the 2^nd defendant’s act in passing the papers to the new solicitors were irrelevant to the issues at hand.  The Tribunal found the plaintiff in breach of Principles 12.04 and 12.05 of the Solicitors’ Guide to Professional Conduct in that he, in the absence of reasonable excuse, refused and/or failed to pay a barrister’s fees within two months from the submission of a fee note.

21.By an order made on 8 August 2012, the Tribunal fined the plaintiff $100,000 and ordered him to pay the costs of the disciplinary proceedings.

22.The plaintiff’s appeal against the decision of the Tribunal (CACV 188/2012) was dismissed by the Court of Appeal (Stock VP, Kwan JA and Barma JA) on 28 February 2014.  The plaintiff’s application for leave to appeal to the Court of Final Appeal was refused by the Court of Appeal on 28 May 2014.

23.The 3^rd defendant’s bill of costs for the intervention work from 8 October 2008 to 5 January 2009 was taxed.  The plaintiff issued a summons for review of taxation in December 2013 in HCMP 2025/2011 and it was heard by Master Levy on 14 March 2014 and 7 April 2014.  Save for three items in which the Master reduced the number of hours claimed, the review was dismissed with 85% of the costs of the review awarded to the 1^st defendant.  Reasons for the review were handed down on 1 August 2014.

24.On 15 November 2013, the plaintiff issued the writ in the present action against the defendants with a statement of claim.  The defendants issued separate summonses on 28 February 2014 to strike out the plaintiff’s statement of claim on the grounds that it discloses no reasonable cause of action and/or is vexatious or an abuse of process.

The application to adduce new evidence on appeal

25.Two days before the hearing of this appeal, the plaintiff issued a summons to adduce new evidence being some correspondence he put together in a separate bundle on 9 March 2016.  He annexed to his summons the directions given by the Registrar of Civil Appeals on 27 July 2015 in which it was made clear that certain items he proposed to include in the appeal bundles were not placed before the judge below and should be removed and that he should take out a summons to apply for leave to adduce new evidence after the date of hearing of the appeal was fixed.  He did not file any supporting affirmation to show how all three conditions in Ladd v Marshall [1954] 3 All ER 745 could be said to have been satisfied.

26.The notice of hearing for the appeal was issued on 23 September 2015, with a hearing date six months away.  There should be more than sufficient time for an application to adduce new evidence to be taken out, well before the hearing of the appeal.

27.At the hearing, we have ascertained from the plaintiff the reason for his delay in issuing the summons.  He has no valid reason for the delay.  On the ground of delay alone, we decided to exercise our discretion to dismiss his summons, having referred him to Law Kwok Fai Paul & Ors v Wellmei (HK) Plastics & Electronics Industrial Ltd & Anr, CACV 45/2014, 31 October 2014, §18; and PW v PPTW, CACV 224/2013, 16 December 2014, §§10 to 12.

The amended statement of claim

28.The striking out summonses first came before the judge on 12 June 2014.  The judge found the statement of claim filed on 15 November 2013 “a long, drawn-out narrative, lacking in essentials, but containing paragraph after paragraph of evidence”.  He would have struck out the statement of claim in its then form as “incoherent and largely unintelligible”.  He gave the plaintiff another opportunity to plead a coherent, succinct and intelligible cause of action, and so adjourned the hearing to 23 June 2014, for a new pleading to be filed and served.

29.Pursuant to the judge’s order the amended statement of claim was filed on 19 June 2014.  We agree with the judge it is not much better than its predecessor.  As the plaintiff has already been given an opportunity to amend his pleading, he should be confined to the amended statement of claim as to the nature and extent of his claims.  We decline to consider as part of the material facts of his case any allegation made in his affirmation, notice of appeal or submissions that does not feature in the amended statement of claim.

30.These principal allegations were made in the amended statement of claim against the defendants:

(1)  The Discharge Arrangement was made by the plaintiff with the barrister before the brief was delivered.  The barrister issued his fee note to the plaintiff in breach of the Discharge Arrangement (§12).

