CACV 529/2018
[2024] HKCA 741
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO 529 OF 2018
(ON APPEAL FROM THE ORDER OF THE SOLICITORS’
DISCIPLINARY TRIBUNAL OF 2ND OCTOBER 2018)
____________
| BETWEEN | | |
| | RODERICK MILLER | Appellant |
and |
| | THE LAW SOCIETY OF HONG KONG | Respondent |
____________
| Before: | Hon Au and Chow JJA, and Queeny Au-Yeung J in Court |
| Date of Hearing: | 5 March 2024 |
| Closing Date of Further Submission: | 18 March 2024 |
| Date of Judgment: | 29 July 2024 |
_________________
J U D G M E N T
_________________
Hon Au JA:
1. I agree with the judgment of Queeny Au-Yeung J and the orders proposed by her at paragraph 95 below.
Hon Chow JA:
2. I also agree with the judgment of Queeny Au-Yeung J and the orders proposed by her at paragraph 95 below.
Hon Queeny Au-Yeung J:
A. INTRODUCTION
3. The appellant, Mr Miller, was a practising solicitor and sole proprietor of a law firm in Hong Kong during the period from 1 October 1999 to 31 December 2013 when the firm ceased practice upon the Law Society’s intervention. However, on 14 April 2014, Lam VP (as he then was) directed the Law Society to issue a practising certificate to Mr Miller subject to conditions.
4. In 2016, the Law Society preferred a total of 10 disciplinary complaints (“Complaints”) against Mr Miller for inquiry and investigation by the Solicitors Disciplinary Tribunal (“theSDT”).
5. Mr Miller admitted all 10 Complaints against him at the second hearing of the SDT. On 2 October 2018, the SDT made an order (i) requiring him to pay fines in the total amount of $370,000; (ii) imposing conditions on his practice as a solicitor for a period of 3 years; and (iii) ordering him to pay costs of the disciplinary proceedings (including the costs of the Law Society in its investigation and the costs of the Clerk to the SDT) on a full indemnity basis (“the Order”).
6. On 24 October 2018, Mr Miller filed a Notice of Appeal against the Order on the grounds that (i) the fines were manifestly excessive and/or “obviously and plainly wrong”, and (ii) the SDT failed to consider a number of matters including the Law Society’s refusal since 2013 to issue a practising certificate to him or otherwise imposed restrictions on his ability to practice, thereby imposing significant financial and reputational penalties in the absence of any determination or admission of guilt.
7. By the Supplementary Notice of Appeal dated 30 May 2023, Mr Miller raised further grounds on the propriety of the SDT process claiming that:
(1) The Decision was influenced by the actual or apparent bias of the Chairman. Allegedly the Chairman had telephoned Mr Firmin, Mr Miller’s former solicitor in another case, with a view to pressuring Mr Miller to admit all the Complaints in return for an adjournment of the 1st Hearing and lighter penalties. Mr Miller eventually admitted all the 10 Complaints at the 2nd Hearing, expecting to receive the usual discount in penalty but received the sentences under the Order. The Court is invited to infer that the Chairman had allowed himself to develop a personal animus against Mr Miller as a result of his “advice” not having been followed, thereby influencing the penalty and costs order imposed.
(2) The Prosecutor and the SDT had so conducted themselves in this Appeal as to seriously undermine public faith and confidence in the SDT system. The conduct that Mr Miller relied on was (i) SDT’s response to a summons for discovery of documents in this appeal, which attempted to prevent disclosure of relevant documents; and (ii) the suggestion by SDT to have the Complaints referred to a new SDT for re-retrial on the basis of Mr Miller’s admission of all the Complaints without dealing with the question of costs.
8. Mr Miller thus seeks variation of the Order, namely, that:
(1) The Law Society’s application to refer the matter to a new SDT be refused.
(2) The financial penalties be reduced to a reasonable level to reflect both Mr Miller’s admission to the Complaints, ability to pay and the seriousness of the relevant offences;
(3) The costs order be varied so that the costs wasted below and in this Court be paid by the Law Society or such other party to Mr Miller as the Court deems fit on an indemnity basis;
(4) Interests on the penalty and/or costs payable by Mr Miller be disallowed;
(5) Payment of fines and costs by instalments of no greater than $6,000 per month from a date commencing at least 6 months from the date of the judgment of this Court;
(6) The Conditions on the practising certificate be treated as spent, although they have expired by the time of the appeal.
9. At the hearing, there was an issue as to whether or not the names of the solicitor disciplined, witnesses and members of the SDT should be anonymized in this judgment. Mr Miller and his witness, Mr Firmin, have no objection to the reporting. The Law Society objects, the reason being that it is difficult to find people to sit in SDTs and the reporting of their names may increase the difficulty.
10. Anonymization and the redaction of judgments both represent derogations from the principle that litigation is to be conducted in public, which must be justified, on the basis of cogent evidence, as strictly necessary in order to secure the proper administration of justice: R (on the application of Willford) v Financial Services Authority [2013] EWCA Civ 674, §8, following Pink Floyd Music Ltd v EMI Records Ltd [2010] EWCA Civ 1429, [2011] 1 WLR 770, §§66 and 67, Lord Neuberger, which talks about anonymization of Court of Appeal judgments specifically.
11. I do not think the reason given by the Law Society is sufficient to justify anonymization in a Court of Appeal judgment. This appeal was heard with witnesses giving evidence in open court. There was no application for anonymization before the hearing. One of the issues in the present case was the apparent bias of the Chairman in conducting the inquiry. The public has an interest in seeing that the process of an inquiry was conducted properly with members of an SDT maintaining a fair attitude in the process. I therefore decline to give an anonymity order.
