Ho Pak Wa v. The Council of the Law Society of Hong Kong
Read the full judgment text of HCAL 129/2016 on BabelCite. This High Court CFI judgment was delivered on 24 August 2016.
1. This is an application by Ho Pak Wa, also known as Alan Ho, (the applicant), for leave to apply for judicial review of the decision of the Council of the Law Society of Hong Kong (Law Society) to intervene in the practice of the firm of solicitors of Messrs Alan Ho & Co (AHC) by way of resolution dated 12 April 2016 pursuant to s.26A(1)(c) of the Legal Practitioners Ordinance, Cap 159, (the Intervention Decision).
Cited by 1 case · Cites 6 cases
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HCAL 129/2016 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 129 OF 2016 _____________________
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_________________________ REASONS FOR DECISION _________________________ Introduction 1.This is an application by Ho Pak Wa, also known as Alan Ho, (the applicant), for leave to apply for judicial review of the decision of the Council of the Law Society of Hong Kong (Law Society) to intervene in the practice of the firm of solicitors of Messrs Alan Ho & Co (AHC) by way of resolution dated 12 April 2016 pursuant to s.26A(1)(c) of the Legal Practitioners Ordinance, Cap 159, (the Intervention Decision). 2.The relief sought was an order of certiorari to quash the Intervention Decision. The applicant sought an oral hearing if leave was not granted on the papers. An oral hearing was accordingly arranged at which the Law Society was invited to attend and participate. The parties were legally represented at the hearing. 3.There were two grounds on which this application for leave to apply for judicial review was advanced by the applicant. The first ground complained that the Law Society committed an error of law in making the Intervention Decision and as a consequence the decision was therefore illogical and irrational. The second ground complained that the Intervention Decision was made when the applicant had legitimate expectation that it would not be made. 4.During the course of the hearing the applicant abandoned the first ground and made application to adjourn the hearing to enable him to amend his Form 86 by adding a new ground of review that the Intervention Decision was Wednesbury unreasonable. The basis of this new ground was that there was insufficient material before the Council to be satisfied as required under the section to intervene in the practice of AHC. 5.At the conclusion of the hearing I refused the application for an adjournment and to amend the Form 86 and dismissed the application for leave to apply for judicial review. I said I would hand down my reasons later and this I now do. Case history 6.Having been founded in 1998, AHC currently has among its partners, the applicant and Ms Poon Fung Chi Farah, (the putative interested party). It has four branches throughout Hong Kong. 7.In May and July 2015 and March 2016, AHC received a number of complaint letters from the Law Society alleging that AHC was acting in breach of various solicitors’ rules. During this period, AHC were requested to provide documents and answer queries from the Law Society. The subject matter of the complaints concerned the alleged preparation by AHC of unauthorised powers of attorney.[1] In relation to the last complaint, the Law Society wrote to AHC on 3 March 2016 in which they put the applicant on notice of the professional responsibilities and rules relating to the conduct of a solicitor’s practice and that the matter would be considered by the Law Society with possible referral to the Investigation Committee.[2] 8.On 15 March 2016, the Law Society wrote to AHC stating that it had considered a report of the Conduct Section and resolved to authorise Monitoring Accountants to conduct visits to AHC under rule 11 of the Solicitors’ Accounts Rules and rule 5B of the Solicitors’ Practice Rules to inspect their books and accounts.[3] Such inspection was carried out on 17 March 2016. However, AHC were unable to make available all the documents requested. During the visit, the Monitoring Accountants made lists of documents that were produced and documents that were outstanding. The lists were signed by the applicant’s partner on behalf of the firm.[4] A further inspection was carried out on 21 March 2016 but documents still remained outstanding. 9.On 18 March 2016, AHC wrote to the Law Society informing them that it had engaged external accountants to prepare the documents that would not be available for inspection on 21 March 2016.[5] AHC requested a period of three months to prepare the outstanding documents to facilitate the inspection. It was claimed that the requested documents were voluminous or needed to be obtained from storage or other sources. It should be noted that a number of the documents outstanding were files. 10.On 24 March 2016, AHC wrote again to the Law Society informing them that they had employed Keyway Management & Secretarial Services Limited to assist in the preparation of the outstanding documents.