(2)  The 2^nd and 3^rd defendants realised the plaintiff had a lien on the Sinoearn file but released the file to the new solicitors without having obtained adequate security.  The plaintiff had complained to the 1^st defendant about the conduct of the 2^nd defendant in the release of the Sinoearn file (§§12 and 23).

(3)  The 1^st defendant asked the plaintiff to explain why the barrister’s fee note was not paid and the plaintiff gave as reasons the Discharge Arrangement and the negligence of the defendants in releasing the Sinoearn file without adequate security and delaying the termination of the intervention (§24).

(4)  The plaintiff was handicapped in defending the disciplinary proceedings as the 1^st defendant withheld disclosure of all contemporaneous correspondence and documents and he had no access to the Sinoearn file and the skeleton submission of the 1^st defendant was not served on him until after the hearing (§§27 and 28).

(5)  The intervention was prolonged after the annulment of the bankruptcy order despite the plaintiff’s protestation.  With the approval or connivance of the 1^st defendant, the 2^nd and 3^rd defendants continued to perform unnecessary and fee driven work to increase costs (§§13 to 17).

31.It was pleaded that the 1^st defendant was in breach of a duty of care in tort to properly and diligently administer and enforce section 26A(1)(d) of LPO in that it had failed:

(1)  to expeditiously terminate the intervention following the annulment of the bankruptcy order and not to unnecessarily prolong the process without justification (“the Prolonged Intervention Claim”);

(2)  to handle the Sinoearn file with care and due diligence as to allow the file to be released without adequate security leading to consequences including the disciplinary proceedings; to make reasonable investigation in relation to the steps taken by the plaintiff to procure payment of the barrister’s fee note; to procure enforcement of the undertaking given by Sinoearn to the 2^nd defendant (“the File Return Claim”); and

(3)  to supervise the conduct of the 2^nd and 3^rd defendants in the intervention as to allow them to perform work not properly forming part of the intervention process; to check and examine invoices of the 2^nd and 3^rd defendants as to allow them to be overpaid and to be paid for work not being part of the intervention process (“the Lack of Supervision Claim”) (§31).

32.In respect of the Prolonged Intervention Claim and the Lack of Supervision Claim, it was pleaded that the plaintiff had suffered loss and damage being: (1) the loss of a chance of profits in practice; (2) the costs incurred during the prolongation of the intervention; and (3) the costs for work not forming part of the intervention process.  For the File Return Claim, the loss and damage pleaded was (4) the loss of a chance to procure payment by Sinoearn of $138,750 and for the barrister to be paid such sum; and (5) the time and costs of the plaintiff having to defend the disciplinary proceedings and to bring an appeal and the penalty imposed (§32).

33.As against the 2^nd and 3^rd defendants, it was pleaded that they were in breach of a duty of care in tort to properly and diligently conduct the intervention.  The breaches were similar to those alleged in respect of the Prolonged Intervention Claim and the File Return Claim (§33).  The loss and damage alleged to arise from the breaches are the same as pleaded against the 1^st defendant (§34).

34.In short, there are three heads of claim advanced against the defendants: the File Return Claim, the Prolonged Intervention Claim and the Lack of Supervision Claim.

35.The principles on an application to strike out a statement of claim are well established.  The burden is on the defendants as the applicants to show it is plain and obvious that the claims are unsustainable and impossible to succeed. Disputed facts are to be taken in favour of the plaintiff.  Where the court comes to the conclusion after full argument in the face of all relevant information that the case is plainly and obviously one for striking out, it should not decline to do so on the grounds that the issues arising are difficult or complicated (Byjoy v Thorogood [1985] 2 HKC 746 at 758F to I).

Abuse of process

36.The judge found himself bound by the findings of the Court of Appeal in CACV 188/2012 that there is no substance or merit in the plaintiff’s complaints about the findings of the Disciplinary Tribunal.  These holdings of the Court of Appeal are particularly pertinent:

(1)  The alleged Discharge Arrangement could not amount to a reasonable excuse to absolve the plaintiff from personal liability for payment of the barrister’s proper fees.  The plaintiff should either have secured funds on account in good time or, in good time, ceased to act.

(2)  The alleged negligence of the defendants in releasing the Sinoearn file to new solicitors and depriving the plaintiff of his lien for payment of outstanding fees could not amount to a reasonable excuse.

