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HCAL 2658/2019
[2020] HKCFI 1789
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST
NO 2658 OF 2019
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| BETWEEN |
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Li Chiu Wah Joseph |
Applicant |
| and |
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Hong Kong Society of Notaries |
Respondent |
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Before: Hon Alex Lee J in Court
Date of Hearing: 24 April 2020
Date of Judgment: 30 July 2020
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J U D G M E N T
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INTRODUCTION
1. This is about the “roll-up” hearing[1] of the Applicant’s application for leave to apply for judicial review and the substantive application[2]. The Applicant is a solicitor and notary public practising in Hong Kong and a member of the Respondent, the Hong Kong Society of Notaries (“Society”). Shortly stated, the Applicant’s challenge concerns a charge of HK$3,000 (“Late Charge”) which the Society levied on him for the late submission of a supporting document for the renewal of his annual Certificate of Membership and the Society’s refusal to waive that charge.
2. In the Amended Form 86, the decision (“Decision”) in respect of which relief is sought is stated as follows:
“Decision of [the Society] dated 12th June 2019 that:
(A) The Applicant’s application for waiver of the Society’s so-called “additional administrative charge” of HK$3,000 be refused;
(B) If the Applicant did not pay the additional administrative charge of HK$3,000 by 12:00 noon on 28th June 2019, without further notice, the Council of the Society would, pursuant to Article 6(5) of the Articles of Association of the Society, amend the Applicant’s Current Certificate of Membership (i.e. for the 2019 Practice Year) by imposing a condition that payment of the additional administrative charge of HK$3,000 be made by 5th July 2019 (“Condition”); and
(C) If the Applicant failed to observe [the Condition], the Council of the Society would consider revoking the Applicant’s Current Certificate of Membership in which event the Applicant would no longer be qualified to practise as a notary public.”
CONTENTIONS OF THE PARTIES
3. In summary, the Applicant contends in the Amended Form 86[3] that:
(i) The Late Charge was not a genuine estimate of the Society’s administrative costs in dealing with his late submission but a penalty in disguise which the Society exacted from its members in connection with its discharge of statutory functions in registering persons qualified to practise as notaries[4]. However, the Society has no power under either its Articles of Association or the Legal Practitioners Ordinance (Cap 159) (“LPO”) to impose such a penalty[5]. Further, the Society’s attempt or threat to impose conditions on the Applicant’s practicing certificate under s40E(5) and or (6) of the LPO is “an abuse of power for improper purpose and/or outside the statutory purpose of its power”[6]. Thus, the Decision is ultra vires, hence illegal[7].
(ii) The Late Charge was also arbitrary in that it would apply across the board irrespective of the length of delay and is therefore Wednesbury unreasonable[8].
(iii) The Council of the Society (“Council”) had “fettered its discretion” by rigidly adhering to the Late Charge[9].
(iv) There was procedural impropriety in that the Decision was tainted with actual and/or apparent bias due to the involvement of certain members of the Council in the decision-making process[10].
4. In terms of relief, the Applicant seeks an order to quash the Decision, as well as declarations that the Decision was unlawful and that the Applicant is entitled to the return of the HK$3,000 paid by him under protest[11].
5. On the other hand, in gist, the Society contends that the Decision in fact consists of two different parts: (1) the refusal to waive the fees; and (2) what the Society would do in case the payment was not made as demanded. It is submitted that neither of them is amenable to judicial review for different reasons. The Society maintains that the Late Charge is a genuine administrative charge and not a penalty. Therefore, the Applicant’s arguments on illegality are wrong and that in any event the Decision is not Wednesbury unreasonable. Lastly, the Society denies that there was bias, actual or apparent, on the part of the Council.
AFFIDAVIT EVIDENCE
6. There are three affidavits filed for this case:
(1) the Applicant’s affidavit[12] (“Li Aff”);
(2) Lau Suk Ying Margaret’s affidavit[13] filed on behalf of the Society (“Lau Aff”); and
(3) the Applicant’s 2nd Affidavit[14] (“Li 2nd Aff”).
FACTUAL & LEGAL MATRIX
7. The following, which I gratefully adopt from the written submission of Mr Dykes, SC (and with him, Mr Yeung), counsel for the Applicant and that of Mr Leung, counsel for the Society, is not largely in dispute.