[6] 11.On 29 March 2016, the Law Society wrote to AHC informing them that the Council had considered their letters and a report of the Conduct Section in relation to alleged breaches by the firm of the Solicitors’ Accounts Rules and notified them that the Council had resolved that the firm provide for inspection by the Monitoring Accountants certain documents by various specified dates, namely, pursuant to paragraph 1, a complete set of bank statements of the firm’s office and clients’ accounts by 5 April 2016, and pursuant to paragraph 2, various accounting and other documents in relation to the firm’s office and clients’ accounts by 30 June 2016. It was further stated that in light of the firm’s alleged breaches of the Solicitors’ Accounts Rules, the Council had further resolved to reject the firm’s accountant’s reports which had been submitted and requested that the firm provide fresh accountant’s reports by 31 July 2016. It was finally stated that the firm’s alleged breaches of the Solicitors’ Accounts Rules would be referred to the Conduct Section for investigation.[7] 12.On 30 March 2016, a Notice of Inspection was sent to AHC where it was requested to produce certain specified documents to inspectors appointed by the Council.[8] The inspectors prepared a number of lists of outstanding documents each of which was acknowledged by the applicant’s partner on behalf of the firm and in which she undertook to produce such documents to the Law Society on or before 12 noon on 1 April 2016.[9] 13.On 1 April 2016, AHC wrote to the Law Society stating that pursuant to the Notice of Inspection they submitted the requested documents except for a number of documents they listed which included a large quantity of files that were being handled by their clerks who it was said were currently on leave and once they resumed their duties the files would be produced.[10] Other current files were requested to be returned in this letter and in a subsequent letter dated 5 April 2016, because there were outstanding matters in relation to them.[11] 14.From the material before me the firm employed a large number of clerks who seemed to have the conduct of a significant number of cases, the files of which had not been produced. As mentioned in the letter of 1 April 2016, a total of 38 files were awaiting the resumption of duty of clerks on leave in order for the files to be produced. I should say for my part one would expect that such files would be held by the firm and under the care of the supervising or handling solicitor. 15.On 5 April 2016, the Law Society wrote to AHC stating that they had received by letter dated 1 April 2016 the documents specified in the Notice of Inspection but noting that not all documents had been produced. The Law Society put on record that AHC had failed to comply with the Notice of Inspection and the matter would be reported to the Council.[12] On the same day, AHC wrote to the Law Society enclosing bank statements that were previously requested but noting that there were still further bank statements outstanding.[13] 16.There followed further communications between the Law Society and AHC concerning the production or return of documents or files. 17.On 12 April 2016, the Law Society issued a Notice of Intervention by way of letter from the Secretary General of the Law Society.[14] The Notice had annexed to it a certificate by the Secretary General setting out the resolution of the Council pursuant to s.26A(1)(c) of the Legal Practitioners Ordinance, Cap 159 (the Ordinance) and certifying that at a meeting of the Council held on 12 April 2016, “the Council is satisfied” that the partners of AHC “have failed to comply with rules made by virtue of section 73(1)(b) of the Ordinance”. 18.The certificate did not identify the rules that had not been complied with. It set out 13 resolutions passed at the meeting and that the Council pursuant to s.26A(1)(c) would exercise their power conferred by Schedule 2 to intervene in the practice of AHC. The Notice and the certificate were served by registered post and by leaving it at AHC’s address. The Notice was directed to the partners of AHC and in so far as material read:
19.On 14 April 2016, members of Messrs Hastings & Co (Hastings) attended the offices of AHC in accordance with the Notice of Intervention. 20.On the next day, 15 April 2016, the applicant and his partner instructed Messrs Troutman Sanders, (Troutman Sanders), to commence proceedings to challenge the intervention. An Originating Summons was issued on behalf of the applicant and his partner against the Law Society on 16 April 2016 where they sought various heads of relief, including the release of sums of money for the purpose of completing forthcoming transactions of clients of the firm.[15] It is pertinent to note that the thrust of the claim sought an order from the court that the Law Society be directed to withdraw the Notice of Intervention dated 12 April 2016 to appoint Hastings as the intervention agent of the Council to intervene in the practice of AHC. 21.In those proceedings, an ex parte order was granted by E Toh J on 16 April 2016, releasing certain sums of money to AHC but this was later discharged by consent after an inter partes hearing before L Chan J on 18 and 19 April 2016. During the hearing, it had been submitted by the Law Society that the original order to release funds to AHC could not be complied with on the basis that it did not have full details of the whereabouts of bank accounts of the firm or documentation concerning those accounts and therefore could not satisfy itself that it was proper to make any payments out of the firm’s accounts. 22.On 18 April 2016, the Law Society informed the applicant that he had failed to comply with the Solicitors’ Accounts Rules, Solicitors’ Practice Rules and Hong Kong Professional Conduct Volume 1, 3rd Edition.[16] A schedule of prima facie breaches was attached together with appendices and it was mentioned that the matter would be referred to the Conduct Section for investigation. It was also mentioned that the Law Society was investigating complaints relating to alleged professional misconduct and that the applicant had until 3 May 2016 to respond to the matter. The schedule particularised the various rules that had been breached together with brief particulars of the offending conduct. 23.The schedule listed the following breaches of the rules of the Solicitors’ Accounts Rules:
24.The schedule listed the following breaches of the rules of the Solicitors’ Practice Rules (SPR) and the Hong Kong Professional Conduct Volume 1, 3rd Edition (the Guide):
Relevant statutory provisions 25.Part IIA of the Ordinance addresses the circumstances in which the Law Society may intervene in the practice of a solicitor or foreign lawyer. The Intervention Decision was made pursuant to s.26A and Schedule 2 of the Ordinance. 26.The powers that are exercisable on intervention are contained in Schedule 2 of the Ordinance. Section 26A deals with circumstances in which powers conferred by Schedule 2 are exercisable which so far as material provides:
27.Schedule 2 is broken up into four parts entitled “Money”, “Documents”, “Mail” and “General” which reads:
The grounds for leave to apply for judicial review 28.There are two grounds of review in the Form 86. Under the first ground, which was abandoned at the hearing, it is complained that the Intervention Decision was made on the basis of an erroneous construction or understanding by the Council of s.26A(1)(c) and properly understood it should not have been made. Under the second ground, it is complained that the Intervention Decision was made in breach of the applicant’s legitimate expectation that the power to intervene would not be exercised until the last deadline, namely 31 July 2016, imposed on the applicant by letter dated 29 March 2016 to produce certain documents and reports for inspection. Illegality or irrationality 29.The applicant argued that the Council had erroneously construed s.26A(1)(c) which provides that the powers conferred by Schedule 2 “shall be exercisable where the Council is satisfied that a solicitor or foreign lawyer has failed to comply with rules made by virtue of section 73(1)(b) or 73A...”. 30.Section 73(1)(b) concerns the making of rules governing accounting matters to which a solicitor must comply. Section 73A concerns the making of rules governing indemnity against loss arising from claims in respect of civil liability incurred by a solicitor and employees of a law firm. As already noted, Schedule 2 confers, amongst other things, power to the Council to freeze and hold on trust and sums of money held in a law firm and to require a solicitor to produce documents. 31.In general terms, under s.29A(1)(c), the Council must be satisfied that a solicitor has failed to comply with professional rules to the extent that it should exercise the powers conferred by Schedule 2. The powers that the Council exercises will obviously depend upon the particular facts and circumstances of the case concerned. The applicant’s position was that in the present case the Council was not and could not be so ‘satisfied’. 32.The applicant submitted that the Council had committed an error of law in interpreting s.29A(1)(c) and therefore the decision in question should be quashed. See Town Planning Board v Society for the Protection of the Harbour Ltd (2004) 7 HKCFAR 1, at §22 per Li CJ. He also submitted that a statutory power must be exercised for the purpose for which it is conferred, and if a public body, by reason of it having misconstrued a statute or for some other reasons, so uses its discretion as to thwart or run counter to the policy and objects of the statute, then persons aggrieved are entitled to the protection of the court. See Padfield v Minister of Agriculture Fisheries & Food [1968] AC 997, at 1030B-D per Lord Reid. In light of the foregoing, he further submitted that the decision was illogical because there was an error of reasoning and therefore liable to be quashed as Wednesbury unreasonable. 33.In short, the applicant argued that this ground of review established that the Council misconstrued s.26A(1)(c) and either misunderstood the proper purpose or principle in making the Intervention Decision or acted illogically in making the Intervention Decision. 34.It was contended by the applicant that for the Council to be satisfied as required that could only be achieved through a final and affirmative conclusion on non-compliance rather than alleged non-compliance. He argued that the Council had misunderstood the section and had thus come to a decision in breach of its purpose. He submitted that the Council proceeded on alleged, rather than proven, breaches of the rules of the Solicitors’ Accounts Rules and this was not sufficient for the Council to be satisfied that there was non-compliance. Therefore, the Council did not have the power to intervene in the practice of AHC at that time. 35.The applicant based his view that the breaches were always allegedon the point that the investigation of non-compliance was ongoing until May 2016, and therefore at the time of the Intervention Decision the case against AHC was still at an investigatory stage, and thus the Council made the Intervention Decision to fish for evidence for the purpose of ascertaining non-compliance with the rules of the Solicitors’ Accounts Rules. 