RE DAVID PANNICK QC

HCMP1512/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1512 of 2005

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J U D G M E N T

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1. The Applicant seeks admission for the purpose of representing Wharf Realty Limited (“Wharf”) in judicial review proceedings (HCAL 14/2005) against the Director of Lands, for which leave to commence has been given by Reyes J on 3 February 2005.  Those proceedings relate essentially to the decision of the Director of Lands refusing to extend the Lease under which at present Wharf occupies Kowloon Permanent Pier No.83.  Through this Lease (which was created on 17 April 1968 and, as varied, is due to expire on 16 June 2012) (“the Lease”), Wharf operates Ocean Terminal and in turn, I understand this benefits the operation by Wharf of adjacent developments such as the Gateway, the Marco Polo Hotel and the Hong Kong Hotel.  I am told that the revenue generated by Ocean Terminal was approximately $300 million in 2004, this accounting for about 23% of the total revenue earned by Wharf in 2004.  Wharf is wholly owned by Harbour City Estates Limited and this company is in turn owned by Wharf (Holdings) Limited.

2. It is unnecessary to go through all the facts alleged by Wharf in the judicial review proceedings.  It is sufficient merely to point to the fact that in about 2000, Wharf had in mind constructing a 6-storey extension to the open deck of Ocean Terminal and then building on top of that a Ferris wheel similar to the “London Eye” in London.  This, it was hoped, would become a major landmark in Hong Kong and benefit, amongst other things, the tourism industry here.  As the anticipated time for the construction of the Ferris wheel was three years and its cost in the region of $650 million, it was therefore important for Wharf to secure an extension of the Lease.  To this end, negotiations began with the Lands Department.  Wharf was, it says, much encouraged by a policy statement issued by the Government on 15 July 1997 and a related press release of the same date which gave rise (it alleges in the judicial review proceedings) to a substantive legitimate expectation that the Lease would be renewed.  Specific reference was made in the press release to Articles 7 and 123 of the Basic Law.  Eventually, after about 16 months of negotiations and despite what Wharf asserts to have been encouraging signs from the Government, the Lands Department decided not to renew the Lease, instead indicating that the development would be disposed of by open competition in due course.  This was contained in two decisions of the Director of Lands communicated to Wharf by a letter dated 21 October 2004.  These are the relevant decisions in the judicial review proceedings.

3. A number of legal issues arise in the judicial review proceedings and it is again unnecessary for me to identify each issue.  Two, however, strike me as being particularly difficult and certainly important ones : -

(1)

The amenability of the two decisions to judicial review, given the reliance by the Government on the decision of Hang Wah Chong Investment Co Ltd v Attorney General [1981] 1 HKLR 1141 to say that the Director of Lands was acting only in his capacity as land agent (that is, the Government was in this instance acting as a private landlord rather than in the discharge of public functions).  This issue has long been a somewhat vexed and controversial one.  In Hong Kong and China Gas Co Ltd v Director of Lands [1997] 3 HKC 520 at 526, Keith J emphasized in the context of this question the importance of identifying the nature of the function which was being performed by the relevant Government authority.  The decision itself was upheld by the Court of Appeal in that case but without any discussion on the point of amenability.  Keith J’s reasoning was, however, approved by the Court of Appeal in Kam Lan Koon & Ors v Secretary for Justice [1999] 3 HKC 591 at 598.  I have also been referred to a decision of the English Court of Appeal in Regina (Beer (trading as Hammer Trout Farm)) v Hampshire Farmers’ Markets Ltd [2004] 1 WLR 233 where at 239 paragraph 12, Dyson LJ said this : -

“It is clear from the authorities that there is no simple litmus test of amenability to judicial review.  The relevant principles tend to be stated in rather elusive terms.  There was a time when courts placed much emphasis on the source, rather that the nature, of the power being exercised by the body making the impugned decision.  If the power derived from statute or the prerogative, then it was a public body and the decision was amenable to public law challenges.  If the source was contractual, then public law had no part to play.”

