RE ALISTAIR JOHN McGREGOR QC

HCMP 1692/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 1692 OF 2003

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REASONS FOR DECISION

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The application before the court

1. The Applicant seeks admission as a barrister to advise and represent Deacons in the trial of an action (HCA 2433/2002) ("the Action") between Deacons as the Plaintiff and another firm, White & Case (both the international firm and the Hong Kong associate of that firm) as the first and second Defendants and two former partners (Mr Mark Fairbairn and Mr Edward Cairns) as the third and fourth Defendants.

2. In the Notice of Motion dated 17 April 2003, the Applicant also seeks an ad hoc admission in relation to an application for leave from an arbitration award dated 23 December 2002 (HCCT 4/2003) and, on the assumption leave is granted, for the hearing of the appeal itself. This part of the Notice of Motion was not pursued before me and was withdrawn without prejudice to a fresh application being made.

3. The Applicant is a Queen's Counsel practising in London. There is no dispute that he is suitably qualified and of high standing were he to be admitted for the Action.

4. The Action concerns first a dispute between Deacons and White & Case arising from the termination of merger talks between the two firms. The main complaint made is that following the termination of the merger talks, White & Case recruited solicitors working for Deacons. This is said to be in breach of contract. There are also allegations of procurement of breach of contract and unlawful interference with Deacons' business. The claims are therefore made both in contract and in tort.

5. As regards the complaints made by Deacons against the two individual solicitors (one formerly an equity partner, the other a salaried one), they involve their alleged participation in helping White & Case recruit solicitors then working for Deacons (including themselves). The claims against the solicitors are based on breach of contract and fiduciary duties, procurement of breach of contract and also unlawful interference with Deacons' business.

6. The trial is fixed to commence before Deputy Judge Poon on 2 June 2003 for 30 days. It had originally been fixed for 20 days but the parties now regard a better estimate as 30 days and the court has accommodated their views.

7. Although the application for admission in relation to the arbitration proceedings was not pursued in the present Notice of Motion, I should perhaps just mention that they relate to a dispute between Mr Fairbairn and the partners of Deacons over the validity of a restrictive covenant in the relevant partnership deed. These proceedings and the Action are obviously linked, although it appears that the Action will proceed to trial before the application for leave to appeal under section 23(3) of the Arbitration Ordinance is heard.

The hearing

8. The hearing of the Notice of Motion took place on 19 May 2003. Mr Gerard McCoy SC appeared for the Applicant, Mr Rimsky Yuen SC for the Hong Kong Bar Association and Ms Jenny Fung SGC appeared for the Secretary of Justice (who adopted a neutral position).

9. After hearing submissions from counsel, I made an order admitting the Applicant to advise and represent Deacons in the trial of the Action. No order as to costs was made.

The applicable principles

10. The foundation of the court's jurisdiction to admit overseas counsel for particular cases or particular hearings within cases, is section 27(4) of the recently amended Legal Practitioners Ordinance Cap. 159 (the amended Ordinance was effective as from 28 March 2003). Formerly, the jurisdiction was founded on section 27(2)(b) of the Ordinance.

11. It is unnecessary to go through all the relevant principles governing the exercise of the court's approach in such applications. They are on the whole contained in cases like Re Flesch QC [1999] 1 HKLRD 506 (which updated to the modern context Re Coles QC [1985] HKLR 480 and Re Goldblatt QC [1985] HKLR 484). I do not intend to repeat the various aspects of the court's approach as set out in that case and other cases but would emphasise the following:

(1) In analysing the issues in the relevant case for which the admission of overseas counsel is sought, the court must ask itself the question whether the determination of such issues would also involve the determination of principles which might impact substantially on the development of Hong Kong law. This is of course not the sole question but it is an important one. If the case is one where the ventilation of arguments on important legal principles is likely to end up in the Court of Final Appeal, this is a very powerful factor in favour of admission. In Re Flesch, Chan CJHC at 514A used the phrase "likely to go all the way up to the Court of Final Appeal for a determination of some principles of law". I do not disagree with this but wish to make it clear that it is merely illustrative of the exercise carried out by the court that I have just referred to, namely, the identification of cases involving the determination of legal principles which might substantially impact on Hong Kong law. Chan CJHC was not advocating an exercise in determining the likelihood or otherwise of the particular case itself going to the Court of Final Appeal, for this may involve considerations far removed from the point of the exercise.