36.The applicant submitted that on 12 April 2016, while the investigation was still ongoing, the Council made the Intervention Decision based on their view that AHC had failed to comply with rules made by virtue of s.73(1)(b) without any particulars of any actual non-compliance. He further submitted that it was therefore unlawful for the Council to exercise its intervention power for the purpose of fishing for evidence. He asserted that it was clear that the intervention power was for enforcement purpose rather than an investigative tool and therefore the making of the Intervention Decision to fish for evidence for ascertaining non-compliance by AHC with the rules of the Solicitors’ Accounts Rules was an exercise of power by the Council outside the scope of the power conferred. 37.Moreover, it was argued by the applicant, if the correct purpose of the exercise of the intervention was further investigation, as the Law Society set out in its letter of 29 March 2016, it acted inconsistently in another alleged statement that it exercised such power for the purpose of winding up the irregular practice of AHC. He submitted that this inconsistency was evidence of illogicality and irrationality, and that the Council in fact made the Intervention Decision with a view to fish for evidence. He further submitted that the inconsistency between the stated purpose and the actual purpose was illogical and hence the Intervention Decision was liable to be quashed. 38.I find no substance to this argument. The evidence pointed to the Council taking the intervention action to address malpractices by AHC as evidenced by apparent non-compliance of professional rules. Legitimate expectation 39.The next ground the applicant argued was that he had a legitimate expectation that the intervention power, pursuant to s.26A(1)(c), would not be exercised by the Council on or before the last of the three deadlines, namely before 31 July 2016, imposed by the Law Society in the letter to the applicant on 29 March 2016. The Council’s Intervention Decision was thus in breach of this legitimate expectation. 40.The applicant contended that in the letter of 29 March 2016 it was made clear by the Law Society that (i) the Law Society extended the date for the production of a complete set of books and accounts to three different dates, the latest of which was 31 July 2016; (ii) investigation would not be closed before 31 July 2016; (iii) before the investigation were to be finished, the Law Society could not return a conclusion on any actual non-compliance in relation to the alleged breaches; (iv) the Law Society would not take any enforcement action in relation to the alleged breaches before 31 July 2016; thus the Council breached these terms by making the Intervention Decision on 12 April 2016, before 31 July 2016. 41.It was submitted by the applicant that the letter of 29 March 2016 established a clear promise of an extension of time to AHC to produce accounts for the purpose of investigating the alleged breaches. Accordingly, there was a clear message to the applicant that this investigation could not be completed by 31 July 2016. Moreover, it was claimed by the applicant that this represented that no final conclusion regarding the alleged breaches would be made by the Law Society on or before the deadline of 31 July 2016. 42.The Law Society therefore represented that it would not take any enforcement action in relation to the alleged breaches on or before 31 July 2016, including but not limited to the exercise of the intervention power pursuant to s.26A(1)(c). As such, the Law Society’s letter of 29 March 2016 had created a legitimate expectation that on or before 31 July 2016 there would not be any action taken by the Law Society against AHC in connection with the alleged breaches. 43.The applicant acknowledged that there are ‘reasons recognised by law for not giving effect’ to legitimate expectations, and therefore the legitimate expectation can be ignored. The applicant stated, however, that there was no reason recognised by law for not giving effect to his legitimate expectation. The applicant’s willingness to produce documents and other things based on the instruction given to him by the Law Society demonstrated that he had relied on the representation and thus the Law Society in making the Intervention Decision had failed to honour the representation. 44.The applicant submitted that the Law Society had breached his legitimate expectation that there would not be any action taken, such as the Intervention Decision, on or before 31 July 2016 and therefore the Intervention Decision should be quashed. 45.I do not agree with the applicant’s submission or with the interpretation he placed on the Law Society’s letter of 29 March 2016. The objections to the application for leave to apply for judicial review 46.The Law Society opposed the granting of leave on three grounds. 47.First, the applicant had not exhausted available alternative remedies. He had commenced legal proceedings before this application by way of Originating Summons seeking withdrawal of the Notice of Intervention served on AHC on 12 April 2016 which was the statutory means to give effect to the Intervention Decision. The Originating Summons is still current. 