B. BACKGROUND
12. The Complaints against Mr Miller were: failure to comply with a Notice of Inspection, 7 breaches of the Solicitors’ Accounts Rules, Cap 159F (“the Account Rules”), and 2 breaches of the Hong Kong Solicitors’ Guide to Professional Conduct (“the Solicitors’ Guide”) and the Solicitors’ Practice Rules, Cap 159H (“the Practice Rules”).
13. The papers were served on Mr Miller on 7 July 2016.
14. Mr Stephen Wong (“Mr Wong”) was the Chairman of the SDT appointed to inquire into and investigate the Complaints. Mr Ting Koon Hung (“Mr Ting”) was the Clerk to the SDT.
15. Mr Firmin previously acted for Mr Miller in his appeal against an earlier decision of the Law Society. They were colleagues many years ago and have been long-time friends.
16. Shortly after his appointment as Chairman, Mr Wong on his own initiative called up Mr Firmin and had a telephone conversation, the date and contents of which are in dispute (“the Disputed Telephone Conversation”).
17. On 21 July 2016, Mr Miller called Mr Ting, asking for an adjournment of the 1st Hearing. Upon Mr Ting’s suggestion, Mr Miller emailed Mr Ting to seek an 8-week adjournment. The SDT refused the adjournment.
18. On 4 August 2016, Miller attended before the SDT (“1st Hearing”), during which he did not admit any of the 10 Complaints. Subsequently, in his statement dated 27 October 2016, he seemed to have admitted the 7th and 9th Complaints.
19. On 23 November 2016 (“2nd Hearing”), Mr Miller admitted all 10 Complaints. Mitigation took place on two occasions in 2017, which ended on 21 April 2017.
20. In early October 2017, Mr Firmin called Mr Wong to inquire about the progress of the making of the decision, during which Mr Wong told Mr Firmin that it would be improper to discuss such matters with him and therefore concluded the call very briefly (“October Conversation”). According to Mr Firmin, this happened about a year after the Disputed Telephone Conversation.
21. 17 months after the close of mitigation, the SDT handed down a written decision dated 2 October 2018 (“the Decision”), and made the Order with details as follows:
(1) fined $50,000 on the 1st Complaint (breach of Rules 2(a) and (d) of the Practice Rules by failing to comply with a notice of inspection dated 23 October 2013 issued by the Council of the Law Society);
(2) fined $20,000 on the 2nd Complaint (breach of Rule 7 of the Accounts Rules in that on around 4 October 2013 Mr Miller transferred and/or allowed $127,191 to be transferred from the client account of his firm to the bank account of the Hong Kong Solicitors Indemnity Fund Limited for payment of the firm’s contribution to the professional indemnity fund);
(3) fined $20,000 on the 3rd Complaint (breach of Rule 7 of the Account Rules in that from July 2012 to April 2013 he drew and/or allowed money to be drawn from the firm’s client account for payment of the firm’s office expenses);
(4) fined $20,000 on the 4th Complaint (breach of Rule 7 of the Accounts Rules in that for the year ended 30 April 2009 he drew and/or allowed money to be drawn from the firm’s client accounts such that there were debit balances in those client accounts);
(5) fined $50,000 on the 5th Complaint (breach of Rule 8(1) of the Accounts Rules in that on divers dates he drew or allowed cash to be drawn from the firm’s client accounts as “costs”);
(6) fined $60,000 on the 6th Complaint (breach of Rule 10 of the Accounts Rules in that he failed to keep properly written up books and accounts to show the firm and/or his dealings with clients’ money and/or failed to record these dealings within 3 working days, and/or that all other dealings were not recorded before the end of the following month);
(7) fined $50,000 on the 7th Complaint (breach of Rule 10A of the Account Rules in that since 1 February 2008 he failed to prepare bank reconciliation statements with regard to the firm’s client accounts);
(8) fined $40,000 on the 8th Complaint (breach of Principle 13.02 of the Solicitors Guide and Rules 2(c), (d) and (e) of the Practice Rules in that he drew or allowed to be drawn cheques from the firm’s client accounts which were not honoured);
(9) fined $50,000 on the 9th Complaint (breach of Principle 12.05 of the Solicitors Guide and Rules 2(a) and (d) of the Practice Rules in that he failed to pay counsel fees within two months of submission of counsel’s fee note);
(10) fined $10,000 on the 10th Complaint (breach of Rule 9A of the Account Rules in that he failed to remedy promptly his breaches in the 2nd, 3rd, 4th, 5th, 6th and 7th Complaints);
(11) for a period of 3 years from the date of the Decision, Mr Miller could not practise in Hong Kong as a sole proprietor or partner of a firm of solicitor; during such period, any practising certificate issued by the Law Society to Mr Miller should be subject to the condition that he could not prepare, handle or sign any vouchers, journals, receipts, cheques or any other documents relating to money of the clients or office money of such firm or handle in any manner whatsoever money of the clients or office money of such firm ("the Conditions”); and
(12) costs of the disciplinary proceedings including the costs of the Law Society in its investigation and the costs of the Clerk of the SDT be paid by Mr Miller on a full indemnity basis to be taxed by a taxing master if not agreed.
22. Mr Miller launched this appeal. By a judgment dated 18 November 2021, the Court of Appeal gave leave to Mr Miller to adduce fresh evidence on the Disputed Telephone Conversation: [2021] HKCA 1662 (§25). Mr Miller accordingly filed the Supplementary Notice of Appeal.
