Chan Cheuk Chi v. The Registrar of the Hong Kong Institute of Certified Public Accountants

CACV 38/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 38 OF 2012

(ON APPEAL FROM THE DECISION DATED 9^TH FEBRUARY 2012

OF THE DISCIPLINARY COMMITTEE OF

THE HONG KONG INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Kwan JA:

1.I agree with the Reasons for Judgment of Fok JA.

Hon Fok JA:

Introduction

2.This was an appeal against orders made by the Disciplinary Committee (the Committee) of the Hong Kong Institute of Certified Public Accountants (HKICPA) on 9 February 2012 against the appellant in disciplinary proceedings against him.  Those orders were that:

(1)  the name of the appellant be removed from the register of Certified Public Accountants for a period of 36 months;

(2)  the current practising certificate issued to the appellant be cancelled;

(3)  a practising certificate shall not be issued to the appellant for a period of 36 months; and

(4)  the appellant do pay a penalty in the amount of HK$500,000.

3.In addition, the Committee also ordered the appellant to pay $442,427 in respect of the costs and expenses of the disciplinary proceedings against him.

4.At the conclusion of the hearing, we dismissed the appeal with costs, indicating that we would hand down our reasons at a later date, which we now do.

Background

5.The appellant was a partner of Baker Tilly Hong Kong Ltd, a firm of certified public accountants.  As a result of the use of a false debit note issued by Baker Tilly dated 13 January 2005, one of Baker Tilly’s clients, PCCW Limited, was defrauded in the amount of HK$432,000 by Mr Lam Sing Keung, an employee of PCCW and also a member of the HKICPA.  The debit note falsely purported to show work done for PCCW by Baker Tilly.  In fact, the arrangement was to reimburse Baker Tilly for salary purportedly paid by it to a Ms Diana Hsieh, who was Mr Lam’s mistress and who needed the appearance of employment in order to obtain a visa to remain in Hong Kong.[1]

6.Mr Lam was convicted, after trial (in DCCC 1013/2007), of the charge of conspiracy to defraud PCCW and sentenced to 18 months’ imprisonment.  His appeal against conviction (in CACC 220/2008) was dismissed.  In DCCC 1013/2007, the appellant gave evidence against Mr Lam under immunity.  It is also pertinent to note that Mr Lam’s co-defendants in DCCC 1013/2007, Mr Robin Radcliffe, also a partner of Baker Tilly, and Ms Hsieh, were acquitted after trial.

7.Following the criminal proceedings against Mr Lam, disciplinary proceedings were brought against the appellant by the HKICPA.  After agreement to amend the original complaints against him, the appellant admitted certain facts (the Admitted Facts) and pleaded guilty to Amended Complaints 2 and 3, which were in the following terms:

“Amended Complaint 2

Contrary to section 34(1)(a)(vi) of the Professional Accountants Ordinance, Mr. Chan failed or neglected to observe, maintain or otherwise apply a professional standard, namely Statement 1.200 “Professional Ethics – Explanatory Foreword” (Revised April 1999 and September 2004 (name change)) in that:

a) he had failed to take sufficient steps to prevent the issuing of the debit note by BTHK and this failure was conduct which was inconsistent with the good reputation of the profession and the HKICPA; and

b) as a result of his failure to prevent the debit note being issued, his failure to report the matter despite knowing that PCCW had been defrauded was a conduct which was inconsistent with the good reputation of the profession and the HKICPA.

Amended Complaint 3

Contrary to section 34(1)(a)(vi) of the Professional Accountants Ordinance, Mr. Chan failed or neglected to observe, maintain or otherwise apply a professional standard, namely paragraph (e) of section 100.4 “Fundamental Principles” as elaborated in section 150.1 of the Code of Ethics for Professional Accountants (issued December 2005, effective on 30th June 2006) when he gave false statements to ICAC officers in an interview, with an attempt to mislead them, which position was corrected during and before the interview was concluded; which was conduct that was inconsistent with the good reputation of the profession and the HKICPA.”

8.It was agreed that Complaint 1 was to remain on the record and not to be proceeded with without an order of the Court of First Instance or Court of Appeal.  Complaint 1 was in the following terms:

“Complaint 1

Section 34(1)(a)(viii) of the PAO applies to Mr. Chan in that he was guilty of professional misconduct, namely, being involved, through his position as an equity partner of Baker Tilly, in a conspiracy with Mr. Lam as a result of which PCCW, a client of Baker Tilly, was deceived into paying $432,000 for work which had never been rendered by Baker Tilly.”

