PETER PO FUN CHAN v. THE HONG KONG SOCIETY OF ACCOUNTANTS AND ANOTHER

CACV 164/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 164 OF 2002

(ON APPEAL FROM HCAL NO. 637 OF 2001)

____________________

____________________

_________________________

REASONS FOR JUDGMENT

_________________________

Hon Rogers VP:

1. This was an application for leave to appeal to the Court of Final Appeal from a decision of this court (Rogers VP, Le Pichon & Stock JJA) given on 12 November 2002. The application was made under section 22(1)(b) of the Court of Final Appeal Ordinance on the grounds that the questions involved were of great general or public importance. At the conclusion of the hearing this court dismissed the application and we now give our reasons in writing.

The facts

2. The background to this matter is set out in the judgment of this court and of Hartmann J. given on 14 January 2002. The matter before the judge below was an application for judicial review in respect of 2 decisions of the respondents. The complaints made by the applicant arose in respect of the decision to constitute a Disciplinary Committee to study a complaint made by the Registrar of the Society that the applicant had been negligent in the conduct of auditing the accounts of Shanghai Land Company Limited. The point to be noted as far as this application is concerned is that there has, as yet, been no hearing of the Disciplinary Committee and that there has, as a consequence, been no facts found.

3. On this application, Mr Choy, who appeared on behalf of the applicant, sought to argue that 2 questions should be submitted to the Court of Final Appeal. Counsel refined the first question during the course of argument and in the result the questions were as follows:-

(1) Does the Kuruma inclusionary rule operate in the same way in disciplinary proceedings as it does in criminal proceedings in circumstances where the Tribunal would be condoning far graver or more dishonourable conduct than the disciplinary offence it is pursuing?

(2) What are the criteria for a disciplinary tribunal to exercise the residual discretion to exclude tainted, but otherwise admissible relevant evidence?

4. At this point it should be noted that it was not sought to argue on appeal that the Kurama decision did not represent the law in criminal and civil proceedings. As part of his argument, Mr Choy relied upon the fact that the objects of the Hong Kong Society of Accountants contain the provision that it shall "discourage dishonourable conduct and practices by professional accountants" (see section 7(h) of the Professional Accountants Ordinance, Cap. 50). The argument was put that because the judge below had considered that the probabilities supported the argument that copies of the relevant accounts had been taken from the applicant's office, this showed that there had been dishonourable conduct on the part of the person who so took them. Although the letter had been signed "an accountant", the obvious point arose that it was by no means clear that it was an accountant who took the accounts. Until facts have been found by the Disciplinary Committee no such conclusion could be drawn.

5. In my view the questions that are sought to be submitted to the Court of Final Appeal are not matters of general importance. Furthermore, I do not consider that they are matters to which I would ascribe the epithet great. In those circumstances if leave to appeal were to be given it should, in my view, be given by the Court of Final Appeal itself.

6. There are, however, other difficulties which also seem to me to make it inappropriate for leave to be given in this case. In the absence of any findings of fact by the Disciplinary Committee, it is not evident how matters of discretion could be considered. On the basis that it is said that the copies of the accounts that had been forwarded to the Registrar had been obtained wrongfully from the applicant's offices, it would be necessary to consider both the circumstances in which that was done, as well as the reasons for it. It would be almost inevitable in any case of whistle blowing where confidential documents were revealed, that some unauthorised use of the documents would have been made. Whether or not that would be culpable would have to be considered in the particular circumstances. If the discretion were to be exercised to exclude not only use of those documents, but also use of any information derived from the documents, then the matter would have to be very carefully weighed in the light of all the circumstances.

7. Inevitably, Mr Choy had to put his case on the basis that the decision would be in his client's favour no matter what the circumstances. When the case is put in that way it is to say, in effect, that there would be no discretion. In my view, it inevitably follows that even if the matter of discretion as to the use of the documents is a matter which might ultimately be considered by the Court of Final Appeal, that could only be done after the Committee had heard the matter.