(3)  Even though the Tribunal did not address the factual issue whether there was the Discharge Arrangement, the Court of Appeal was satisfied on the evidence and on the plaintiff’s oral submissions that he had failed to establish the Discharge Arrangement.

(4)  The intervention after the plaintiff’s bankruptcy did not constitute a reasonable excuse for his failure to pay counsel’s fees, as the bankruptcy order was made well after the fees became due and there was no attempt by him in that period or after his discharge from bankruptcy to secure the fees from Sinoearn.

37.In light of the findings of the Court of Appeal, the judge held at §14 that is the end of the matter as far as the Discharge Arrangement, the liability for counsel’s fees and any attack on the disciplinary proceedings are concerned.  He concluded at §21 that the plaintiff was attempting to re-litigate matters which have already been decided by courts of competent jurisdiction and this is vexatious and an abuse of the process of the court.

38.On appeal, the plaintiff submitted that the issue in the disciplinary proceedings was whether he had a reasonable excuse that would absolve him from being liable for counsel’s fees, whereas the issue he raised in the present proceedings was one of negligence and the issue of negligence was never litigated.  He contended there was no attempt to re-litigate matters already decided by any court of law.

39.We firmly reject the plaintiff’s contention.

40.Mr Jason Yu for the 2^nd and 3^rd defendants has helpfully summarised these relevant principles established by the Court of Appeal in Ho Kin Man v Secretary for Justice [2014] 3 HKLRD 478:

(1)  In deciding if a claim should be struck out based on the kind of abuse of process in Henderson v Henderson (1843) 3 Hare 100, the court will take a broad merits-based assessment having regard to the relevant private and public interest (§§14 and 16).  An abuse must be found to exist in seeking to raise in subsequent proceedings claims or issues which could and should have been raised in earlier proceedings, such that the other party is vexed or oppressed by the subsequent proceedings (§39(3)).  In considering this type of abuse, the court is required to assess a number of factors and balance competing interests (§39(5)).

(2)  Insofar as a second action can be regarded as a collateral attack on the previous decision, this is relevant to the broad merits-based assessment and can be a weighty consideration in terms of the public interest in the finality of litigation.  The abuse takes the form of bringing the administration of justice into disrepute.  It would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same again (§§17, 31, 35, 37 and 38).  The court must have power to strike out an abusive second attempt to litigate regardless of the nature of earlier proceedings and even though it may not be strictly between the same parties.  It is not necessary to have a party being vexed twice if abuse can be established in all the circumstances of the case (§§25 and 26).

41.We have set out in some detail the facts pleaded by the plaintiff in support of the File Return Claim.  As pointed out by Mr Yu, the following issues that have or should have been decided in the disciplinary proceedings which led to his appeal in CACV 188/2012 are attacked in the amended statement of claim:

(1)  the Discharge Arrangement and the plaintiff’s liability to pay counsel’s fees;

(2)  the challenges against the procedure of and the findings made in the disciplinary proceedings;

(3)  the transfer of the Sinoearn file without adequate security, the deprivation of the plaintiff’s lien and the negligence of the defendants as being the cause of the disciplinary proceedings; and

(4)  the claims of damages for the loss of a chance to pay counsel and for an indemnity of the costs of defending the disciplinary charges.

42.The present situation clearly falls within the established principles as stated in Ho Kin Man.  It is immaterial that the form of the present action is different, or that the issues framed in support of the plaintiff’s case are not identical to the issues in the disciplinary proceedings, or that the present action is not between the same parties.  The File Return Claim stems from the plaintiff’s obstinate refusal to accept that it was his personal responsibility to pay counsel’s fees and his persistent reliance on previous allegations like the Discharge Arrangement, the release of the Sinoearn file without adequate security, the deprivation of his lien – all of which have been rejected in the disciplinary proceedings.  It would put the administration of justice into disrepute if the plaintiff were to be allowed to mount a collateral attack on the findings in the disciplinary proceedings under the guise of a claim for damages in negligence.  The public interest in the finality of litigation is a weighty consideration.  The judge is clearly right in holding that there was an abuse of the process of the court.  The File Return Claim and all the paragraphs in the amended statement of claim associated with it must be struck out for abuse of process.