C. APPELLANT’S CASE
23. On Mr Firmin’s evidence, the Disputed Telephone Conversation (which lasted between 10 and 15 minutes) took place around the beginning of August 2016. Despite Mr Firmin telling Mr Wong at the very beginning of the conversation that he no longer acted for Mr Miller, Mr Wong continued to engage Mr Firmin in the conversation concerning the disciplinary proceedings against Mr Miller. Mr Firmin summarized the contents of the Disputed Telephone Conversation in a letter to Mr Wong dated 3 October 2017 exhibited as “PEF-1” (“the Letter”) as follows (underline added):
“[4] About a year ago and just after you had been appointed as Chairman to the Solicitors Disciplinary Tribunal to hear [Mr Miller]’s case, you rang me out of the blue, the two of us not having spoken in years, about [Mr Miller]’s case. The pretext for the call being that you had been appointed as Chairman of the disciplinary tribunal to hear the charges against [Mr Miller], and had seen my name in some of the papers and knew that [Mr Miller] was a former client of mine. But the conversation quickly moved on at your instigation from a ‘long time no see, how are you these days’, to the case itself. I mentioned immediately to you that I was not going to be acting for [Mr Miller] in the disciplinary proceedings against him.
[5] Nevertheless you persisted in the conversation and I well recall you telling me that [Mr Miller] had asked in writing for an adjournment of an upcoming tribunal hearing and you were not terribly happy about that, and were minded to refuse his request; because he had not, at that time, indicated whether he was going to admit or deny the charges against him.
[6] I distinctly recall you telling me that your view on whether or not to grant the adjournment requested by [Mr Miller], would be very different if he was to enter a plea to all the charges against him. I think the words you used were something similar to ‘then that would be a wholly different matter’.
[7] You then initiated a conversation in general terms about the significant financial impact and hardship that adverse costs orders could have on solicitors who found themselves before a Solicitors Disciplinary Tribunal, making it ‘sensible’ for solicitors to plead guilty (so long as they were not looking at being struck off the Roll) even if they had some defence to one or other of the charges against them; because it was just not financially worthwhile to do otherwise.
[8] You talked about how, if a solicitor failed in such a defence after trial, he would have a very substantial costs order made against him. And even if a solicitor succeeded in defending one or two charges, but admitted to others, what difference was it really going to make to the overall sentence (i.e. none or minimal).
[9] You mentioned to me that you did not see [Mr Miller]’s case and his wrongdoing as matters that would result in him being struck off the Roll of Solicitors, so what the heck - why not plead guilty, and avoid running up costs for which he would be responsible.
[10] And finally, having earlier mentioned the matter of an adjournment as stated above, in absolutely no uncertain terms, you told me that if [Mr Miller] entered a plea to all the charges, you would give him the adjournment he had requested.”
24. Mr Firmin considered Mr Wong to be biased. He therefore told Mr Miller about the Disputed Telephone Conversation shortly after but prior to the 1st Hearing (which was corroborated by Mr Miller), as he wanted Mr Miller to seek legal advice. Both Mr Firmin and Mr Miller confirmed that the latter had never mentioned anything about his intended adjournment to the former.
25. Mr Miller did not raise the issue of recusal at the 1st Hearing. He did not know whether the Law Society would accuse him of dishonesty, he therefore decided not to plead guilty to all 10 Complaints.
26. The SDT proceedings ended with oral submission on mitigation on 21 April 2017.
27. Mr Miller spoke to Mr Firmin in a social context and told the latter that he was still waiting for the SDT’s decision, which triggered the October Conversation between Mr Firmin and Mr Wong.
28. Upset by Mr Wong’s attitude in the October Conversation, Mr Firmin wrote the Letter. He posted it himself on the same day by inserting it in the post box on the ground floor of St George’s Building in Central where his office was located. He did not show the Letter to Mr Miller because he thought that was a private matter between the Chairman and himself. However, he could not say for sure how the Letter subsequently came into Mr Miller’s possession. Mr Miller also confirmed that he was not aware that the Letter was sent out.
D. RESPONDENT’S CASE
29. Mr Wong denied the existence of the Disputed Telephone Conversation, the accusations in the Letter and receipt of the Letter. He and Mr Ting were adamant that only one telephone conversation took place with Mr Firmin and that was on 7 July 2016 (“the July Conversation”) Mr Wong was merely seeking assistance from Mr Firmin to serve the papers on Mr Miller.
30. Mr Wong was adamant that he had not discussed with Mr Firmin any other matters such as adjournment (which did not come up until 21 July 2016), or Mr Miller pleading guilty to the Complaints. Mr Wong explained that since he knew Mr Firmin personally and upon knowing that he no longer represented Mr Miller, the conversation might have got casual such that Mr Wong made some “passing remarks” to Mr Firmin to the effect that “the charges looked serious”. Mr Wong’s version was corroborated by Mr Ting,who was present throughout the July Conversation.
31. Mr Wong conceded that Mr Miller, as a defendant, should be given sufficient time to consider whether to admit the Complaints, and that Mr Miller was entitled to an adjournment if he needed more time for consideration. However, as it was difficult to fix a hearing date with other SDT members, he did not consult Mr Miller or the Prosecutor in fixing the 1st Hearing. Even though Mr Miller requested for an adjournment, the 1st Hearing proceeded as set down. If Mr Miller decided otherwise after the plea, he could always appeal. Both Mr Wong and Mr Ting admitted under cross-examination that they mistakenly thought that the Prosecutor objected to the adjournment.
32. Mr Wong claimed that he only first read the Letter in late April 2021 when he read Mr Firmin’s affidavit, in support of Mr Miller’s application to adduce fresh evidence on appeal, forwarded to him by the Law Society. Had he received the Letter, he would have replied to Mr Firmin and set the substantially inaccurate account of events straight. Mr Wong further commented that the evidence adduced by Mr Firmin to show the date of creation of the Letter looked like an internal record rather than proof of posting.
E. ISSUES
33. The present appeal raises the following 7 issues:
(1) Whether the Decision was influenced by Mr Wong’s actual or apparent bias (“Bias Issue”), which in turn depended on 2 questions:
(a) Did the Disputed Telephone Conversation take place as recounted in the Letter?
(b) Did Mr Firmin send out the Letter?
