The Practice Review Committee of the Hong Kong Institute of Certified Public Accountants v. Ng Kay Lam

CACV 343/2021

[2023] HKCA 645

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 343 OF 2021

(ON APPEAL FROM THE DISCIPLINARY COMMITTEE OF THE HONG KONG INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PROCEEDINGS NO D-18-1402P)

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BETWEEN

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Before: Hon Cheung, Yuen and G Lam JJA in Court

Date of Hearing: 17 March 2023

Date of Judgment: 12 May 2023

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J U D G M E N T

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Hon Cheung JA:

1.I agree with the judgment of Yuen JA.

Hon Yuen JA:

2.This is the appeal of Mr Ng Kay Lam (“Mr Ng”) against:

(1)  the finding (“the Finding”) of the Disciplinary Committee (“DC”) of the Hong Kong Institute of Certified Public Accountants (“HKICPA”) in D-18-1402P (“the 2018 Disciplinary Proceedings”) in Reasons for Decision dated 13 May 2020 (“Reasons for Decision”) that the complaint made by the Practice Review Committee (“PRC”) of the HKICPA against Mr Ng dated 25 January 2019 was proved. The complaint, made under s.34(1)(a)(v) of the Professional Accountants Ordinance Cap. 50 then in force[1], was that Mr Ng, without reasonable excuse, failed or neglected to comply with a direction issued by the PRC dated 26 March 2018 under s.32F(2)(b) (“the 2018 Direction”);

(2)  the order of the DC given in its Costs and Sanctions Order dated 10 June 2021 (“CSO”) that Mr Ng’s practising certificate (“PC”) be cancelled under s.35(1)(da) effective on the 42nd day from the date of the order, and that a PC shall not be issued to him for 24 months commencing from the same date under s.35(1)(db) (“the cancellation order”);

(3)  the order of the DC in the CSO that Mr Ng pay the PRC’s and the DC Clerk’s costs and expenses of the disciplinary proceedings in the total sum of $174,866[2] under s.35(1)(iii) (“the costs order”).

Background

3.To understand Mr Ng’s arguments on appeal, it is necessary to set out some background.

The 2005 Disciplinary Proceedings   

4.1.Back in 2005, disciplinary proceedings (D-05-121C) (“the 2005 Disciplinary Proceedings”) were commenced against Mr Ng following a complaint made by a corporate client to the HKICPA in relation to certain audit work that had been performed by Mr Ng’s part-time employee who also became the company secretary and accountant of the corporation.  Mr Ng was aware of his employee’s various functions. 

4.2.On 29 June 2009, the DC in that case found that the complaint that Mr Ng had breached s.34(1)(a)(vi)[3] was proved, and on 24 December 2009 he was reprimanded and penalised. 

CACV28/2010

5.1.Mr Ng appealed to the Court of Appeal[4] in CACV28/2010 against the DC’s finding and sanction in the 2005 Disciplinary Proceedings.  He was represented by counsel.

5.2.On 30 November 2010, the Court of Appeal dismissed the appeal, holding that the conflict of interests in the case was “all too obvious to require any elaboration”[5].

Correspondence between Mr Ng, Mr Chan and PRC

6.1.After CACV28/2010, on 24 August 2011, Mr Paul Chan Mo Po (“Mr Chan”), then a legislative councillor, emailed[6] the HKICPA at Mr Ng’s request to seek clarification of a section[7] in the HKICPA’s Code of Ethics and its application to three specific factual scenarios raised by Mr Ng.

6.2.On 15 May 2012, the Executive Director of the PRC, Mr Chris Joy (“Mr Joy”) replied[8] to Mr Ng and Mr Chan on the application of the section to the three scenarios. 

6.3.Mr Ng asked Mr Joy to disclose his reply to all HKICPA members, but Mr Joy declined to do so as he considered that the content of his letter was drawn from materials available to all members anyway[9].

The 2013 Direction

7.1.On 21 February 2013, the PRC informed Mr Ng that a practice review was scheduled for 13 May 2013 (the practice review previously scheduled for 2011 had been cancelled before the hearing of CACV28/2010). 

7.2.Mr Ng’s firm was selected for review as it had refused to submit practice review self assessment questionnaires (“the questionnaires”) for 2011 and 2012 as requested by the HKICPA’s Quality Assurance Department (“QAD”) and the PRC.

7.3.On 8 March 2013 and 5 April 2013, Mr Ng informed the QAD that he would not accept a practice review.

7.4.On 26 April 2013[10], the PRC issued a direction to Mr Ng (“the 2013 Direction”) under s.32F(2)(b) requiring him to co-operate with the QAD to ensure that a practice review visit is carried out from

7.5.On 7 May 2013[11] however, Mr Ng stated he would not comply with the 2013 Direction, saying:

“as HKICPA has not fulfilled its duty towards members to clarify the stance taken in the Court of Appeal submission, we are unable to comply and accommodate with the Practice Review requirements at the time being”.