Vexatious claim

43.Quite apart from abuse of process, the File Return Claim must be struck out as vexatious and obviously untenable, insofar as it is premised on the allegations that the Sinoearn file was released without adequate security, that the plaintiff was deprived of his lien on the file, and that the defendants had failed to procure enforcement of the undertaking given by Sinoearn to the 2^nd defendant.

44.The powers of the Law Society exercisable on an intervention are set out in Schedule 2 to LPO.  Section 9 of Schedule 2 provides: “The powers in relation to sums of money and documents conferred by this Schedule shall be exercisable notwithstanding any lien on them or right to their possession.”  This provision makes it plain that the solicitor has no private law right to the documents or of access to them even though access may be necessary to make a claim for recovery of outstanding professional fees (Kevin Dooley v The Law Society, 23 November 2001, Lightman J, §11).

45.Further, the right of a solicitor to sue his client for outstanding fees remains with him and does not vest in the Law Society upon an intervention.  The Law Society is not under any duty to afford assistance to the solicitor to recover outstanding professional fees where there is an intervention (Dooley, §10; Egole v The Law Society of England & Wales [2003] EWHC 747 (Ch), §§16 and 17).

46.The judge also rightly held in §20 there is no causation in respect of the loss allegedly arising from the File Return Claim.

47.This leaves the Prolonged Intervention Claim and the Lack of Supervision Claim.

If there was a duty of care

48.The judge held in §18 that on the authorities cited to him, it is beyond argument that a solicitor cannot bring claims for breaches of a private law duty of care against the Law Society arising out of an intervention, as this cannot coexist with the statutory scheme and the legislation gives precedence to the interests of the public in being protected from solicitors over the interests of the solicitor himself.  He referred to Miller v The Law Society [2002] 4 All E R 312; Egole and Dooley.

49.On appeal, the plaintiff advanced these principal arguments:

(1)  In determining whether a duty of care existed, the judge failed to have regard to the three-stage test of the House of Lords in Caparo Industries Plc v Dickman [1990] 2 AC 605: foreseeability of damage; a relationship of proximity; and the requirements of fairness, justice and reasonableness.  Had the judge applied the test properly, he should have held that the requirements are all satisfied here.

(2)  The judge failed to have regard to the principles of the Supreme Court in Woodland v Essex County Council [2013] UKSC 66 at §23, which have been followed in Hong Kong in Li Ming Tak v Hong Kong Airport Services Ltd, CACV 254/2014, 20 August 2015 at §§39 to 42.  He should have held that the 1^st defendant owed to the plaintiff a non-delegable duty of care and is therefore liable for the negligence of its agents, the 2^nd and 3^rd defendants, in the intervention.

(3)  Miller v The Law Society does not provide support for the proposition that a duty of care should not be held to exist in the present situation.  In Miller, the court was required to determine whether a solicitor could bring a claim against the Law Society for breaches of a private law duty of care arising from the conduct of an investigation leading to an intervention.  In this action, the plaintiff was not challenging the validity of the commencement of the intervention or the process leading to the 1^st defendant’s decision to intervene.  His contention was that the intervention process went beyond what was reasonable and necessary, when the ground of bankruptcy had been removed.  So the statutory time limit of eight days regarding an application to the court directing the Law Society to withdraw the notice given concerning the powers exercisable on intervention referred to in Miller (the equivalent in Hong Kong legislation is section 2(4) of Schedule 2 to LPO) is irrelevant.

50.Regarding the first argument, the long line of English cases concerning whether the Law Society owed a private law duty of care arising out of an intervention did have regard to the three-stage test laid down in Caparo v Dickman a decade ago, see, for example, Miller at §26.

51.As for the second argument, it does not get off ground if no negligence is established against the agents, namely, the 2^nd and 3^rd defendants.

52.The third argument is unsound.  Granted that Miller was concerned with the challenge to the conduct of an investigation which led to an intervention, there are quite a number of authorities cited to us that supported the proposition there should be no private law duty of care owed by the Law Society in respect of its conduct of the intervention: Hedworth v Law Society, 4 January 1995, Judge Colbert (cited in Miller at §§35 and 38); Kaberry v The Law Society [2001] EWCA Civ 108; Dooley; Egole; Gauntlett v The Law Society [2006] EWHC 1954 (Ch).