(2) Whether the Prosecutor and the SDT had so conducted themselves in this appeal as to seriously undermine public faith and confidence in the SDT system (“Conduct of Prosecutor and SDT Issue”);
(3) Whether financial penalties in the Order were manifestly excessive and/or obviously and plainly wrong (“Financial Penalties Issue”);
(4) Whether the Conditions imposed on Mr Miller’s practising certificate should be regarded as spent (“Conditions of Practising Certificate Issue”);
(5) Whether the SDT had erred in imposing costs on indemnity basis (“Indemnity Costs Issue”); and
(6) Whether Mr Miller should be allowed to pay the penalties and costs by instalments (“Instalments Issue”).
34. The Law Society raised the issue as to whether the bias, if established, had been waived by Mr Miller. As it was raised only in its supplemental submission, the Court will not entertain this issue[1].
F. ISSUE 1: BIAS ISSUE
F1. Applicable legal principles on Issue 1
35. In Deacons v White & Case Limited Liability Partnership & Ors [2003] 3 HKC 374, §28, the Court of Final Appeal provided the test for reasonable apprehension of bias:
“The court must first ascertain all the circumstances which have a bearing on the suggestion that the judge was biased. It must then ask whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility that the tribunal was biased.”
36. The party seeking recusal must justify the recusal by substantiating the logical connection between the conduct giving rise to the apprehension of bias and the possibility of departure from impartial decision making: Falcon Private Bank Ltd v Borry Bernard Edouard Charles Ltd & Anor [2014] 1 HKC 214, §55, Kwan JA.
F2. Credibility of witnesses
37. The credibility of witnesses was crucial to Issue 1. Insofar as witnesses were concerned, the Court considers the inherent probabilities and logicality in a party’s case and whether a party’s case is contradicted in a material way by other undisputed or indisputable evidence and whether a witness has been discredited over one or more matters to which he has given evidence using the above tests. Memory may be fallible, if the relevant events have happened a long time ago. The Court will place more weight on contemporaneous documents. See Chan Pak Hung v Keung Lai Nor Winnie[2022] HKCFI 1264 at §§43-45. It would be relevant to have regard to factors like shortcomings in a party’s disclosure and evidence: Yu Man Fung Alice v Chiau Sing Chi Stephen[2020] HKCFI 2923 at §§53-62, Coleman J.
38. Two important documents were a Bill of Costs dated 19 October 2016 that Mr Ting rendered to the Law Society (“the Bill of Costs”) and an attendance note prepared by him (“the Attendance Note”). The Letter was not a contemporaneous document.
39. Mr Firmin and Mr Miller have been friends for over 20 years, were members of the same club and have had regular social contacts. Likewise, Mr Wong and Mr Ting have known each other for a period dating back to Mr Ting’s earliest days in the profession and they socialized. It was at the instigation of Mr Wong that Mr Ting was appointed as the Clerk to the SDT. I do not find these per se undermined or enhanced the credibility of any of these witnesses, who are officers of the Court.
40. Mr McGowan has some queries as to whether the affirmations of Mr Wong and Mr Ting were independently drafted or coordinated, in view of the same words and phrases and near identical ordering in their affirmations. In the absence of more cogent evidence, these were not sufficient, in my view, to prove that Mr Wong and Mr Ting might have coordinated to undermine Mr Firmin’s allegations.
F3. Did the Disputed Telephone Conversation take place as recounted in the Letter?
41. There is no dispute that if the July Conversation occurred, it was not the Disputed Telephone Conversation.
42. Insofar as Mr Firmin’s evidence was concerned, he had no recollection of the July Conversation. However,
(1) He had no interest at all in Mr Miller’s SDT proceedings and hence no reason to concoct evidence for or against anybody. Despite lapse of 14 months until he wrote the Letter, he could remember the Disputed Telephone Conversation because of, in his own words, “the exceptional contents”. He even took the view that Mr Wong should have recused himself.
(2) The Letter mentioned an adjournment. Mr Firmin was not a party to the emails passing between Mr Miller, the SDT and the Prosecutor. In cross-examination, it was disclosed that Mr Miller had not told Mr Firmin of the intention to seek an adjournment and Mr Firmin was not aware of it either. The suggestion of Mr Toms (Solicitor Advocate acting for the Law Society) that Mr Miller had told Mr Firmin about the intention of seeking an adjournment was, without disrespect, baseless and I fail to see why it was necessary for Mr Miller to bother Mr Firmin on such a procedural matter. It followed that Mr Firmin would not have possessed any knowledge of the adjournment but for the Disputed Telephone Conversation.
(3) Mr Firmin had produced a computer record (Exhibit “PEF-2”) showing that the Letter was last modified on 3 October 2017 at 9:32 am, which was the same date as the Letter. However, PEF-2 did not show anything beyond the introductory paragraphs to the Letter, which referred to the undisputed October Conversation but not the Disputed Telephone Conversation. There was no discernible purpose why Mr Firmin cared to write a letter that just referred to the October Conversation when he was not a solicitor acting for Mr Miller.
43. Insofar as Mr Wong’s evidence was concerned, his affirmation filed on 22 December 2021 stated that in the July Conversation, he made some “passing remarks that the charges looked quite serious”, but gave no details. He had suggested that Mr Firmin should urge Mr Miller to take proper action to deal with them and should accept service as soon as possible.
44. Under cross-examination, Mr Wong claimed that the passing remarks were to the effect that “it looks like the charges were serious. Just deal with it. Get on with it.” When cross-examined as to whether it was appropriate to do so as a Chairman, Mr Wong frankly admitted that if he had a second chance, he would not do it. He had regretted it ever since. He was an efficient man and had pushed things ahead in 7 other cases when he sat in a SDT. The “passing remarks”, in my view, indicated that the discussion had probably gone beyond a subject of service.