He said that that was

“due to the lacking of clear official guideline from HKICPA on interpretation of Ethical Standards in view of the subsequent development arising from the Court of Appeal decision”.

7.6.I shall refer to this as “the non-clarification argument”, which Mr Ng has persisted in raising in his dealings with the HKICPA.

The 2013 Disciplinary Proceedings

8.1.As Mr Ng continued to refuse to file the questionnaires and to permit the practice review visit, another set of disciplinary proceedings was commenced (D-13-818P) (“the 2013 Disciplinary Proceedings”).

8.2.The 2013 Disciplinary Proceedings took place in 2015.  Mr Ng’s “key”[12] argument was the non-clarification argument, which he claimed was a good reason for not complying with the 2013 Direction. 

The 2015 Order

9.1.For reasons set out in its Order & Reasons for Decision given on 11 September 2015, the DC rejected the non-clarification argument as a reasonable excuse for Mr Ng’s failure or neglect to comply with the 2013 Direction[13]. 

9.2.The DC found that Mr Ng’s failure to cooperate in the practice review, as well as his continued refusal to file the questionnaires since 2011, were serious breaches, and made the following orders (“the 2015 Order”):

(a)  Mr Ng pay a penalty of $60,000, and

(b)  his name be removed from the Register for 6 months starting from the expiry of 4 months from the date of the order, order (b) to take effect if Mr Ng still failed to

-  file the questionnaires from 2011 to the current year, or

-  cooperate with the practice review to the effect that the “Practice Review Program Reviewer’s Report” could not be issued by the PRC

on or before the expiry of 4 months from the date of the order; and

(c)  Mr Ng pay the costs of the PRC and the Clerk to the DC in the total sum of $223,468.

The 2015 practice review

10.1.Pursuant to the 2015 Order, on 21 September 2015 Ms Elsa Ho (“Ms Ho”), the Director of the QAD, wrote to Mr Ng notifying him of the procedures that he was required to carry out for the practice review[14].

10.2.Mr Ng did not appeal the 2015 Order[15], and a practice review was carried out in November 2015 and completed in December 2015. 

Mr Ng’s agreement to take follow-up actions

11.1.As the practice reviewer found certain areas required follow-up, on 18 December 2015[16], Mr Ng was asked to confirm that he would take certain follow-up actions[17], including:

V.  by 30 November 2016, Mr Ng’s practice will complete an external monitoring review, and

VI.  by 31 December 2016, the practice would provide the QAD with a copy of the monitoring review report (“MRR”) to verify that appropriate follow-up actions had been taken to address the practice review findings. 

11.2.On 8 January 2016, Mr Ng wrote to Ms Ho stating (among other things)[18]:

“V. the practice would arrange an external monitoring review of completed audit engagement for subsequent audits of Client A and Client B as soon as practicable after the audits have been performed. The review would include follow up actions set out in items I to IV above and whether all the findings in the reviewer’s report have been adequately and properly addressed.

VI. My practice will endeavour to finish the audit of Client B as early as possible to ensure that a monitoring report referred to in item V above would be available by 31 December 2016 to the Practice Review Committee”.

Mr Ng’s complaints and refusal to submit the MRR

12.1.However, on 1 August 2016[19], Mr Ng wrote to the PRC asking it to “justify its conduct on implementation of the [2015] Order” which he alleged breached the Ordinance.

12.2.On 23 September 2016[20], the PRC replied stating that the 2013 Disciplinary Proceedings had been completed and therefore it did not consider it appropriate to further comment.

12.3.On 12 December 2016[21], Mr Ng wrote to the Director of the QAD alleging that the PRC was acting “in abuse of power”, and stated that:

“If the PRC is unable to justify its conduct and to prove that the Order is implementable and due process has been followed, then I would have reservations in filing the [MRR]”; and

“After these issues are resolved and settled, I would arrange to file the [MRR] accordingly”.

12.4.Although the PRC informed Mr Ng that his complaint was a separate issue from his obligation to submit the MRR, he nevertheless did not submit the MRR. 

Mr Ng’s refusal to allow a follow-up visit

13.1.In the absence of an MRR, on 24 October 2017, Mr Ng was notified that a follow-up visit was scheduled to commence on 27 December 2017 (“the Follow-up visit”) and he was asked to submit information required for the visit.

13.2.On 7 November 2017, Mr Ng lodged a complaint against Ms Ho, Mabel Chan Mei Bo (“Ms Chan”) then Chair of the PRC, and others (being a firm and an individual)[22]. 

13.3.Mr Ng did not allow the Follow-up visit to take place.  