The parties
8. The Society is a company limited by guarantee[15] which was incorporated in Hong Kong in 1977 with the Articles of Association[16].
9. The Applicant has been a solicitor practising in Hong Kong since 1987 and a notary public since 1995. He joined the Society as a member in 2005.
Statutory requirements for notary publics
10. The current Part IV of the LPO was the product of the Legal Practitioners (Amendment) Ordinance 1998 (“the 1998 Amendments”) which came into effect on 30 June 2005[17].
11. Pursuant to s40D(1)(d)[18] & (2)[19] of the LPO, membership of the Society is necessary in order for a person to practise as a notary public. To practise as a notary public in Hong Kong, one must either:
(i) hold a current Certificate of Membership from the Society and a current Practising Certificate as a Solicitor; or
(ii) hold a current Practising Certificate as a notary public from the Society.
12. A Practising Certificate for a notary public is issued under s40E of the LPO, and an applicant for which must have paid the membership subscription to the Society (hence be a member of the Society): s40E(4) of the LPO. These provisions came into effect in 2005.
Articles of Association
13. Members of the Society are contractually bound by the Articles of Association. Membership in the Society is governed inter alia by at Art 2 to 9[20]. In particular:
• Art 5 says, “A Notary Public shall be entitled to apply for membership of the Society, either as a Member or an Associate Member.”
• Art 6(5) says, “The Council is entitled to prescribe conditions to a Certificate of Membership or amend a Current Certificate of Membership by imposing conditions to it. The Council is entitled to revoke the Current Certificate of Membership of a Member on the ground that he has acted in breach or failed to observe the conditions to his Current Certificate of Membership.”
• Art 7 says, “Every Member … shall be bound by the Memorandum and Articles of Association and Practice Directions, Practice Requirements, Guidance Notes, Circulars and any Rules made by the Council and they shall be deemed to have given an undertaking to the Society to abide by all such Memorandum and Articles of Association and Practice Directions, Practice Requirements, Guidance Notes, Circulars and any Rules made by the Council.”
• Art 8(1) provides that membership in the Society expires at the end of each Practice Year (“PY”)[21].
• Art 8(2) provides that in November of each year, every member intending to renew his membership for the next PY must make an application for a Certificate of Membership for the next PY. Moreover, “Any Member who makes his application to the Society to renew his membership for the next Practice Year but fails to do so on or before 30 November of the current year shall pay to the Society such late processing fee as the Council may determine from time to time, without prejudice to the Council’s power to refuse such application in accordance with Article 6(5).”
• Art 8(5) says, “Council shall have power in such circumstances as it thinks fit to waive and reduce any fees or membership subscription.”
14. Powers of the Council are governed by Art 36 to Art 38:
• Art 36 says, “The business of the Society shall be managed by the Council, who may exercise all such powers of the Society and do on behalf of the Society all such acts as may be exercised and done by the Society in furtherance of the objects of the Society….”
• Art 37(7) says, “… The Council shall have power to issue Practice Directions, Practice Requirements, Guidance Notes, Circulars and any Rules made by the Council relating to the professional practice, membership, conduct and discipline of Notaries Public.”
• Art 37(8) says, “Without prejudice to the general powers conferred by Article 36 hereof the Council shall have power:–
…
(8)To determine and prescribe from time to time administrative charges payable by Members or other persons and to waive and reduce the same in such circumstances as the Council may think fit.”
Society Circulars
15. Following the pattern of previous years, by the Circulars dated 18 September 2018[22] and 3 October 2018[23], the Society informed its members that anyone who sought to practise as a notary public in PY 2019 by virtue of holding a Certificate of Membership and a Practising Certificate as a Solicitor had to:
(a) submit a duly completed Application for 2019 Certificate of Membership (“Application Form”) on or before 5:30pm on Friday, 30 November 2018[24] (“1st Deadline”). A membership subscription fee of HK$9,000 needed to accompany the application[25]; and
(b) honour the undertaking (“Undertaking”) contained in Part B1 of the Application Form by delivering a certified true copy of his Practising Certificate as a Solicitor issued by The Law Society of Hong Kong for PY 2019 to the Secretary General of the Council on or before 12 noon on Friday, 11 January 2019 [26](“2nd Deadline”).
16. In the Circular...
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