45. Mr Ting’s evidence corroborated Mr Wong’s that in the July Conversation, Mr Wong did not talk about adjournment. He testified that it was difficult to book a venue and he had to give 21 days’ notice of hearing to Mr Miller. As he could not find Mr Miller, he told Mr Wong, who then called up Mr Firmin.
(1) Mr Ting claimed that there was only one conversation with Mr Firmin and the Bill of Costs also recorded only one such attendance. However, there were at least 2 conversations between them – one on 5 July 2016, which was recorded in an email dated 6 July 2016; the other was the July Conversation.
(2) Having noted that Mr Firmin’s firm would not accept service of documents on behalf of Mr Miller and that Mr Ting’s clerk had not left any documents at Mr Firmin’s office for the purpose of service, Mr Ting wrote in the 6 July 2016 email,
“… we [SDT] are grateful that you [Mr Firmin] have successfully informed Mr Miller by phone yesterday of my contact information and the intended service of the documents on him at your firm’s address.”
Mr Firmin had already assisted in passing on a message to Mr Miller about service. There was no necessity for Mr Wong to call up Mr Firmin again on 7 July 2016, solely to ask him to assist on service.
(3) Mr Ting cared to record in the email dated 6 July 2016 the conversation between him and Mr Firmin on the previous day when Mr Wong was not involved. And yet despite the fact that the July Conversation was conducted by Mr Wong for a specific purpose, the Attendance Note neither recorded the name of Mr Firmin nor the contents of that Conversation. It was a very brief note made a few days after the July Conversation as Mr Ting testified, and the next item was about 10 August 2016. The Attendance Note thus only showed a sequence of events recorded by Mr Ting but would not exclude the existence of the Disputed Telephone Conversation in which Mr Ting was not involved.
46. Weighing the evidence in section F3, I find Mr Firmin’s evidence to be more logical and credible, whereas I have doubts as to the necessity, occurrence and contents of the July Conversation. I find that the Disputed Telephone Conversation had occurred as recounted in the Letter. In view of paragraph 42(2) above and the contents of the Letter, I further draw the inference that the Disputed Telephone Conversation took place sometime between 21 July 2016 and the 1st Hearing on 4 August 2016.
F4. Did Mr Firmin send out the Letter?
47. Mr Wong stated on oath that he had not seen the Letter until April 2021. There is no proof in support of Mr McGowan’s submission that a copy of the Letter was given to the counsel for the Law Society by Mr Miller’s counsel on 24 April 2019.
48. Mr Firmin and Mr Miller confirmed that the former had never given a copy of the Letter to the latter on the many occasions they saw each other since the date of the Letter.
49. On the other hand, PEF-2, considered in the light of Mr Firmin’s evidence, unshaken under cross-examination, provided strong proof that the Letter was created on the date alleged. It was a strongly worded Letter and I accept that due to its “exceptional contents”, Mr Firmin posted it personally to ensure that Mr Wong would receive it.
50. I find that Mr Firmin’s evidence was logical and credible and I accept that he had posted it personally on the same date of the Letter.
F5. Bias arising from the Disputed Telephone Conversation
51. As Chairman of the SDT, Mr Wong should have refrained from disclosing or discussing any details of a disciplinary case, even a passing comment, to a third party. Despite knowing that Mr Firmin no longer represented Mr Miller, Mr Wong continued to actively engage Mr Firmin in the discussion regarding Mr Miller’s disciplinary proceedings. The plain intent was to try to influence Mr Miller’s decision, through Mr Firmin, to admit all the Complaints for the grant of an adjournment or leniency in sentence in return.
52. The underlined sentences in the Letter (in paragraph 23 above) would have appeared to a fair minded and informed observer that Mr Wong had already formed an opinion on the seriousness of the Complaints, that the sentence would not be a struck off the roll, and that Mr Miller’s success in defending 1 or 2 Complaints at the trial would not have an impact on the overall sentence. Mr Wong was exerting pressure on Mr Miller to admit the Complaints at the 1st Hearing or else face both high penalties and adverse costs orders. Mr Wong ought to have recused himself, but he did not do so.
53. Mr Firmin himself reasonably took the view that Mr Wong was biased so he had suggested to Mr Miller to inform his then solicitors of the Disputed Telephone Conversation, although Mr Firmin did not recall suggesting to Mr Miller to seek recusal of Mr Wong.
54. Mr Miller frankly admitted that Mr Firmin had apprised him of the gist of the Disputed Telephone Conversation prior to the 1st Hearing.
55. One could appreciate that it was difficult to find a venue and a date that suited all members of the SDT. Mr Wong thus pressed ahead with the 1st Hearing, but granted an adjournment to let Mr Miller better prepare his case and plead to the charges.
56. Mr Miller did not appreciate the apparent bias arising from Mr Wong’s statements to Mr Firmin. He was anxious to make it clear to the SDT at both the 1st and 2nd Hearings that he was not merely seeking to delay or waste time. He was assured by Mr Wong that he could alter his plea later without detriment to himself.
57. As the impression given by Mr Wong at the 1st and 2nd Hearings was that Mr Miller’s failure to admit would not be held against him, it never occurred to Mr Miller that an application for recusal was even warranted in all the circumstances. He only realized with hindsight the full import of Mr Wong’s statements after the Decision was delivered. By then it was 17 months after the proceedings were completed and he did not know how Mr Wong could be recused.
58. In sum, the refusal to adjourn the 1st Hearing, the assurance that Mr Miller could alter his plea without detriment and yet full discount was not given for his admission, the sentence and the costs order would have appeared to a fair minded and informed observer that there was a nexus between the contents of the Disputed Telephone Conversation and the consequences that Mr Miller faced for not admitting the Complaints at the 1st Hearing.
59. The Law Society submits, however, that if a trained and experienced solicitor like Mr Miller, familiar with the law and intimately familiar with the facts of the case did not appreciate the apparent bias, it could not be said that those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility that the tribunal was biased.