The 2018 Direction

14.1.On 26 March 2018, the PRC wrote to Mr Ng, explaining that the PRC was not a party to the complaints, and that the practice reviewer is independently assigned by the Registrar to conduct the Follow-up visit. 

14.2.The PRC issued a Direction requiring Mr Ng to co-operate with the QAD to accommodate the Follow-up visit (to start on 28 May 2018 for 3 days), and to provide the materials previously requested at least 3 weeks before the scheduled Follow-up visit (i.e. the 2018 Direction).

Mr Ng’s non-compliance with the 2018 Direction

15.1.On 29 March 2018, Mr Ng replied to the Associate Director of the QAD[23], saying that he considered that the practice review was “conducted in a manner unfair to me”, that he had lodged complaints against Ms Chan and Ms Ho, and that he had “no reason now to believe that the proposed practice review is fair under the prevailing circumstances”.  He stated that until his complaints were “handled with proper response by the Compliance Department also under the supervision of [Mr Joy], there is little chance of you coming to conduct the second practice review on 28 May 2018".

15.2.Mr Ng did not allow the Follow-up visit to take place. 

15.3.On 5 June 2018,

-  the HKICPA informed Mr Ng that it found his complaints against Ms Ho, Ms Chan and others were unsubstantiated, and that the complaints were dismissed, and

-  Mr Ng informed the HKICPA it that he would continue to refuse the Follow-up visit. 

15.4.Mr Ng’s refusal led to the 2018 Disciplinary Proceedings. 

The 2018 Disciplinary Proceedings

16.1.In a nutshell, the PRC’s case as set out in the “Complainant’s Case”[24] was that Mr Ng’s complaints against Ms Ho and other staff was not a reasonable excuse for his failure or neglect to comply with the 2018 Direction, which was to follow-up matters found at the 2015 practice review which Mr Ng had accepted as shown in his letter dated 8 January 2016[25].

16.2.Mr Ng’s case as set out in the “Respondent’s Case”[26] may be summarized as follows:

(a)  the non-clarification argument[27];

(b)  non-publication to members of Mr Joy’s reply to Mr Chan’s email[28];

(c)  no alternate plans were made for the practice review when Mr Ng was injured[29];

(d)  the typographical error in the name of Mr Chan[30] in the Order & Reasons for Decision in the 2013 Disciplinary Proceedings was not rectified;

(e)  an error in the Order & Reasons for Decision in the 2013 Disciplinary Proceedings (which referred to the PRC as the party issuing the Practice Review Program Reviewer’s Report in place of the QAD) was not rectified;

(f)  a complaint against Ms Ho for making arrangements for the execution of the 2015 Order 11 days after it was issued;

(g)  complaints against Ms Chan and Ms Yam Hoi Yin Cecilia for raising and approving the complaints that gave rise to the 2013 Disciplinary Proceedings and the 2018 Disciplinary Proceedings;

(h)  a complaint against Mr Chu Kin Chung Alex, the practice reviewer who conducted the practice review in November - December 2015.

Further,

-  prejudice to Mr Ng due to procedural unfairness during the 2013 and 2018 Disciplinary Proceedings; and

-  unfairness to him in having to face “similar” disciplinary proceedings for the 2013 complaint and the 2018 complaint, for which he would raise “double jeopardy” as a defence.

16.3.Pausing here, it is notable that Mr Ng did not rely on his complaints against Ms Chan, Ms Yam or Mr Chu in his written submissions filed in the appeal before us.  

16.4  The hearing of the 2018 Disciplinary Proceedings took place on 3 March 2020.

The DC’s Reasons for Decision

17.1.On 13 May 2020, the DC issued its Reasons for Decision (for ease of reference, attached as “Annex A” to this Judgment).

17.2.In §23, the DC set out Mr Ng’s alleged grievances (“the alleged grievances”):

(i)  continuous clarification requests in connection with past proceedings;

(ii)  what Mr Ng perceived to be a policy issue that needs clarification from the HKICPA;  

(iii)  the typographical error in Mr Chan’s name in the 2015 Order;

(iv)  the error in the name of the party to issue the Practice Review Program Reviewer’s Report;

(v)  various timing and procedural issues that potentially led to Mr Ng’s failure to lodge a review[31] against the 2013 Disciplinary Proceedings;

(vi)  the conduct of staff of the HKICPA in handling past and current disciplinary proceedings;

(vii)  conflict of interests of certain staff;

(viii) “double jeopardy”.  

17.3.In §§29 and 31, the DC noted that the following facts were undisputed:

(1)  Mr Ng had refused to allow the practice reviewer to carry out the Follow-up visit despite repeated requests, and

(2)  he did not comply with the 2018 Direction.

