Li Chiu Wah Joseph v. Hong Kong Society of Notaries
Read the full judgment text of HCAL 2658/2019 on BabelCite. This High Court CFI judgment was delivered on 30 July 2020.
1. This is about the “roll-up” hearing [1] of the Applicant’s application for leave to apply for judicial review and the substantive application [2] . The Applicant is a solicitor and notary public practising in Hong Kong and a member of the Respondent, the Hong Kong Society of Notaries (“ Society ”). Shortly stated, the Applicant’s challenge concerns a charge of HK$3,000 (“ Late Charge ”) which the Society levied on him for the late submission of a supporting document for the renewal of his a
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HCAL 2658/2019 [2020] HKCFI 1789 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 2658 OF 2019 _________________
_________________ Before: Hon Alex Lee J in Court Date of Hearing: 24 April 2020 Date of Judgment: 30 July 2020 ____________________ J U D G M E N T ____________________ INTRODUCTION 1.This is about the “roll-up” hearing[1] of the Applicant’s application for leave to apply for judicial review and the substantive application[2]. The Applicant is a solicitor and notary public practising in Hong Kong and a member of the Respondent, the Hong Kong Society of Notaries (“Society”). Shortly stated, the Applicant’s challenge concerns a charge of HK$3,000 (“Late Charge”) which the Society levied on him for the late submission of a supporting document for the renewal of his annual Certificate of Membership and the Society’s refusal to waive that charge. 2.In the Amended Form 86, the decision (“Decision”) in respect of which relief is sought is stated as follows:
CONTENTIONS OF THE PARTIES 3.In summary, the Applicant contends in the Amended Form 86[3] that:
4.In terms of relief, the Applicant seeks an order to quash the Decision, as well as declarations that the Decision was unlawful and that the Applicant is entitled to the return of the HK$3,000 paid by him under protest[11]. 5.On the other hand, in gist, the Society contends that the Decision in fact consists of two different parts: (1) the refusal to waive the fees; and (2) what the Society would do in case the payment was not made as demanded. It is submitted that neither of them is amenable to judicial review for different reasons. The Society maintains that the Late Charge is a genuine administrative charge and not a penalty. Therefore, the Applicant’s arguments on illegality are wrong and that in any event the Decision is not Wednesbury unreasonable. Lastly, the Society denies that there was bias, actual or apparent, on the part of the Council. AFFIDAVIT EVIDENCE 6.There are three affidavits filed for this case:
FACTUAL & LEGAL MATRIX 7.The following, which I gratefully adopt from the written submission of Mr Dykes, SC (and with him, Mr Yeung), counsel for the Applicant and that of Mr Leung, counsel for the Society, is not largely in dispute. The parties 8.The Society is a company limited by guarantee[15] which was incorporated in Hong Kong in 1977 with the Articles of Association[16]. 9.The Applicant has been a solicitor practising in Hong Kong since 1987 and a notary public since 1995. He joined the Society as a member in 2005. Statutory requirements for notary publics 10.The current Part IV of the LPO was the product of the Legal Practitioners (Amendment) Ordinance 1998 (“the 1998 Amendments”) which came into effect on 30 June 2005[17]. 11.Pursuant to s40D(1)(d)[18] & (2)[19] of the LPO, membership of the Society is necessary in order for a person to practise as a notary public. To practise as a notary public in Hong Kong, one must either:
12.A Practising Certificate for a notary public is issued under s40E of the LPO, and an applicant for which must have paid the membership subscription to the Society (hence be a member of the Society): s40E(4) of the LPO. These provisions came into effect in 2005. Articles of Association 13.Members of the Society are contractually bound by the Articles of Association. Membership in the Society is governed inter alia by at Art 2 to 9[20]. In particular:
14.Powers of the Council are governed by Art 36 to Art 38:
Society Circulars 15.Following the pattern of previous years, by the Circulars dated 18 September 2018[22] and 3 October 2018[23], the Society informed its members that anyone who sought to practise as a notary public in PY 2019 by virtue of holding a Certificate of Membership and a Practising Certificate as a Solicitor had to:
16.In the Circular dated 18 September 2018, it was also stated that should a member fail to honour his or her Undertaking by the 2nd Deadline,
17.Attached to the Circular dated 3 October 2018 was a standard Application Form. Part B1 of that form contained the following declaration:
Facts leading to the present application 18.On 19 November 2018, the Applicant submitted a duly completed Application Form (which contained the aforesaid standard declaration) for PY 2019 together with the membership subscription fee ahead of the 1st Deadline[30]. In that Application Form, the Applicant gave the Undertaking as he had done in previous years. 19.On 14 December 2018, the Society sent to all its members (including the Applicant) who had opted to practise on the strength of a solicitor’s practising certificate their PY 2019 membership certificate, together with an “Important Notice” reminding them to honour the Undertaking by the 2nd Deadline, failing which the member: (i) would have to pay the additional administrative Charge; and (ii) may further be subject to disciplinary proceedings. However, the Applicant inadvertently missed the 2nd Deadline for delivering his certified true copy of his 2019 Law Society Practising Certificate. 20.On 11 January 2019, the Society, via post[31] and email, informed the Applicant that he was in breach of the Annual Undertaking and he was therefore required to deliver a certified true copy of his 2019 Solicitor Practising Certificate, as well as to make payment of HK$3,000 (being the Additional Administrative Charge) by 21 January 2019. 21.On 14 January 2019, the Applicant wrote[32] to the Society to apologise for the delay and sought a waiver of the Late Charge on the basis that the delay of one working day did not cause any prejudice and that he had not performed any notarial acts in the meantime[33]. 22.On 13 February 2019, the Council met and discussed[34] the Applicant’s letter dated 14 January 2019. Then, by a letter dated 25 March 2019[35] signed by Mr Kenneth Sit as President of the Society, the Applicant was informed, amongst other things, that his request for waiver was refused. The relevant part of that letter reads,