60. I am unable to agree. The reasonable apprehension of bias test is an objective test that does not depend on the subjective view of the person concerned and the issue of waiver has not been properly raised by the Law Society.
61. I find a case of apparent bias arising out of Mr Wong’s pressure (exerted through Mr Firmin) on Mr Miller to admit the Complaints established.
G. ISSUE 2: CONDUCT OF THE PROSECUTOR AND SDT ISSUE
62. Mr Miller’s complaint is that when he sought discovery of documents relating to the July Conversation, the Prosecutor initially stated that he was instructed that there were no such documents. However the Prosecutor later was able to produce the Bill of Costs and Attendance Note after Chow JA directed, on 24 March 2023, the Law Society to confirm by affidavit that it had no such documents. The Prosecutor gave the excuse that the instructions had come from the Law Society, whereas the 2 documents were produced by the SDT, a different entity. Neither the Bill of Costs nor the Attendance Note were exhibited to the 1st affirmations of Mr Wong or Mr Ting. The Law Society was unwilling to disclose whether those 2 documents existed at a date prior to the filing of Mr Wong and Mr Ting’s 1st affirmations.
63. Mr Miller invites the Court to infer that the Law Society had actively engaged in an attempt to prevent disclosure of Mr Wong and Mr Ting’s impropriety in producing evidence that would show that the July Conversation was less likely to have taken place. In the premises Mr Miller has no faith in the objectivity or integrity of the Law Society or its proposal to form a new SDT.
64. With respect, these are submissions as to credibility of Mr Wong and Mr Ting’s evidence under Issue 1 instead of being a ground of appeal. The late disclosure of the Bill of Costs and Attendance Note did not cast doubt in my mind as to their authenticity. The Law Society’s proposal as to disposal of the appeal may save time and costs; and Mr Miller could have counter-proposed on costs. It is far-fetched for him to suggest that it caused him to lose faith in the formation of a new SDT. This complaint has no merit.
H. ISSUE 3: FINANCIAL PENALTIESISSUE
H1. Applicable legal principles on Issue 3
65. In A Solicitor v The Law Society of Hong Kong, CACV 182/2014, 30 June 2015, Kwan JA (as she then was) summarized the principles on penalties as follows:
“29.…The appeal court will give recognition and great weight to a penalty imposed by this tribunal, as it comprises an expert and informed tribunal, particularly well placed to assess what measures are required to deal with defaulting solicitors and to protect the public interest. But the scope for intervention by the appeal court is no longer restricted to cases where “a very strong case” for doing so is established. If the court is satisfied that the sentencing decision was “clearly inappropriate” or “clearly wrong” despite paying considerable respect to it, the court will interfere. It is not enough for the court to take a different view, however forceful that view may be (A Solicitor v Law Society of Hong Kong, CACV 107/2005, 18 May 2007, §16; Salsbury v Law Society [2009] 1 WLR 1286 at 1296E to G, §30; Chan Cheuk Chi v The Registrar of the Hong Kong Institute of Certified Public Accountants , CACV 38/2012, 8 February 2013, §§44 and 45; A Solicitor v Law Society of Hong Kong [2015] 2 HKLRD 802 at §§67 and 68).
30. Each case has to be determined on its own facts. A submission that a lighter sentence was imposed in other decisions of a Solicitors Disciplinary Tribunal where the failures were no more severe is of little assistance. Penalties imposed by this tribunal are not designed as precedents (The Law Society v Emeana [2013] EWHC 2130 (Admin) at [24] to [26]). The essential principle is that which was identified by Sir Thomas Bingham MR in Bolton v Law Society [1994] 1 WLR 512 at 518A to B: it is required of solicitors that they should discharge their professional duties with integrity, probity and complete trustworthiness and 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 by the disciplinary tribunal.
31. The sanction imposed by this tribunal is not primarily punitive. More emphasis would be placed on the need to protect the public and to maintain public confidence in the profession. Thus, it can never be an objection to an order of suspension in an appropriate case that the solicitor may be unable to re-establish his practice when the period of suspension is past. The reputation of the profession is more important than the fortunes of any individual member (Bolton v Law Society at 519B to E; A Solicitor v Law Society of Hong Kong [2015] 2 HKLRD 802 at §70).
32. This rationale applies with equal force in cases involving breaches of the SAR [Solicitors’ Account Rules], which existed “to afford the public maximum protection against the improper and unauthorised use of their money and to assure them of that protection”. Solicitors are accordingly under a heavy obligation, quite distinct from their duty to act honestly, to ensure observance of the SAR (Weston v Law Society , The Times, 15 July 1998).
66. It is well established that dishonesty is a determining factor in considering the severity of penalty in solicitor disciplinary matters: A Solicitor v Law Society of Hong Kong [2004] 2 HKLRD 490 (§61).
H2. Totality of financial penalties
67. Mr Miller was fined a total of $370,000 on the 10 Complaints. The reasons for sentence as stated in the Decision were as follows.
(1) Mr Miller had a poor disciplinary record and his misbehaviour occurred over quite a long period of time of about 10 years.
(2) Full discount should not be given for Mr Miller’s admission as he did not admit any of the Complaints at the 1st Hearing. He did not make clear as to which two Complaints he admitted when he filed his witness statement. He was late for 49 minutes at the 2nd Hearing, and only admitted all 10 Complaints in the afternoon. A lot of time and effort had been spent before he made such a decision.
(3) There was no documentary proof to show that he had paid what was due to counsel (9th Complaint).
(4) It did not appear to the SDT that Mr Miller was remorseful for what he had done.
(5) The management by Mr Miller of money matters of his firm was chaotic and it seemed that he had lost control over it.