(2) Another of the usual grounds justifying the admission of overseas counsel is that the matter in which he is sought to be instructed, is one of unusual difficulty and complexity (the feature discussed in the preceding paragraph of course overlaps with this ground although in certain cases it may stand alone). However, as Re Kosmin QC [1999] 1 HKLRD 641, at 644A-H makes clear, in order to come within this category, it is not necessary to demonstrate that there is no local counsel who is competent to do the case. This would be too high a burden. However, it is incumbent on the applicant to demonstrate that reasonable efforts have been made in good time to instruct suitable local counsel to do the case and for whatever reason, such counsel are unavailable. As to what is meant by 'suitable' and 'available', I refer again to the judgment of Chan CJHC in Re Kosmin at 646F to 647D:-

"It is of course not necessary to approach each and every senior counsel; only those who have the requisite experience and standing would be sufficient. The more difficult the issues involved in the case are, the smaller the pool of suitable and available counsel will be. In briefing counsel, solicitors' views usually carry great weight. It is accepted that a certain amount of personality is involved in the choice of counsel. It is clearly not possible for solicitors to have the experience of briefing all of the local senior counsel. Individual solicitors may regularly brief those counsel who have worked well with them and they may have the opportunity of forming a fairly good idea of their competence and ability. Naturally these counsel would be the first to be approached by them. Occasionally, there may be a few competent and able senior counsel who are not solicitors' first choice because from their experience, individual solicitors may find it not altogether easy to work with such counsel, particularly in difficult or urgent cases. Solicitors, apart from their own judgment, would rely on the comments from colleagues and partners as to who would be competent in any particular area of the law. They would also have to rely on the comments from other professionals on those counsel with whom one can easily work. There are therefore a great variety of personal considerations in choosing one counsel rather than another.

While great reliance is placed, and rightly placed, upon subjective views based on the amount of information one can receive and the experience one has in working with counsel, I think a certain amount of objectivity is required. In my view, any attempt to instruct local counsel must be reasonable, serious and genuine. A mere statement that a particular counsel of well-known competence and ability is, in the opinion of the handling solicitors or senior partners, not competent or not suitable for that case may not be sufficient. A simple telephone call to counsel's clerk asking for available dates without giving any information about the nature and complexity of the case, the time expected of counsel in handling it and other special features, if any, may not be regarded as satisfactory. A timely approach is also important to enable counsel to assess whether he has sufficient time to handle the case before agreeing to take up the brief. It would be unacceptable, if the solicitors having decided at the outset to brief London counsel, merely proceed to look for local counsel as a matter of routine or formality in order to satisfy the requisite criteria."

(3) I should just say something more about the aspect of suitability of local counsel. It is clear from the passage just set out that it is not necessary to demonstrate that no senior counsel exists in Hong Kong who would be able to do the case. That must be an extremely rare situation anyway. However, where the degree of difficulty or complexity is such that the court is of the view that specialist counsel would be highly desirable, the pool of suitable local counsel will necessarily be limited. In the past, complex cases involving tax or patent law have come under this category. The question is not so much whether counsel in Hong Kong is able to do the case competently or even skilfully, but whether the specialist overseas counsel can add a significant dimension to a very complex or difficult case. Having said this, I think it must also be recognised that in other cases of unusual difficulty or complexity, the pool may be larger and the court may be less receptive to the admission of overseas counsel. These involve matters of degree from case to case.

(4) The court must be prepared to adopt a flexible approach to admissions and not treat what is said in Re Flesch and other cases as anything more than guidelines. The applicability (or inapplicability) in any given case of the guidelines enumerated in these cases, while obviously a matter of significant (and in some cases, decisive) weight, is nevertheless subject to the court's overall discretion in looking at the whole of the circumstances and may involve a balancing exercise between sometimes conflicting factors. Such flexibility must be the right approach where the court is required to consider as the paramount consideration, the public interest.