17.4.In §32, the DC briefly set out its observations on Mr Ng’s grievances.  In summary,

(i) and (ii)  

the DC did not accept that the non-clarification argument was related to Mr Ng’s failure to comply with the 2018 Direction, and it was of the view that he was “trying to find an excuse in avoiding the Follow-up visit”;

(iii) and (iv)

the DC found that the errors in the Order & Reasons for Decision in the 2013 Disciplinary Proceedings were irrelevant or immaterial;

(v)  the DC noted that Mr Ng did not lodge a review of the 2013 Disciplinary Proceedings, but it found that even if he had, that would not have exempted him from compliance with the practice reviewer’s request for the Follow-up visit in 2018;

(vi)  the DC noted that Mr Ng’s complaints about the conduct of the HKICPA staff have been dealt with by the HKICPA, but in any event, it found that his complaints against them were not related to his failure to comply with the 2018 Direction;

(vii)  the DC rejected Mr Ng’s argument that some of the staff were conflicted as they were involved in both the 2013 Disciplinary Proceedings and the 2018 Disciplinary Proceedings, because they were merely carrying out their respective clerical, administrative or regulatory functions, without any self-interest or personal interest relating to the outcome of any proceedings;

(viii)  the DC held that if by “double jeopardy”, Mr Ng meant that the practice review referred to in the 2018 Disciplinary Proceedings resulted from the 2013 Disciplinary Proceedings, that was incorrect as compliance was a continuous obligation as a professional accountant.

17.5.In §34, the DC stated that it had rejected Mr Ng’s request to call experts or witnesses as Mr Ng’s grounds for doing so were not related to his reason for failing or neglecting to comply with the Follow-up visit.

17.6.In §35, the DC concluded as follows:

“In conclusion, the [DC] cannot see any legitimate reason or any reasonable excuse as to the failure of [Mr Ng], as a professional accountant, to attend the follow up visit. In addition, [Mr Ng] has put up all sorts of different excuses to divert the [DC’s] attention from the subject matter of the current complaint. The [DC] has grave concerns over [Mr Ng‘s] attitude over complying with any directions from the PRC in the future”.

Costs and Sanctions Order (CSO)

18.On 10 June 2021, the DC issued the CSO referred to in §§2(2) and 2(3) of this Judgment.

This Appeal

19.1.On 9 July 2021, Mr Ng filed a Notice of Appeal.  The grounds of appeal were drafted by counsel.

19.2.On 17 February 2023, Mr Ng filed written submissions and at the hearing of the appeal, appeared in person.

Discussion on grounds related to the Finding

20.It would be logical to first discuss the grounds relating to the Finding.  It is notable that Mr Ng did not allege e.g. that hedid not know how to obtain an external monitoring report, or (if he had obtained one) that he was prevented from providing it to the practice reviewer.  Nor has he alleged that he was prevented from providing materials or allowing access for the Follow-up visit.  Instead, he stated in his letter to the Clerk of the DC on 8 October 2019[32]:

“By not submitting a monitoring report, [Mr Ng] considers the consequence would be theonly means to expose the long history of grievances suffered by [Mr Ng] and the conduct of the [HKICPA] to an independent disciplinary committee” (emphasis added).

Ground (2) 

21.Mr Ng submitted at Ground (2) of his written submissions that the DC was wrong in finding that his grievances were not relevant to his non-compliance with the 2018 Direction.

22.I do not agree with this submission.  As discussed below, the DC was entitled on the evidence, and was right, to reject Mr Ng’s grievances (individually or collectively) as a reasonable excuse for his failure or neglect to comply with the 2018 Direction. 

23.First and foremost, the 2018 Direction for the Follow-up visit was issued because Mr Ng had not provided the MRR – which he had agreed to do in his letter of 6 January 2016[33]. Absent the MRR, the PRC was entitled and was right to require a follow-up visit.  

24.The purpose of the MRR and the Follow-up visit was to ensure that professional standards were upheld for the protection of clients.  Compliance with the 2018 Direction was Mr Ng’s professional obligation.  However subjectively genuine Mr Ng’s alleged grievances may or may not have been, the “reasonable excuse” referred to in the Ordinance connotes an objective standard.  Whatever grievance he bore against the HKICPA cannot be transformed into an objective, reasonable excuse for non-compliance with professional obligations. 

25.As for the alleged grievances, whether individually or collectively they do not provide a reasonable excuse for non-compliance with the 2018 Direction for the following reasons:

(i) and (ii)  

Mr Ng’s non-clarification argument had already been rejected in the Order & Reasons for Decision in the 2013 Disciplinary Proceedings, which, as stated above, he had not appealed.  Therefore, even if he did not know before the 2013 Direction, he certainly knew by the time of the 2018 Direction that the non-clarification argument was not a reasonable excuse for non-compliance with practice review obligations.