68. The mitigating circumstances presented by Mr Miller to the SDT are taken into account in this appeal.
69. Despite the poor disciplinary record, this was the first time Mr Miller went before an SDT. As noted by the SDT, there was an absence of dishonesty on the part of Mr Miller with regard to the 10 Complaints. He did his best to resolve the problems. His clients did not complain of his activities and they (or any member of public) did not suffer any loss. He was not guilty of any offence on moral turpitude.
70. However, he still owed counsel’s fees of $80,000 despite its being a compromised sum. Mr Miller explained that his application for a practising certificate was refused in 2013 and that caused a sudden closure of his law firm. Because of this reason, he could not recover substantial costs awarded in various actions to settle the fees of the barrister.
71. The professional members of the SDT were better acquainted than the courts to judge the seriousness of the professional misconduct of Mr Miller and the level of the financial penalties. The misconduct had spanned over 5 years from 2008 to 2013. Viewed individually, the sentence for each Complaint could not be said to be inappropriate. However, the SDT failed to consider (i) a discount for early admission at the 2nd Hearing, (ii) the totality of the penalties, and (iii) the inability of Mr Miller to pay both the fines and indemnity costs.
72. In respect of the early admission, it took the Law Society 3 years to investigate and file the supporting affidavit on 1 April 2016, but Mr Miller was only given 4 weeks until the 1st Hearing to consider the papers, recover documents from storage, seek legal advice and decide whether or not to admit 10 Complaints. His admission had still saved time of the inquiry.
73. The totality of the penalties and Mr Miller’s ability to pay were not mentioned at all in the Decision.
74. The SDT has gone clearly wrong and imposed manifestly excessive financial penalties.
I. ISSUE 4:CONDITIONS ON PRACTISING CERTIFICATE ISSUE
75. It was open to the SDT to impose conditions on Mr Miller’s practising certificate but the effective date of the Conditions was the date of the Decision. Taking into account Lam VP’s direction to the Law Society to issue practising certificates to Mr Miller since 14 April 2014 subject to conditions (without a finding of guilt yet), Mr Miller had been under such conditions for about 10 years (nearly 1/3 of his working life). Although that did not prevent him from working, the Law Society’s intervention and those conditions caused him to lose his client base built over 23 years, and affected his ability to pay the fines.
76. The Conditions had already expired on 1 October 2021. I disagree with Mr Toms that this issue is academic, as it may affect the professional record of Mr Miller as a solicitor.
77. Through no fault of Mr Miller, there was delay in the handing down of the Decision - almost 2 years after Mr Miller first admitted the Complaints and 17 months after the final hearing date. This has caused Mr Miller’s practising certificate to be subject to conditions longer than was appropriate and was plainly wrong and excessive.
78. In my view, the effective date of the Conditions should be 1 June 2017, the date after Mr Miller filed an affidavit in response to the Prosecutor’s submission (Decision, §16(b)). The Conditions would have expired on 31 May 2020.
79. When one takes into account paragraphs 71-74 above, one can see that the financial penalties and period of imposition of Conditions were plainly excessive and wrong. In exercise of our discretion, we order that Mr Miller do pay an overall penalty of $250,000 for all the 10 Complaints (representing about 1/3 discount of the original penalties). The period for the Conditions should have started from 1 June 2017.
J. ISUSE 5:INDEMNITY COSTS ISSUE
J1. Applicable legal principles on Issue 5
80. Section 10(2)(e) of the Legal Practitioners Ordinance, Cap 159 (“LPO”) empowers a SDT to make any order for “payment by any party of the costs of and incidental to the proceedings of the Tribunal and the costs of any prior inquiry or investigation in relation to the matters before the Tribunal, to be taxed by a Master of the High Court on a full indemnity basis, or payment of an amount that the Tribunal considers is a reasonable contribution towards those costs”.
81. In A Solicitor and the Law Society of Hong Kong/ The Solicitors Disciplinary Tribunal CACV 254/2003, it was held that:
a. This is an enabling section. The power to order costs on an indemnity basis encompasses the power to award costs on the more restricted party and party basis (§123).
b. Any costs order should strive for at least some element of proportionality (§114).
c. Indemnity costs were used as a mark of disapproval as to a party’s conduct by departing from the ordinary principle of costs (§126):
“Indemnity costs may be ordered where a hearing is prolonged by deliberately false allegations of fact. Mere prolongation without more will not ordinarily justify an award of indemnity costs…”
82. In A Solicitor v Law Society of Hong Kong CACV 221/2003, Stone J criticized the SDT for imposing the “usual order” of indemnity costs without further considering the matter (§113). Several principles were laid down:
(1) In order properly to exercise its statutory powers as to costs and in particular whether to apply the indemnity basis or whether there should be an assessment of an amount considered to be a “reasonable contribution” towards those costs, the SDT must be given information sufficient to enable it properly to exercise its statutory discretion (§113). Rogers VP refers to “ball park” figures of the likely bill of costs to be given to the SDT (§128).
(2) In the context of disciplinary proceedings, the costs order should strive for at least some element of proportionality (§114). (In that case, charges ending up with fines totalling $170,000 were regarded as “dwarfed” by a bill of cost of some $4 million generated, and possibly more if the full indemnity basis was to be applied on taxation (§§114-5).
(3) Even an unruly solicitor who had unnecessarily lengthened the hearing should not, without more, be visited with a bill of costs in a sum totally disproportionate to the level of punishment imposed (§116).
(4) The subject of disciplinary proceedings, who has no alternative but to attend such proceedings as and when ordered to do so, should not be liable to meet the costs of hiring expensive commercial venues (§§117-8).
83. CACV 221/2003 was described as “an extreme case” in A Solicitor v The Law Society of Hong Kong, CACV 182/2014, §64. In the latter case, the Court of Appeal considered that the indemnity costs of over $1 million to be taxed if not agreed were not so completely disproportionate to the level of total fines of $130,000 that the court would say it was unfair or unjust to award costs on an indemnity basis (§65).
