RE MR NICHOLAS GREEN, QC

HCMP 704 /2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 704 OF 2011

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Hon Hartmann JA:

Introduction

1.  The applicant has applied to be admitted as a barrister under s. 27(4) of the Legal Practitioners Ordinance, Cap 159, to advise and appear on behalf of a Hong Kong company, Match Power Investment Limited, in relation to an application for leave to appeal to the Court of Final Appeal and, if the application is successful, to appear at the appeal hearing itself.  I am told that the application for leave is due to be heard by the Appeal Committee on 9 June 2011.

2.  If this application is successful, it is intended that the applicant will appear with two local counsel, Mr Johnny Mok SC, who has appeared before me in support of the application, and a junior counsel.

3.  The application for admission has been opposed by the Hong Kong Bar Association.  Ms Liza Jane Cruden has appeared as the leading counsel for the Bar Association.  As is usual, the Secretary for Justice has been represented, the counsel on this occasion being Ms Leona Cheung.  It would be fair to say that the Secretary for Justice has reservations as to the admission being in the public interest.

Relevant background

4.  Match Power is a development company.  In 2003, it sold units in a development under construction to a number of purchasers.  The development was known as ‘One Beacon Hill’.  There were delays in the completion of the development.  In terms of the contracts of sale, the delays may have entitled the purchasers to rescind the contracts.  However, a number of the purchasers, seven in total, chose instead to go ahead with completion and through their solicitors demand was made for damages by way of interest.

5.  It appears that, at about the time of completion of the units in the development, complaints were made to the Consumer Council concerning the delay. Some sort of limited communication took place between the Consumer Council and Match Power in which the company denied any liability by reason of the delay but indicated that, as a gesture of goodwill, it would be prepared to attempt to resolve the matter on a confidential basis.

6.  In respect of the seven purchasers who chose to complete, the act of completion entitled them to exercise an option to purchase a car parking space in the development at a cost of one dollar only.  Shortly after completion, each of the purchasers was called into the offices of Match Power to choose a parking site and to complete the necessary paperwork.  They were asked to sign three documents.  The first two were related directly to the exercise of the option to purchase parking sites.  The third document, a letter, contained the following provision:

“By signing this letter, the car parking space purchase option letter between the purchaser and Match Power Investment Limited is hereby exercised as the full and final settlement of all the purchaser’s rights relating to the purchase of the property.”

7.  All but one of the seven purchasers signed this letter.

8.  Thereafter the seven purchasers instituted action in the Court of First Instance seeking damages by way of interest for the delay in completing the development.  While it was Match Power’s principal defence that it bore no liability for any alleged delay, it also raised the defence that, in respect of six of the plaintiffs, the ones who had signed the ‘settlement agreements’, they had, by entering into those agreements, waived or settled their claims in full.

9.  This ‘preliminary issue’ was determined in the Court of First Instance by Chu J who held that, on the true construction of the ‘settlement agreements’ the six plaintiffs who had signed had not waived or settled their claims for damages.  Match Power appealed to the Court of Appeal which dismissed the appeal.  It is against that dismissal that Match Power has now sought leave before the Appeal Committee to appeal to the Court of Final Appeal.

10.  Whether the six plaintiffs, in signing the ‘settlement agreements’, had waived or settled their claims was a matter of construction.  As such, the previous negotiations of the parties were not admissible as a guide to reaching the true construction of the agreements.  This is a principle long recognised.

11.  In her judgment at first instance, Chu J was careful to distinguish between details of the negotiations and what she considered to be the permissible factual matrix that could be used as a guide to assist her in determining the true construction of the agreements.  While recognising that the actual details of any prior negotiations or subjective statements of interest were not permissible, she was of the view that the permissible factual matrix did allow her to include the following two matters; first, that there was an ongoing dispute, the plaintiffs’ solicitors having sought damages and Match Power’s solicitors having denied liability, and, second, that the parties had not engaged in discussions to resolve their dispute; in short they had not entered into any negotiations.

12.  The Court of Appeal was of the same view.  In her judgment, Le Pichon JA said the following:

“… the fact that the parties had not engaged in discussions to resolve the dispute is undeniable and has not been challenged. While evidence of prior negotiations is inadmissible for the purpose of construing the settlement agreements, in my view, the fact that there had been no negotiations of any kind must form part of the relevant factual matrix.”

