The Council of the Law Society of Hong Kong v. Christopher Paul Erving Previously Practising As Erving Brettell
|
HCMP 2402/2014 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 2402 OF 2014 ________________________
____________________
________________________ DECISION 1.This was the adjourned hearing of an originating summons filed on 26 September 2014 by the Council of the Law Society of Hong Kong (the “Council”) for directions in relation to various matters arising out of the Council’s intervention (the “Intervention”) in the practice of Irving Brettell (the “Firm”). Christopher Paul Irving, the sole proprietor of the Firm at the date of the Intervention, is the defendant. Background facts 2.Since the Intervention commenced in late April 2012, the Council has carried out investigations. The relief it now seeks relate to:
3.The Council has identified three claimants but the funds in the client and office accounts stand at approximately $194,000 and are clearly insufficient to meet those claims. By far the most significant of the claims is one due to a Mr Neill of approximately $1.58 million. The other two claims are for small sums amounting to no more than $10,000 in total. 4.The matter first came before Chow J on 15 October 2014. As the defendant opposed the application, directions were given for the filing of evidence. 5.In its letter to the Council’s solicitors dated 26 January 2014, the defendant’s solicitors stated that “the only live issue now between the parties is the validity of the intervention” and would not agree to the inclusion of various affidavits (including affidavits filed since the date of the first hearing) in the hearing bundle. This caused the Council to take out an ex parte summons for leave to admit such evidence which I granted at the hearing. 6.In his written submissions, Mr Blanchflower SC who appeared for the defendant set out his client’s position as follows:
That would suggest that in the event of the court finding in the defendant’s favour, the defendant would not be making any payment out of his own funds. The written submissions were directed at impugning the validity of the Intervention. 7.At the conclusion of the hearing, Mr Blanchflower clarified that the defendant would make a payment to Mr Neill in any event, ie whether or not his argument succeeds. If that is the case, it would appear that the whole exercise was largely academic and a waste of time and resources. 8.Mr Hudson who appeared for the Council explained that there is a practical difference because the amount the defendant proposes to pay is an amount that is netted off against the current assets rather than replacing the amount that had been misappropriated from the client account which the defendant is required to do under Rule 9A of the Solicitors’ Accounts Rules. That difference appears to be of the order of $184,000. Further, the defendant has given no particulars or specifics of when such payment would be forthcoming. It remains to be seen if the defendant’s stated stance would be made good. 9.What is now clear is that the defendant neither disputes nor challenges the Council’s conclusions following the completion of its investigations. Monies have been misappropriated from client accounts and sums are due and owing to the three claimants who were clients of the Firm. In other words, the Intervention was entirely justified. 10.As regards the relief sought in the originating summons, having read the evidence that has been filed, I was satisfied that the directions sought are justified and reasonable and, accordingly, an order in terms was made at the conclusion of the hearing. 11.I now turn to consider the merits of the defendant’s challenge to the validity of the Intervention, a matter that I reserved for decision. As earlier noted, the challenge has little practical consequences. The defendant’s objective could only be to embarrass the Council if he succeeds in showing the Council to be wrong in law and to cause the Council considerable inconvenience. Mr Blanchflower has made it clear that the defendant would require the Council to ‘rectify’ its error. Validity of the Intervention 12.On 24 April 2012, pursuant to section 26A(1)(c) of the Legal Practitioners Ordinance, Cap 159 (the “Ordinance”) the Council resolved to intervene in the practice of the Firm the Council being satisfied that the defendant had failed to comply with the rules made by virtue of section 73(1) of the Ordinance, in particular, Rules 7, 7A, 9A, 10(1), 10A and 11 of the Solicitors’ Accounts Rules. The Council further resolved that, inter alia, client accounts and any positive balance of the office accounts of the Firm be vested in the Council, that designated persons be appointed joint signatories to the client and office accounts and that all documents in the possession of the defendant or the Firm in connection with his practice be delivered to the plaintiff’s solicitors. 13.By letter dated 25 April 2012 (“the letter”), the then Secretary General of the Council wrote to the defendant. In pertinent part, the letter read:
14.Enclosed with the letter was a document bearing the description “CERTIFICATE BY SECRETARY GENERAL OF THE LAW SOCIETY OF HONG KONG” and signed by the Secretary General (“the document”). The document under the hand of the Secretary General certified that a meeting of the Council took place on 24 April 2012, that the Council was satisfied that the defendant had failed to comply with rules made by virtue of section 73(1)(b) of the Ordinance (identifying the Rules that had not been complied with) and set out the 10 resolutions passed at that meeting. 15.The powers that are exercisable on intervention are contained in Schedule 2 of the Ordinance. Section 26A, in pertinent part, provides:
16.There is no dispute and it is common ground that the letter of 25 April 2012 with enclosure complied with the requirements of section 26A. That compliance rendered the commencement of this Intervention valid and the Schedule 2 powers exercisable. 17.The next relevant provisions are to be found in paragraph 2 of Schedule 2:
18.Mr Blanchflower submitted that the powers conferred by section 2 of Schedule 2 are conditional on compliance with the two requirements set out in section 2(3). That required service of a certified copy of the Council’s resolution on the defendant and service of a notice prohibiting the payment out of monies (the “prohibition notice”). It was submitted that absent such service, the intervention powers could not be exercised. 19.The first matter to note is that the Ordinance including Schedule 2 does not provide any mechanism for a party to challenge the validity of an intervention. While judicial review proceedings are not excluded, that is another matter. Non‑compliance with section 2(3) could not result in an intervention being held to be invalid. Nothing in Schedule 2 provides for that result. Section 2(3) does not state the consequences of non-compliance. 20.Mr Blanchflower submitted that the document is not and cannot constitute a “certified copy of the Council’s resolution”. It was said that a “certified copy” was never served on the defendant. He cited examples of definitions of “certified copy” to be found in other ordinances such as section 775 of the Companies Ordinance (Cap 662) and section 22(2)(a) of the Births and Deaths Registration Ordinance (Cap 174). His submission was premised on there being a resolution in writing or alternatively, that a resolution must be in writing. 21.Mr Hudson explained that in fact there is no physical resolution of the Council. The passing of a resolution by the Council on any particular matter is done orally. The Secretary General present at the meeting would record the resolution. 22.In my view, a resolution is nothing more than a decision made or taken by the relevant person/entity in relation to the particular matter before it. No authority has been cited to the effect that a resolution must be in writing. The document issued by the Secretary General certified that the meeting of the Council took place on the date specified and that the resolutions set out therein were passed. As such, it constitutes a copy of the resolutions passed by the Council. Further, such copy has been certified by the Secretary General. 23.While in other contexts, for example where the subject matter exists in written form (such as official documents recording birth, death, marriage or nationality), a “certified copy” may bear a different meaning or connotation, there is nothing in the Ordinance that requires the resolution to be in writing. In the circumstances, I am satisfied that the Council has complied with the requirements of section 2(3). 24.Even if (contrary to my view) the document does not constitute a certified copy of the resolution, it would not follow that the Intervention would be rendered invalid. In fact, as earlier noted, once the requirements of section 26A(1) and (2) have been complied with, the Schedule 2 powers are engaged and become exercisable. Plainly, the Intervention was valid. 25.It is evident from the terms of the letter that the defendant was given notice of the prohibition in relation to the payment out of monies held by the defendant or his firm in connection with his practice. It is also apparent from the face of the document that the Council had passed the resolutions stated therein. 26.If there had been any non‑compliance with the twin requirements of section 2(3), the only recourse available to the defendant would be under section 2(4) which enables the solicitor to make an application to the court within 8 days of the service of the notice for an order that the Council withdraw the notice. It should be noted that “withdrawal” of the notice does not translate into “invalidity of the Intervention”. 27.The defendant has not made such an application. His challenge comes more than two years and nine months later and is out of time. In that connection, I do not consider that the defendant has any prospect of obtaining a time extension. I agree with the views expressed in Miller v Law Society [2002] 4 All ER 312 at §36:
28.As the Ordinance followed the English provisions, the scheme applicable in Hong Kong is the same as the English scheme. Conclusion 29.For the reasons stated, the defendant’s challenge is wholly misconceived and devoid of merit. It falls to be rejected with costs in favour of the Council.
Mr Richard Hudson, instructed by Deacons, for the plaintiff Mr Michael Blanchflower SC, instructed by Chong & Yen, for the defendant | |||||||||||||||||||||||||||||||||||||||||
Other judgments that cite this case