RE LESLIE GORDON KOSMIN, QC

HCMP 5622 & 5623/1998

Headnote

Admission of overseas counsel - section 27(2) of Legal Practitioners Ordinance, Cap 159

Case of unusual difficulty and complexity - availability of local counsel

Attempts of solicitors to look for local counsel - reasonable, serious and genuine attempts

HCMP 5622 & 5623/1998

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J U D G M E N T

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1. In HCMP 5622 of 1998, Mr Kosmin QC seeks to be admitted to the Hong Kong Bar for the purpose of representing one of the parties in the liquidation of the CA Pacific Securities Ltd (CAP Securities) and CA Pacific Finance Ltd (CAP Finance). In HCMP 5623 of 1998, Mr Hildyard QC applies to be admitted for the purpose of representing another party in the same case. The Bar Association opposes both applications and the Department of Justice is neutral.

2. Mr Bleach SC for the applicants relies on two grounds : that the case in which the applicants are briefed to appear is of unusual difficulty and complexity and that no local counsel of appropriate skill and experience is available.

Difficulty and complexity

3. CAP Securities was a registered dealer under the Securities Ordinance and was engaged mainly in executing trades in Hong Kong equities on behalf of retail customers. CAP Finance was an associated company providing credit facilities to the customers of CAP Securities to enable them to finance their share dealings. On 4 June 1998, these companies were ordered by the court to be wound up. Messrs Herbert Smith are the solicitors advising the joint liquidators. On 18 June 1998, the court directed the liquidators to issue and prosecute an application by way of representative action to determine the question relating to the title of certain equities which were purchased by CAP Securities on behalf of customers through the CCASS. The main question as framed by the court is : what is the nature and extent of the interest, if any, of the 9500 customers of CAP Securities in the equities held by or to the order of CAP Securities acquired through the CCASS, such customers and CAP Securities having contracts which were based on standard client agreements. It is sought to be determined which, if any, of the customers have a proprietary claim to those equities. Two other firms of solicitors were approved by the court to represent two groups of parties. They were Messrs Lovell White Durrant and Messrs Allen & Overy. It is these firms which wish to instruct overseas counsel to appear at the hearing to commence on 12 November 1998.

4. I do not need to go into details of the issues to be determined by the court. The solicitors involved have affirmed that these are very complicated issues. Counsel retained by the liquidators and counsel retained by these two firms also agree that the issues involved are of exceptional difficulty and complexity. Mr Mitchell SC, in his outline written submissions, suggests that the issues involved may be difficult and complex but not of unusual difficulty and complexity. It is only fair to say that during the arguments before me, Mr Mitchell does not strongly pursue this point.

5. Having regard to the materials placed before me, I am satisfied that for the present purpose, there are issues of unusual difficulty and complexity in the case to be heard. It would seem that there are no direct authorities which touched upon these issues. The case calls for expertise in the law of insolvency.

Availability of local counsel

6. Mr Bleach SC for the applicants quite fairly accepts that even if it can be shown that the case in which the applicants are briefed to appear is one of unusual difficulty and complexity, it is still incumbent on the instructing solicitors to look for suitable local counsel. With respect, I agree. The fact that it can be shown that the case is one of unusual difficulty and complexity does not absolve the solicitors of the obligation to approach local counsel first before turning to overseas counsel. I have yet to be persuaded that there would be cases which no local counsel are capable of handling because they are of unusual difficulty and complexity. That a case is of such difficulty and complexity would only reduce the number of local counsel who the solicitors think would be suitable and whom they would approach. The court would not readily grant the admission of an overseas counsel merely because the case involves issues which are of unusual difficulty and complexity if the solicitors have not made any attempt to approach local counsel first. After all, the court would not normally allow an overseas counsel to appear in a case without at least one or more local counsel.

7. Mr Bleach SC admits that there are local senior counsel of appropriate skill and experience capable of handling the case in question. It is however his submission that those local counsel whom the solicitors considered suitable either were or are not available. He submits that where the case dictates urgent retention of counsel and London counsel are retained because no suitable local counsel are available, it cannot be as a rule that the admission of overseas counsel should be refused because local counsel have subsequently become available. He also argues that where the solicitors have acted responsibly and retained London counsel, that counsel is to be admitted in view of the urgency of the matter, the nature of the case, the duplication of work, the logistical problems and the costs and expenses to be involved. He points out that both firms of solicitors had as their first choice local counsel and only instructed London counsel because at the time that they respectively thought counsel had to be instructed, suitable local counsel were not sufficiently available. He draws my attention to the remarks in Re Goldblatt [1985] HKLR 484 that the views of the solicitors would carry considerable weight. Instructing solicitors are not required to consider the availability of each and every local senior counsel.

