Superb Quo Ltd v. Lee Yuen Cheung Co Ltd and Others

HCMP 29 /2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 29 OF 2011

(ON AN INTENDED APPEAL FROM LDCS NO. 5000 OF 2010)

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BETWEEN

Before: Hon Rogers VP, Le Pichon and Kwan JJA in Court

Date of Hearing: 20 January 2011

Date of Handing Down Judgment: 14 February 2011

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Hon Rogers VP:

1.I have had the advantage of reading in draft the judgments of Mrs Justice Le Pichon JA and Madam Justice Kwan JA. With no disrespect to the judgment of Kwan JA, I agree with the judgment of Le Pichon JA for the reasons which are given in her judgment. It has to be appreciated that this is not a case where it is alleged that there is actual bias. It is a case that where it is said the facts would lead a rational and independent observer, properly acquainted with the facts, to come to the conclusion that there was a real possibility of bias. Whilst there may be different views of the matter, I consider that that situation does exist here. Clearly, the purpose of judicial proceedings is to arrive at a conclusion where, whatever the outcome, the parties can rest assured it has been arrived at without any possibility of bias. Hence, were there any doubt about the matter I consider that a court should always come a decision would do the least harm or to put it in a more colloquial way “err on the side of caution”.

Hon Le Pichon JA:

2.I have had the advantage of reading in draft the judgment of Kwan JA.  I gratefully adopt §§ 48 to 51 of her judgment which helpfully set out, inter alia, the relevant facts and circumstances giving rise to these proceedings.  For the reasons set out below, for my part, I consider that the applicable test for apparent bias has been satisfied in the present case and I would grant leave to appeal and allow this appeal.

3.The present case is one of apparent bias.  To put the matter in context, the application before the tribunal concerns an application made pursuant to the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545, by the majority owner of the building (“the applicant”) for the compulsory sale of all the undivided shares in the lot on which the building stands.  The three respondents to the application are minority owners, each owning one of the units in the building (“the respondents”).  On 30 May 2010, directions were given that the application be heard by a presiding officer and a member.

4.The tribunal has no power to make an order for sale under section 4 of the Ordinance unless, after hearing objections, the tribunal is satisfied that redevelopment is justified “due to the age or state of repair of the existing development”.  In coming to a decision, the tribunal will have to make findings of fact.  Absent agreement, the tribunal will also have to determine the existing use value of each of the units for apportionment purposes (to enable the proceeds of sale to be divided on a pro rata basis among the owners) as well as the redevelopment value of the lot which normally becomes the reserve price in the event an order for compulsory sale is made.  It is not unusual for the parties’ valuations to be significantly different.  The court was given to understand that the applicant and the respondents will each be calling four experts as witnesses.  It is common ground that a lot is at stake for the parties.

5.According to the Gazette Notice published on 31 December 2010 (G.N. 8259, Gazette No. 52 of 2010) Kenneth Kwok Wing Hon (“the member”) was appointed a “Temporary Member” for the period from 3 January 2011 to 14 January 2011.  Seemingly, he was appointed to hear this single application only as it had been set down for 10 days from 3 to 7 and 10 to 14 January 2011 which coincides with the period of appointment.  The member has not previously sat as a member of the Lands Tribunal, whether on a temporary basis or otherwise.  He is a valuation surveyor who has spent his entire career with Swire Properties Ltd (“Swires”), his last position before his retirement in 2006 was senior manager, advisor to the managing director.

6.One of the applicant’s experts, Mr Benson Wong is known to the member sitting with the presiding officer.  During the hearing, Mr Mok who appeared for the applicant elaborated on the nature of Mr Wong’s expert evidence.  The example he gave related to exposed wiring in the building and for that item, Mr Wong’s opinion was that repairs were necessary for the building to be put into tenantable repair and that meant ‘boxing-in’ the exposed wiring which is an expensive exercise.  The respondents’ expert takes a different view and does not consider the exercise necessary.  It seems, although it is not entirely clear, that Mr Wong’s evidence does not go beyond identifying the items of repair the building requires and their cost.  He estimated that the recommended repairs would cost $36 million.  Suffice it to say that there is a huge disparity between Mr Wong’s estimate and that of the respondents’ expert which is $7 million.  On any view, Mr Wong’s evidence will be highly controversial.  The tribunal’s findings on the repairs required for the existing building and their cost are bound to have a significant impact on its decision on whether a compulsory sale order should be made.