J2. Appropriateness of indemnity costs
84. SDT gave no reasons as to why indemnity costs were ordered and did not consider “reasonable contribution to costs” at all.
85. Mr Toms seeks to distinguish CACV 221/2003 on the facts. In that case, a significant aggravating factor that gave rise to concerns of Stone J was the use of expensive commercial premises for the holding of disciplinary proceedings; and the costs might be disproportionate given the length and number of hearings. He submits that such aggravating factor did not exist in this case. The rental for the hearing venue was not substantial and the hearings were not protracted.
86. In my view, Mr Tom’s submission could not justify indemnity costs. In the present case, there is no evidence that the difficulties encountered by the SDT in service on Mr Miller was due to his evasion of service. He did not put forth false allegations of fact and admitted all Complaints at the 2nd Hearing. There were no findings that his conduct during the investigations and the subsequent proceedings was consistently and deliberately obstructive and uncooperative. An order for party and party costs was, in principle, more appropriate.
87. Further, the SDT did not consider “reasonable contribution to costs” as the alternative. As Mr McGowan points out, whilst it was within the Law Society’s remit to negotiate on costs, it had refused, on 5 occasions following the Decision, to come up with even ballpark figures till now.
88. In my opinion, the SDT erred in principle in ordering indemnity costs against Mr Miller. To that end, the indemnity costs order must be set aside. Considering that these proceedings have been hanging over Mr Miller’s head for over 8 years, there are 2 options open to this Court to dispose of the costs issue expediently: (i) to order costs on party-and-party basis to be summarily assessed; or (ii) to order Mr Miller to make a reasonable contribution to costs. To that end, the Law Society should file and serve costs statements for the costs of the SDT proceedings. Mr Miller should have an opportunity to respond.
89. Mr Miller was concerned that the costs order may require him to bear costs for investigation which did not end up with a Complaint against him. For the avoidance of doubt, Mr Toms has confirmed that the “costs of investigation” under the costs order would cover only the work done in relation to the 10 Complaints actually brought against Mr Miller and not those arising from the Law Society’s intervention itself.
K. ISSUE 6: INSTALMENTS ISSUE
90. Under section 12(4) of the LPO, an application for payment by instalments, or for the deferring of payment, may be made at the hearing or, within 14 days after the date of the order for payment, by notice in writing to the Tribunal Convenor and to all parties who were represented at the Tribunal hearing.
91. No such application was made by Mr Miller after the Decision was handed down. No payment of the fines has ever been made. However, the Court has to take into account Mr Miller’s financial ability to pay the fine of $250,000 and the yet to be quantified legal costs. The question of payment of instalments shall be considered after the question of costs is determined. Meanwhile, Mr Miller shall update the Court as to his ability to pay by filing an affidavit of means.
L. CONCLUSION
92. I find apparent bias of Mr Wong to be established. The financial penalties were manifestly excessive, as the SDT failed to take into account Mr Miller’s early admission, totality of penalties and inability to pay. It was an error of law to impose indemnity costs in the absence of conduct that warranted disapproval. The question of reasonable contribution to costs was also not considered.
93. As for costs before the SDT, since Mr Miller has maintained his admissions to all the 10 Complaints in this appeal, costs before the SDT should be borne by Mr Miller on a party-and-party basis, subject to the question of summary assessment or reasonable contribution.
94. As for costs of this appeal, since Mr Miller has succeeded on the question of bias, has his financial penalties reduced and the Conditions imposed on his practising certificate varied, he is entitled to costs to be summarily assessed. Such costs shall include costs reserved by G Lam JA in his decision dated 18 November 2021 as regards leave to adduce fresh evidence.
95. Accordingly, I would allow the appeal and order that:
(1) The financial penalties for the 10 Complaints be reduced to a total amount of $250,000.
(2) The Conditions imposed on the practising certificate of Mr Miller be varied so as to commence on 1 June 2017 for 3 years;
(3) Costs of the SDT proceedings, including the costs of the Law Society in its investigation of the 10 Complaints and costs of the Clerk to the SDT shall be borne by Mr Miller on a party-and-party basis, subject to the question of summary assessment or reasonable contribution.
(4) On a nisi basis, costs of this appeal, including costs reserved by the order dated 18 November 2021 as regards leave to adduce fresh evidence, shall be borne by the Law Society, to be summarily assessed.
(5) In relation to the question of summary assessment or reasonable contribution to costs under Clause (3),
(a) Within 21 days of the handing down of this Judgment, the Law Society shall file and serve a costs statement, covering the costs in Clause (3);
(b) Within 21 days thereafter, Mr Miller shall file and serve:
(i) his affidavit of means and
(ii) costs statement for the costs under Clause (4);
(c) Within 14 days thereafter, the Law Society shall file and serve:
(i) its submission of not more than 3 pages on the question of reasonable contribution and instalment payments; and
(ii) the grounds in opposition to Mr Miller’s costs statement.
(d) Within 14 days thereafter, Mr Miller shall file and serve submission in response of not more than 3 pages and grounds in opposition to the Law Society’s costs.
(e) No further submission shall be filed without leave.
(f) The Court will dispose of the question of summary assessment or reasonable contribution to costs and instalment payments on paper.
(Thomas Au)
Justice of Appeal | (Anderson Chow)
Justice of Appeal | (Queeny Au-Yeung)
Judge of the Court of First Instance |
Mr. James McGowan, instructed by Chan & Ho, for the Appellant
Mr. Jason Toms (Solicitor Advocate) of M.B. Kemp LLP for the Respondent
[1] In this respect, it is pertinent to note that the court directed at the end of the hearing that the supplemental submissions to be lodged by the parties were only in relation to the oral evidence adduced at the hearing and the question of redaction.