A Solicitor v. The Law Society
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CACV000123A/1998 CACV 123/1998 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 123 OF 1998 (On appeal from the Solicitors Disciplinary Tribunal)
---------------------- Coram : Hon. Godfrey, Leong & Rogers, JJ.A. Date of Hearing : 9 December 1998 Date of Judgment : 9 December 1998 Date of Reasons : 23 December 1998 ---------------------- J U D G M E N T ---------------------- Leong, J.A. (handing down the reasons of the court for its judgment pronounced on 9 December 1998) : 1. The appellant is a solicitor. On 24 November 1997 he admitted before the Solicitors Disciplinary Tribunal two out of six charges of breach of proper standard of professional conduct. The remaining charges were withdrawn by the Director of Compliance. The first charge is failing without any proper justification to promptly release Title Deeds to a client and the second charge is issuing an invoice in March 1996 containing an overcharge and/or pursuing claim for disbursements that had been waived in an earlier invoice issued in March 1995. The sum involved in the invoice was $4,390 of which $2,000 was fees and $2,390 was disbursements. 2. At the conclusion of the proceedings, the Tribunal ordered that the appellant :
3. The Tribunal also ordered the respondent to direct its findings to a future Solicitors Disciplinary Tribunal which might concern the appellant. 4. The appellant now appeals against that order on the ground that sanctions are unlawful and wholly disproportionate to the gravity of the breaches. 5. The facts in relation to the two charges may be summarized as these. 6. In May 1995 the appellant's firm was instructed by a Mr. Woo Chi Chiu in the purchase of a property. The transaction was handled by the appellant's brother who was a consultant in the firm. After completion, a bill of costs (the first invoice) dated 31 March 1995 was delivered to Mr. Woo. This was for $38,000 which after deducting costs paid on account of $30,000 was stated to be for a balance of $8,000. This invoice also contained a number of items stated to be complimentary. Payment on this invoice was made by Mr. Woo and receipt acknowledged by the appellant's firm on 22 September 1995. Since then Mr. Woo telephoned the appellant on various occasions seeking the return of the Title Deeds and was advised that they were not available for collection. In the mean time the appellant's brother left the firm in November 1995 in apparently unpleasant circumstances and the two brothers became entangled in litigation. 7. On 12 March 1996, Mr. Woo again telephoned the appellant and told him that he had secured a mortgage offer for the property and asked for the return of the Deeds. The appellant told him the Deeds were available but would not be returned to him until he settled an outstanding bill of costs. Mr. Woo considered he had settled all the outstanding charges and by a fax, he formally demanded the appellant to return the Deeds within seven days. 8. On 14 March 1996, the appellant's firm delivered to Mr. Woo a second invoice described as a "Final Invoice" for professional charges of $2000 incurred between 4 January 1996 and 14 March 1996. This invoice also included $2,390 disbursements which had been described in the first invoice as complimentary. 9. During the following few days, Mr. Woo complained to the appellant by phone and fax about the second invoice and asked for the return of the Deeds but these were not responded to by the appellant. Mr. Woo then formally complained to the Law Society on 17 March 1998. 10. On 18 March 1998, the appellant wrote to Mr. Woo asking him to explain the complaint he made to the Law Society and threatened legal proceedings against Mr. Woo if the second invoice was not paid by him by 14 April 1998. 11. On 22 March 1996, Mr. C.P. Chang of the Conduct Section of the Law Society wrote to the appellant and enquired about the complaint but the appellant's reply did not address to the enquiry. 12. On 3 April 1996, the appellant agreed to release the Title Deeds to Mr. Woo upon settlement of the second invoice. Payment was made on 11 April 1996 by Mr. Woo under protest, reserving the right to challenge the propriety of the second invoice. 13. On 13 April 1996, the Title Deeds were eventually released by the appellant. 14. These facts were not challenged by the appellant. 15. Before the Tribunal, the appellant admitted that the animosity between him and his brother had led him to direct his animosity towards his brother "towards Mr. Woo who he felt was motivated by his brother" and what Mr. Woo did towards him was directed by his brother. The appellant has now admitted that it was wrong of him to seek to recover the $2,390 disbursements waived in the first invoice and the additional fees of $2,000 of which $650 was overcharged, which should have been complimentary "after sales service". He has since repaid to Mr. Woo $5,000 being the two sums in the second invoice plus $610 interests. 16. The respondent, the Law Society does not seek to uphold the orders of the Tribunal except the order of censure but submits that the appellant should in addition be required to pay such penalty as the Court may think fit; and pay the Law Society its agreed costs of and incidental to the proceedings in the Tribunal below and of the investigation in the sum of $122,500. 17. That this court has jurisdiction to make such orders as the Tribunal may make and therefore the orders sought by the respondent is not disputed. The question is whether in the circumstances of this case, censure is appropriate and if a financial penalty need to be imposed, what should that be. 18. In his mitigation before the Tribunal, the appellant submitted that he was anxious that he should not be criticized as giving a "rebate" that he sought to recover the waived sum. He also submitted what he did towards Mr. Woo was motivated by animus towards his brother. He admitted it was an error of judgment on his part. The Deeds were released only four weeks later than they should have been released and the delay was not lengthy. Apart from that, he had all along conducted himself properly. It is now submitted that taking these into account and his admissions, in all the circumstances of the case, the penalty of censure is too severe. 