The grounds of appeal

9.Mr Jason Pow SC, leading counsel for the appellant,[2] advanced three grounds of appeal, namely:

(1)   First, that the Committee had proceeded on a wrong and improper factual foundation;

(2)   Secondly, that the Committee adopted the wrong approach in considering mitigating factors; and

(3)   Thirdly, that the sanctions imposed by the Committee were wrong in principle or manifestly excessive.

Ground 1: wrong and improper factual foundation?

10.The Committee proceeded to consider the sanctions it would impose in respect of the two complaints to which the appellant was pleading guilty mainly based on the Admitted Facts and matters confirmed by his counsel at the hearing before it.  The Admitted Facts were appended to the Committee’s Reasons for Decision.

11.It was submitted that the Committee erred in drawing certain inferences against the appellant in paragraphs 20 to 22 of the Reasons for Decision.  In those paragraphs, the Committee said:

“20. It must first be pointed out that Mr. Radcliffe was not before this Committee and that though he was one of the accused in DCCC 1013/2007, he was acquitted after trial. It was not the function of this Committee to pass any judgment on Mr. Radcliffe. However, it is equally inevitable that in forming a view on the [appellant’s] conduct, certain inferences would have to be drawn on Mr. Radcliffe’s role. And the only inferences this Committee would draw are that both Mr. Radcliffe and the [appellant] were involved (again using the word in a broad sense) in the issuance of the False Debit Note, that they both had the power, if they had thought fit, to stop its issuance, and that they both could and should have reported the matter to PCCW.

21. Indeed, if one looks at the Amended Complaint 2 which was admitted by the [appellant], he admitted that ‘he had failed to take sufficient steps to prevent the issuing of the debit note by BTHK … and as a result of his failure to prevent the debit note being issued, his failure to report the matter despite knowing that PCCW had been defrauded was a conduct which was inconsistent with the good reputation of the profession and the HKICPA.’ It is a necessary inference from this admission that the [appellant] had the power, which he failed to use, to stop the False Debit Note from being issued, and that he failed to report the matter despite his knowledge of the False Debit Note, irrespective of what Mr. Radcliffe had or had not done.

22.       Further, this Committee regards it as a safe inference that the purpose for issuing the False Debit Note at the behest of Mr. Lam was to keep him pleased in the hope that he, the finance director of PCCW, would continue to procure PCCW to use the services of Baker Tilly.  As a 21.25% equity partner of Baker Tilly, the [appellant] stood to gain from PCCW’s continued patronage not so indirectly.  This Committee does not speculate as to whether the [appellant] committed or omitted to perform any acts deliberately or specifically for such purpose.  But this Committee has difficulty in accepting that ‘the [appellant] has derived no personal benefit from the incidents complained of.’ ”

12.First, in relation to paragraphs 20 and 21 of the Reasons for Decision, it was submitted that the Committee’s inferences were inconsistent with the matters stated in the Admitted Facts and that the Committee could not and should not therefore have drawn them in the absence of a Newton[3] inquiry to challenge the Admitted Facts.

13.In order to put this submission in context, it is necessary to set out certain parts of the Admitted Facts:

“2.7 In early 2005 during lunch with the [appellant] at the Macau Jockey Club clubhouse at Shun Tak Centre, Mr. Lam asked whether the [appellant] could arrange for BTHK to issue a debit note to PCCW so as to enable Mr. Lam to be reimbursed certain unclaimed expenses;

2.8 In response to this request from Mr. Lam, the [appellant] told Mr. Lam that it was difficult to do and it was also outside his scope of authority. Indirectly, the [appellant] told Mr. Lam that he would not do it for him. Having heard what the [appellant] said, Mr. Lam told the [appellant] that he would directly contact Mr. Radcliffe if he really had the need;

…

2.10 In this discussion, nothing else was mentioned by the [appellant] to Mr. Radcliffe. At the time, the [appellant] assumed that, like him, Mr. Radcliffe was uncertain if Mr. Lam would contact Mr. Radcliffe to pursue his request. The [appellant] maintains that he was neither involved in nor otherwise aware of any contact or discussion between Mr. Lam and Mr. Radcliffe in relation to the said request made by Mr. Lam;

2.11 Subsequently, the [appellant] received a call from Mr. Lam’s assistant, Benson Chu (“Mr. Chu”), requesting for the [appellant’s] facsimile number in his room. The [appellant] was told to expect a draft debit note that was to be issued by BTHK to PCCW and which should, on receipt, be passed to Mr. Radcliffe;

2.12 The [appellant] was the only partner in BTHK who had a fax machine in his room and a draft debit note was faxed to the [appellant’s] facsimile machine.