48.Second, the challenge was academic and the relief sought was futile. The evidence disclosed at the present stage revealed various breaches on the part of AHC. It was argued that even if the Intervention Decision was quashed, the Law Society, which has a continuing duty to protect the public from misconduct on the part of the solicitors’ profession, would be compelled in the exercise of this duty to reach the same decision as the Intervention Decision. 49.Third, the two proposed grounds of review, namely illegality and legitimate expectation, were without merit. Failure to exhaust alternative remedies 50.As a general statement of principle, a court would expect, an alternative remedy if available, to be sought before bringing judicial review proceedings, which is a remedy of last resort. In consequence, a court would normally decline a remedy in judicial review if there is an effective alternative remedy. Departure from this general position is only observed in exceptional circumstances. See Stock Exchange of Hong Kong Ltd v New World Development Co Ltd (2006) 9 HKCFAR 234, §§114-117 and 140 per Ribeiro PJ; Kwok Ping Sheung Walter v The Law Society of Hong Kong, HCAL 73/2012, 27 September 2013, unreported, §19 per Au J; Kwok Cheuk Kin v Secretary for Transport and Housing, HCAL 136/2015, 4 January 2016, unreported, §§98-118 per Zervos J. 51.As already noted, AHC had previously applied for withdrawal of the Notice of Intervention by Originating Summons before seeking relief to quash the Intervention Decision. The Law Society made the point that there was practically little distinction between the Notice of the Intervention and the Intervention Decision, as the former is a mechanism to effectuate the latter. In other words, upon withdrawal of the Notice of Intervention, the Intervention Decision would have no practical effect. Pursuant to s.26A(2) the Notice of Intervention is the mandated statutory means of giving effect to the Intervention Decision. It will be recalled that under subs.(2) the powers conferred by Schedule 2 can only be exercisable under subs.(1)(c) if the Council has given notice in writing as specified. 52.The Law Society argued that in any event this was supported by Troutman Sanders’ letter dated 10 May 2016 to the solicitors representing the Law Society, which stipulated that “the Intervention is contested which is the basis of our clients’ Originating Summons filed on 16 April 2016”. 53.The Law Society submitted that the applicant had not exhausted his alternative remedies. Futility of relief 54.This ground of objection by the Law Society was premised on the fact that the practice of AHC had attracted the largest intervention ever conducted against a firm of solicitors in Hong Kong. It followed that even if relief was granted, that is, the Intervention Decision was quashed and the question was remitted to the Law Society for reconsideration, it would inevitably come to the same decision. 55.The Law Society submitted that AHC was run in a shambolic manner, without a proper filing system for its accounts, bank account records, client information, and so on. There was also evidence of non-compliance by AHC after the Intervention Decision was made. Together with its partners and employees, AHC had yet to give a satisfactory response to the prima facie breaches set out in the Law Society’s letter of 18 April 2016. 56.It is well established that a court would not generally entertain a matter which is hypothetical or academic in a sense that there is a lack of factual basis that gives rise to the question to be answered. On other occasions, if the question has been overtaken by a subsequent event, the court might exercise its discretion to hear the matter if it considers relief would serve the public interest and carry utility. 57.The Law Society argued that in the present case, the facts before the Court called for interference with the malpractices of AHC. An example is the shortfall of records which concerns missing funds from AHC’s client accounts involving a total of over $1.4 billion. It followed that the Law Society was compelled to make the Intervention Decision against AHC to protect the interests of the public and to ensure the integrity of the solicitors’ profession. 58.The Law Society submitted that it was purely an academic exercise for the Court to judicially review the making of the Intervention Decision, when it did not make any practical difference. Illegality or irrationality 59.Section 26A(1)(c) provides that the power of intervention shall be exercisable if the Council is “satisfied” that a solicitor has failed to comply with the professional rules. It was argued that it was unrealistic for the applicant to speculate that the Council was ignorant of the express need to be satisfied as to the breach of the rules within the meaning of the section. 60.The Law Society pointed out that the Council was in fact “satisfied” that the applicant and his partner had failed to comply with the relevant rules, as evident from the certified resolution dated 12 April 2016.[17] Moreover, it was open to the Council to be satisfied that failure of compliance had occurred even though the Law Society through its disciplinary process had not yet reached a conclusion that the applicant had committed any non-compliance of the rules. The fact that the investigation was still ongoing or that the case for breaches was only prima facie at that stage is not inconsistent with the Council being satisfied that there were grounds for intervention pursuant to s.26A(1)(c). 