7.The applicable test for apparent bias is not controversial and is conveniently set out in the judgment of Mummery LJ in AWG Group Ltd. v Morrison [2006] 1 WLR 1163:

“7  The test for apparent bias …is that, having ascertained all the circumstances bearing on the suggestion that the judge was (or would be) biased, the court must ask “whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility …that the tribunal was biased” …”

8.Mummery LJ then referred (with approval) to the judge’s citation of the following passage from judgment of the Court of Appeal (Lord Bingham CJ, Lord Woolf M.R. and Sir Richard Scott V.-C.) in Locabail (UK) Ltd v Bayfield Properties Ltd [2000] QB 451, § 25 to illustrate the kind of circumstances in which there would be a real possibility of bias:

“25 …by contrast, a real danger of bias might well be thought to arise in there were personal friendship or animosity between the judge and any member of the public involved in the case; or if the judge were closely acquainted with any member of the public involved in the case, particularly if the credibility of that individual could be significant in the decision of the case …or if, for any other reason, there were real ground for doubting the ability of the judge to ignore extraneous considerations, prejudices and predilections and bring an objective judgment to bear on the issues before him …In most cases, we think, the answer, one way or the other, will be obvious. But if in any case there is real ground for doubt, that doubt should be resolved in favour of recusal.”

9.What, then, are the circumstances in the present case that bear on the suggestion that the member would be biased?

10.In the afternoon of the first day, before the tribunal delivered its ruling on the respondents’ recusal application, the member made a declaration in court which provided information concerning the nature of his contact with Mr Wong.  The contents of his declaration are set out in full in § 48 of Kwan JA’s judgment to which reference should be made.

11.What emerges from that declaration is that:

(1) The member and Mr Wong know each other.  They attended the same secondary school and overlapped for three years from 1967 to 1970, although the member was senior to Mr Wong by several years.  The member came to know Mr Wong because they played football at school together.  Mr Wong also participated in extracurricular activities such as camps which the member had organized.

(2) After leaving secondary school, they met occasionally at old school functions or in the street.

(3) The member met Mr Wong again in 1980 when Mr Wong (who by then had become a building surveyor) joined Swires where the member was already working.

(4) Although the member and Mr Wong had no ‘work interface’ as such in that they worked in different departments and had different reporting lines, they were in contact in as much as they were team-mates in the company’s football team.  They also met at annual dinners of the company.

(5) While Mr Wong left Swires after five years to set up his own practice in 1985, his relationship with Swires did not come to an end.  The member and Mr Wong “met occasionally” at Swires because Mr Wong had business dealings with Swires which required his attendance at Swires from time to time.

(6) Although the member himself had no direct business dealings on Swires’ behalf with Mr Wong during this period, his subordinates or other department colleagues did have such dealings.

(7) Socially, the member and Mr Wong might meet casually in the street or in group social functions.

12.It is not suggested that the member and Mr Wong were personal friends, much less close personal friends.  They knew nothing of each other’s personal life and circumstances and did not maintain a relationship at a social level.  Nevertheless, one could not properly describe the member as having no more than a ‘nodding’ acquaintance with Mr Wong or that Mr Wong was but a mere casual acquaintance.  That description would be wrong and grossly inaccurate.  The fact is that on and off over the years they have been in one another’s ‘orbit’.  Their acquaintance went well beyond that of recognition but without the relationship being intimate.  Mr Wong was a long-standing acquaintance, dating back many years.  Besides, it is almost inevitable that playing sports as members of the same team would have engendered a degree of camaraderie between them.

13.Mr Mok has characterised that relationship as “quite superficial”.  I do not find that characterisation either accurate or helpful.  Rather, the focus should be on whether, viewed objectively, the nature and circumstances of their acquaintance could or would lead to some form of subconscious bias.

14.Subconscious bias operates subtly and imperceptibly.  The process could be said to be insidious.  Because of its very nature, ‘hard’ evidence is seldom (if ever) available.  But it does not follow that absent such evidence, it would not be possible to arrive at an objective view based on known facts as to whether or not there is a real possibility of subconscious bias.  I do not accept that any such view has to be rejected as speculative.

15.The objective facts are that the member has spent his whole working career with a single employer, an established and well-respected company.  In a manner of speaking, Mr Wong emanates from the same stable.  Admittedly he worked at Swires for no more than 5 years but, importantly, his relationship with Swires did not then cease and the member was aware of that.  Mr Wong’s professional expertise was as a building surveyor.  He continued to have business dealings with the company presumably, by providing professional services to Swires.  It is his professional expertise that is also engaged when he gives expert evidence before the tribunal.  It would only be natural for the member to have a view of Mr Wong’s expertise and competence.  In those circumstances, would it be reasonable to rule out a real possibility of subconscious bias?