2.13 Upon receipt of the draft debit note, the [appellant] knew that the details contained in the draft debit note were false as the services mentioned in it were expressed in broad and vague terms and it was not the same as the usual debit notes issued by BTHK. Also, if such services had been rendered, they should have been performed by the [appellant’s] department, but the [appellant] was not aware of his department performing such services;

2.14 Further, the [appellant] related the draft debit note to the earlier request made to the [appellant] by Mr. Lam over lunch at the Macau Jockey Club;

2.15 Shortly after the [appellant] received the draft debit note, Mr. Chu telephoned the [appellant] and sought his confirmation that the draft debit note had been received by fax. Mr. Chu also told the [appellant] that Mr. Radcliffe was aware of the draft debit note and that Mr. Lam would later contact Mr. Radcliffe about this. Mr. Chu did not explain anything further about the purpose of this draft debit note to the [appellant].

2.16 Pursuant to Mr. Chu’s request, the [appellant] passed the draft debit note personally to Mr. Radcliffe assuming that Mr. Radcliffe would also reject Mr. Lam’s request. No discussion took place between them;

2.17 The [appellant] maintains that, as so told by Mr. Chu, he understood that Mr. Lam had contacted Mr. Radcliffe direct and would deal with it direct with Mr. Radcliffe;

2.18 Since PCCW was within the [appellant’s] client portfolio, in the normal course of events other partners would not be able to issue a debit note to PCCW without the [appellant’s] knowledge. The [appellant] believed that it had never happened in BTHK for one partner in another department to issue debit note for another partner of another department. The [appellant] therefore thought that he could have prevented the issue of the debit note. However, the [appellant] maintains that without his knowledge or involvement, the draft debit note was issued by BTHK on 13 January 2005;

…

2.20 Nevertheless, the [appellant] admits that he failed or neglected to observe, maintain or otherwise apply a professional standard, namely Statement 1.200 “Professional Ethics - Explanatory Foreword” (Revised April 1999 and September 2004 (name change)) (Amended Complaint 2) in that he had failed to take sufficient steps to prevent the issuing of the debit note by BTHK and this failure was conduct which was inconsistent with the good reputation of the profession and the HKICPA;

2.21 The [appellant] asserts that Mr. Radcliffe, to further conceal the issue of the debit note, did the following things:-

2.21.1 He authorised the issue of a new client code for PCCW (namely, P0508) for the debit note notwithstanding that there was an existing client code for PCCW;

2.21.2 He authorised the preparation of a new client checklist for PCCW, even though PCCW was an existing client within the [appellant’s] client portfolio; and

2.21.3 On the new client checklist, Mr. Radcliffe left explicit follow up instructions “refer to RR before any correspondence etc”.

…

2.25 On 8 November 2005, Mr. Chu faxed the original of the said debit note. When the [appellant] received the fax, the first thing the [appellant] remembered was that there was a draft of which the contents were similar to this faxed original debit note and believed that this original debit note in the form of faxed document was prepared from that draft. The [appellant] maintains that this was the first time which the [appellant] became aware that the draft debit note received by him by fax in January 2005 was turned into an official debit note issued by BTHK;

2.26 Upon the request made by Mr. Chu, the [appellant] made some handwritten amendments on the said fax. The [appellant] maintains that he asked Mr. Chu as to why he needed to make those amendments to the said fax and Mr. Chu said in response that he had no idea and that he was just asked by Mr. Lam to do so.

2.27 Apart from making the handwritten amendments, the [appellant] also marked at the bottom of the said fax three annotations, namely: “Cash in?”, “Receipt?” and “Not related to Diana?”. The [appellant] maintains that he wrote down these notations to raise his queries as to whether BTHK had received any money for the debit note, whether any official receipt was issued, and whether this had nothing to do with Miss Hsieh (i.e. Diana).

2.28 The [appellant] maintains that he then passed the fax (with all the handwritten amendments and annotations made by him) to Mr. Radcliffe and asked him for details about the original official debit note and the amendments sought to be made on it. The [appellant] maintains that Mr. Radcliffe had told him that the original was issued to cover Miss Hsieh’s salary in 2005 and the debit note intended to be issued after amendments was to cover Miss Hsieh’s salary in 2006.