(iii)  It is absurd for the typographical error in Mr Chan’s name to be regarded as an excuse (let alone a reasonable excuse) for non-compliance with professional obligations for practice review.

(iv)  As for the error in the 2015 Order referring to the issuer of the “Practice Review Program Reviewer’s Report”, Mr Ng has not suggested that he was confused by it such that he thought he did not need to comply with the Order or with the 2018 Direction.  The practice review was completed in December 2015.  The Follow-up visit was required because of Mr Ng’s failure to produce the MRR which he agreed to do after the practice review identified areas that needed follow-up.

(v) and (vi) 

As for the complaints that Mr Ng had lodged against staff of the HKICPA, the only extant complaint is that against Ms Ho.  The complaint was that she had issued a letter to him on 21 September 2015, which Mr Ng alleged meant he did not have enough time to consider whether to lodge an appeal against the 2015 Order.  Mr Ng submitted that this was a breach of the Ordinance as he “should be entitled a quiet period of 30 days to consider of making an appeal”.  This submission is incorrect, as there is no such express provision in the Ordinance, nor can it be implied.  It was up to Mr Ng to decide whether to lodge an appeal against the 2015 Order, or to apply to court for an extension of time to appeal (by reason of his injury and/or the need to comply with the 2015 Order), and if necessary, to apply for a stay of the 2015 Order pending appeal.

(vii)  Mr Ng also argued that there was a conflict of interests on the part of Ms Carla Tu, who was the Clerk to the DC in the 2013 Disciplinary Proceedings, and was Deputy Director, Compliance of the HKICPA at the time of the 2018 Disciplinary Proceedings (in which position she oversaw the provision of staff to act as clerks to disciplinary committees).  However, as noted by the DC, clerks only provide clerical or administrative support to the disciplinary committees[34], and there was no evidence from Mr Ng that Ms Tu acted in any other capacity, or had any interest in the outcome of either set of disciplinary proceedings.

(viii)  Finally, it is clear that there is no “double jeopardy”, because the complaints against Mr Ng were different:

-  the 2013 complaint arose from his failure to comply with the 2013 Direction to file questionnaires and to permit the practice review visit scheduled for May 2013, whereas

-  the 2018 complaint arose from his failure to comply with the 2018 Direction to provide materials prior to, and to permit, the Follow-up visit scheduled for May 2018 as a result of his failure to provide the MRR as per his agreement in January 2016.  

Ground (3) 

26.1.Mr Ng submitted at Ground (3) that there had been procedural impropriety in that he was deprived of the opportunity of calling witnesses at the hearing of the 2018 Disciplinary Proceedings.

26.2.On 15 November 2019, Mr Ng had provided the Clerk to the DC with certain outstanding checklist information, which included the names of the witnesses that he considered should attend the hearing to give evidence[35].  They were:

(a)  Mr Raphael Ding Wai Chuen (“Mr Ding”), at one time[36] the director of professional practice of the HKICPA, who Mr Ng said “gave advice” to him when he received a complaint enquiry from the HKICPA “in respect of the first complaint for breach of Ethical Standards”.  According to Mr Ng, “Mr Ding considered that the breach was not serious and the most likely outcome would be the issuance of a disapproval letter”;

(b)  Mr Chan, whose evidence Mr Ng said was “required to confirm the background and his view on the issue” being the “clarification arising from [CACV 28/2010]”;

(c)  Ms Ho, who Mr Ng said was required to give evidence:

-  “on the circumstances of the 2013 complaint”;

-  “to explain the reasons for her action to write to [Mr Ng] 11 days after the 2015 Order ... effective to disturb the appeal process”; and

-  “her role in formulating the 2015 Order on practice review issue which was fundamentally wrong and did not provide adequate time to complete the Order”.

26.3.In his answer to the checklist, Mr Ng stated that the evidence of these three persons was “necessary to justify [Mr Ng’s] grievances”.

27.As discussed above, Mr Ng’s alleged grievances did not provide a reasonable excuse for his failure or neglect to comply with the 2018 Direction.  As such, the DC was right to hold that these persons should not be called, as their evidence would be irrelevant to the issue before it.

28.In conclusion, Mr Ng’s grounds for appealing the Finding are dismissed.  I shall now consider his grounds for appealing the CSO.

CSO

29.After the Finding on 13 May 2020,

-  the DC was provided with the following: 

-  Statement of Costs of the Clerk dated 1 June 2020[37],

-  Statement of Costs of the PRC dated 3 June 2020[38],

-  PRC’s Submissions on Sanctions dated 3 June 2020[39], and

-  Mr Ng’s Submissions on Sanctions and Costs dated 19 June 2020, which was drafted by counsel[40].