13.  The principal contention to be advanced on behalf of Match Power in its application to the Appeal Committee and, if successful, to the Court of Final Appeal itself, is that the Court of Appeal made a fundamental error in drawing a distinction between evidence relating to the nature and extent of pre-contractual negotiations (which are non-admissible) and the alleged fact itself that there were no negotiations (which was found to be admissible).

14.  In the present case, so it will be argued, in drawing the conclusion that there had been no negotiations, the Court of Appeal had to take into account a number of factors which pointed to the fact that some form of early negotiation had in fact taken place.  What this illustrates, so it will be argued, is that the so-called distinction between details of negotiations and the fact of non-negotiation is wholly artificial.  By drawing a distinction, the Court of Appeal has “opened a significant and highly uncertain inroad into the principle of legal certainty which is at the very heart of the law of contract.”

15.  The issue that has arisen, it is said, relating as it does to the admissibility of pre-contractual conduct and statements, is an issue of considerable relevance to trade and industry generally and could affect the construction of many future contracts, especially when considered in light of the fact that in other jurisdictions the courts are seeking to limit the scope of pre-contractual admissible evidence not to broaden it.

The grounds of application

16.  In support of the application for the admission, Mr Mok relied on two principal, independent grounds.

17.  It was his first principal contention that the determination of the issue broadly outlined above, taken together with certain subsidiary issues, had the potential to clarify an important principle of law and in the result would almost certainly impact substantially on the development of Hong Kong jurisprudence.  Mr Green, it was said, was a counsel of very considerable experience in a number of jurisdictions.  He was therefore a counsel of sufficiently high quality and standing to be able to lead the two local counsel with distinction in developing Match Power’s arguments.

18.  It was his second principal contention that this was an appeal to be heard by the Court of Final Appeal, albeit in the first instance by the Appeal Committee only.  This of itself, he argued, was an important factor steering this Court towards acceptance of the application rather than its dismissal.

19.  Although it was not advanced as one of his principal grounds, Mr Mok also relied on the ground that the issue of law to be argued before the Appeal Committee (and, if successful, before the Court of Final Appeal itself) was one of unusual difficulty or complexity.

The first ground of application

20.  On behalf of the Bar Association, Ms Cruden made the point that the principle that pre-contractual negotiations are not admissible as a guide to the determination of the construction of agreements is now well settled, both in English law and Hong Kong law.  The Court of Appeal had not made any “uncertain inroad” into the principle.  It had done no more than come to the determination that, in the present case, the fact that there had been no pre-contractual negotiations was an objective fact that legitimately formed part of the factual matrix.  Even if that issue is debatable, the case remains one involving a straightforward issue of construction.  As such, no specialist skill or expertise is required.

21.  There is strength in this contention.  The difficulty I have, however, is that a distinction of the kind made by the Court of Appeal may be found to be a distinction of fact and law which does influence the principle and which, unless qualified, may be found in some way to compromise the principle.  If that is found to be the case then the crafting of the necessary qualifications may well have an impact of some substance on Hong Kong jurisprudence.  I am not able to agree, therefore, that the case quite plainly involves nothing more than a straightforward issue of construction.

22.  For myself, in the context of this application, I am not confident enough to be able to dismiss out of hand the contention that, potentially at least, the issue to be argued is one that may have a substantive impact on our local jurisprudence.  I can see its potential importance.

23.  I am told that the argument has been constructed by Mr Green; in short, it is founded on his advice.  The fact that Mr Green has already been involved in the litigation, if only by way of rendering advice, can never act as any sort of ‘trump card’ restraining this court’s discretion.  But I am entitled to take into account that Mr Green is a counsel of very considerable experience, experienced too in this general area of the law, and clearly a counsel of sufficiently high quality to be able to bring an added dimension to the matter. 

24.  Ms Cruden has made the point, and again it is a good point, that the principles of construction in the law of contract are matters well-known to a large pool of senior counsel.  It is not a specialist skill nor indeed does Mr Green hold himself out to have developed a particular specialist skill in that area.  Accordingly, while she does not wish to diminish the abilities of Mr Green, she is concerned that he does not “bring anything extra to the table”.