19. The Tribunal in its conclusion remarked: "the disgraceful submission of invoices and purported exercise of liens on documents in respect thereof, (which invoices border on the dishonest in any event), all apparently finding their origins in some breakdown of communication, vendetta and/or hatred between the two siblings is an utter disgrace to the profession". The Tribunal further added: "The Tribunal would have had no hesitation whatsoever in striking off the Respondent from the roll of solicitors of the Hong Kong Special Administrative Region in the event that at the hearings of this matter he had been found, guilty of the Charges". It would appear that the Tribunal took a very serious view of the case. 20. Mr. Dykes, S.C. for the appellant submits that it is possible that the Tribunal had been misled by the unclear remarks made in the affidavit of the Director of Compliance, Mr. Harrod that the appellant had charged the same stamp duty twice under the two invoices and therefore took the view that the invoices "border on the dishonest". He submits that the Tribunal had misunderstood and misconstrued the material before it and these offences were venial. He urges that a financial penalty would be sufficient. 21. Mr. Kat for the Law Society submits that the offence of deliberate overcharging or double charging is serious and so is the withholding of the client's deed. The order of censure, it is submitted, is appropriate. 22. In our judgment, these charges are not venial. The appellant was aware that the disbursements were waived and that he should not have charged the additional fees in the second invoice; nevertheless he sought to recover them. To aggravate the matter, the appellant threatened legal action and withheld the Deeds to force Mr. Woo to pay the second invoice which was unwarranted. This was all because the appellant and his brother fell out and he felt that Mr. Woo was motivated by his brother. Although the Deeds were withheld for a period of only four weeks, there was no justification for doing so. While the materials before the Tribunal do not justify their finding on the invoices "border on the dishonest", it was entitled to find the appellant's conduct disgraceful. The Tribunal's remarks that "a client should not be subjected to and held hostage by liens and the threat of legal proceedings concerning unwarranted invoices presented on a haphazard and entirely unjustifiable basis and defacto purporting to charge for matters resulting from the Respondent's or his firm's own lack of care" aptly described the appellant's breach of proper professional conduct for which the penalty of censure cannot be regarded as inappropriate. 23. It is well established that the Disciplinary Tribunal is far better placed than the court to assess the seriousness of the appellant's professional conduct and unless it is shown to be wrong and unjustified, a court should not interfere with the penalty of the Tribunal. In all the circumstances of the case, we saw no reason to interfere with the penalty of censure as ordered by the Tribunal. 24. On the financial penalty, there is no comparable previous case in terms of fines. Each case depends on its own merits. From the list of penalties submitted before this court on various cases since 1988, the fine of $250,000 would appear on the very heavy side. The Law Society concedes that this sum of $250,000 is excessive in the circumstances of this case and a sum of $50,000 was suggested. 25. Bearing in mind that the financial penalty is in addition to the censure and the appellant admitted the charges on the first day of the hearing, in our judgment, a fine of $50,000 is sufficient to reflect the seriousness of the breaches committed by the appellant. 26. On the order of attendance of course on professional conduct, the appellant disputes that the Tribunal's jurisdiction to make such an order. As the Law Society is content to have that order set aside, the matter is no longer at issue. 27. On the order for costs, the Tribunal formerly had jurisdiction under s.10(2)(e) of the Legal Practitioners' Ordinance to order the appellant to pay the costs of the proceedings and of the enquiry and investigation on an indemnity basis or such sum as the Tribunal may think fit as a reasonable contribution to the costs. This has now been replaced by s.10(2F). Under this new provision, the order on costs which may be made would be the appellant to pay the whole or part of the costs of and incidental to the proceedings and the costs of the enquiry and investigation. Mr. Kat submits that the Law Society is willing to accept a sum of $122,500 for the costs of the proceedings plus $20,000 for the costs of investigation and $85,000 for the costs of the Tribunal making a total of $227,500. He submits that this is about 65% of the Law Society's full indemnity costs of $327,000. Based on the new provision in s.10(2F), Mr. Kat now seeks 6/10 of the sum of $327,000. Mr. Dykes on the other hand submits the appellant should not be liable for the costs of the Tribunal since the Tribunal had approached the case on a wrong footing and the appellant should only be liable for 1/6 of that amount. Having regard to all the circumstances of the case, the proper proportion of costs to be borne by the appellant should be 1/3 of the costs of and incidental to the proceedings and of the previous inquiry and investigation, on a full indemnity basis. 28. It was for these reasons that we arrived at the decision we pronounced on 9 December 1998.
Representation: Mr. Philip J. Dykes, S.C. & Mr. Anthony Watson-Brown (M/s. Hioe & Pun) for Appellant Mr. Nigel Kat (M/s. Wilkinson & Grist) for Respondent |
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