Partner in HK law firm issues legal challenge against regulator’s decision to shut his practice down

23-Jan-2021 Intellasia | South China Moring Post | 6:02 AM Print This Post

A partner at the major Hong Kong conveyancing firm shut down by the Law Society last month has hit back at the professional body’s intervention, calling it irrational, “oppressive and disproportionate” in an application for judicial review.

Ng Wing-hung, of Wong, Fung & Co, on Wednesday took legal action to challenge the society’s decision on December 23 to intervene in his firm’s practice, and later ignore proposals that would have allowed his clients to complete their conveyancing transactions.

He also defended the integrity of his firm’s accounts and partners, and said the clients’ funds were “never in jeopardy”, contrary to suggestions by the society, which regulates the city’s 12,000 solicitors and some 900 law firms.

Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.

“The clients are the victims of the intervention as they cannot complete their transactions and their rights are being arbitrarily infringed,” his High Court filing read. “Plainly, there is enormous public interest involved in this application.”

Ng is now seeking an urgent hearing to resolve the matter, demanding court orders to quash the society’s decision to intervene and for its council to reconsider his proposals, which included allowing him to manage the accounts under strict supervision, or permitting another experienced lawyer to take over so the pending transactions could be completed.

The firm, according to Ng, was one of the biggest dealing with conveyancing in Hong Kong.

Data published by Centaline Property Agency cited in his application showed the total consideration of the transactions handled by the firm was more than HK$15 billion in 2019 and that there were only two other firms exceeding HK$10 billion.

Wong, Fung & Co was abruptly shut down last month after the society found “irregularities in the practice”, such as a former clerk misappropriating a client’s money, as well as “serious breaches of the Solicitors’ Accounts Rules”, including overdrawing on client accounts and allowing unqualified people to be authorised signatories.

The society did not disclose the number of clients affected or the amount of money involved, saying only that an investigation was under way. But an insider had earlier told the Post that about 10,000 clients were affected.

Ng estimated that the volume of transactions handled last year was similar to 2019, and there were about 700 expected to be completed from December 23, 2020 to January 31, affecting scores of clients who are now “exposed to serious hardship and the possibility of being ruined financially”.

Those who borrowed money to acquire property were now unable to complete their purchases because the funds they deposited into the firm’s client account were frozen, while others who entered agreements to sell their properties were unable to complete the sales because their title deeds were now in the possession of the intervening agents appointed by the society.

Ng was also adversely affected, as he may be subject to potential claims from the clients.

This result was “especially bizarre”, he said, given the alleged irregularities “could not affect these clients” since the clerk accused of misappropriating HK$6.1 million had left the firm in 2019, and the partners had deposited HK$23 million to make up for the apparent shortfall in funds.

But Ng stressed there was no shortfall “at all in the firm’s client accounts”, and attributed the perceived difference to defects in the computer accounting system and wrong entries, which he said the firm had rectified by engaging new accountants and upgrading its software.

“It is irrational for the council to decide that intervention is in the interest of the firm’s clients or the public,” he said, calling the decision “oppressive and disproportionate”.

“The clients’ funds were never in jeopardy.”

https://sg.news.yahoo.com/partner-hong-kong-law-firm-103400781.html

 

Category: Hong Kong

Print This Post

Leave a Reply

You must be logged in to post a comment.