Re Philip Anthony Naughton Qc

HCMP001512/2002

HCMP1512/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1512 of 2002

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Coram: Hon Leong CJHC in Court

Date of Hearing: 22 May 2002

Date of Handing Down Judgment: 28 May 2002

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J U D G M E N T

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1.This is an application by Mr Philip Anthony Naughton QC (the "applicant") for admission to the Hong Kong Bar. The Notice of Motion states that the applicant seeks admission for "the purposes of advising and appearing on behalf of the LSG Lufthansa Service Hong Kong, the appellant in High Court Action HCCT 34 of 2002 and the respondent in HCCT 35 of 2002 and HCCT 39 of 2002 in the trial of the said Actions and in any applications, proceedings, hearings and in any appeals arising therefrom and relating thereto."

2.The Bar Association opposes this application. The Secretary for Justice takes a neutral stand.

3.The other party involved in the proceedings is one Leighton Contractors (Asia) Limited ("Leighton"). Leighton was under a contract with LSG Lufthansa Service Hong Kong ("LSG") to construct an airline catering facility at Chek Lap Kok International Airport. Disputes arose from the project. The disputes were referred to the arbitrator and three hearings took place. An award was made at the end of the third hearing ("the Award").

4.The applicant is an overseas leading counsel. He is widely acknowledged as a leading specialist in construction and arbitration law. The applicant represented LSG at all the three hearings and the summons for directions and pre-trial reviews leading to the third hearing. The submissions of LSG on the issues raised in the third hearing were also prepared by the applicant. Leighton was represented by local leading counsel without the assistance of a junior at the arbitration hearings.

5.In High Court Action HCCT 34 of 2002, LSG seeks leave to appeal or to remit back to the arbitrator certain aspects of the Award and this will involve consideration by the court of the contract between the parties, the arbitrator's conduct at the third hearing, the evidence of argument presented at that hearing and the submissions made. In High Court Action HCCT 35 of 2002 and 39 of 2002, Leighton seeks a determination by the court on questions of law and fact relating to construction of a particular clause in the contract.

6.The grounds on which it is sought to justify the applicant's admission, according to the affidavit of Tracy Louise Williams of Messrs Denton Wilde Sapte, solicitors for the applicant, may be summarized as follows:

(1) The issues of law and fact in the proceedings are of unusual difficulty and complexity and their resolution could have a real impact on the development of local jurisprudence.

(2) The applicant's specialist knowledge and experience in the construction field and his in depth knowledge of the factual and technical background to the arbitration underlying these proceeding would assist LSG as well as the court.

(3) The need for local counsel to replicate the applicant's knowledge in the case would result in substantial delay and significant costs to LSG.

7.Mr Ian Llyod, counsel for the applicant, today informs me that LSG has now briefed local Senior Counsel Mr Charles Sussex SC, specialist in arbitration, to appear in the proceedings along side with the applicant and Mr Llyod himself should the application be granted by this court. Mr Llyod indicates that he no longer relies on the ground that appeals should be prosecuted expeditiously and briefing of local Senior Counsel will result in delay in the proceedings and higher fees because of the need for local counsel to familiarise himself of the facts of the case.

8.The Bar Association's contentions are:

(1) LSG is applying for leave to appeal against an arbitration award and the ambit for such appeal under the Arbitration Ordinance is a narrow one. Leave would only be granted in limited circumstances.

(2) There is no unusual question of law and fact. The questions raised concern the interpretation of the contract between the parties and this only involves the application of established legal principles to the particular facts. The proceedings do not involve the determination of legal principles that may impact on the development of local law.

(3) Prejudice and inconvenience to LSG if the applicant is not admitted is not a good ground for admission of overseas counsel in the present case since the essential criteria for admission have not been satisfied.

9.The principles for admission of overseas counsel to practice at the Hong Kong Bar for a particular purpose are now well known and they have been summed up in the case of Re Flesch QC [1998] 1 HKLRD 506 by Patrick Chan CJHC (as he then was) and set out in the head-note of the case. Principally these are:

(1) Public interest is always the paramount consideration in the exercise of the court's discretion in applications of this kind and it is in the public interest for Hong Kong to develop its own jurisprudence which would enjoy international recognition and reputation. Applicants must show that the case in which they are instructed to appear involved the determination of legal principles which might impact upon the development of local jurisprudence and that they were of sufficiently high quality and standing to make a useful contribution to that case.

(2) The court should adopt a flexible and sensible approach in dealing with such applications, balancing different aspects of the public interest.

10.In Re Badenoch QC [1999] 2 HKLRD 209, Chan CJHC added this:

"But even if the case in question is one of usual difficulty and complexity, it is still necessary to satisfy the court that no local counsel of appropriate skill and experience is available. The greater the difficulty and complexity of the case is, the smaller is the pool of senior counsel experienced in the relevant field. But instructing solicitors are still obliged to try and find out whether any suitable local counsel would be available." (p.213)

11.On these principles, Mr Llyod submits that the guidelines in Re Flesch QC are not a strict jacket since the court has a discretion and should adopt a flexible approach in exercising that discretion. There may be a case not falling within any of the categories in the guidelines but nevertheless, the circumstances of the case are such that when taken together, an exception can be made out for granting the application. He points to the case of Re Richards QC [1999] HKCU 539 where the factual matrix is complex and heavy and Chan CJHC granted the admission despite the case did not fit into any of the categories. Mr Llyod adds that even if the court finds the issues are not of unusual difficulty and complexity, the court should consider the difficulty and complexity of the case together with other circumstances to see if an exception is made out.