8. When the Court ordered the question of title to be determined, it also directed that an early hearing date should be obtained, preferably in the middle of September. It appears that Messrs Allen & Overy were instructed sometime in July 1998 for one of the representative parties. At about the same time, Messrs Lovell White & Durrant were also instructed to act on behalf of another party in the case. It was, according to the solicitors, their intention to brief local senior counsel and junior counsel, to be assisted by London junior counsel who would advise in London. It would seem that in July, Allen & Overy approached a local leading counsel who replied that he would be available. However, a few days later, before he was briefed, that particular counsel was retained for the Airport Inquiry. They also approached three other leading counsel and two juniors. It was found that the local counsel whom they have approached were either involved in the Airport Inquiry or would not be available in mid-September. Between 24 and 29 July, Lovell White & Durrant too had made inquiries of four leading counsel. According to the instructing solicitors, both Lovell White Durrent and Allen & Overy formed the intention on 3 August 1998 to instruct London counsel. In fact, Allen & Overy approached Mr Hildyard and a London junior counsel. On 5 August 1998, Lovell While Durrent made another inquiry of one more local senior counsel. On the following day, they retained a London junior counsel who specialises in liquidation and insolvency. In August and early September, there were further attempts to approach that particular local senior counsel. During the meantime, it became clear some time in August that it would not be possible to have a hearing date in mid-September 1998. On or about 10 September 1998, the solicitors were informed that the hearing date was likely to be sometime in November. On 14 September1998, there was a meeting between the solicitors for the liquidators and those for the two parties in the title application. Messrs Herbert Smith suggested making an application for the admission of overseas counsel. It is however clear from the affirmations that the solicitors did not make any effort in September to get local senior counsel apart from one. That particular local counsel was subsequently not available.

9. Although London counsel had already been instructed in early August and it was proposed on 14 September to make an application to the court for their admission, it was only on 30 September 1998 that the solicitors for the liquidators wrote to the Bar seeking consent for the admission of London silks and juniors to appear for the parties. The Bar took time to consider. It was not until 9 October 1998 that the Bar indicated that they would oppose the application. The Bar suggested a few names to the solicitors for the liquidators. In the middle of October 1998, Allen & Overy made inquiries with six or seven leading counsel but none of them would be available.

10. It is Mr Mitchell's submission that what the solicitors said they did to discover the availability of local counsel does not satisfy the criteria set out in the guidelines in the authorities. A few local silks would be available. I need not go into details and the identities of the local counsel approached or said to have been approached by the solicitors. Suffice it to say that it is Mr Mitchell's submission that the solicitors had the intention in early August to brief London counsel and that if they had approached the Bar then, the position might have been different. The Bar had indicated its opposition on 9 October 1998 but was only informed of the application a few days before the hearing. It is pointed out that the solicitors' choice could not have been entirely objective.

11. Having been referred to what the solicitors have attempted to do in July, August and September and subsequently after the Bar's opposition in October, I am satisfied that at the beginning, there were some genuine attempts made by the solicitors to brief local counsel.

Criticisms

12. However, in my view, what happened has given rise to a number of criticisms on the part of the solicitors handling the case. First, after they had formed the intention to brief London counsel in early August and had in fact started to do so, they did not approach the Bar for consent but waited until the end of September. There was a lapse of almost two months. There is no satisfactory explanation for this. Secondly, it is said that the solicitors had not made sufficient effort to brief local senior counsel. After the initial approaches to some leading counsel in July, the solicitors turned immediately to brief London counsel. It is also said that no serious attempts were made to brief local senior counsel in August and September. Thirdly, it was originally intended to brief both London silk and junior counsel to appear at the hearing. It was at the Bar's opposition that the idea of having also overseas junior counsel was dropped. I am informed by Mr Bleach that now only junior counsel of a few years standing were briefed to appear with overseas counsel in the forthcoming hearing. It is not clear when these two local juniors were briefed but since there is nothing in the affirmations on this, I can only assume that they were briefed at a late stage.

13. 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.

14. 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.

15. Having read the affirmations made by instructing solicitors and heard the submissions of counsel, I have come to the view that the above criticisms are not without substance. These criticisms do give rise to a suspicion that the instructing solicitors' views on the suitability of counsel may not, in the present case, have been all that objective. Such views were possibly or even probably clouded by the anxiety to get the best representation for their clients in this complicated case. It seems to me that there was initially a genuine intention to brief local counsel, possibly with the assistance of London experts in insolvency law. When those few counsel were known to be not available, the solicitors very promptly instructed London counsel in early August. That was excusable when it was thought that the court wanted the application to be heard in mid-September. At that stage, the matter certainly could not wait. However, after it had become known some time in August that the hearing date would only be in mid-November, it would seem that the solicitors had not made too many attempts to brief local counsel in August and September. The efforts made then were hardly sufficient. It may be that at that time London counsel had already been instructed, at least to advise on the matter. That would be part of the reasons for the solicitors not making sufficient effort during those two months. Besides, there does not seem to be any good reason for the solicitors not to approach the Bar Association as early as possible but instead to wait until the end of September.

Conclusion

16. I take note of the special circumstances of this case. I also bear in mind the complexity of the issues to be determined. It is also clear, and I take judicial notice of this, that the Airport Inquiry which commenced sometime ago had attracted quite a lot of experienced and competent counsel who would otherwise have been available. In these circumstances, I would, not without reluctance, grant the applications for admission.