-  on 2 November 2020, the DC asked for details of some of Mr Ng’s submissions[41];

-  on 16 November 2020, Mr Ng provided the details[42];

-  on 5 February 2021, the DC asked for a breakdown of the PRC’s Statement of Costs[43];

-  on 24 February 2021, the PRC provided the breakdown[44];

-  on 30 April 2021, the PRC asked the DC to confirm when it was likely that it would hand down its CSO[45].

30.On 10 June 2021, the DC handed down its CSO, the orders being summarized at §§2(2) and 2(3) above.  The CSO is the subject-matter of:

-  §§1 and 2 of the grounds of appeal in the Notice of Appeal (referred to as Ground (1) of Mr Ng’s written submissions) and

-  §5 of the grounds of appeal in the Notice of Appeal (referred to as Ground (4) of the written submissions). 

The Guideline for determining Disciplinary Orders

31.1.Before discussing these grounds of appeal, it may be helpful to summarize those parts of the Guideline to Disciplinary Committee for Determining Disciplinary Orders issued by the HKICPA on 24 October 2017 (“the Guideline”) (for ease of reference, attached as “Annex B” to this Judgment) which are relevant to the present appeal.

31.2.Section 1.1 sets out the objectives of the Guideline which is designed to provide a consistent and structured approach when a DC determines its disciplinary order, and help to ensure consistency and fairness in orders made by different DCs. 

31.3.Section 1.2 states that a DC is not bound by the Guideline but should refer to it as a starting point in considering its order. 

31.4.Sections 1.3 and 1.4 set out general considerations, such as the objects of the HKICPA and the aim of a DC when imposing sanctions.

31.5.Section 4 sets out the sequential steps that a DC is recommended to take in determining a disciplinary order:

(1)  determination of the seriousness of the offence: section 4.1(1)

taking into account:

-  the circumstances: section 5.2(1),

-  the conduct of the respondent: section 5.2(2), and

-  features increasing the seriousness of the offence: section 5.3;

(2)  determination of the appropriate sanctions based on case severity before considering other factors: section 4.1(2)

-  with suggested “starting points for sanctions” set out in a table in section 6.1,

-  the “suggested sanctions” within the same category of seriousness being additional and alternative (“and/or”); and

(3)  consideration of the impact of other factors: section 4.1(3)

after determining preliminary sanctions: section 7.1,

factors include:

-  past similar cases: sections 7.2-7.3, 

-  aggravating factors: sections 7.4, 7.5 and 7.7,

-  mitigating factors: sections 7.4, 7.5 and 7.8.

31.6.Section 3.2 sets out the sanctions which could be imposed by a DC.  Considerations applying to an order of cancellation of a PC are set out in sections 3.2(1)(b) to (e).  Section 3.4 (a) permits conditions and (b) refers to payment e.g. of costs of the disciplinary proceedings.

31.7.Section 1.5 states that in giving reasons for the disciplinary order, the DC should provide sufficient information on the considerations that it has taken into account.

31.8.Section 8 states:

“To protect the public interest by efficiently taking action in disciplinary matters, the DC should aim to hand down its written decision within six weeks from the date of the parties’ submissions on sanctions. If DC considers that it will take longer than six weeks to hand down its decision, it should notify the parties and indicate when it is likely to provide its judgment”.

Reasons in the CSO

32.The CSO was handed down on 10 June 2021.  The reasons for the disciplinary order appear in §§4-6:

“4. During the proceedings, [Mr Ng] has put forward numerous submissions in connection with certain ‘grievances’ which are not relevant to the proceedings. These are set out in the Decision on 13 May 2020, which the [DC] will not repeat here. The [DC] cannot see [Mr Ng] has shown any remorse in connection with the Complaints.

5. The [DC] is satisfied that the Complaint is serious. The [DC] does not see any valid mitigating factor put forward by [Mr Ng].

6. The [DC] takes the view that any attempt to put forward irrelevant and unnecessary arguments to prolong proceedings should be deterred”.

Ground (1)

33.1.The following is an attempt to reiterate Mr Ng’s submissions on Ground (1) in more or less the sequence set out in the Guideline summarized above. 

33.2.In a nutshell, Mr Ng submitted that the DC failed to:

-  assess the seriousness of the findings, and failed to refer, apply and comply with the Guideline which it should have referred to as a starting point;

-  consider, or provide sufficient information on the considerations and factors it had taken into account regarding the following:

-  whether the sanctions it intended to impose should only apply on the occurrence or non-occurrence of a condition: section 3.4(a);  

-  how it came to an upward adjustment for the period of cancellation of his PC, since the suggested starting point for “serious” offences was for cancellation of the PC and non-issue for up to 1 year only;

-  Mr Ng’s submissions distinguishing his case from previous similar cases, and of mitigating factors including his remorsefulness and “the unique circumstances of the present case”; and 

-  how it came to order the costs and expenses of the PRC and the Clerk to the DC.