8. In the absence of any hearings by the Disciplinary Committee and findings by that Committee it seems to me to be impossible for any court to embark on the second question, which would amount to an academic exercise based on uncertain facts.

Hon Le Pichon JA:

9. I agree.

Hon Yuen JA:

10. I agree.

Representation:

Mr Edwin Choy, instructed by Messrs Tong & Tsoi, for the Applicant

Mr Jonathan Harris, instructed by Messrs Johnson Stokes & Master, for the 1st & 2nd Respondents

CACV 164/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 164 OF 2002

(ON APPEAL FROM HCAL NO. 637 OF 2001)

____________________

____________________

____________________

J U D G M E N T

____________________

Hon Rogers VP:

1. This is an appeal from the judgment of Hartmann J given on 14 December 2002 whereby he dismissed an application by the appellant for judicial review. The application before the court related to two decisions. The major decision was that by the Hong Kong Society of Accountants made on or about 8 March 2001 which was communicated to the appellant by a letter from the Society dated 20 March 2001. The decision was to constitute a Disciplinary Committee under Part VI of the Professional Accountants Ordinance, Cap. 50 ("the Ordinance") to study the complaint made by the Registrar of the Society that section 34(1)(a)(iv) of the Ordinance applied to the applicant in that the Applicant had been negligent in the conduct of the accounts of Shanghai Land Company Limited ("the company") for the year ended 31 December 1998. The other decision was the decision of the Registrar to file a complaint with the Council of the Society on 26 October 2000. The judge dismissed the application and from that dismissal the appellant now appeals.

Background

2. In or about April 2000 the Society received an anonymous letter. It purported to be sent by an accountant. Enclosed with the letter were financial statements for the year ended 31 March 1998 of the company. As referred to by the judge below, it can be assumed for the purposes of this case that those accounts were taken from the appellant's office, almost certainly by an employee or now ex-employee. At about the same time two other sets of accounts were similarly sent to the Society under cover of anonymous letters.

3. Following receipt of the letter the Director of Professional Conduct of the Society wrote to the appellant's firm and raised a number of questions. These were answered in a letter signed by the appellant. There then followed correspondence between the parties primarily because the Director sought further clarification and the appellant did his best to supply the necessary information. It must be said that the appellant cooperated fully with the Director to enable the investigations to be conducted.

4. On 26 October 2000, the Registrar of the Society submitted a complaint to the Council of the Society under section 34(1)(a) of the Ordinance. The complaint was that the appellant in the auditing of the financial statements had been "negligent in the conduct of his profession" and/or had "failed or neglected to observe, maintain or otherwise apply a professional standard". The appellant was subsequently notified of this. Later, by letter of 20 March 2001, the appellant was given notice that the Council had referred the Registrar's complaint to a Disciplinary Panel and had constituted a Disciplinary Committee. It is in respect of that decision and the decision of the Registrar of 26 October 2000 to file a complaint against the appellant that the application for judicial review is made.

This appeal

5. On this appeal the appellant appeared in person, as he did in the court below. He argued his case clearly. He had obviously taken great trouble in the preparation of the case and in the preparation of his arguments. The primary points taken by the appellant arise from the fact that the information which has led to the bringing of the disciplinary charge against the appellant came initially as a result of an anonymous letter and the copies of the accounts which, at least for present purposes, must be taken to have been obtained illegally, in all probability stolen, from the appellant's office.

6. In approaching this case it must be stated that there is a natural distaste for those who seek to convey information by anonymous letters. Those who hide behind anonymity in making complaints against others might legitimately be accused of cowardice. The expression willing to wound but afraid to strike is also applicable to their conduct. The traditional place for anonymous accusations is the waste paper basket. In legal terms an anonymous accusation can carry no weight. It is for that reason, for example, that in the case of Barclays Bank plc v Anderson, Times Law Reports, 10 March 1987, Stephen Brown LJ said that the anonymous letter, which contained the information relevant to that case, had no evidential validity. In this case, however, the position is somewhat different. The letter itself was not sought to be relied upon. It was the copies of the accounts which came with that letter which contained the information which sparked the inquiries which ultimately led to the charges being laid.

