MISCELLANEOUS PROCEEDINGS NO. 1865 of 2006
1. Akai Holdings Limited (“Akai”) is a subsidiary of Semi-Tech Corporation Limited (“STC”), a Canadian company of which Mr James Henry Ting (“Mr Ting”) held 44% of the voting rights. In turn, Kong Wah Holdings Limited (“Kong Wah”) was a company that had been acquired by Akai through a Japanese company in 1995. Between 1988 and 1992, Akai made a number of acquisitions resulting in its having substantial interests in some 160 subsidiaries and associated companies. Both Akai and Kong Wah were listed companies and, it is right to point out, carried on substantial businesses together with their subsidiaries and associated companies. The STC group of companies was described in Akai’s 1996 Annual Report as an international conglomerate with a total market capitalization of US$4.5 billion and sales turnover of US$5 billion. Mr Ting was the Chairman and Chief Executive Officer of STC.
2. The accounting firm, Ernst & Young, were the auditors of Akai from 1992 and of Kong Wah from 1997 to 1999. Not only that, they provided tax, accounting and other business advisory services to these companies.
3. In August 2000, Akai and Kong Wah were ordered to be wound-up in Hong Kong and this was followed up by similar orders made by the court in Bermuda in September 2000. The collapse of these two companies, together with their subsidiaries and associated companies, has been described as constituting the largest corporate insolvency in Hong Kong. It is perhaps a gross understatement to say that the liquidators of these companies have much work to do in order to unravel the intricacies of the various companies.
4. In this application, the Applicant seeks admission as a barrister under section 27(4) of the Legal Practitioners Ordinance, Cap.159 (“the Ordinance”) to act on the instructions of the liquidators of Akai on behalf of the company in various matters : -
(1) in HCCL 29 of 2004, at the trial of the action, including any related interlocutory applications, directions hearings and/or appeals of the same, as well as advising the Plaintiff generally on the trial in consultation and in writing;
(2) in HCCL 59 of 2004, at the trial of the action, including any related interlocutory applications, directions hearings and/or appeals of the same, as well as advising the Plaintiff generally on the trial in consultation and in writing;
(3) in HCCL 42 of 2005, at the trial of the action, including any related interlocutory applications, directions hearings and/or appeals of the same, as well as advising the Plaintiff generally on the trial in consultation and in writing; and
(4) together with Kong Wah at the hearing of the appeal to the Court of Final Appeal in FACV 17 and 18 of 2006, including any related interlocutory applications, directions hearings as well as advising Respondents generally in relation to the appeal in consultation and in writing.
5. The Hong Kong Bar Association (represented this morning by Mr Herbert Au-Yeung) has consented to the Applicant’s admission for the trial of three commercial list actions (one of which involves Ernst & Young). It also takes the view it was unnecessary to seek admission for the purpose of advising the liquidators. Here, I wish to point out that generally, where it is intended overseas counsel will advise in Hong Kong on any matter for which Hong Kong counsel is normally instructed, an application for admission will be required, although where an order for admission has been or will be granted for a trial or other hearing, it will normally follow that there will also be an order in relation to any advices that may be rendered in Hong Kong in relation to that hearing. I will therefore make an order that the Applicant be admitted to advise in relation to the trial of the three actions as well.
6. In view of the Hong Kong Bar Association’s position, only the following matters require the determination of the court today : -
(1) The admission of the Applicant for the purposes of appearing in “any related interlocutory applications, directions hearings and/or appeals” in connection with the three identified actions.
(2) Admission to appear in the appeals to the Court of Final Appeal in FACV 17 & 18 of 2006 (which are fixed to be heard on 20, 23 and 24 November 2006).
7. As to the general admission that is sought in relation to all interlocutory and directions hearings and appeals, it has been the consistent approach in applications for admission that the court is apprised of the precise hearing or hearings for which admission is sought. The reason for this approach is that where a balance has to be struck in the public interest (which is the paramount consideration) between the interests of the Hong Kong Bar, the wishes of the litigant to engage overseas counsel and the court itself, it is important to have a clear picture as to the precise purpose of admission. The applicable criteria found in the numerous decisions for the admission of overseas counsel are all predicated on an analysis of the very hearing or matter for which the overseas counsel seeks admission. This is no coincidence but reflects the exercise that the court has to undertake and the various interests it has to take into account in deciding whether overseas counsel ought to be admitted. The mere fact that generally, an action or proceedings involve complex facts and will at some point engage issues of great general or public importance which will contribute substantially to Hong Kong jurisprudence does not mean that every hearing or appeal will involve such factors. This is obvious and by itself militates against blanket orders generally.
8. In Re Mostyn QC, unreported, HCMP 3552/2003, 17 September 2003, I made the following observations at paragraphs 7 and 10 regarding interlocutory applications and blanket orders such as the present : -
“7. On a general note, this form of wording is not acceptable in applications for admission. The function of the court under section 27(4) of the LPO is to consider the application for admission against the specific matter for which his admission is required. Where court hearings are concerned, the particular hearing or hearings should be identified. …
10. The court’s basic approach to admissions as set out in cases like Re Flesch QC applies to all hearings, irrespective whether the hearings are final or interlocutory. It is true that there are fewer applications for admission in relation to interlocutory hearings compared to final hearings. However, the reason for this is that interlocutory hearings (which cover a very wide spectrum of types of hearings) are less likely to involve very complicated issues or important points of principle than final ones. This is not always true of course because sometimes interlocutory matters do involve weighty issues, particularly when the outcome may dispose of or significantly affect the action as a whole. Each case has to be looked at individually and no real assistance can be derived from the label ‘final’ or ‘interlocutory’. As I remarked in Re Pannick QC, unreported, HCMP 2374 of 2003, 9 June 2003, at paragraph 18, ‘However, the court must always look at the nature of the application and the issues that arise from it’.”
9. It was submitted by Mr Rimsky Yuen SC (for the Applicant) that only for “substantial” or “key” interlocutory hearings or directions hearings would overseas counsel be required. It is not clear whether it was suggested that this was to be made part of the order (the terms “substantial” and “key” do not appear in the Notice of Motion for admission) or whether this was an undertaking offered to the court. Either way it is unsatisfactory. The terms do not assist in identifying the type of proceedings for which counsel seeks admission. It also begs the question as to who will decide whether a hearing is “substantial” or “key”. All this ought to be left to the court rather than anyone else.
10. It was suggested that time and costs would be saved if such a blanket order was made since successive applications for admission would not be necessary. It is difficult to understand this point. First, any saving of time or costs is in any event entirely speculative in the absence of any idea as to the number and type of applications involved. Secondly, it seems to place a general and vague assertion of convenience above the considerations a court is required to consider in applications of this nature. This is not a satisfactory approach. It was submitted that the peculiar features of the present litigation should militate in favour of granting such a blanket order but none was shown except that the various actions for which the Applicant seeks admission are complex ones. The court was barely given an idea as to the type of interlocutory or directions hearings for which the Applicant would be expected and required to attend nor was there any indication as to why it was felt that the two leading counsel and experienced junior already retained for the liquidators would somehow not be adequate. The difficulties which are anticipated seem to me at this stage to be speculative, although I accept that what is involved here is litigation of the most hostile kind.
11. Accordingly, I dismiss the application for the blanket order sought.