Disciplinary proceedings – striking off not limited to cases involving dishonesty – could be imposed in appropriate cases of falling below required standards of integrity, probity and trustworthiness
H and W, who were formerly married and joint tenants of a Home Ownership Scheme property, instructed S, a principal partner of a solicitor’s firm, to transfer the property to H’s sole name. The Housing Authority (the “HA”) granted approval in principle conditional on inter alia it approving the draft assignment. H and W signed the draft assignment, which S had explained would probably be amended by the HA. H subsequently died, but S did not inform the HA of this. When the HA returned the draft assignment with extensive amendments and required the assignee to endorse his agreement to the conditions imposed, S replaced pages in the copy of the draft assignment signed by the parties except the signature page and the backsheet. S left the date unchanged and registered that version, together with the HA’s letter imposing conditions endorsed by H’s father and sole executor of his estate (“F”), at the Land Registry. F, believing that under the assignment he had inherited the property from H, paid off the mortgage but could not sell the property due to the defect in the assignment. The Solicitors Disciplinary Tribunal (the “Tribunal”) found S in breach of Principle 6.01 of the Hong Kong Solicitors’ Guide to Professional Conduct (the duty to act competently) and r. 2(a), (c) and (e) of the Solicitors’ Practice Rules (Cap. 159H, Sub. Leg.) and fined him $40,000 (the “1st Complaint”). The Tribunal also found that S had concealed or failed to disclose to the Hong Kong Solicitors Indemnity Fund Ltd that as part of a proposed settlement, he would obtain a personal interest in the property; and imposed a fine of $80,000 (the “2nd Complaint”). S abandoned his appeal against the finding of guilt under the 1st Complaint, but in CACV 20/2014, appealed against the finding of guilt under the 2nd Complaint. The Law Society, in CACV 78/2014, appealed against the penalty under the 1st Complaint (the “Penalty”), submitting that the proper sentence was the striking off or suspension of S.
Held, allowing the appeal by the Law Society on the 1st Complaint by setting aside the Penalty and making an order of suspension from practice for 2 years against S, that:
- There was room for flexibility in the circumstances under which a striking off penalty was appropriate and they should not be straitjacketed to cases involving dishonesty. Hence, in an appropriate case of a solicitor being found to have fallen below the required standards of integrity, probity and trustworthiness, the Tribunal could impose a penalty of striking off.
- However, while the Penalty was clearly wrong, it was not appropriate to order a striking off. The appropriate penalty was a suspension for 2 years with the condition that when S resumed practice, he was prohibited from practising as a sole proprietor or partner or manager of a solicitor’s firm until the Law Society was satisfied he was fit to do so.
- S’s conduct constituted a gross dereliction of his duty to the HA and gross incompetence. Even though there was no dishonesty on S’s part and he did not derive any personal benefit from the transaction, it was still a very serious matter for a solicitor to swap pages in a conveyancing document and then have it registered in the Land Registry creating a false impression in a public registry as to F’s title to the property. It was a serious breach of the public’s trust in S. This was not a victimless infraction. F had suffered financial losses and he and W had to litigate to resolve the problem as to title. Substantial public resources also had been incurred as a result of S’s wrongdoing.