	Mr Horace Wong SC (for the Applicant) emphasizes the source of the Director of Lands’ power in the present case.  The source, he submits, is to be found in Articles 7 and 123 of the Basic Law (the same two articles referred to in the Government’s press release dated 15 July 1997).  Thus, one of the important questions that will have to be considered by the court in the judicial review proceedings is how the decision in Hang Wah Chong should be, if at all, qualified by these Articles in the Basic Law.
(2)	On the assumption that the decisions are amenable to judicial review, one of the grounds relied upon by Wharf to impugn them includes legitimate expectation in the procedural sense.  This is not based on the policy statement or the press release referred to earlier, but on an alleged expectation on Wharf’s part that their application for a renewal of the Lease would be considered by the Executive Council rather than by some other body before which Wharf was not permitted to make any representations.  The point made by Mr Wong, irrespective of the facts, was whether Wharf could rely on procedural legitimate expectation in the first place in the absence of any detrimental reliance.  This was a question that was argued before, though not decided by, the Court of Final Appeal in Ng Siu Tung v Director of Immigration (2002) 5 HKCFAR 1.

4. In my view, these legal questions just identified will impact substantially on the development of the law in Hong Kong.  They are also important and substantial points that would very much likely end up in the present case to be determined by the Court of Final Appeal.  On both these points alone, I would exercise my discretion in favour of admitting the Applicant.  The Applicant is of course an eminent Queen’s Counsel who, in my view, would add a significant dimension to a case involving the questions I have identified.

5. There is finally one matter with which I should deal.  In a recent decision, I referred to the duty on solicitors to make inquiries as to the availability of suitable local counsel.  In Re Crystal QC, unreported, HCMP 598/2005, 7 April 2005, I said at paragraphs 11 to 13 : -

“	11.	One aspect that Ms Newall (for the Hong Kong Bar Association) highlighted was that it had not been shown that there was no counsel in Hong Kong who was qualified or competent to deal with the application for the appointment of provisional liquidators.  Indeed, this was not shown but it need not be.  Where the court is required to determine principles that might impact substantially on the development of Hong Kong law or the case for which specialist counsel seeks to be admitted is one of unusual difficulty or complexity, these factors by themselves can sometimes justify the admission of specialist overseas counsel notwithstanding the availability of counsel in Hong Kong who are able competently to do the case.  This is of course provided that the overseas counsel is of sufficient high quality and standing so as to be able to add a significant dimension to the case.  In Re McGregor QC at 591 paragraph 11(3), the court said : -
		‘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.’
		Although this passage refers to a case of unusual difficulty or complexity, it equally applies to a case involving important principles the determination of which might impact substantially on the development of Hong Kong law.
	12.	However, I wish to stress that what has been stated just now does not absolve solicitors from the duty to make inquiries of the availability of Hong Kong counsel.  There are at least two reasons for this.  First, this will show the size of the “pool” of suitable local counsel.  Sometimes, it may show that the “pool” does not exist.  Secondly, even if suitable counsel does exist in Hong Kong, timeous inquiries will demonstrate the availability (or non-availability) of such counsel.  All this will enable the court to arrive at an informed decision taking into account all relevant facts as to whether or not to admit overseas counsel for any particular case.  At times, this can be a difficult balancing exercise involving questions of degree.  Accordingly, it is important that the court is provided with all the necessary facts.
	13.	In the present case, regardless of availability, the pool of Hong Kong counsel with sufficient expertise to handle the type of application and the issues therein with which we are concerned must be very small anyway.  This morning, I was provided with an affidavit from the Applicant’s solicitors detailing the inquiries that had been made of the availability of Hong Kong counsel.  Following the criteria laid down in cases like Re Flesch QC and Re McGregor QC (which followed Re Kosmin QC & Another [1999] 1 HKLRD 641), I am satisfied that due inquiries have been made in the present case.  These inquiries in fact reinforce the conclusion I have reached that the “pool” of suitable counsel for the requirements of the case at hand is very small indeed and that the Applicant would be able to provide the significant dimension to which I have earlier referred.”

6. In the present case, the pool of suitable local counsel is relatively small (even smaller when one considers the team that is to be led in the judicial review proceedings comprising Mr Wong himself and a very senior and experienced junior).  Some inquiries have been made (as I have been told by Mr Wong this morning) and I am just about satisfied that sufficient inquiries have been made in the present instance.

7. For the above reasons, I made an order in terms of the Notice of Motion dated 22 July 2005.