25.  Clearly, when counsel from another common law jurisdiction can demonstrate a particular narrow specialty that will manifestly assist the courts of Hong Kong that will be a factor in favour of admission.  But not all issues that potentially will have a significant impact on local jurisprudence will be issues mastered only by an inner sanctum of specialists.  The common law has always been, and remains, international in its dimensions and, as such, counsel recognised for his experience and quality in practising in a relevant area of law (in this case commercial law) in one or more outside jurisdictions will bring the benefit of that outside experience in advancing arguments that potentially may have real significance in the development of our law.

26.  In Re Flesch QC and Another [1999] 1 HKLRD 506, at 511, Chan CJHC (as he then was) made the following observation in respect of the admission of overseas counsel to appear before the Court of Final Appeal:

“If Hong Kong is to remain as an international financial and commercial centre, it is vital that our legal system with all the jurisprudence which our courts, particularly the Court of Final Appeal, can develop should acquire international recognition for its quality and reliability. This is clearly in the public interest. In order to develop such jurisprudence, it may be helpful to have the benefit of the talents and experience of overseas counsel.”

27.  Chan CJHC continued by observing that it can only benefit local counsel to have exposure to, and cross-fertilisation with, lawyers of sufficiently high quality and standing from other common law jurisdictions.

The second ground of application

28.  Mr Mok placed considerable emphasis on the fact that Mr Green seeks admission in respect of a case that is to go before the Appeal Committee of the Court of Final Appeal and thereafter, if the Committee grants leave, to the Court of Final Appeal itself.

29.  It is not disputed that this is an important factor.  As Ma JA (as he then was) said in Re Pannick QC [2004] 1HKLRD 950, at 957:

“… where a hearing before the Court of Final Appeal is involved, the Court will be more, rather than less, inclined than at any other level to admit overseas counsel. This is provided of course that the matter is one that is substantial and in which overseas counsel is able to contribute significantly by reason of his expertise.”

30.  In the present case, it has been emphasised both by Ms Cruden, on behalf of the Bar Association, and by Ms Cheung, on behalf of the Secretary for Justice, that the admission is sought (essentially) in respect of an application only to the Appeal Committee which may well not be successful.  The argument has been made: “if the application is successful before the Appeal Committee then, in light of what the Committee says, let application be made at that time for Mr Green’s admission in order to appear at the appeal hearing itself.  At the moment, however, it is premature”.

31.  I have taken that argument into consideration, accepting that there must be a difference between an application made to the Appeal Committee and the full hearing of an appeal before the Court of Final itself.  But, in my view, it is a difference of degree.  The matters to be argued before the Appeal Committee will in this case remain substantial ones.  In the circumstances, I am satisfied that the Committee will receive considerable assistance if Mr Green is permitted to appear before it.

The third ground of application

32.  Understandably, Mr Mok has not placed great emphasis on the third ground, namely, that the issue is one of unusual difficulty or complexity.  While the matters of fact and law to be argued are difficult, I do not believe it can be said that they are unusually so.  The strength of Mr Mok’s arguments lies in his first two grounds.

Failure to report to the Court concerning the availability of local counsel

33.  Ms Cruden has made the point that no attempt has been made to inform this Court of what attempts, if any, have been made to seek the services of a senior member of the local Bar to lead Mr Mok and his junior.  In this, Ms Cruden is correct.

34.  But, as Ma CJHC (as he then was) observed in Re Richard Gordon QC (unreported) HCMP 1031/2010:

“… where (as in the present case) it has been represented to the court that leading counsel in Hong Kong will be instructed in the same proceedings, the necessity of making enquiries of other suitable leading counsel assumes far less importance. The enquiry then would be of suitable leading counsel in Hong Kong to lead another leading counsel; by definition, a limited exercise.”

My conclusions

35.  I confess that this has not been the easiest application to resolve.  In my judgment, adopting, as I must, a flexible, commonsense approach, it has remained finely balanced.  At the end of the day, however, for the reasons I have set out, I have been drawn to the conclusion that the admission of overseas counsel is justified.

36.  In particular, I have been persuaded by the fact that the admission is made in respect of proceedings before our highest court and is made in the context of the fact that overseas counsel will act as the leading counsel to two local counsel, one a senior counsel and one a junior.  There can be no suggestion therefore of available local expertise being completely shut out.

37.  I will therefore make an order in terms of the notice of motion