Ground (4)

34.Ground (4) is concerned with the DC’s delay in handing down its CSO.  Mr Ng submitted that the CSO was handed down more than six weeks after submissions were provided, and without an indication of when it was likely to provide the order, and that it was in breach of section 8 of the Guideline and in breach of natural justice. 

Discussion on the grounds related to the CSO

35.The Guideline is a salutary effort to assist a DC (which may comprise some non-legally trained persons) with the approach and procedure to be adopted when determining the appropriate sanction in any given case. 

36.The Guideline was at the forefront of the submissions on sanctions of both the PRC and Mr Ng’s counsel, and was both the first Appendix to the PRC’s submissions, and the first document in the List of Authorities of Mr Ng’s counsel.  In the CSO, the DC referred to both sets of submissions (§2) and stated that it had considered them (§3).  As such, although the Guideline is not referred to explicitly in the CSO, it is inconceivable that the DC did not have the contents in mind when it made the order, even though, as section 1.2 expressly states, the DC isnot bound by the Guideline.  Certainly, at no stage in the CSO did the DC indicate that it would not apply or comply with the Guideline. 

37.1.In sanction appeals to the court,

“it is well-established that the court would not generally interfere with the sanction imposed by a specialist tribunal whose members consist of members of the profession unless the sanction is plainly wrong, excessive or disproportionate. So long as the sanction imposed falls within the reasonable range of options, the court will not intervene”[46].

37.2.Within this principle, I consider that it is open to the court to take into account not only the reasons given in the particular case for the actual sanction imposed[47], but also the suggested sanctions in the Guideline as a broad expression of the views of the profession’s governing body.  I consider that the approach the court should take is that the further the actual sanction imposed has deviated from the suggested sanctions in the Guideline without the DC methodically articulating adequate reasons for the deviation, the more heightened the court’s concern will be when considering whether or not the sanction imposed in the case was “plainly wrong, excessive or disproportionate”.  However, a mere deviation from the suggested sanctions in the Guideline is not by itself a valid ground of appeal as the allocation of various sanctions to the various scales of seriousness of offence is not provided by statute, and the Guideline is expressly not binding.

38.In Ground (1), Mr Ng’s complaint is that even though the DC described his offence as “serious” (for which in section 6.1, suggested sanctions include cancellation of PC and non-issue for “up to 1 year”), the DC ordered the cancellation of his PC and non-issue for 24 months.

39.1.A more detailed examination of the parties’ submissions on sanctions before the DC actually explains the cancellation order it eventually made. 

39.2.First, regarding the characterization of the severity of the case, it is notable that:

-  in the PRC’s Submissions on Sanctions, the PRC characterized the offence as “very serious” and considered that a removal of Mr Ng’s name from the registerwas warranted to reflect the seriousness of the offence (§11), proposing a period of removal of “at least 24 months” (§19).  Pausing here, it is notable that an accountant whose name has been removed from the register (including temporarily) must apply to the Council to restore his name, which application may be rejected, or may be allowed, with or without conditions[48], whereas no such application is needed for the re-issue of a cancelled PC;

-  in Mr Ng’s Submissions on Sanctions, he characterized the offence as “not serious” (§13), suggesting that the sanctions “usually attracted” in cases of this type were “severe reprimand and penalty fine” (§36).  He submitted that “removal of membership is a dire and harsh penalty” (§52).  Indeed at §51, Mr Ng’s counsel quoted this passage in another disciplinary proceedings case D-15-1050P Lam Kin Kun, Arthur (§41):

“... removal from the register of CPAs is more draconian than the cancellation of a [PC]. Removal from the register of CPAs, in other words, cancellation of membership, deprives a member of his or her livelihood. By contrast, even if a member’s [PC] is cancelled, he is not necessarily barred from carrying out accounting work, for example for another certified public accountant”.

39.3.It is notable that in the DC’s characterization of the offence as “serious”, it had taken the middle road between the PRC’s characterization (“very serious”) and Mr Ng’s (“not serious”), which it was entitled to do on its findings.

39.4.Then, regarding the sanction, it is notable that even for “serious” offences, the Guideline includes temporary removal as a suggested sanction.  As noted above, removal is more draconian than cancellation.

39.5.On the above analysis, I consider that the DC’s decision in the present case to make a cancellation order, instead of a removal order, but for the same period proposed by the PRC (24 months) is entirely consistent with its taking the middle road in its view of the severity of the case, and is not an inexplicable arbitrary upward adjustment from the suggested period in the Guideline.  Having said that, it would greatly assist the parties and the court (if an appeal were to be filed) for disciplinary committees to express their reasons for sanctions in a more methodical manner, following the procedural steps in the Guideline as set out above[49], to avoid further time and costs being expended on appeals.