61.I entirely agree with this submission and this seems to have been the basis for the abandonment of this ground by the applicant during the course of the hearing. 62.The Law Society submitted that the applicant’s allegation that the Council had misconstrued the meaning of “satisfied” was a request for this Court to review the merits of the Council’s decision that there was sufficient evidence for intervention under s.26A(1). They contended that the weighing of evidence should entirely remain at the discretion of the primary decision maker. It is well established that a court exercising judicial review jurisdiction will not review the merits of the decision. That is not the concern of the supervisory function of this jurisdiction. Legitimate expectation 63.In the case of Ng Siu Tung v Director of Immigration (2002) 5 HKCFAR 1 the Court of Final Appeal held that any representation relied upon to support a legitimate expectation is to be “clear and unambiguous”, with any ambiguity resolved in favour of the implicated public authority. See §§103-104 and 360. 64.In addressing the issue of legitimate expectation the Court noted at §101 that:
65.As noted by the quoted passage, an expectation of a benefit which cannot legally be accorded is not a legitimate expectation. Even if there is an established expectation, it will still not be given effect if it involves the decision maker acting contrary to its legal duties, including its public law duties. This was explained by the Court at §112:
66.The Law Society argued that there was no legitimate expectation that it would not take any enforcement action before the last closing deadline of 31 July 2016. They argued that the letter it sent to the applicant on 29 March 2016 did not constitute such a representation, let alone in “clear and unambiguous” terms. The purpose of the letter was simply to seek the provision of documents within a specified timeframe. This was part of the ongoing investigation by the Law Society into the practice of AHC. I agree with this observation. 67.The Law Society has a continuing duty to protect the reputation and integrity of the solicitors’ profession and interests of the public. Therefore, applying Ng Siu Tung, the applicant’s expectation that the Law Society would not take any enforcement action before the last closing deadline could not be a legitimate one, in light of its continuing duty to take urgent intervention if the public interest so demands, regardless of whether an investigation is in progress. The exercise of the power to intervene was not an abuse of statutory power. 68.As noted in Ng Siu Tung at §91, the doctrine of substantive legitimate expectation serves to ensure “first, that statutory powers are exercised lawfully and are not abused and, secondly, that they are exercised so as to result in administrative fairness in relation to both procedural and substantive benefits”. The Court went on to explain at §92:
69.The Law Society submitted that in this context there can be no basis for an allegation in the present case that there has been an abuse of statutory powers or that any unfairness has arisen. I agree. Discussion 70.I will address further the two grounds of review and the preliminary grounds of objection by the Law Society. Whilst I have already made comments on these matters, I wish to add the following. Legitimate expectation 71.The first ground I will address is the one in relation to legitimate expectation. 72.The applicant claimed that he had a legitimate expectation that the Law Society would not intervene in the firm’s practice when it did by notice dated 12 April 2016 because he was given a deadline until 31 July 2016. The deadline the applicant is referring to is the one that was given by the Law Society in its letter of 29 March 2016 in relation to the provision of certain documents and fresh accountant’s reports. The applicant having been informed that the Council had resolved to request from the firm a list of documents for inspection by the Monitoring Accountants and that in light of the firm’s alleged breaches of the Solicitors’ Accounts Rules, the Council further resolved to reject the firm’s accountant’s reports on the ground that they were not prepared in compliance with the Accountant’s Report Rules and hence fresh accountant’s reports of the firm were requested to be prepared by another certified practising public accountant by 31 July 2016. The applicant was also advised in the letter that the alleged breaches of the Solicitors’ Accounts Rules would be referred to the Conduct Section for investigation. 73.It was clearly apparent from the letter and other communications between the Law Society and AHC throughout this period that AHC were the subject of serious complaints which were being investigated by the Law Society in accordance with its responsibilities and powers. 74.A number of relevant documents were requested to be produced but were not forthcoming, and while this was a concern to the Law Society, it was also apparent to the Law Society that an array of malpractices had taken place in the conduct of the firm’s practice. This was evident from the rejection by the Council of the firm’s accountant’s reports. The Law Society made its position very clear to the applicant that a number of breaches of the rules had been identified which had been referred to the Conduct Section for further investigation. 