2.29 The [appellant] maintains that this was the first time when the [appellant] was aware of the true purpose of the official debit note issued by BTHK (without his knowledge) in January 2005. The [appellant] maintains that:

2.29.1 He told Mr. Radcliffe that it was wrong for him to do so and asked him to reconsider whether it should be done again;

2.29.2 A few days later, Mr. Radcliffe told the [appellant] that he had decided “not to go ahead with it”;

2.29.3 As a result, the debit note with handwritten amendments thereon was not issued by BTHK.

…

2.32 The [appellant] admits that he failed or neglected to observe, maintain or otherwise apply a professional standard, namely Statement 1.200 “Professional Ethics – Explanatory Foreword” (Revised April 1999 and September 2004 (name change)) (Amended Complaint 2) in that, as a result of his failure to prevent the debit note being issued, his failure to report the matter despite knowing that PCCW had been defrauded was a conduct which was inconsistent with the good reputation of the profession and the HKICPA.

…

3.4 He did not tell PCCW that the Debit Note was false and/or that no services had been rendered;

…

3.12  On the morning of Monday, 25 September 2006, the [appellant] told Mr. Radcliffe what had happened during his meeting on 23 September with Mr. Lam and Mr. Chu.  Mr. Radcliffe pleaded with the [appellant] to assist him to explain the debit note.  Nothing else was mentioned.”

14.Mr Pow submitted that it was clear from the Admitted Facts that the appellant and Mr Radcliffe had played different roles and had a different degree of involvement in respect of the false debit note. Whereas Mr Radcliffe had been directly involved in the issue of the debit note and had taken active steps to conceal its issue, the appellant had not done so.  The appellant believed that Mr Radcliffe would not issue the debit note. If the Committee was not minded to accept this, it should have called for a Newton inquiry to resolve the disputed facts.  Mr Pow submitted that, having failed to do so, it is clear the Committee refused or failed to distinguish between the degree of involvement of Mr Radcliffe and the appellant.

15.I do not agree that the Committee failed to distinguish between the involvement of Mr Radcliffe and the appellant.  The comments of the Committee in paragraphs 20 and 21 quoted above follow immediately after the Committee set out the thrust of the submission of counsel for the appellant.  Thus, paragraphs 18 and 19 of the Reasons for Decision state:

“18. It seems to this Committee that the thrust of Mr. Wong’s submission in mitigation, and a point which this Committee found to be most pertinent, is in his third point, which we shall set out in more details:-

Third, for the reasons explained above, this is not a case of fraud or dishonesty on the [appellant]. The complaints against the [appellant] are in the nature of a professional misjudgment or the negligence on the part of the [appellant]. Whilst the misjudgment or negligence in question may be said to be remarkable, it was done out of the [appellant’s] kindheartedness to assist his business partner, Mr. Radcliffe…. The [appellant] has derived no personal benefit from the incidents complained of.

19.       In response to questions from this Committee at the hearing, Mr. Wong clarified that ‘… the [appellant’s] kindheartedness to assist his business partner, Mr. Radcliffe’ referred to his assistance in not exposing Mr. Radcliffe’s misdeed in issuing the False Debit Note to PCCW.  It seems to this Committee that this is a point which goes to the heart of the matter and therefore this Committee will make further comments thereon.”

16.In paragraphs 20 and 21, the Committee was therefore rightly focusing on the appellant’s role.  It pointed out that it was not its function to pass judgment on Mr Radcliffe.  That there was no failure to distinguish between Mr Radcliffe and the appellant is amply clear from the concluding words of paragraph 21 which make it clear that the Committee drew the inference as to the appellant’s culpability “irrespective of what Mr. Radcliffe had or had not done”.  Thus, it based its sanctions on the fact that the appellant:

(1)  was involved, in a broad sense, in the issuance of the false debit note;

(2)  had power to prevent the issue of the false debit note but failed to take sufficient steps to prevent this; and

(3)  could and should have reported the matter but failed to do so.

17.These three facts were fully justified on the basis of the Admitted Facts: (1) on the basis of paragraphs 2.13 to 2.16; (2) on the basis of paragraphs 2.11 to 2.16 and 2.20and (3) on the basis of paragraphs 2.25 to 2.29 and 2.32.