12. With the relevant principles in mind, I now turn to the merits of the application itself.

Should the Applicant be admitted for the trial of the action?

13. I first deal with the nature of and the issues in the Action.

14. In my judgment, some of the issues arising in the Action can fairly and clearly be described as being of unusual difficulty and complexity, requiring the expertise of experienced and specialist counsel. Some of the same issues also involve the determination of important points of law which would make a significant contribution to Hong Kong (and indeed Common Law) jurisprudence.

15. I will not deal with all the issues that fall into these categories but highlight just a few:-

(1) The movement of solicitors between firms has always been a fact of life in the profession and none more so than in Hong Kong. The limits of what can or cannot be done during the time the solicitor is still employed or in partnership in a firm with a view to furthering his career and looking to the future, are still being considered by the courts. The number of relevant cases is not great. The constant conflict between fiduciary duties owed to the firm and the concept that there should not be an unreasonable restraint on the right of a professional to earn a living or to further his career, requires careful consideration by the courts. I have recently had to deal with some aspects of this in Kao Lee & Yip v Koo Hoi Yan, Donald & Others, unreported, 2 April 2003, HCA 8847/1993.

(2) In the present case, important questions arise as to the permissible limits to which solicitors are able to carry on activities looking to their future outside the firm in which they are employed or are partners and as to the proper analysis of whether or not certain types of information can be classified as being confidential. For example, in the Action, there is a substantial dispute as to whether information about the billings potential of solicitors amounts to confidential information and in particular whether this information can be used by the solicitor concerned to show "his own worth, standing or expertise". There is also the very important but delicate question of contacts with clients by solicitors who are thinking of leaving the firm. I accept that in the Action questions of degree may well be involved when the court eventually comes to determine the disputes between the parties. In my view, the application of what are often difficult concepts of law is not straightforward.

(3) Although it would appear that the question of damages has been separated from the issue of liability in the coming trial, the issue of the appropriate relief to be granted, assuming liability, is very much alive. Here, the Plaintiff claims a combination of common law and equitable reliefs against the defendants, including damages, accounts of profits, injunctive relief etc. The appropriateness of the various reliefs sought and if granted, their extent, may well be a major and difficult issue to resolve.

(4) The issues that will have to be determined in the Action will also have great significance beyond just solicitors. They will be relevant to all persons in a fiduciary relationship as well.

16. The complexity of the Action is also demonstrated by the legal representation (no doubt at high cost) on all sides. It is also in part shown by the length of trial (30 days reserved). From my own involvement in the action, this is a big piece of litigation, which may well end up in the Court of Final Appeal. I have also taken into account the Certificate signed by Leading Counsel stating that in his view the Action calls for the admission of overseas counsel. It is also not without significance that the Applicant will head a team already comprising a Hong Kong Senior Counsel and a senior junior counsel.

17. In his submissions on behalf of the Hong Kong Bar Association, Mr Rimsky Yuen SC suggests that the Action perhaps does not involve unusually complex or difficult issues. He makes reference to a number of cases (as does the Applicant) in which questions of the fiduciary duties owed by solicitors to their firms or restraint of trade issues have arisen. He also makes reference to a number of cases which deal with the relevant law on some of the issues in the Action.

18. In my judgment, the law is difficult and perhaps even more difficult is the application of the law to the facts. I have earlier mentioned that questions of degree are involved in the application of the law to the facts and it is this aspect that makes the Action particularly difficult and complex. This is a clear case in my view of the high desirability to have the benefit of specialist counsel experienced in this field.

19. I have no doubt that many Senior Counsel in Hong Kong will be able, competently and skilfully, to conduct the case. Those already instructed and who have appeared before me in the various interlocutory proceedings in the action, amply demonstrate this. However, as I have said, the Action calls out for specialist and experienced counsel and I feel that Mr McGregor QC can be expected and will provide the necessary level of expertise and assistance in what may turn out to be an extremely difficult case.