53.In any event, the distinction sought to be drawn by the plaintiff is of no significance.  As stated by the judge in Miller, Geoffrey Vos, QC, solicitors quite frequently seek to challenge the Law Society’s decision to intervene or its conduct of the intervention process.  None the less, without any significant exception, the authorities speak with one voice in deciding that the procedures for application to the High Court under paras 6(4) and 9(8) of Schedule 1 to the Solicitors Act 1974 (the equivalent provisions in Hong Kong are sections 2(4) and 7(8) of Schedule 2 to LPO) form part of a complete statutory scheme to protect the public from errant solicitors.  Hence, the scheme ensures that the intervention process is swift, and that any admissible challenge by the solicitor is undertaken pursuant to a very rapid timetable (at §36).

54.The authorities, which speak with one voice, accord with the general principle that a claimant, who has a means of challenging the conduct of a public authority by way of a statutory appeal mechanism, specifically created for that purpose, will not be permitted to pursue a common law damages claim as an alternative (Booth & Squires, The Negligence Liability of Public Authorities (2005 ed), §14.63).  See also Liu Mei Huei v The Government of the HKSAR, CACV 185/2012, 30 April 2015, §80.

55.The only recourse of the plaintiff was to apply to court under section 2(4) of Schedule 2 to LPO to withdraw the notice served on him vesting money held by the Firm in the 1^st defendant within eight days of service of the notice, or to apply under section 7(8) of Schedule 2 for the delivery of the Sinoearn file to him within eight days of the notice served by the 1^st defendant that it had taken possession of the documents.  The plaintiff did not take action within the time limits prescribed by statute.  There is no express or implied power to extend the time for such an application to the court (Miller at §§36 and 38, citing Bradford v Law Society, 31 July 1995, Robert Walker J).

56.The judge is plainly right in holding that the plaintiff cannot bring a claim for breach of a private law duty of care against the defendants arising out of the intervention.

57.Furthermore, the claim that the intervention was prolonged unnecessarily without justification following the annulment of the bankruptcy order is obviously unsustainable.  As held by Lightman J in Dooley at §14, it is a public law question whether the Law Society in the exercise of its public law duties can reasonably and properly decide that the intervention agent should continue their role.  It was discovered in the course of the intervention that the accounts of the Firm were prepared only up to March 2008.  The files were in disarray and it had taken the 2^nd and 3^rd defendants 15 days to prepare the necessary indices for current and closed files and to pack them into 174 carton boxes.  The 1^st defendant, in its letter to the plaintiff dated 17 December 2008, stated that “it is essential for the Council to allow the intervention to continue to a conclusion in order to ensure that both clients and public interests are well protected under these circumstances”.  There is no proper basis to challenge the decision of the 1^st defendant in this regard.

58.Lastly, insofar as challenge was mounted to the costs of the intervention on the grounds that the work did not form part of the intervention process and that the costs were excessive, these were considered by the taxing master and rejected in the taxation proceedings.  It would be an abuse of process to allow the plaintiff to re-litigate the same issues in different proceedings.  The judge rightly held in §14 that the complaint about the taxation of costs cannot give rise to any cause of action.

59.The Prolonged Intervention Claim and the Lack of Supervision Claim must be struck out as there is no reasonable cause of action and they are untenable and vexatious.  The outcome is that all parts of the amended statement of claim are to be struck out and the action should be dismissed.

Conclusion

60.We dismiss the plaintiff’s appeal.  It is not in dispute that costs should follow the event.  We order the plaintiff to pay the costs of the 1^st, 2^nd and 3^rd defendants, to be taxed if not agreed.

The Plaintiff (Appellant) appeared in person

Ms Debora S Y Poon, instructed by Deacons, for the 1^st Defendant (1^st Respondent)

Mr Jason H T Yu, instructed by ONC Lawyers, for the 2^nd & 3^rd Defendants (2^nd & 3^rd Respondents)