23.On 10 April 2019, the Applicant wrote[36] back to the Society, requesting a freshly constituted panel of the Council to review the decision refusing his request for waiver of the “additional administrative charge”. He also requested three of the Council members (Mr Jesse Kwok, Mr Kenneth Sit and Mr Andrew Hart) not to take part in the decision-making process on the basis of his on-going and past dealings with them. 24.On 8 May 2019, the Council discussed[37] the Applicant’s letter dated 10 April 2019. The Council resolved to set up an ad hoc committee comprising the President (Mr Kenneth Sit), the Vice President (Ms Au Miu Po) and Mr Andrew Hart (the “Ad Hoc Committee”). The Ad Hoc Committee met on 17 May 2019[38]. 25.On 12 June 2019, the Council met[39] again and discussed, among other things, the matters concerning the Applicant’s complaint. Mr Kwok did not take part in the deliberation of this matter, but Mr Sit and Mr Hart did. The Council resolved inter alia to approve (subject to certain revisions) the draft letter (prepared by the Ad Hoc Committee) to the Applicant refusing to waive the Late Charge. On the same date, the Society communicated the Decision to the Applicant by way of a letter[40] the relevant part of which reads,
26.On 27 June 2019, the Applicant paid the “additional administrative charge” “under protest”[41]. As a result, the Council did not in fact amend the Applicant’s PY 2019 Certificate of Membership and did not decide whether to revoke the Applicant’s PY 2019 Certificate of Membership. Therefore, the Applicant’s practice as a notary public had not been interrupted. 27.On 11 September 2019, the Applicant filed the present application for leave to apply for judicial review. AMENABILITY Public function of the Society 28.Notwithstanding that the Society is a limited company and that its relationship with the members is contractual in nature, it can hardly be disputed that the Society bears a public function in the regulation of notaries public. In this regard, the Legislature, in passing the 1998 Amendments, clearly intended that the Society should be a self-regulating body given with monopolistic powers over the profession of notaries public so that a solicitor cannot practise as a notary public without submitting to the terms of membership of the Society. This can be gathered from the speech of the then Secretary for Justice in moving the second reading of the amendment bill on 11 February 1998[42]:
29.Then, at the resumption of the second reading on 7 April 1998, the Secretary of Justice said[43]:
30.That the Society, albeit a company, has been imbued with a public function is, as submitted by Mr Dykes, further evidenced by the relevant statutory scheme in the LPO as follows:
Legal principles on amenability 31.That said, it is not the case that every decision made by a body discharging a public function is amenable to judicial review: Financial Secretary v Wong[47]. 32.On the issue of amenability, it is well-established that the source of the power of the decision-maker to make the impugned decision, whether statutory or contractual, is a highly relevant factor: R v Panel on Take-overs and Mergers, Ex parte Datafin[48]. So much so, the source of power will often, perhaps usually be decisive: Hong Kong Rifle Association v Hong Kong Shooting Association (No 2)[49]. On the other hand, it has also been held that, “the existence of a contractual relationship is not inconsistent with judicial review”: R (Mullins) v The Jockey Club[50]. The crux of the matter is whether the impugned decision has a sufficiently weighty public element so that it falls within the public law domain: King Prosper Trading Ltd v Urban Renewal Authority[51]. 33.The general principles on amenability are comprehensively discussed in the judgment of A Cheung J (as Cheung PJ then was) in Anderson Asphalt Ltd v The Secretary for Justice[52]. In essence, only a decision made in the public law domain is amenable to judicial review and therefore the nature of the functions that the decision-maker was performing when making the decision under challenge is of crucial importance. Put another way, the presence of a public element of sufficient significance in the decision-making process could turn an otherwise commercial decision into a public law decision, amenable to judicial review. What is sufficient is a matter of fact and degree, depending very much on individual cases. As such, no hard and fast rule can be laid down. It is, in a borderline case, very much a matter of overall impression and one of degree[53]. The Decision 34.Before applying the aforesaid legal principles to the present case, the first issue that this court has to decide is whether the Decision, as Mr Leung contends, actually consists of more than one decision. In this regard, with respect, I agree with the submission of Mr Leung that the Decision can logically be separated into two different parts as follows:
35.In so doing, I have taken into account that Part (1) and Part (2) are contained in the same letter of the Society (dated 12 June 2019). I have also taken into account that the Decision was a “staged” one the outcome of which could adversely affect the Applicant’s qualification to practise as a notary public. However, I take the view that the two parts were separate decisions in the sense that Part (2) was the product of a separate conscious act different and distinct from Part (1) and that the natural consequences of not complying with either of them were also different. The fact that the two parts were separate conscious acts of the Society is borne out by the following evidence:
36.Besides, the nature of the decisions in Part (1) and Part (2) are different in that Part (1) was a decision about an event which had already taken place and thus was certain, whilst Part (2) was conditional upon occurrence of certain incidents. The consequence of Part (1) was that the Applicant remained liable to pay the Late Charge. The consequence of not complying with Part (2) would bear adversely on the Applicant’s qualification to practice as a notary public. 37.If I am right that Part (1) and Part (2) are different and separate decisions, then it cannot be assumed that each part bears a sufficiently weighty public element so as to render both of them equally amenable to judicial review. As a consequence, it would be necessary for the court to examine each part separately in order to decide their respective amenability to judicial review. 38.When considering each part of the Decision, this court will take a broad and flexible approach as recommended by the learned authors of De Smith’s Judicial Review at • 3-059 and will take into account a host of factors including the source of the power or function exercised, the nature of the decision (whether it falls within the public domain), the relationship between the parties and the consequences of the decision. Part (1) of the Decision 39.I agree with the submission of Mr Leung that even though the Society bears a public function, Part (1) of the Decision simply does not have a sufficiently weighty public law element to render it amenable to judicial review. In this regard, I have taken the following factors into consideration as a whole:
40.In my judgment, Part (1) of the Decision is not amenable to judicial review. As such, I refuse the Applicant leave to apply for judicial review in relation to that part of the Decision. Part (2) of the Decision 41.As regards Part (2), Mr Leung’s objection is not that it lacks a sufficiently weighty public element. With respect, he is right not to take any point on this. In my judgement, it is plain that the Society was indeed exercising its function as the regulator of the notarial profession here. Moreover, this part of the Decision could have the effect on the Applicant’s qualification to practise as a notary public. 42.What Mr Leung stresses in respect of Part (2) is that the Society had never actually amended the Applicant’s PY 2019 Certificate of Membership. Even if it had, so the argument goes, that would still have been an “intermediary step” with no substantive legal consequence and a decisive or determinative effect. If Mr Leung was correct on this, then it means that the Applicant would not be able to seek any judicial review unless and until the “threat” contained in the Society’s 12 June 2019 letter had materialised, ie, the Society had in fact imposed the Condition on his PY 2019 Certificate of Membership and/or revoked the said Certificate. 43.As to this submission of Mr Leung on “intermediary step”, I readily accept as well-established law that judicial review, generally, is concerned with actions or other events which have, or will have, substantive legal consequences: for example, by conferring new legal rights or powers, or by restricting existing legal rights or interests. Typically there is a process of initiation, consultation, and review, culminating in the formal action or event (“the substantive event”) which creates the new legal right or restriction: R (on the application of Shrewsbury and Atcham Borough Council and another) v Secretary of State for Communities and Local Government (Shropshire County Council, interested party)[58]. Therefore, intermediate steps will normally only be reviewed, if at all, as part of the entire process after the determinative and ultimate action is taken. I also accept that given the finite capacity of the court in judicial review, this restraint is vital to sound judicial administration. 44.However, it does not follow that a conditional decision can never be amenable to judicial review. This point is illustrated by what had happened in R v Hammersmith and Fulham LBC, ex p Burkett[59]. In that case, on 15 September 1999 a Local Planning Authority resolved to grant planning permission for a development subject to a particular condition being satisfied. On 6 April 2000, well after a three-month time limit had expired, the applicants sought leave to apply for judicial review of the resolution. On 12 May 2000, the condition having been complied with by the developer, the Local Planning Authority granted the planning permission. It was this grant which affected the applicant’s rights. Richards J on a renewed application[60] accepted, as to the merits, that the applicants’ grounds for judicial review were arguable. However, his lordship refused permission to apply on the ground of delay, holding that the date when grounds for the application had first arisen had been the date of the local planning authority’s resolution of 15 September 1999. The Court of Appeal gave the applicants permission to appeal from Richard J’s decision but dismissed the appeal. The House of Lords, however, reversed the judgment of the Court of Appeal. That was on the basis that the grounds, in relation to an application for judicial review of a grant of planning permission, first arose on the date when permission was actually granted; that the application could be amended to substitute that the date for that of the local planning authority’s resolution; and that, accordingly, it was not out of time. 45.For the present purpose, it is important to note that the House of Lords did not allow the appeal on the basis that a conditional resolution could be amenable to judicial review. The effect of the judgment of the House of Lords is that the applicants’ failure to challenge the resolution in time did not bar them from challenging the later grant. Moreover, in the context of town planning, time runs when the actual planning permission is granted. Lord Slynn of Hadley[61] had the following to say,
46.Lord Steyn, whose speeches the other law lords[62] concurred, acknowledged that in law the resolution was not a juristic act giving rise to rights and obligations and that it was not inevitable that it would ripen into an actual grant of planning permission[63]. Nevertheless, his lordship said[64],
47.Burkett’s case was discussed and explained in R (Nash) v Barnet LBC[65]. The issue in Nash’s case was the lawfulness of a decision and an impending decision of the defendant council to outsource to private sector organisations a high proportion of its functions and services, following an earlier public procurement process. The claimant issued judicial review proceedings in January 2013 to challenge: (i) a decision made by the council’s cabinet on 6 December 2012 to award a contract to the first interested party, to provide a new support and customer service organisation; and (ii) a decision which would, but for the proceedings, have been taken by the cabinet on 31 January 2013 to award a contract to either the second or third interested party to provide development and regulatory services. The council contended, inter alia, that the claim was out of time, having been brought more than three months after the grounds of claim first arose. It maintained that its decisions in November 2010 and March 2011 to proceed with the procurement process for the outsourcing of the functions and services in question constituted the formal beginning of the process leading to the decisions under challenge, so that the grounds of claim had arisen when those decisions initiating the process had been taken. Underhill J held that the claim was out of time and he refused permission to extend time[66]. Davis LJ, giving the judgment of the Court of Appeal upholding Underhill J’s decision, expressly approved the following dictum given at first instance:
48.Davis LJ distinguished Burkett and said[67]:
49.Based on Burkett and Nash, in my view in case of a “staged decision-making”, an earlier decision in a series is capable of becoming the subject matter of a judicial review, if it is not merely provisional or procedural in nature and if it also carries with it substantive public law consequences. Of course, if the earlier decision has been subsumed into or overtaken by a later decision, then only the later decision should be the subject matter of a judicial review. To borrow the words of the Court of Appeal in Keen Lloyd Holdings Ltd v Commissioner of Customs and Excise[68],
50.Applying the above to the present case, I do not agree with Mr Leung’s submission that Part (2) of the Decision was a mere “procedural decision” or “intermediate step” so that the time had not become ripen for the applicant’s application for leave to apply for judicial review. I am also unable to agree with Mr Leung that that time could never arrive now that the Applicant had paid. My reasons are as follows:
51.With respect, the case authorities on “intermediate step” relied upon by Mr Leung are clearly distinguishable from the present case:
52.Based on the above, in my judgment Part (2) of the Decision is amenable to judicial review. ILLEGALITY Applicant’s contention 53.In his written submission[75], Mr Dykes summarises his contentions under this ground are as follows:
As to (a): tying payment to certificate of membership 54.In his written and oral submissions, Mr Dykes, based on a general analysis of the various provisions of the LPO, the legislative history of the 1998 Amendments and a comparison with the regulatory regime for barristers and solicitors, submits that the Society is ultra vires the LPO in tying the payment of the “additional administrative charge” to the Applicant’s Certificate of Membership. 55.Mr Dykes submits that the legislature, by empowering the Society to issue Certificates of Membership, did not intend to confer additional regulatory powers for entry into the profession of notaries public that were completely different from the regulatory powers for entry into the solicitors profession. As such, it would be surprising if the Society had an independent power to regulate entry into the profession of notaries public by way of amending or revoking Certificates of Membership, and in doing so completely circumvent the safeguard of the right of appeal to the Chief Judge. Further, a power to impose an administrative charge as a condition in the Certificate of Membership (or to revoke a Certificate of Membership if such charge is not paid) is neither expressed or implied in the statute nor can it be incidental to the exercise of the statutory function: McCarthy & Stone (Developments) Ltd v Richmond upon Thames LBC[76]. Further or alternatively, the Society cannot rely on its private law power under the Articles of Association in a way that is consistent with its statutory function. Alternatively, the Council’s power to amend or revoke Certificates of Membership under Art 6(5) must at least be construed such that it can only be exercised on the same grounds as those on which the Council is entitled to refuse to issue a Practising Certificate under Cap 159AF and failure to pay an additional administrative charge cannot be such a ground. 56.Before dealing with the above submissions, there are a few observations to be made:
57.As regards observation (1), since I have already ruled that Part (1) of the Decision is not amenable to judicial review, I do not think it is necessary more on this. It suffices for me to say that this aspect of Mr Dykes’ submissions does not affect my aforesaid ruling. 58.However, as regards observation (2), as pointed out by Mr Leung, there is a problem in that the above submissions of Mr Dykes are fundamentally different from the way in which the illegality ground is pleaded in the Amended Form 86. 59.Firstly, in the Amended Form 86, the impugned decision is said to be:
Nothing, however, was said that it is illegal for the Society to amend a member’s certificate of membership in a certain way. The closest argument that one can find in that document is that:
However, it refers to whether the Society’s power to impose conditions on a notary’s practising certificate pursuant to s40E(5) & (6), LPO rather than certificate of membership, which is a different animal. Besides, in the sentence in quote, it is argued that the Society’s imposition of conditions (on a notary’s practising certificate) would be illegal if it was for the purpose of “punishment”. 60.Secondly, the illegality ground as pleaded in the Amended Form 86 is premised solely on the proposition that the Late Charge is a penalty in disguise. This can be gleaned from the following passages in the Amended Form 86:
Thus, the argument now advanced in Mr Dykes’ written and oral submissions, if accepted, would have the effect rendering Part (2) of the Decision ultra vires even if the Late Charge was a genuine administrative charge rather than a punishment. This is a new argument which has not been covered by the Applicant’s pleadings in the Amended Form 86. 61.However, by Order 53, rule 6(1), Rules of the High Court, no grounds shall be relied upon or any relief sought at the hearing except the grounds and relief set out in the Amended Form 86. In this regards, the courts have consistently emphasised the importance of adhering to the pleaded grounds. In Hong Kong Aircrew Officers Association v Director of Civil Aviation[81], Stock J (as he then was) said:
In Sunevision Holdings Ltd v Hong Kong Science and Technology Parks Corporation & Anor[82], G Lam J said,
In A v Secretary for Justice & 2 Ors[83], Chow J said,
62.Based on the above, I agree with Mr Leung’s submission that this new argument should not even be considered by this Court because it has not been properly set out in the Amended Form 86. 63.However, for the sake of completeness, I will go on to deal with the merits of this new argument. First of all, the Society (and the Articles of Association) has come into existence in 1977 which was long before the 1998 Amendments. Art 6(5) of the Articles of Association expressly provides for the Council’s power to amend a member’s certificate of membership by imposing conditions to it. This is a pre-existing contractual power. Therefore, the Applicant’s reliance on McCarthy & Stone (Developments) Ltd v Richmond upon Thames LBC, ante, which is about the scope of powers of a body created solely by statute, is misplaced. 64.Secondly, the present case is different from the case in Porter v Magill[84] which was about the misuse of a public power for an improper purpose. Here, the power relied upon by the Society, which came from the Articles of Association, was contractual and private in nature. Therefore, in order for the Applicant to succeed on the new argument, he must demonstrate show that the expressed powers conferred by the Articles of Association under consideration has been taken away or somehow restricted by the LPO: see s40S[85], LPO and Art 36[86] of the Articles of Association. Moreover, since there is no express provision in the LPO which overrides the Council’s clear and pre-existing contractual power under the Articles of Association to amend a member’s certificate of membership, the Applicant has to argue for and rely upon the existence of a necessary implication to that effect. However, this, as Mr Leung submits, is a high threshold to surmount. As explained by Lord Hobhouse in R (Morgan Grenfell & Co Ltd) v Special Commissioner of Income Tax & Anor[87]:
65.Therefore, it would not be insufficient for the Applicant to show that it would be more convenient, more reasonable, more sensible, or otherwise preferable for the Society to be deprived of its contractual power under consideration which had existed long before the 1998 Amendments came into operation. In order to succeed, the Applicant has to show that the legislature, despite not inserting any express provision in the LPO to that effect, must have intended for the Society to be so deprived. This, with respect, the Applicant has failed to do for the following reasons. 66.Firstly, the legislature must be taken to have been aware of the terms of the Articles of Association (including Art 6(5)) when it enacted the 1998 amendments to confer on the Society a regulatory role over notaries public. However, as can be seen from the Hansard, the requirement of mandatory membership of the Society was a considered decision[88]. Yet, no one in the legislature had expressed any concern about the pre-existing powers conferred on the Council by Art 6(5). 67.Secondly, the Applicant’s heavy reliance on a comparison of the regulatory regime for barristers and solicitors with that of notaries public is misplaced:
68.Based on the above, I refuse leave for the argument that it is illegal for the Society to tie the payment of the Late Charge to the Applicant’s certificate of membership. As to (b) – (d): whether the Late Charge a penalty 69.Contentions (b) to (d) under the illegality ground are premised on the common proposition that the Late Charge of HK$3,000 was a penalty in disguise, which amount is arbitrary and bears no relationship to the actual expenses incurred by the Society in dealing with his late submission of document. 70.In reply, Mr Leung does not seek to argue that the Society can impose a penalty on its members. The essence of Mr Leung’s reply on this part of the Applicant’s case is that the Late Charge was a genuine administrative charge. In this regard, it cannot be denied that the Society has indeed been given the power, under Art 37 of the Articles of Association, to levy administrative charge on its members. Therefore, if the Late Charge was a genuine administrative charge, then contentions (b) – (d) under this ground would fall apart. 71.With respect, Mr Leung is right not to argue that Part (2) of the Decision could still be justified if the Late Charge was in fact a penalty. Notably, the Notaries Public Disciplinary Tribunal[95] does have power to order payment by a notary including payment of a financial penalty: s40J(2)(d)-(f), LPO. However, that statutory power does not belong to the Society or the Council and therefore is not applicable in the present case. As such, I will deal with contentions (b) to (d) on the basis that the Society does not have any power, whether by virtue of the LPO or the Articles of Association, to impose a financial penalty (as opposed to a genuine administrative charge[96]) on its members. 72.Determination of the true nature of the Late Charge calls for a detailed examination of the affirmation evidence. For the purpose of the leave application, however, in view of the fact that the Late Charge (of HK$3,000) was a fixed sum which applied across the board without regard to the length of delay, it is in my assessment reasonable arguable that the Late Charge was a fixed penalty. Therefore, applying Po Fun Chan v Winnie Cheung[97], I grant the Applicant leave to apply for judicial review on contentions (b) to (d). The evidence 73.Turning to the affirmation evidence, Ms Lau, the Secretary General of the Society, says that the Late Charge was a “reasonable fee which is a general approximation of the extra expense required to process all events in that category of work, without having to do an exact and unique calculation each time an event occurs”[98]. Support for her assertion can be found in the Minutes of the Council’s meeting on 13 February 2019, in which it was said that the Council was of the view that “additional work has been generated due to Li’s breach of his undertaking and it takes a grave view of his breach of undertaking despite it treats members with goodwill and respect”[99]. I note that the Late Charge was set at HK$3,000 in late 2016 and has never been changed since then[100]. 74.As regards the decision not to waive the Late Charge, Ms Lau said[101],
75.As regards the relevant internal records of the Society in handling the Applicant’s case, in the Minutes of the Council meeting on 8 May 2019[102], Mr Hart, one of the Council members, expressed the view that the “principal issue in the current case is the breach of undertaking and not the amount of $3,000 additional administrative charge”. At Mr Hart’s suggestion, the Council formed the Ad Hoc Committee of which Mr Hart was also appointed as a member. 76.In the Minutes of the Ad Hoc Committee meeting on 17 May 2019[103], Mr Hart reiterated his view that the “breach of undertaking is a disciplinary matter”. He added that the Council should consider whether disciplinary proceedings would be an appropriate option. Both Mr Sit and Ms Au agreed with Mr Hart’s view. The Ad Hoc Committee decided to make recommendations to the Council which included a draft a letter to the Applicant “based on the discussion”, to be prepared by Mr Sit for the Council’s approval. 77.In the Minutes of the Council meeting on 12 June 2019[104], the Council considered the notes of the Ad Hoc Committee meeting on 17 May 2019 and Mr Sit’s draft letter. The Council noted that the levying of the Late Charge “is a contractual matter between the Society and its member, Li, under the Society’s constitution which does not bear reference to costs”. The Council also noted that “a number of default members had already paid this additional administrative charge without challenge”. A suggestion was made that the Council should refute the Applicant’s allegation that the Society’s letter requesting for payment of HK$3,000 additional administrative charge being a fixed penalty ticket. The Council eventually resolved to approve the draft letter with amendments. It is plain that the suggestion to refute the Applicant’s allegation of a fixed penalty was accepted by the Council, as the final version of the letter (which contained the Decision) to the Applicant began with a refutation of the Late Charge being a fixed penalty:
On the other hand, it is also noteworthy that there was no mention of any disciplinary proceedings in either the aforesaid Minutes of the Council Meeting or the aforesaid letter. Consideration 78.To start with, the view of Mr Hart expressed in the Council Meeting on 8 May 2019 has to be considered in context. The purpose of that Council Meeting was to consider the Applicant’s letter dated 10 April 2019[106]. Prior to the aforesaid letter, the Council had refused the Applicant’s request that the Late Charge be waived. In the aforesaid letter, the Applicant complained about the refusal and said:
The Applicant referred to his on-going or past dealings with Mr Hart, Mr Kwok and Mr Sit and asked that his request be reviewed by an “impartial panel”. The Applicant asserted that no prejudice had been caused by his one-day delay. Whilst not accepting to pay an additional administrative charge, he argued that the charge was not “reasonably incurred” and that the one-page pro forma letter issued by the Secretary General was tantamount to a “fixed penalty ticket” which had no statutory backing and was Wednesbury unreasonable. 79.It is important to note, therefore, that the request of the Applicant had always been that the Late Charge against him be waived altogether rather than varied. It is in this context that Mr Hart commented that the “principal issue … is the breach of undertaking and not the amount of $3,000 additional administrative charge.” In my view, this comment of Mr Hart does not really assist one in deciding whether the Late Charge was a penalty. 80.Secondly, I agree with Mr Leung that one should not attach too much weight to the back-and-forth deliberations as recorded in the minutes. As explained by Cheung JA in Capital Rich Development Ltd v Town Planning Board[107]:
The above dictum was followed in Hysan Development Co Ltd v Town Planning Board[108] where Lam VP said[109]:
81.On the other hand, in its 2019 Circular[110] to the members, the Society clearly distinguished between the payment of the “additional administrative charge of HK$3,000” on the one hand and “disciplinary proceedings for breach of undertaking” on the other. Besides, the Late Charge had consistently been referred to as an “administrative charge” in all the internal minutes of the Ad Hoc Committee and the Council as well as the Society’s correspondence with the Applicant. Therefore, as far as the evidence is concerned, there is nothing to suggest that the Council had treated the levying of the Late Charge as a disciplinary action. 82.As regards the Applicant’s assertion that the amount of the Late Charge is arbitrary and that the Secretary General’s letter to him levying the charge was tantamount to a fixed penalty ticket, Ms Lau has explained in her affirmation[111] that there were a series of jobs to be done by different people before the demand letter could be issued:
Ms Lau has not been cross-examined on the above and I can see no reason not to accept this part of her factual evidence. 83.As regards the Applicant’s complaint that the Late Charge was a fixed sum without regard to the length of the delay, the explanation given by Ms Lau is that the amount of HK$3,000 was a general approximation of the extra expenses required to process a case in which a member breaches the Annual Undertaking. Judging from the list of things that Ms Lau said would need to be undertaken before the demand letter was issued, the amount of extra administrative works does not really depend on the length of the delay in the sense that the same steps would have to be followed whether the delay concerned was in terms of days or months. Therefore, I accept Mr Leung’s submission that it makes more sense for the Society to adopt a broad brush approach to charge a fixed sum rather than to calculate an exact amount based on the time cost concerned on every occasion. In the circumstances, in my judgment a charge based on a general approximation is not of itself objectionable. 84.Furthermore, bearing in mind that the people who would be asked to pay the Late Charge are all notaries public practising in Hong Kong, if the HK$3,000 Late Charge were a penalty, then I do not think that that amount would likely to have any deterrent effect on those people. This tends to weaken the inference the Applicant asks the court to draw that the Late Charge is a penalty. 85.Having considered all the evidence in the round, I am unable to be satisfied that the Late Charge was a penalty in disguise. To the contrary, I am satisfied that it is a genuine administrative charge based on a general approximation of the costs involved. As a result, this grounds fails. As to Ground (ii): Wednesbury unreasonableness 86.The legal principles under this head are well-settled not in dispute. In judicial review proceedings, the court exercises a supervisory and not an appellate jurisdiction. A high threshold needs to be cleared before a Wednesbury challenge can succeed. As put by Lord Greene MR in Associated Provincial Picture Houses Limited v Wednesbury Corporation[112], it has to be so unreasonable that no authority properly directing itself on the relevant law and acting reasonably could have reached that decision. Nevertheless, the court in dealing with a Wednesbury challenge must still examine the reasons and justifications relied upon to see whether they are capable of supporting the conclusion: Zestra Asia Ltd v Commissioner for Transport[113]. 87.Insofar as this ground concerns the Wednesbury unreasonableness or otherwise of the Society’s fixing of the Late Charge at HK$3,000, this ground overlaps to a large extent with the Applicant’s contention that the charge was a fixed penalty in disguise. 88.As aforesaid, based on Ms Lau’s evidence as to the administrative works that were entailed before the Late Charge could be levied, there was a sufficiently objective basis for the level of the charge fixed. Moreover, having taken into account that the steps and the number of people involved in the process, I am of the opinion that HK$3,000 as a general approximation is not unreasonable. As the Society said in its 12 June 2019 letter,
89.I note also the undisputed evidence that other members who had been late were also charged with the same amount, so that the Society had not targeted specifically at the Applicant. Finally, I note that the sum of HK$3,000 has not been adjusted with inflation since late 2016. 90.Based on all of the above, in my judgment the Late Charge is not arbitrary and is not one which can be said to be so absurd or irrational to be Wednesbury unreasonable. As a result, this ground also fails. As to Ground (iii): the Society fettering its discretion 91.No argument has been advanced by Mr Dykes under this head in his written or oral submission. Insofar as it relates to the Society’s decision not to waive the Late Charge, as I have said, it is not amenable to judicial review. As to the amount demanded from him, the Applicant has never asked the Society to reduce the Late Charge. In any event, I can find no basis for this ground. This ground fails. As to Ground (iv): Bias 92.There is no evidence of actual basis in the present case. The Applicant’s arguments under this ground is based on apparent bias. In this regard, I note that Lord Nolan said in Ex p Pinochet Ugarte[114] that, “in any case where the impartiality of a judge is in question the appearance of the matter is just as important as the reality.” 93.The test for apparent bias is not in dispute, namely, whether a fair-minded and informed observer, having considered the relevant facts, would conclude that there is a reasonable apprehension of bias: see Porter v Magill[115]; Deacons v White & Case LLP[116]; and Falcon Private Bank Ltd v Borry Bernard Edouard Charles Ltd[117]. 94.There has been judicial guidance as to what the fair-minded and informed observer is like: he is one who reserves judgment on every point until he has seen and fully understood both sides of the argument. The observer is not unduly sensitive or suspicious. The observer is also informed, in that he takes the trouble to inform herself on all matters that are relevant and is able to put whatever he has read or seen into its overall social context: ZN v Secretary for Justice[118]. 95.As to examples of what may constitute apparent bias, as discussed in De Smith’s Judicial Review at • 10-038,
It is, however, remarked in the footnote[119] to the above passage that:
There, the learned authors refer to R (on the application of Hofstetter) v Barnet London Borough Council[120]; and O’Neill v HM Advocate (No 2)[121]. 96.Besides, it is commented in De Smith’s Judicial Review at • 10-48 that:
97.See also Taylor v Lawrence[122], in which the defendant complained that there was an appearance of bias on the basis that the claimants’ solicitors had drafted the will for the judge and his wife the night before judgment was given. The Court of Appeal held that there was no apparent bias and commented that judges, solicitors and advocates are entitled to expect from a fair-minded and informed observer a corresponding recognition that they will endeavour to be true to the standards set by their respective professional codes[123]. 98.Taylor v Lawrence was applied in Jung Science Information Technology Co Ltd v ZTE Corporation[124], where DHCJ Lisa Wong SC (as she then was) held that the principle in Taylor’s case applies equally to the legal traditions and culture of Hong Kong. In that case, there was no bias by the presiding arbitrator when he had an ordinary acquaintance relationship with the legal representative of one of the parties. In particular, the Court observed that given both the arbitrator and the legal representative are senior and well-respected practitioners in the arbitration field, they could be expected to observe high standards of integrity. 99.Similarly in A v B[125], the Court held that a fair-minded and informed observer, who was presumed to know how the legal profession works, would not consider that there was a real possibility of apparent bias when the arbitrator was actively involved as counsel in another piece of litigation for one of the firms of solicitors who were acting in the arbitration. 100.Turning to the present case, the Applicant’s main complaint against Mr Hart is that the latter had been acting for the creditor in an ongoing bankruptcy litigation while the Applicant had been acting for the opposite party. In the Applicant’s words[126]:
101.In relation to Mr Sit, the Applicant’s complaint was that, on various occasions, the Mr Sit acted as the clerk to the Solicitors Disciplinary Tribunal while the Applicant acted as the prosecutor. The Applicant also complains that Mr Kenneth Sit was the original decision-maker in refusing the request for waiver, and that he should not be involved in the subsequent consideration of the Applicant’s appeal against the original decision. 102.As regards Ms Au, who was the last member of the Ad Hoc Committee, Mr Dykes did not advance any argument about her. I note that Ms Au did not attend the Council Meeting on 12 June 2019[127]. 103.According to Ms Lau, the Council had considered the explanations given by Mr Hart and Mr Sit and decided that there was no justifiable reason to recuse them from the meeting:
104.I note also that even on the Applicant’s own account, in relation to Mr Hart, a call-over hearing had not yet been fixed pending further instructions from respective clients.[130] 105.Having considered the authorities and the evidence before me, I am not satisfied that the Applicant’s case for apparent bias is reasonable arguable. To start with, the dealings which the Applicant referred to were all professional in nature and there is no evidence of any personal acrimony. Secondly, as submitted by Mr Leung, the fair-minded and informed observer would be aware of the legal tradition in Hong Kong and that Mr Hart and Mr Sit are both senior members of the legal and notarial profession who can be expected to recognise the need to conduct themselves according to high professional standards. As such, cogent evidence would be required to show a case of apparent bias: Kwok Cheuk Kin Registrar of the High Court & Anor[131]. This, with respect, the Applicant has failed to do,as the evidence adduced by him in support of this ground is tenuous and bordering on speculation. 106.As regards the Applicant’s complaint that Mr Sit was also the original decision maker of the refusal to waive the Late Charge, I agree with Mr Leung that the point is without merits. 107.Regarding the legal principles, as explained by Harman J in Hamlet v General Municipal Boilermakers and Allied Trades Union[132]:
See also PS’s Application[133] which was about a challenge to the decision of a fostering panel where Hamlet’s case was applied. 108.My attention has also been drawn by Mr Leung to AMEC Capital Projects Ltd v Whitefriars City Estates Ltd[134], where the English Court of Appeal held that the mere fact that the tribunal had previously decided the issue is not of itself sufficient to justify a conclusion of apparent bias. It was said that Judges and adjudicators are assumed to be trustworthy and to understand that they should approach every case with an open mind. There needs to be something of substance to lead the fair-minded and informed observer to conclude that there is a real possibility that the tribunal will not bring an open mind and objective judgment to bear, such as if the tribunal had made an extremely hostile remark about a party. 109.Lastly, there is the judgment of English Court of Appeal in Sengupta & Anor v Holmes & Ors[135], which was about the position of a judge who had refused permission to appeal on a paper application listening the appeal, where Law LJ said:
Notably, Sengupta & Anor v Holmes & Ors HKSAR is cited with approval by the Court of Final Appeal in HKSAR v MD Emran Hossain[136]. 110.In the present case, although the refusal to waive was first communicated to the Applicant by a letter signed by Mr Sit as President, that decision was a result of the deliberation of the Council on 13 February 2019 rather than the decision of Mr Sit alone. Mr Sit (and also Mr Hart for that matter) was subsequently appointed by the Council as a member of the Ad Hoc Committee on 8 May 2019. After recommendations were made by the Ad Hoc Committee on 17 May 2019, Mr Sit presided the Council Meeting on 12 June 2019 discussing those recommendations. 111.When the governing body of an organisation forms a task force or sub-committee to look into certain matters, it would not be unusual, and in my view it also makes sense, for members of that “task force” or sub-committee to attend the meeting of the governing body when the report or recommendations of the former were presented to the governing body for discussion. In case the member(s) of the “task force” or sub-committee is also a member of the government body, I can see no reason in general why he or she should not be allowed to take part in the deliberation of the governing body. This is because any valid objections (for example, on the ground of bias) would have already precluded that person from being appointed to the “task force” or sub-committee in the first place. In the present case, as I have said, there are simply no basis for any allegations of bias against Mr Sit (and also Mr Hart for that matter) for his appointment to the Ad Hoc Committee. 112.Furthermore, in the present case, there is no evidence that either Mr Sit or Mr Hart would disregard the proper professional standard and approach the Applicant’s argument with a closed mind. Besides, there were other Council members[137] (who are all experienced lawyers) taking part in the deliberation on 12 June 2019 and there is nothing to suggest that they were not exercising their independent judgment in the matter. In all the circumstances, I am satisfied that the prior involvement of Mr Sit (and Mr Hart for that matter) concerning the Applicant’s request for waiver would not cause a fair-minded and informed observer to conclude that there was a real possibility of bias which might taint the decision of the Council. 113.Based on the above, this ground also fails. CONCLUSION 114.I refuse leave to apply for judicial review as regards Part (1) of the Decision. 115.Leave is granted as regards Part (2) of the Decision but only on the illegality ground based on contentions (b) – (d) above. Leave is refused on the other grounds put forward by the Applicant. However, the substantive application is dismissed on the merits. COSTS 116.I make an order nisi that the Society shall have the costs of these proceedings, to be taxed if not agreed. If there is no application to vary within 14 days of the handing down of this judgment, it will be made absolute.