20. Given the level of expertise required in the Action, the pool of suitable Senior Counsel in Hong Kong of the appropriate skill and experience to lead a very senior team, is small. The affidavit in support of the application refers to some efforts having been made to instruct counsel (presumably regarded as suitable) to replace Mr McCoy (the leading counsel instructed for the trial who has an engagement midway through the trial). There are some very senior leading counsel here. They are apparently unavailable.

21. My views therefore render it unnecessary to consider other matters raised in the present application. However, I should just say that were it not for what I regard as the overwhelming desirability of having specialist and experienced overseas counsel in the present case, I would have had little hesitation in dismissing the application. The following points are of note here:-

(1) The trial dates in the Action were fixed on 30 October 2002. It is of note that since the litigation commenced, the Plaintiff (Deacons) has continually pressed for early dates for trial.

(2) Mr McGregor QC has been consulted in relation to the Action at a relatively early stage.

(3) Yet, the Hong Kong Bar Association was asked for its views on the admission of Mr McGregor QC only on 3 March 2003. The reply from the Hong Kong Bar Association to the Applicant's solicitors was dated 4 April 2003. The month it took the Bar Association to respond was understandable given the volume of papers sent to it (some 500 pages).

(4) The Notice of Motion was taken out on 16 April 2003 and it would appear that no one impressed on the Clerk of the Court the urgency of the matter. The hearing was fixed for 19 May 2003.

(5) I have found it difficult to accept the statement that the application has been made in a timely fashion. I was effectively faced with an application for the admission of overseas counsel two weeks before the trial. This application could and should have been made much earlier.

(6) By now, it should be abundantly clear to any applicant for admission that the application should be made in a timely manner. This warning has been made in a number of cases, among them, Re Goldblatt QC and Re Kosmin QC. In Re Badenoch QC (No. 2) [1999] 2 HKLRD 215, at 216 I-J, Chan CJHC said, "I would take this opportunity of reiterating yet again that in future any failure in complying with the guidelines without good reasons will not be tolerated. If such failure results in the Court refusing an application for admission and hence in any detriment to a litigant's interest, the blame will lie on those who have the conduct of the litigation and this may well be visited by further litigation for negligence or for costs".

(7) The ground relied on by the Applicant focusing on the prominence of the parties and therefore the possible embarrassment of engaging certain local Senior Counsel is purely speculative and cannot be taken into account as a factor. In certain circumstances, of course, the identity of the parties or some of them concerned in the relevant litigation may be a factor (see Re Coles QC [1985] HKLR 480), but this is a rare situation.

Outcome

22. For the above reasons, I am of the view that the application should be granted.

23. No order as to costs was made and this reflected the agreement between the parties. As a matter of jurisdiction, there seems to be no power to award costs against the Hong Kong Bar Association in the event of a successful application: see Rule 3 of the Barristers (Admission) Rules (also effective as from 28 March 2003); Re Potts QC, unreported, HCMP 5047/2001, 19 December 2001, Leong CJHC (dealing with the predecessor of the present Rule 3). This reflects the fact that proceedings in relation to the admission of overseas counsel are not adversarial in the sense of true hostile litigation. Even where the applicant, the Hong Kong Bar Association and the Secretary for Justice are in agreement, the application has still to be determined by the court. In such applications, the Hong Kong Bar Association and the Secretary for Justice are expected, and often do, provide invaluable assistance to the court in expressing what is the public interest.

24. I will end on this note. The nature of the proceedings should also mean that it would be good practice for there to be more contacts between the Applicant and the Hong Kong Bar Association to narrow any points in dispute. All too often in the past, misunderstandings have arisen which more frequent contacts would help avoid to a significant degree. I wish to make it clear that I am not directing these remarks to the present application, but only for the future. As for the position of the Secretary for Justice, the usual practice has for many years been to remain neutral and say nothing in relation to the merits of the application. There may or may not be good reason for this, but when the public interest is involved, this has very much to be borne in mind. Again, I am not directing this remark to what has happened in the present application (for Ms Fung has been extremely helpful in her submissions regarding costs) but again this is a matter to consider for the future. It is hoped that those representing the Secretary for Justice will take a more active role in expressing her views on the public interest in any application.