The Registrar of the Hong Kong Institute of Certified Public Accountants v. Zhonghui Anda Cpa Ltd and Another

Background

This appeal concerns disciplinary proceedings against Zhonghui Anda CPA Limited and its engagement quality control reviewer Mr Sze Lin Tang before the Disciplinary Committee of the Hong Kong Institute of Certified Public Accountants (HKICPA). The Registrar brought three complaints under section 34(1)(a)(vi) of the Professional Accountants Ordinance (Cap. 50) relating to the 2015 audit of Ko Yo Chemical (Group) Limited, covering the valuation of a Put Option and the impairment assessment of two chemical plants (§3-§8). After the disciplinary hearing on 14 June 2022 but before the decision was issued, one lay member Mr Chu's term expired on 31 January 2023 (§10). The Misconduct Decision and Sanctions Decision were signed by only four of the five members, comprising two lay members and two professional members (§12-§13). The Respondents appealed on three grounds relating to jurisdiction, procedural fairness, and sufficiency of reasons (§20).

Key findings

1. The court held (§33-§52) that the four-member Disciplinary Committee was validly constituted under section 33B(1) of the Pre-Amended PAO, which provides a quorum of four members. Section 51 of the Interpretation and General Clauses Ordinance (Cap. 1) confirms that a vacancy does not affect the body's power. 2. The court rejected (§34) the argument that the 3:2 lay-to-professional ratio must be maintained throughout, noting that the quorum provision provides a complete answer and that other professional disciplinary legislation expressly requires lay member participation in quorums where intended (§45). 3. The court observed (§48) that the lay member majority is in substance preserved through the chairman's casting vote under section 52(2) of the IGCO. 4. On Ground 2, the court held (§56-§66) that the "he who decides must hear" principle was satisfied because all four remaining members had heard the case. The case of R v Greater Manchester Valuation Panel (§59) supported the validity of decisions by remaining members after a member's death. 5. On Ground 3, the court held (§70-§76) that the Sanctions Decision gave adequate reasons. The Disciplinary Committee was not bound by the Institute's earlier Resolution by Agreement offer (§71), and the reasons need only address substantial issues briefly per Oriental Daily Publisher (§73).

Why it matters

This decision provides important guidance on the operation of statutory disciplinary tribunals when membership changes mid-proceeding. Practitioners advising professional discipline clients should note that a properly quorate tribunal retains jurisdiction despite vacancies, and that the "he who decides must hear" principle does not require every member who heard the case to participate in the final decision. The court also signals (§51) that the Institute may wish to adopt express provisions similar to section 11 of the High Court Ordinance to address members whose terms expire before decisions are rendered.