75.The suggestion by the applicant that he had a legitimate expectation that the Law Society would not take any action against the firm until the last deadline for the production of accountant’s reports by 31 July 2016 is not borne out in reality. First, the Law Society was constantly taking action to deal with the firm in relation to the investigation it was undertaking. Secondly, the deadlines were for the production of outstanding documents and the accountant’s reports. Thirdly, the latest deadline of 31 July 2016 related to the provision of fresh accountant’s reports because the reports submitted were not in compliance with the rules. 76.It is simply not open to the applicant to suggest that he had a legitimate expectation that the Law Society would not take some other or further action if it considered it necessary in its dealings with the firm. The Law Society took a series of steps in its investigation of AHC and clearly put the firm on notice of its concern about the failure to produce certain documents and apparent breaches of the professional rules. It finally took intervention action. There was no representation by the Law Society, even implicitly, that the Council would not take intervention action. 77.There is no substance to this ground and it is completely without merit. Illegality or irrationality 78.As I have noted this ground of review was abandoned during the course of oral submission, however I will discuss the argument advanced by the applicant and why it was fundamentally flawed. 79.In this regard, it is necessary to focus on the requirement that the Council had to meet in order to invoke the power under s.26A(1)(c), namely it had to be “satisfied” that the solicitor had failed to comply with certain professional rules. 80.In general terms, the requirement of being “satisfied” involves the decision maker conducting an assessment and evaluation of the information material before him in order to come to an informed decision. In the present case, this involved the Council applying its mind to the information and material before it in the context of the statutory scheme and its provisions under which the decision was to be made. It provides for the intervention in a solicitor’s practice in the public interest where it is sufficiently clear that there has been a failure to comply with certain professional rules warranting such intervention. 81.There were occasions in correspondence where the Law Society refers to prima facie breaches of the rules. The expression prima facie is frequently used in a variety of situations in legal lexicon. Prima facie denotes evidence that, unless rebutted, would be sufficient to prove a proposition or fact. In this instance, prima facie breaches seem to have been used on the basis that the evidence presented was sufficient to prove a breach of the rules, unless the solicitor was able to present evidence that was contradictory. 82.To invoke the power pursuant to subs.(1)(c), the Council needs to be satisfied that the solicitor has failed to comply with rules made by virtue of s.73(1)(b) or 73A. It is a further requirement that the power can only be exercisable if the Council has given the solicitor notice in writing that it is satisfied that he has failed to comply with rules specified in the notice and that the powers conferred by Schedule 2 are accordingly exercisable in his case. 83.The Notice of Intervention dated 12 April 2016 set out that the Council was satisfied that the defendant had failed to comply with rules made by virtue of s.73(1)(b) (without identifying the rules that had not been complied with) and that the powers conferred by Schedule 2 would be exercised to intervene in the practice of AHC in the manner described therein. Later by way of letter dated 18 April 2016, the applicant was provided with a schedule of prima facie breaches of the rules made by virtue of s.73(1)(b) and 73A. 84.The first observation to make in relation to the power under the subsection is that it only requires the Council to be “satisfied” of a failure to comply with the rules. The Council in so being satisfied must act reasonably and fairly. Whilst the applicant sought to raise a complaint that the Council acted unreasonably, it lacked sufficient particularity and substance. 85.It is to be noted that the applicant did not take issue with the form of the Notice or the lack of particularity in relation to the rules made by virtue of s.73(1)(b) that had not been complied with. His complaint was that the Council could only invoke this power after there had been a formal determination that the applicant had breached the rules in question. 86.That is not what the section says. This is a power of intervention by the Council to be exercised in the circumstances as specified by the section. The taking of disciplinary action against a solicitor involves a separate process where ultimately a formal finding is made as to whether or not a solicitor has committed professional misconduct. In this sense, the power of intervention is different where the Council only has to be satisfied of a failure to comply with professional rule by a solicitor. 87.As drastic as the power of intervention may be, it is there for the governing professional body, the Council, to take prompt and effective action to protect the public interest and maintain and safeguard the standards and ethics of the solicitors’ profession. The Council is constituted by elected members of the Law Society, who are practicing solicitors, and in their decision making processes they are governed by a detailed set of rules and requirements. There was nothing before me that indicated that the Council departed from the relevant rules and requirements and in consequence acted unfairly or unreasonably. 