18.Mr Pow further submitted that the inference drawn by the Committee in paragraph 22 of the Reasons for Decision amounted to an attribution of a mercenary motive on the part of the appellant in his involvement in the issue of the debit note.  It would be right to do so in respect of Mr Radcliffe but not for the appellant.

19.However, as I read paragraph 22 of the Reasons for Decision, the Committee was there primarily rejecting the submission recorded in the last sentence of that paragraph, namely that the appellant derived no personal benefit from the issue of the debit note.  I do not agree that the Committee attributed a mercenary motive to the appellant as contended.  That it was not doing so is made clear, in my opinion, by the Committee’s statement that it would not speculate as to whether the appellant did or did not do anything with the purpose of keeping Mr Lam pleased in the hope that PCCW would continue to use Baker Tilly’s services.

20.Since the inferences drawn by the Committee were justified, I would also reject the appellant’s contention that the Committee effectively imposed sanctions on him for the misconduct set out in complaint 1.

Ground 2: wrong approach in considering mitigating factors?

21.In paragraph 15 of the Reasons for Decision, the Committee recorded the mitigation advanced on behalf of the appellant, namely:

“first, the [appellant’s] admission to Amended Complaints 2 and 3; second, his clean record; the third factor will be discussed in more details below; fourth, the incidents complained of were one-off in nature; fifth, personal circumstances of the [appellant], mainly that he was generally regarded as being of good character and participated in various community and voluntary services; sixth, he seems to still command considerable support from professional colleagues and friends; in support of this point, the [appellant] produced no less than 17 letters from members of the society, including current and former legislative councilors, justices of peace and other professionals; seventh, the lapse of time between the incidents complained of and the disposal of this matter.”

22.In paragraph 17 of the Reasons for Decision, the Committee then said:

“17. The fact that the Committee does not set out and discuss all the seven matters at length here does not mean this Committee has not considered them fully and carefully. However, this Committee is of the view that the primary factors that this Committee should focus on are the seriousness of the proved complaints and their impact on the reputation and good name of the profession, unless there are truly exceptional mitigating factors.”

23.Mr Pow submitted that the approach adopted by the Committee in its consideration of the mitigating factors was plainly wrong in that there was no authority supporting the proposition that only truly exceptional mitigating factors should be taken into account by a disciplinary tribunal.

24.On the contrary, Mr Pow submitted, it was unhelpful for a disciplinary tribunal to speak of exceptional circumstances and it must look at the misconduct and the mitigation and decide on the appropriate sanction.  He referred in support to Giele v General Medical Council [2006] 1 WLR 942 per Collins J (as he then was) at §26, where he held:

“… The panel had to approach the question of sanctions starting with the least severe. It was not a question of deciding whether erasure was wrong but whether it was right for the misconduct in question after considering any lesser sanction. Furthermore, it was wrong to ask whether there were exceptional circumstances to avoid erasure. Exceptional circumstances would only avoid the possibility of erasure. That is not surprising since what is exceptional will depend on the facts of a particular case. But in my judgement it was in this case and will in most cases be unhelpful to talk in terms of exceptional circumstances. The panel must look at the misconduct and the mitigation and decide what sanction is appropriate …”.

25.Mr Pow submitted that the Committee adopted an unduly narrow approach to its consideration of the mitigating factors and thereby failed to place any weight on the fact that an order of removal would effectively end the career of the appellant given his age (he was 56 at the time of the hearing) and that professional colleagues and friends knowing the circumstances of the disciplinary proceedings had given character references requesting leniency on his behalf.[4]

26.I do not accept the submission that there was a conflict between the approach adopted by the Committee and that of Collins J in Giele or that it adopted an incorrect approach as regards mitigating factors.  It is apparent from Geile (see esp. §§24 to 26) that the disciplinary panel in that case had erred in being guided by advice from its legal assessor that it should take erasure as a starting point and impose that penalty unless exceptional circumstances were established.

27.In the present case, on the other hand, there is no basis for concluding that the Committee started with any predisposition as to the type of sanction to be imposed.  On the contrary, as is clear from paragraphs 15 to 19 of the Reasons for Decision, the Committee adopted the correct procedure, described in Giele, of looking at the misconduct and the mitigation and deciding what sanction was appropriate.  In particular, it is to be noted from the first sentence of paragraph 17 of the Reasons for Decision that it is clear the Committee considered all the seven matters of mitigation advanced on behalf of the appellant.  These included his personal circumstances and the character references and pleas for leniency of professional colleagues and friends.