7. One can but have sympathy with the appellant. Not only has this whole episode been started by somebody acting anonymously but that person is more than likely to have been, and possibly is still, employed in the appellant's office. It is not for this court to speculate as to why such a person would wish to act anonymously in the way he or she has done rather than draw any supposed defects in accounting procedure to the appellant's attention or, if a complaint to a third party is thought necessary, to say who he (or she) is. Nevertheless, such a person's actions do not on the face of the matter, cast the person involved in a favourable light.

8. The other aspect of the matter is that it would appear that the accounts which were forwarded to the Society had been stolen. This was a point which was accepted by the judge below. He was inclined to view the matter as de minimis. It is impossible in my view to form a concluded view as to whether a criminal offence has been committed, specifically one of theft, because the full facts are not known. The details of the acts actually committed are not known nor is the mental state and intention of the person who performed those acts. However, I would go further than the judge below in that it would seem that the accounts, as they lay in the accountants' office, might well have constituted confidential information. In view of section 5(1) of the Theft Ordinance, Cap. 210, I see no reason why confidential information should not be categorised as property which is capable of being stolen.

9. The difficulties which lie in the appellant's way in relation to the arguments which have been raised because the accounts had been stolen seem to me to be twofold. In the first place, the appellant has himself in the course of the correspondence with the Society, and in particular with the Director of Professional Conduct, confirmed the existence of the relevant accounts. In the second place, even if the writer of the anonymous letter had acted wrongfully no imputation of criminal conduct could be made against the Society or any of its officers. The use which the Society and its officers have made of the accounts was clearly made on the basis that the persons involved considered that they had a duty to take the actions which they have done.

10. In the course of his submissions Mr Chan sought to rely upon the decision of the Court of Final Appeal in FAMV No. 11/2001 given on 25 April 2001 wherein the appellant's application for leave to appeal in a previous case was refused. It would seem that the appellant has been under the misimpression that the Court of Final Appeal was of the view that the Society should be directed to ignore anonymous complaints and stolen documents. That, however, would be a misinterpretation of what the Court of Final Appeal said and I do not propose to take that matter any further.

11. I would agree with the judge below that even if evidence had been obtained illegally that would not preclude its use in the course of the formulation and prosecution of a disciplinary offence under the Ordinance. Although the position might be different in other jurisdictions, in Hong Kong there is no absolute bar to the use of illegally obtained evidence.

12. In pursuing his point that the evidence had been obtained illegally, the appellant sought to avoid the difficulty which arose from the fact that the Registrar in making the complaint could rely upon the appellant's own admissions in the correspondence, on the basis that such evidence had been obtained from him unfairly without informing him of what the purpose was. In my view whenever the Director of Professional Conduct makes inquiries it must be implicit that anything resulting from those inquiries might or could result in some complaint being made.

13. It is, of course, trite law that judicial review proceedings are concerned with the decision making process and the court cannot sit as an appellate tribunal from the actual decision taken. Obviously, if the decision taken was in the hallowed expression "Wednesbury unreasonable" a court may take the appropriate action. But in this case I do not consider that arises.

14. None of the other points raised by Mr Chan whether taken individually or collectively could in my view give rise to a conclusion that judicial review should be granted in this case. Therefore, whilst having sympathy in many respects, as I have indicated, for Mr Chan's position I am of the view that this appeal must be dismissed, with an order nisi of costs in favour of the 1st and 2nd respondents.

Hon Stock JA:

15. I agree and have nothing to add.

Hon Le Pichon JA:

16. I agree.

Representation:

Dr Peter Po Fun Chan, the Applicant/Appellant appearing in person

Mr Jonathan Harris, instructed by Messrs Johnson, Stokes & Master, for the 1st & 2nd Respondents