88.I should explain that although no issue was taken by the applicant on this matter, the Notice did not specify the rules that the solicitor had failed to comply with. This is a requirement under s.26A(2). I should note that there were other documents that listed the rules concerned. It would be prudent when drafting a document pursuant to, and in the exercise of, a statutory power and in order to provide formal notification to an affected party, that it sufficiently particularises compliance with the relevant statutory provision or provisions by appropriately following the statutory language and sufficiently particularising the requirements as necessary and appropriate in the circumstances. Wednesbury unreasonable 89.As pointed out, during the course of oral submission the applicant abandoned the first ground and sought an adjournment to amend the Form 86 to include a new ground under the head of Wednesbury unreasonableness on the basis there was insufficient evidence to warrant a decision by the Council to intervene. 90.As noted by the Law Society such a complaint is unsustainable. The weighing of evidence is entirely for the primary decision maker subject only to clear and obvious cases of irrationality in the assessment and evaluation process. It was difficult to see any merit in this ground given the history and circumstances of the case. It not only lacked specificity but also substance. Academic and futile 91.I turn to deal briefly with the general grounds of objection by the Law Society that it would be academic and futile to quash the Intervention Decision. Even though judicial review proceedings may be viewed as academic, leave may be granted where an important point of law or matter of public interest warrants adjudication by the court in the context of public duties or functions. See Chit Fai Motors Co Ltd v Commissioner for Transport [2004] 1 HKC 465, at §20 per Ma CJHC (now Chief Justice Ma). 92.It is beyond question that it is of vital importance to the public interest that solicitors discharge their professional duties with integrity, probity and complete trustworthiness. The purpose of intervention in the practice of a firm of solicitors is not punishment as would normally be available in disciplinary proceedings against a solicitor but for the protection of the public and upholding the rule of law. Solicitors are officers of the court and they have a unique and important role and responsibility in the administration of justice and any form of compromise or diminution of that role and responsibility can have serious deleterious consequences to our legal system. 93.As noted by the Law Society, the Council is under a continuing duty to protect the integrity and reputation of the solicitors’ profession and the interests of the public and in light of all the facts and circumstances of the present case there were grounds for intervention against AHC at the time although they argued that since then further grounds have emerged that reinforce the intervention of AHC. 94.I would not go as far as suggested by the Law Society in their submission that where there is little or no practical effect judicial review should be disallowed. It will very much depend upon the particular facts and circumstances of the case concerned and the issue or issues under consideration. The court in judicial review does have the discretion not to provide a remedy if to make an order would serve no practical purpose. See De Smith’s Judicial Review, 7th Edition, at §18-054. Alternative remedy 95.Finally, there is the issue that the applicant had not exhausted an alternative remedy, namely the Originating Summons in which together with his partner he seeks the withdrawal of the Notice of Intervention. 96.Judicial review is an exceptional remedy and the grant of it is in the discretion of the court. There is a blurred distinction as to whether the Originating Summons in seeking the withdrawal of the Notice is also challenging the decision of the Council. In any event, as I have already explained pursuant to s.26A(2) the Notice is the mandated statutory means of giving effect to the Intervention Decision. In the present proceedings the applicant did not seek to challenge the validity of the Notice but rather sought to question the Council’s decision on the basis of construction of s.26A(1)(c), which he has now abandoned. 97.It would seem that the forum of the Originating Summons did provide the means of an alternative remedy in that the applicant by seeking the withdrawal of the Notice of Intervention was in effect challenging the decision to issue it. Conclusion 98.For the foregoing reasons, I concluded that none of the grounds advanced by the applicant were reasonably arguable. I refused the application for an adjournment to amend the Form 86 and for leave to apply for judicial review of the Intervention Decision. 99.I make an order nisi that there is no order as to costs. I do so because this is a leave application and the Law Society were invited to attend the hearing to assist the Court if it so wished, even though I was assisted by its submission.
Mr Paul KN Wu and Mr Dick Lee, instructed by Tong & Lawyers, for the applicant Mr Abraham Chan, instructed by Deacons, for the putative respondent | |||||||||||||||||
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