28.Mr Pow then submitted, specifically in respect of Amended Complaint 3, that the Committee’s indication that it should focus on the seriousness of the proved complaints and their impact on the reputation and good name of the profession (paragraph 17 of the Reasons for Decision) and its not taking the appellant’s recanting of his misleading explanation into account as a mitigating factor (in paragraph 25 of the Reasons for Decision) involved a non sequitur since the recanting would certainly reduce the gravity and seriousness of the complaint.

29.I do not agree that the Committee erred in its approach to the appellant’s recanting of his false explanation constituting the basis for Amended Complaint 3.  It is clear from paragraph 25 of the Reasons for Decision that the Committee was aware of the fact that the appellant had recanted from the misleading explanation.  The point it was seeking to make, however, was that but for his having recanted, there would have been much more serious consequences for the appellant.  That observation is plainly correct; the initial provision of the false account reflected the existence of a conspiracy to pervert the course of justice, to which the appellant was a party.  That reflects the seriousness of the misconduct constituting Amended Complaint 3, the terms of which expressly recognised the recanting, and, in this sense, the recanting was plainly not a mitigating factor.

30.Further, it was wholly accurate for the Committee to record that the recanting was not one of the mitigating factors relied upon by the appellant’s counsel.  Although that fact was referred to in the written submissions, it was in the context of stressing that Amended Complaint 3 recognised the correction of the position so that the complaint was “essentially one of momentarily serious misjudgment on the part of the [appellant]”.[5]  So far as the mitigating factors were concerned, all seven points taken were summarised in paragraph 15 of the Reasons for Decision.[6]

Ground 3: sanctions wrong in principle or manifestly excessive?

31.Mr Pow submitted that the Committee should have adopted the approach of considering imposing sanctions starting with the least severe and then asked whether an order for removal was right for the misconduct in question after considering any lesser sanction.  He cited Giele at §26 and Disciplinary and Regulatory Proceedings (6^th Ed.), Brian Harris OBE QC, §14.31 (which quotes Giele at §29).

32.Mr Pow submitted that the Committee did not follow this approach and that paragraphs 26 and 27 of the Reasons for Decision showed that its approach was effectively that an order for removal should follow as a result of the appellant’s misconduct being regarded as within the second category of misconduct described in Bolton v Law Society [1994] 1 WLR 512 at p.518B-E (see below).

33.Mr Pow contended that the Committee’s erroneous approach caused it to fail to give any proper consideration to mitigating factors such as the effect of ending of the appellant’s career as a professional accountant and the view is taken by other members of the profession on the matter.  He relied on §29 of Giele where Collins J held:

“29. I do not doubt that the maintenance of public confidence in the profession must outweigh the interests of the individual doctor. But that confidence will surely be maintained by imposing such sanction as is in all the circumstances appropriate. Thus in considering the maintenance of confidence, the existence of a public interest in not ending the career of a competent doctor will play a part. Furthermore, the fact that many patients and colleagues have, in the knowledge of the misconduct found, clearly indicated their views that erasure was not needed is a matter which can carry some weight in deciding how confidence can properly be maintained. …”.

34.With respect, I do not agree that the Committee erred in the manner contended by Mr Pow.  The Committee did not in fact order the removal of the appellant’s name from the register permanently and it cannot be correct to say that the sanctions would inevitably have the effect of ending the appellant’s career.  Although in his late 50s, the appellant’s age is not so advanced that he does not have the prospect of a number of useful years’ working life ahead of him after the expiry of the period of suspension. Indeed, given that he still has a relatively young family (we were told that his two sons are 21 and 11 years old respectively and both in full time education), it is reasonable to think that the appellant would have envisaged that his working life will continue well into his 60s.  As to the views of other members of the profession, it is clear that the Committee took these into account (see paragraph 15 of the Reasons for Decision) and the weight to be given to them was a matter for the Committee.