40.1.As for Mr Ng’s complaint that the DC had not considered the imposition of a condition, no conditions had been suggested in the PRC’s Submissions on Sanctions.  In Mr Ng’s Submissions on Sanctions, he referred to Lam and the view expressed by the DC in that case on the conditions in the 2015 Order in Mr Ng’s case.  Of course the DC in Lam (which handed down its decision on 28 July 2016) was not to know that Mr Ng in fact subsequently challenged the 2015 Order, including the implementation of a condition.  As Mr Ng’s position was known to the DC in the present case, it is therefore not surprising at all that the DC did not consider imposing conditions in the CSO.

40.2.In fact, the DC had found at §35 of the Finding that:

“The [DC] has grave concerns over [Mr Ng‘s] attitude over complying with any directions from the PRC in the future”.

41.As for Mr Ng’s submission that the DC did not distinguish his case from previous similar cases, and did not consider mitigating factors including his “remorsefulness” and “the unique circumstances” of the present case, it is clear that the DC did not simply apply a sanction from another proceeding or fail to consider the submissions in mitigation advanced by Mr Ng’s counsel.  In Lam, the cancellation was for 12 months in a case where the respondent had been suffering from both physical and mental illnesses during the period when he failed to comply with the direction in question.  In the present case, Mr Ng made it clear that the reason for his non-compliance was to pose a deliberate challenge to the HKICPA, as per his letter to the Clerk of the DC on 8 October 2019[50]:

“By not submitting a monitoring report, [Mr Ng] considers the consequence would be the only means to expose the long history of grievances suffered by [Mr Ng] and the conduct of the [HKICPA] to an independent disciplinary committee” (emphasis added).

42.In relation to Mr Ng’s Submissions on Sanctions that he was “genuinely remorseful” and that the “incident was an unhappy saga across a decade” revolving around Mr Ng’s grievances which he felt had not been properly addressed by the HKICPA (§55), the DC expressly referred to the grievances as irrelevant to the proceedings, and held that it could not see that he “has shown any remorse”.  The DC was clearly entitled on the evidence and its findings to arrive at that conclusion.  Mr Ng had been aware after the 2015 Order that the grievances were not a reasonable excuse for him to fail or neglect to comply with practice review directions, yet he persisted in ignoring his professional obligations which, as noted above, are for the protection of clients. 

43.1.As for the costs order, Mr Ng had submitted in his Submissions on Sanctions that the costs were “excessive” (§61) and “highly exaggerated” (§65). 

43.2.Although no external legal professionals were involved in the 2018 Disciplinary Proceedings before the DC, one only needs to look at the bundles before this court to see the amount of time that had to be expended by staff of the PRC and the DC to deal with Mr Ng’s correspondence and arguments.  It is correct that the circumstances of the complaint were straightforward, but the defences Mr Ng advanced were convoluted and wide-ranging.  The DC had asked for a breakdown of costs, which was provided, and was entitled to accept the sum sought which was not excessive.

44.For the reasons set out above, I do not consider that this court should intervene in the CSO as it has not been shown that the sanctions are plainly wrong, excessive or disproportionate.

45.Finally, as for Ground (4), the Guideline says that the DC should aim to hand down its written decision within six weeks from the date of the parties’ submissions on sanctions, and that if the DC considers that it will take longer than six weeks to hand down its decision, it should notify the parties and indicate when it is likely to do so (section 8). 

46.1.In the present case, the DC asked for details of Mr Ng’s Submissions on Sanctions about four months after they were provided, and further asked for a breakdown of the PRC’s costs about eight months after the Statement of Costs was provided.  Regrettably, even after that, the DC did not inform the parties when it was likely to provide the CSO.  

46.2.Whilst this court understands that Mr Ng may have been anxious to know the result during the period pending the handing down of the CSO, the period for handing down the decision is not prescribed by statute. 

46.3.Further, it is well-established that a decision will not be set aside simply on the ground of delay when there is no other discernible unfairness or error[51], and there is no evidence of prejudice in the present case as a result of the delay.  

Order  

47.Accordingly, I would dismiss the appeal.  The parties have agreed that costs follow the event. Accordingly, Mr Ng is to pay the PRC’s costs.  For the purpose of summary assessment of costs, the PRC is to submit a statement of costs within 14 days from the date of this Judgment, and Mr Ng may file submissions in opposition (limited to 5 pages) within 14 days thereafter. 

Hon G Lam JA:

48.I agree with the judgment of Yuen JA.

Mr Lau Ka Kin, instructed by MinterEllison LLP, for the complainant

The respondent appeared in person