16.The fact that the member has not had occasion previously to evaluate or comment on Mr Wong’s work or ability is not dispositive of the point.  The member’s acquaintance with Mr Wong and the matters mentioned in the preceding paragraph would lead a fair-minded and informed observer to conclude that there is a real possibility that the member would be more receptive than he otherwise would be to Mr Wong’s professional opinion and that the member’s regard for and perception and appreciation of Mr Wong’s evidence would be heightened, especially when, on any particular issue, the line between the competing views happens to be finely balanced.  Human nature being what it is, such occurrences are natural and hardly out of the ordinary and if they should occur, it would give Mr Wong an edge over his opposite number. In other words, the respondents would be put at a disadvantage.

17.It was said that we are not here concerned with factual disputes but opinion evidence.  Mr Mok sought to draw a distinction between factual and expert witnesses.  I fail to see the relevance.  The fact is that the tribunal has to make factual findings based on the opinion evidence of the experts on the items of repair that are necessary and the resultant cost of such repairs.  Any disadvantage to the respondents would be exacerbated by the fact that, generally speaking, such findings tend to be unappealable.

18.In this case, objection was raised on the first day of the trial which commenced on 3 January 2011.  Upon the adverse ruling of the tribunal on the recusal application, the respondents obtained a stay of the proceedings from Rogers VP on 6 January 2011, with directions that an application for leave to appeal be made on an expedited basis.  On 10 January 2011, the stay granted was lifted upon the applicant’s undertaking to pay the respondents’ costs thrown away in the event that the appeal against refusal of recusal were successful.  The hearing then resumed on 11 January until 14 January when it was adjourned part-heard to dates in March and April 2011, it being agreed that another 21 hearing days would be required to complete the trial.

19.This is a case where the hearing has hardly begun.  In the AWG case, Mummery LJ alluded to such situations as having “scope for the sensible application of the precautionary principle” and explained (at § 9) that:

“If, as here, the court has to predict what might happen if the hearing goes ahead before the judge to whom objection is taken and to assess the real possibility of apparent bias arising, prudence naturally leans on the side of being safe rather than sorry.”

It is perhaps worth reiterating the English Court of Appeal’s observation in Locabail (see § 8 above) that:

“…if in any case there is a real ground for doubt, that doubt should be resolved in favour of recusal.”

20.Taking into consideration all the circumstances of the present case, I am of the view that a fair-minded and informed observer would consider that there is a real possibility of bias.  For my part, I would grant leave to appeal, allow the appeal and set aside the order below.  I would also make an order nisi of costs (here and below) in favour of the respondents.

21.I would add that given the ‘temporary’ nature of the member’s appointment, it is unlikely that practical difficulties would be encountered in identifying and appointing another valuation surveyor to replace the member to hear this particular application.

Hon Kwan JA:

The application

22.We have before us an application for leave to appeal against a decision of the Lands Tribunal (made up of presiding officer HH Judge M Wong and member Mr. Kenneth Kwok Wing Hon) on 3 January 2011 refusing an application that member Kwok should recuse himself from trying the case in Land Compulsory Sale Main Application No. 5000 of 2010. That application was made by the 1^st to 3^rd respondents in the case. Under sections 11(2) and 11AA(1) of the Lands Tribunal Ordinance, Cap. 17, a party may appeal to the Court of Appeal against a decision of the tribunal on the ground that the decision is erroneous in point of law with leave to appeal granted by the tribunal or the Court of Appeal. Leave to appeal was sought from this court as the respondents failed to obtain leave from the tribunal.

23.We heard full arguments from the parties as if the application were the substantive appeal, recognising that there might legitimately be room for disagreement whether member Kwok should recuse himself in the circumstances here.

The proceedings in the tribunal

24.The case before the tribunal is an application by the majority owner of a building for an order for compulsory sale of all the undivided shares in the lot on which the building was erected for redevelopment, under the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545. The 3 respondents are the minority owners of 3 units in the building. Under that ordinance, no order for compulsory sale shall be made unless the tribunal is satisfied that the redevelopment of the lot is justified due to the age or state of repair of the existing development on the lot.