35.As regards the Committee’s reliance on Bolton, the particular passage in the judgment of Sir Thomas Bingham MR (as he then was) reads as follows:

“Any solicitor who is shown to have discharged his professional duties with anything less than complete integrity, probity and trustworthiness must expect severe sanctions to be imposed upon him by the Solicitors Disciplinary Tribunal. Lapses from the required high standard may, of course, take different forms and be of varying degrees. The most serious involves proven dishonesty, whether or not leading to criminal proceedings and criminal penalties. In such cases the tribunal has almost invariably, no matter how strong the mitigation advanced for the solicitor, ordered that he be struck off the Roll of Solicitors. Only infrequently, particularly in recent years, has it been willing to order the restoration to the Roll of a solicitor against whom serious dishonesty had been established, even after a passage of years, and even where the solicitor had made every effort to re-establish himself and redeem his reputation. If a solicitor is not shown to have acted dishonestly, but is shown to have fallen below the required standards of integrity, probity and trustworthiness, his lapse is less serious but it remains very serious indeed in a member of a profession whose reputation depends upon trust. A striking off order will not necessarily follow in such a case, but it may well. The decision whether to strike off or to suspend will often involve a fine and difficult exercise of judgment, to be made by the tribunal as an informed and expert body on all the facts of the case. Only in a very unusual and venial case of this kind would the tribunal be likely to regard as appropriate any order less severe than one of suspension.”

36.The Committee considered that the same principles apply to accountants as they do to solicitors (and it was not suggested they were wrong in this regard) and then concluded that the appellant’s conduct in this matter “fell at least within the second category of misconduct described in the above judgment.”  They then looked at the matter in the round and took the view that the appropriate sanctions for Amended Complaints 2 and 3 “together” (and there is no criticism of the Committee in this regard) were those which they imposed.

37.It is clear that the Committee was of the view that the appellant’s misconduct was “serious indeed” (Reasons for Decision, paragraph 26) and, in my view, they were right to do so.  On his own admission, the appellant was in a position to have prevented the issue of the false debit note.  He could have done so very simply at the outset by shredding the draft debit note faxed to him.  Even if he had not done that, he could have followed up and taken steps either to confirm that Mr Radcliffe had not issued the debit note or, if he had, to communicate to PCCW that it was not due and should be treated as withdrawn.  He took far too passive a role in the matter, in effect turning a blind eye to the debit note.  This was conduct that was seriously below the standard of integrity, probity and trustworthiness that the public should be able to expect from a member of the HKICPA.  In relation to Amended Complaint 3, I repeat the observations in paragraph 29 above.  The appellant’s misleading explanation demonstrated that he was prepared, at least initially, to be party to a conspiracy to cover up the falsity of the debit note by giving a bogus explanation to law enforcement officers investigating the matter.  The misconduct encapsulated in Amended Complaints 2 and 3 is conduct that clearly merited the penalty of suspension and I do not therefore consider that the Committee was in any way in error in its approach.  This was not a case in which a lesser punishment than suspension was realistically appropriate.

38.I would add, in this context, that it is pertinent to point out that in disciplinary proceedings against Mr Lam, whose involvement in the issue of the debit note led to his conviction of a criminal offence, a Disciplinary Committee imposed the sanction of permanent removal of his name from the register of Certified Public Accountants.  That penalty was plainly consistent with the observations of Sir Thomas Bingham MR in Bolton since Mr Lam’s misconduct plainly involved proven dishonesty.

39.Mr Pow also submitted that the Committee failed to pay any or any sufficient regard to the sentencing trend in previous disciplinary proceedings of the HKICPA.  In support of this submission, Mr Pow provided a table of decisions made by Disciplinary Committees of the HKICPA since August 2008.  He pointed in particular to two decisions in which accountants had committed criminal acts and who were not suspended but instead reprimanded and ordered to pay a monetary penalty in the region of HK$200,000 to HK$400,000.[7]

40.Finally, Mr Pow submitted that it was important not to lose sight of the combined effect of the sanctions, which involve not only a removal order for 36 months but also a heavy fine of HK$500,000 and a substantial costs order of HK$442,427.  He submitted that the combined sanctions went beyond protecting the public and had the effect of penalising the appellant severely in financial terms.  It was his contention that the Committee did not take a global consideration of the sanctions so that they were based on a wrong sentencing approach and manifestly excessive in the circumstances.

41.I do not accept that reference to the table in question justifies interference in the sanctions imposed by the Committee.  In this context, the following comments of Chu J (as she then was) in Ng Sai Hing v Commissioner of Police, unrep., HCAL 15/2006, 26 January 2007 are relevant:

“44. [Counsel] also refers to other disciplinary cases involving the same offence that were reported in the Bulletin on Discipline Cases (“the Bulletin”). The Bulletin contained selected cases of discipline of interest and was compiled for the purposes of updating the trends in disciplinary cases and the level of awards confirmed by the FDO. It is common ground that the awards made in the reported cases are not binding on future cases. The purpose of Mr Lau’s reference to the Bulletin is to show that for the offence in question, lesser punishments had been awarded so as to support his submission that punishment that does not result in loss of pensions is a realistic option open to the decision-makers in the applicant’s case.