Mr Philip Dykes, SC and Mr Geoffrey Yeung, instructed by Joseph Li & Co, for the Applicant Mr Wilson Leung, instructed by Boase, Cohen & Collins, for the Respondent [1] As per the directions of Chow J on 12 September 2019. [2] As the case does not involve any witnesses giving live evidence and is concerned mainly with submissions on law, by consent a remote hearing was conducted during the General Adjournment Period. [3] Dated 11.2.2020 [1/1-21] [4] [1/16-17/• • 24-25] [5] [1/17/• 25A] [6] [1/17/• 25B] [7] [1/17/• 25C] [8] [1/18/• 26] [9] [1/18/• 27] [10] [1/14/• • 20-22] [11] [1/3] [12] Dated 11 September 2019 [1/31-34] (which stands for Hearing Bundle (1), from pages 31-34. Paragraph reference, if any, will be added after the page reference. The same annotations will apply to documents contained in the Hearing Bundle.) [13] Dated 6 December 2019 [1/35-50] [14] Dated 3 January 2020 [1/51-76] [15] [2/172] [16] [2/189] [17] See the commencement notice: LN 60 of 2005. [18] S40D(1) reads:
[19] S40D(2) reads:
[20] [2/174-177] [21] A “Practice Year” means 1 January to 31 December of a calendar year, and a “Current Certificate of Membership” means a Certificate of Membership valid for a particular PY or part thereof: Art 1. [22] [2/77] [23] [2/81] [24] [2/79/• 7(1)] [25] [2/82/• 1] [26] [2/79/• 7(4)] [27] The late processing fee had been $3,000 since November 2016: see the Circular dated 22.11.2016 [2/136] [28] [2/79/• 7(5)] [29] [2/84] [30] [1/38/• 9] [31] [2/87] [32] [2/150-151] [33] [2/88] [34] [2/148] [35] [2/90] [36] [2/93] [37] [2/153] [38] [2/155] [39] [2/157] [40] [2/100] [41] [1/42] [42] Hansard (Provisional Legislative Council), 11 February 1998 at pp 81-84 [43] Hansard (Provisional Legislative Council), 7 April 1998, pp 149-151. [44] S2, LPO says:
[45] Article 35 says,
[46] Article 62 says,
[47] (2003) 6 HKCFAR 476, at • 93 (per Litton NPJ) [48] [1987] 1 QB 815, at 847 (per Lloyd LJ) [49] [2013] 3 HKLRD 362 (CA), at • 27 as per Kwan JA (as she then was). [50] [2005] EWHC 2197 (Admin), at • 29 [51] HCAL 56/2009 (Dated 17.12.2010) [52] [2009] 3 HKLRD 215 (affirmed in [2010] 5 HKLRD 490), at • 38 onwards [53] His lordship cited R v Legal Aid Board, ex p Donn & Co [1996] 3 All ER 1 and Matteograssi SpA v The Airport Authority [1998] 2 HKLRD 213. [54] [2/79/• 7(5)] [55] [2/156/• 11(b)] & [2/158/72(i)] [56] See Lau Aff [1/45/• 25] [57] [2015] 5 HKLRD 791 [58] [2008] 3 All ER 548, at • • 32-33 [59] [2002] 1 WLR 1593, at • • 39-42 [60] The applicants’ first application was refused by Newman J on the merits and also on the ground of their delay in applying. [61] Ibid, at • 5, whose speech Lord Millett (at • 67) and Lord Phillips (at • 68) concurred. [62] Lord Slynn (at • 1), Lord Hope (at • 55), Lord Millett (at • 67) & Lord Phillips (at • 68). [63] Ibid, at • 42. [64] Ibid, at 1067E-F. [65] [2013] PTSR 1457 [66] [2013] PTSR Digest D31 [67] Ibid, at • 65. [68] [2016] 2 HKLRD 1372, at • 31. [69] [2/158] [70] [2013] 5 HKC 593 [71] [2012] 3 HKLRD 1 [72] (2003) 6 HKCFAR 476 [73] With whom Lord Millett NPJ agreed. [74] Ibid, at • • 14 & 27. [75]Skeleton Submissions for the Applicant (dated 14.4.2020), at • 59. [76] [1992] 2 AC 48 at 74E-H [77] [1/21/• 32] [78] [1/17/• 25B] [79] [1/16/• 24] [80] • • 25A-25C were amendments added to the Form 86. [81] HCAL 51/1999 (dated 28.10.1999) at • 9. [82] HCAL 1890/2018 [2020] HKCFI 548, at • • 72-73. [83] [2020] 2 HKLRD 86, at • 51. [84] [2002] 2 AC 357 [85] The provision says,
[86] The article says,
[87] [2003] 1 AC 563, at • 45 [88] The Legal Practitioners (Amendment) Bill 1996 introduced to the former Legislative Council in 1996 was withdrawn by the Administrative during committee stage specifically for the concerned that such a prerequisite would probably infringe the right to freedom of association under Article 22 of the International Covenant on Civil and Political Rights (ICCPR). At the time, the Administrative was apparently not in favour of giving the Society a regulatory role. Subsequently, on 11 February 1998 the Secretary for Justice introduced the Legal Practitioners (Amendment) Bill 1998 with provisions giving the Society a regulatory role: see the speech of Mrs Miriam Lau (Chairperson of the Bills Committee on Legal Practitioners (Amendment) Bill: Hansard (Provisional Legislative Council) on 7.4.1998, at pp147-148. [89] See s6(5)(e) & s40E(6)(c), LPO. [90] See generally Part III, LPO and in particular s30. [91] CACV 12/2015, at • • 46-62. [92] [2019] 3 HKLRD 455 [93] S6(9)-(11), LPO [94] S40E(6), LPO [95] The panel of which consists of both practising notaries public and lay persons and is appointed by the Chief Justice: see ss40G & 40I, LPO [96] It is no disputed that the Society can charge members genuine administrative charges: Art 36 & Art 37 [2/180-181] [97] (2007) 10 HKCFAR 676 [98] [1/45/• 25] [99] [2/149] [100] Li 2nd Aff [1/54] [101] [1/48/• 28] [102] [2/153/• 62] [103] [2/156/] [104] [2/157/] [105] [2/100] [106] [2/93-99] [107] [2007] 2 HKLRD 155 (CA), • 87 [108] CACV 232/2012 (Dated 13 November 2014). The judgement of the Court of Appeal was reversed by the Court of Final Appeal ([2016] 19 HKCFAR 372) but the point was not disturbed. [109] Ibid, at • • 191-192. [110] [2/79/• 7(5)] [111] [1/45-46/• 25] [112] [1948] 1 KB 223, at 233 [113] [2007] 4 HKLRD 722 at • 36 (per Chu J, as she then was) [114] [2000] 1 AC 119, at 139 [115] Supra, at • • 102-103 [116] (2003) 6 HKCFAR 322, at • • 21, 30 [117] (2014) 17 HKCFAR 281, at • 11. [118] [2016] 1 HKLRD 174, at • • 32-34 (per Zervos J, as he then was) [119] Ibid, Footnote 134 [120] [EWHC 3282 (Admin); [2010] PTSR 1527 [121] [2013] UKSC 36; [2013] 1 WLR 1992 at [53]. [122] [2003] QB 528 [123] Ibid, at • 69 [124] [2008] 4 HKLRD 776 [125] [2011] 2 Lloyd’s Rep 591 [126] Li 2nd Aff [1/73/• 29] [127] [2/157]. A total of 9 Council Members attended that meeting including Mr Sit, Mr Hart and Mr Kwok. Mr Jesse Kwok, however, did not take part in the deliberation concerning the Applicant’s breach of the Undertaking. [128] Lau Aff [1/47/• 27(2)] [129] Lau Aff [1/47/• 27(3)] [130] Li 2nd Aff [1/73-74/• 29(2)] [131] [2019] 1 HKC 551 (per Au J, as he then was) [132] [1987] 1 WLR 449, at 455B-C [133] [2013] NIQB 133 [134] [2005] 1 All ER 723 [135] [2002] EWCA Civ1 104 [136] (2016) 19 HKCFAR 679, at • 43. [137] Apart from Mr Sit and Mr Hart, there were 6 others (not including Mr Kwok, who did not take part in the deliberation of the item concerning the Applicant). | ||||||||||||||||||
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