25.We understand this case is the first fully contested case before the Lands Tribunal since the decision in Fineway Properties Ltd. v. Sin Ho Yuen Victor [2010] 4 HKLRD 1, in which the Court of Appeal expressed reservation about the correctness of the concept of “economic lifespan” in the test formulated by the tribunal in deciding whether redevelopment is justified due to age or state of repair of the existing building. For present purpose, it is not necessary to discuss the correctness of the test.

26.One of the expert witnesses retained by the majority owner is a building surveyor, Benson Wong Sai Ning. He has provided a report on the state of repair of the building and formulated items of repair with a total cost of $36 million. This would probably go to support the applicant’s case that the state of repair is such that the cost of repair exceeds the existing use value or significantly exceeds the enhancement value attributable to the repairs, to justify a case for redevelopment. The respondents’ expert has formulated items of repair on a much lesser scale and of a different nature, arriving at a total cost of only $7 million. There is no dispute on the factual evidence between the 2 experts. The dispute is regarding the applicable standard which they used to identify and formulate their respective items of repair.

27.We appreciate there is a lot of money at stake. The open offers made by the applicant, which were not accepted by the respondents, were almost $170 million.

28.On 30 May 2010, the presiding officer gave directions that the case should be heard by a presiding officer with a member. Mr. Mok, who appeared for the applicant, submitted to us that the presence of a member with valuation surveying qualification is necessary in this case, as there is substantial dispute on the assessment of the redevelopment value and for the tribunal to make an assessment of this value, it would need to decide on major differences between the experts on the level of construction costs, adjustments to comparables, and the like. He said that the identity of the member is unimportant, save that there may be delay if another member with appropriate qualifications should be appointed to replace member Kwok. Mr. Chain for the respondents argued that in the event member Kwok should recuse himself, there is no reason why the case should not be heard by the presiding officer alone.

29.The direction on 30 May 2010 is not a matter on appeal, so it is unnecessary to express a view on the appropriateness of this. Besides, in deciding whether there is any real possibility of bias in an application for recusal, the paramount concern is to administer justice fairly and impartially as publicly perceived, considerations of inconvenience, disruption to the proceedings, costs and delay are not relevant where the principle of judicial impartiality is properly invoked (AWG Group Ltd. v. Morrison [2006] 1 WLR 1163, paras. 6 and 29, per Mummery LJ).

The application for recusal in the tribunal

30.There is no suggestion that the application was not made in good faith and it arose in this way.

31.Member Kwok was appointed a temporary member of the tribunal to try this case. His appointment first came to the notice of the applicant’s solicitors on 28 December 2010. After confirming his identity with the tribunal on 29 December, the applicant’s solicitors wrote to the tribunal the following day and copied their letter to the respondents’ solicitors. They informed the tribunal that both a partner of their firm (who is a member of the legal team representing the applicant) and Mr. Wong “have known Mr. Kwok personally for a number of years.” They stated they had no objection to member Kwok hearing the case. Mr. Mok also spoke to Mr. Chain around this time on the matter and Mr. Chain said he would take instructions.

32.On 31 December the applicant’s solicitors provided further information to the respondents about member Kwok’s relationship with the partner and with Mr. Wong, in response to the enquiries of the respondents’ solicitors. Details of member Kwok’s relationship with Mr. Wong will be set out later. No objection was taken by the respondents at any time to member Kwok’s relationship with the partner.

33.The trial commenced on 3 January 2011 before the presiding officer and member Kwok. Mr. Chain got a short adjournment to take instructions whether objection would be taken to member Kwok trying the case. Having obtained instructions, he proceeded with his application for member Kwok to recuse himself on the ground of apparent unconscious bias, based on his acquaintance with Mr. Wong. He suggested it would be better for the presiding officer to hear the application alone without member Kwok, but the presiding officer was against this and he did not press the point.  Mr. Mok made his submission in opposition and Mr. Chain replied. The hearing was adjourned for a ruling in the afternoon.

34.Before the ruling was given, and at the invitation of the presiding officer, member Kwok made a declaration in court in the afternoon regarding his relationship with Mr. Wong. Counsel were invited to make further submissions if they wished and neither had any new points of substance to add. The presiding officer gave a reasoned decision dismissing the application. Member Kwok gave a short concurring decision.