45. Several points have to be made on the relevance and use of the Bulletin.  First, it is not in dispute that it is within the decision-makers’ power under the Police (Discipline) Regulations to make award that will not result in loss of pension.  Second, What is an appropriate award must depend on the facts of each case.  Third, the Bulletin does not set out the full facts of the cases selected.  Fourth, while in some of the reported cases lesser punishments were imposed, there was one case in which a senior police constable was given a dismissal. In short, no useful use can be made of the Bulletin. It does not lend force to the argument that it was unfair for the decision-makers not to consider lesser punishments.”

42.So too, here, the table does not set out a full statement of the facts of each case summarised.  The sanctions imposed by the Committee on the appellant were clearly within its jurisdiction.  At best, Mr Pow was able to point to other cases in which lesser sanctions had been imposed.  But equally, the table shows that orders of removal from the register for varying periods have been made in other cases involving conduct which was neither the subject of any criminal conviction nor dishonest.  It also shows that recent decisions of Disciplinary Committees have included the imposition of an order for suspension together with a fine and an order for the payment of costs.

43.I also do not accept the contention that the Committee failed to take a global consideration of the sanctions.  The Committee dealt with Amended Complaints 2 and 3 together and there is no complaint as to this.  Given that it was imposing sanctions for the two complaints together, the imposition of more than one particular type of sanction was fully justified.  Moreover, as Mr Peter Duncan SC, counsel for the HKICPA, pointed out, the maximum fine for each complaint is HK$500,000 so the financial penalty imposed in this case was not the maximum that could have been imposed but instead represented a proportionate part of HK$500,000 in respect of each complaint.  Rather than supporting the appellant’s contention that the Committee failed to take a global view of the sanctions, this tends to show that it did precisely that.

44.As Chu JA held in Lie Han Ji v The Registrar of the Hong Kong Institute of Certified Public Accountants, unrep., CACV 265/2009, 9 March 2012:

“56. … In dealing with a complaint on the propriety of sanctions passed by a disciplinary tribunal, the court has always accord great weight to the decision of the tribunal whose members possess the expertise and know the appropriate standards that are expected of members of the profession and will only interfere with the tribunal’s decision when it is clearly wrong: MacLeod v. The Royal College of Veterinary Surgeons [2006] UKPC 39 at para 23.”

45.The “clearly wrong” test for interference by this court is, in my view, consistent with the approach adopted in England on appeals to the High Court from the Solicitors Disciplinary Tribunal as stated by Jackson LJ in Salsbury v Law Society [2009] 1 WLR 1286 at p. 1296:

“30. From this review of authority I conclude that the statements of principle set out by Sir Thomas Bingham MR in Bolton v Law Society [1994] 1 WLR 512 remain good law, subject to this qualification. In applying the Bolton principles the Solicitors Disciplinary Tribunal must also take into account the rights of the solicitor under articles 6 and 8 of the Convention. It is now an overstatement to say that ‘a very strong case’ is required before the court will interfere with the sentence imposed by the Solicitors Disciplinary Tribunal. The correct analysis is that the Solicitors Disciplinary Tribunal comprises an expert and informed tribunal, which is particularly well placed in any case to assess what measures are required to deal with defaulting solicitors and to protect the public interest. Absent any error of law, the High Court must pay considerable respect to the sentencing decisions of the tribunal. Nevertheless if the High Court, despite paying such respect, is satisfied that the sentencing decision was clearly inappropriate, then the court will interfere. …”.
(Underlining added)

46.The appellant clearly feels that he has been severely punished.  However, whilst the sanctions imposed on the appellant were certainly not lenient, I do not consider that the sanctions imposed are wrong or inappropriate let alone clearly wrong or inappropriate, that being the test for interference by this court.

Conclusion

47.For these reasons, the appeal was dismissed.

48.Mr Pow rightly accepted the appellant could not resist an order that the appellant pay the respondent’s costs of the appeal, to be taxed if not agreed.

Hon Barma JA:

49.I agree with the Reasons for Judgment of Fok JA.

Mr Jason Pow SC and Mr Anson Wong, instructed by K.C. Ho & Fong, for the Appellant

Mr Peter Duncan SC, instructed by Reed Smith Richards Butler, for the Respondent