12.On the question of unusual difficulty and complexity, Mr Llyod refers to paragraph 15 of the affidavit of Ms Williams where she summed up the issues involved. Essentially these relate to the complex and factual back ground of the Award, the nature of the contract, admission of extrinsic evidence to resolve ambiguity and questions of construction of particular clauses in the contract having regard to voluminous documents and expert reports and the lengthy arbitration hearings.

13.In addition, Mr Lloyd submits that the issue in LSG's application for leave to appeal is the applicability to the arbitration proceedings of the principles decided in AG v Shimizu Corporation [1997] 1 HKC 417 and effect of s.2GA(1) of the Arbitration Ordinance on these principles. A proper interpretation of this section and its effect on the case of Shimizu could have an impact upon the development of local jurisprudence.

14.Mr Llyod also submits that an expansive pool of knowledge of the history, complexities and factual matrix of the three earlier hearings will be lost and need to be gained by local Senior Counsel if the applicant fails in the present application. Finally, he adds that the appointment of Mr Sussex SC to appear with the applicant in the proceedings, if the application is granted, who has been involved in one of the possible appeals in the Arbitration, will enhance cross fertilization of lawyers and benefit Hong Kong.

15.On the other hand, Mr Chua for the Bar Council submits that the issues raised in the proceedings are no more than questions on construction of a clause in the contract by applying established principles of construction. There is little difference between the law on interpretation of contract in Hong Kong and in the United Kingdom and determination of the issues involved would unlikely impact upon the development of jurisprudence in Hong Kong.

16.In addition, there is no unusual difficulty and complexity, Mr Chua submits. The amount of documents and evidence involved in the arbitration may be voluminous but reference to only parts of them will be required for the purposes of the proceedings. In any case, Leighton was able to conduct the case without the assistance of leading counsel or overseas lead counsel.

17.Mr Chua referring to Re Badenoch QC, submits that the argument that if the applicant is not admitted, LSG will face added costs and delay in the proceedings and thereby suffer inconvenience and prejudice can not stand up since that is LSG's self created situation. The court should not allow itself to be held ransom by it and grant the admission since this would be against the spirit of the provisions in the Legal Practitioners Ordinance.

18.In my opinion, the issues involved in the proceedings are issues on construction of contract and interpretation of statute by the application of established principles. The court's determination on the meaning of particular clauses in the contract between LSG and Leighton would unlikely be of general application. S.2GA of the Arbitration Ordinance which imposes a duty on arbitrators to avoid delay and unnecessary expense in resolving a dispute was considered by the court in China Link Construction Co Ltd and China Insurance Co Ltd [2002] HKEC 425 in relation to the need for a party to prosecute an appeal expeditiously. But so far, the court has not considered the effect of the section in relation to the principles in Shumizu. Neither the UK courts have considered the UK counterpart of this section. Be that as it may, how the section would affect the case is still a matter of interpretation by the application of established principles. It would be unlikely that a determination in this aspect will have an impact on the development of local jurisprudence. The amount of material in the arbitration may be voluminous and the arbitration hearings may have been lengthy, indicating some complexity, I do not think that the proceedings are of such unusual complexity and difficulty that they should be conducted by leading overseas counsel.

19.It has not been shown by evidence or otherwise that no suitable local counsel with such specialist experience and knowledge is available in Hong Kong to take over the proceedings nor that such specialist knowledge is not available from the local Bar. On the contrary, as Mr Chua pointed out in his skeleton submission, there are experienced local leading counsel who specialize in this field and they are more than able to argue the issues involved.

20.On Mr Llyod's contention that LGS will be prejudiced and inconvenienced if the application is not granted, the principle must be that counsel's early involvement in the case should not as a matter of fact qualify him for admission to appear in subsequent proceedings, if he is otherwise not qualified or it is inappropriate to admit him. The fact that he is more conversant with the case is not relevant. One must remember that a party has a choice of local or overseas counsel and he should not be heard to complain of prejudice if representation by overseas counsel becomes impossible when the Legal Practitioners Ordinance applies.

21.The fact that LSG has now retained local Senior Counsel should not provide a basis for the applicant's admission if it is otherwise inappropriate to grant the application. As Chan CJHC said in Re Richards QC:

"It must not be thought that so long as local senior and junior counsel are instructed, the court would, as a rule, admit an overseas counsel to add to their team."

22.It must be a rare exception that the court will grant an application that does not fall within the established guidelines for admission of overseas counsel for a particular purpose. The case of Re Richards is decided on its particular facts and it should not be taken as a precedent that a heavy and complicated case would justify appointing overseas counsel where it is otherwise inappropriate. On the facts of the present case, I do not think the applicant had made out an exceptional case.

23.I have no doubt that the applicant is an acknowledged expert in this field. However, on the facts of this case, I am far from convinced that this is a proper case that I should exercise my discretion to admit overseas leading counsel to appear in the proceedings in question. The application is refused with no order as to costs.

Representation:

Mr Ian Lloyd, instructed by Messrs Denton Wilde Sapte, for Applicant.

Ms Jenny Fung, Senior Government Counsel, for Secretary for Justice.

Mr Chua Guan Hock and Mr José Maurellet, instructed by Messrs Boase Cohen & Collins, for Hong Kong Bar Association.