RE PHILIP HESLOP QC

HCMP2680/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.2680 OF 2003

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REASONS FOR RULING

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1. This is an application by way of Motion for the ad hoc admission of Michael Heslop, QC to advise and represent the petitioners in HCMP No.4146 of 2001. The Motion is dated 23 June 2003.

2. There is also a time Summons for the Motion to be heard notwithstanding that there has not been the required 14 days notice under Rule 2(2)(b) of the Barristers (Admission) Rules, Cap.159AA.

3. No objection having been taken as to the time Summons, I heard the application from counsel appearing for the applicant in the Motion and also from counsel representing the Hong Kong Bar Association. The Department of Justice was also represented at the hearing before me but made no submission and did not object to the application.

4. Having heard those submissions, I granted the Motion and made an order that Philip Heslop, QC be admitted and enrolled as a barrister of the High Court of Hong Kong to advise and represent the applicants in CACV No.124 of 2003 and any appeal arising therefrom. I indicated to the parties that I shall give my reasons in writing at a later time which I now do.

The application

5. The petitioners in HCMP No.4146 of 2001 are the joint administrators of the estate of Wong Teh Huei. They are appealing from an order of Madam Justice Kwan given by her on 6 May 2003. That appeal has been listed as CACV No.124 of 2003.

6. At the hearing of that matter before Madam Justice Kwan and from which CACV No.124 of 2003 arose, the joint administrators were represented by Michael Lunn, SC, the 1st respondent by Winston Poon, SC, the 2nd respondent by Denis Chang, SC and the 3rd respondent by Ms Catherine Hui.

7. One of the issues which fell to be determined by Madam Justice Kwan at that hearing was whether the petitioners were entitled to relief sought by them under section 168A of the Companies Ordinance, Cap.32 or whether such relief can only be by way of a derivative action. It therefore goes to the jurisdictional ambit of section 168A upon its proper construction.

8. Section 168A is a home-grown section of the Companies Ordinance dealing with alternative remedy to winding up in cases of unfair prejudice conduct to minority shareholders. It is home-grown in the sense that section 168A was not copied from English legislation and whilst there are provisions in the English legislation (namely section 459 of the Companies Act 1985) dealing with the same aspects, the wording of the English legislation differs somewhat to section 168A.

9. It is also true to say that the Companies Ordinance in Hong Kong, which was enacted in 1933, was modelled closely along the lines of the Companies Act of 1929 in England, English statutory legislation regarding companies law has developed much more extensively in England than it has in Hong Kong since such times. The 1929 Companies Act in England has been overtaken by the 1948 Companies Act and now the 1985 Companies Act.

10. It is accepted by all concerned (including Madam Justice Kwan in her decision appealed from) that there is no direct authority on point relating to that issue of law which she had to decide regarding section 168A

11. In making this application before me, Mr Bleach has submitted that what the applicant seeks, in instructing Mr Heslop to represent them in conducting CACV No.124 of 2003, is a specialist in English companies law and procedure to deal specifically with just that. The reason for it being that over the years, two distinct lines of conflicting English decisions have developed in respect of the relationship between unfair prejudice conduct and derivative actions. This is central to the issue to be determined in CACV No.124 of 2003 since the decision of Madam Justice Kwan on that issue was arrived at by preferring one of the two lines of conflicting decisions in England.

12. It was further submitted by Mr Bleach that it is not the intention of the petitioners to instruct Mr Heslop to deal with Hong Kong company law which will be left in the capable hands of Mr Lunn. If the application to have Mr Heslop is refused, then it is the intention of the petitioners to instruct only Mr Lunn for the appeal but that the Court of Appeal will be deprived on the assistance to be had from a specialist on English companies law. In those circumstances, it cannot be against the public interest for Mr Heslop to be admitted for the appeal.

13. It is also for these reasons that no approach had been made to other local leading counsel.

Objections from the Bar Association

14. The objection from the Hong Kong Bar Association is effectively twofold. Firstly, counsel for the Bar Association challenges whether the law point to be decided on appeal is of unusual difficulty or complexity that it warrants the admission of an English silk. Secondly, the objection is based on the availability of local leading counsel. In his skeleton submission, Mr Wong who appears for the Bar Association has listed no less than 10 local leading counsel as specializing in Hong Kong companies law and that there is no evidence that any of these counsel had been approached by the solicitors for the petitioners.

Decision

15. In so far as the nature of the point to be argued on appeal is concerned, it is the view not only of the solicitors and leading counsel for the petitioners but also the view of the judge herself, as can be seen from her judgment, that it is a difficult and complex point of law. Quite obviously it is made even more difficult by the fact that there is no direct authority on it.

16. The argument put forward by counsel for the Bar Association that this cannot be such a difficult point of law because it is only an interlocutory appeal the argument for which is estimated to last half a day finds no favour with me.

17. The difficulty or complexity of a point of law should not depend whether or not the appeal is or is not an interlocutory appeal, much less on the time estimated for the appeal. Rather it depends on the underlying rationale for the lines of conflicting English decisions and how they should or should not apply to our section 168A given that the wording of that section differs from those of the English legislation.

18. A further consideration must be that because there is no direct decisions on that issue in Hong Kong relating to section 168A, it is a matter, when decided by the Court of Appeal, to add to the development of local jurisprudence and therefore also important in that respect.

19. The further submission by counsel for the Bar Association that section 168A is a home-grown section and therefore there is no need for an English silk to be engaged is readily answered by the submission of Mr Bleach that what is required is a specialist on English companies law and the reasons given for that requirement.

20. I accept the submissions of Mr Bleach and in the overview I have taken of this matter, it does not appear to me that allowing the application can be against public interest.

21. For these reasons I have allowed the application and granted the Motion.