The tribunal’s decision

35.The presiding officer adopted the established test in Porter v. Magill [2002] 2 AC 357 at 494, para. 103, which was to decide whether a fair-minded and informed observer, having considered the given facts, would conclude there was a real possibility the tribunal was biased. On the personal and social aspects of member Kwok’s relationship with Mr. Wong, he held that he cannot come to the conclusion they were closely acquainted or that they have any personal friendship, and as there is no in-depth friendship or relationship between them, he could not find any real danger of bias. He noted there was no working relationship between them and took into account that member Kwok was never required to assess the performance of Mr. Wong or vice versa at work, that there is no factual dispute between the experts and that Mr. Wong’s evidence would be his expert opinion. He did not think member Kwok’s professional judgment would be influenced by Mr. Wong’s opinion simply because they know each other.

36.Member Kwok agreed with the presiding officer. He mentioned that Mr. Wong will be giving evidence as an expert witness and he has never been asked to judge Mr. Wong’s performance before, so did not think there is any possibility of bias.

Some preliminary observations

37.Before dealing with the central issue of apparent bias, it is convenient that I should address several matters raised in the course of the arguments before us.

38.Firstly, Mr. Mok submitted that the central issue of apparent bias is not a point of law, as it is a matter of fact and degree whether this would be established in a particular situation. A conclusion or finding of fact does not involve an error of law unless that conclusion or finding is perverse, in that a reasonable tribunal of fact properly directed would not have made that conclusion or finding. Under section 11(2) of Cap. 17, appeals from the Lands Tribunal are confined to errors of law. As the central issue here is a factual conclusion or finding and involves no error of law, leave to appeal should not be granted under section 11AA(1).

39.Mr. Chain submitted to the contrary that although each case of apparent bias is fact sensitive, the question is one of law to be answered in the light of the relevant facts, see Helow v. Home Secretary [2008] 1 WLR 2416 at 2426G, para. 39, per Lord Mance). I agree with this.

40.No exercise of discretion is involved in deciding the question whether there is a real possibility of bias. As stated in AWG Group, supra. at 1170C, para. 20, an appellate court is well able to assume the vantage point of a fair-minded and informed observer with knowledge of the relevant circumstances. It must itself make an assessment of all the relevant circumstances and then decide whether there is a real possibility of bias.

41.Secondly, Mr. Chain submitted that member Kwok should not have ruled on the application for his recusal and it should have been decided by the presiding officer alone. I think this is a valid criticism. The question is one of law and a lay member is not likely to contribute to its resolution. More importantly, the application was for his recusal and member Kwok should not be asked to take up the invidious position of sitting as judge in his own cause (there is nothing untoward if he was merely to make a declaration of his relationship with the relevant person and to correct any factual errors in the submissions of the parties), unless no other member of the tribunal was available to determine the application at the time.

42.Thirdly, Mr. Chain emphasised that this application was made before the trial began. Quoting from AWG Group, supra. at 1167D to E and 1172D, paras. 9 and 30, and Locabail (U.K.) Ltd. v. Bayfield Properties Ltd. [2000] QB 451 at 480H, para. 25, he submitted that “prudence naturally leans on the side of being safe rather than sorry”, and where there is real ground for doubt, that doubt should be resolved in favour of recusal. I agree this is the appropriate approach.

43.Fourthly, Mr. Chain drew our attention to the statement of Lord Steyn in Lawal v. Northern Spirit Ltd. [2003] ICR 856 at 865F, para. 22 that the indispensable requirement of public confidence in the administration of justice requires higher standards today than was the case a decade or two ago, and the changing times should be borne in mind in considering the case of Tse Kwok Keung v. Swedish Motors Ltd. & Anr., CACV 441 of 2000, which was decided on 20 September 2001. I accept that in the situation of Hong Kong, in keeping with the changing times, higher standards are required today than was the case 10 years ago.

The test for apparent bias

44.The test for apparent bias has been mentioned above and need not be repeated.

45.Mr. Chain made great emphasis that public perception of the possibility of unconscious bias is the key in deciding this issue, citing Lawal, supra. at para 14, per Lord Steyn. It should be borne in mind that the perception is through the prism of a fair minded and informed lay observer, a reasonable member of the public, who is neither complacent nor unduly sensitive or suspicious (see Johnson v Johnson (2000) 201 CLR 488 at 509, para. 53, per Kirby J, quoted in Lawal, para 14 and Helow, supra., para. 2).

46.As stated by Lord Hope of Craighead in Helow at para. 2, the observer who is fair-minded is the sort of person who always reserves judgment on every point until he has seen and fully understood both sides of the argument, and his approach must not be confused with that of the person who has brought the complaint. “The “real possibility” test ensures that there is this measure of detachment. The assumptions that the complainer makes are not to be attributed to the observer unless they can be justified objectively.”

47.The attribute “informed” makes the point that the observer will take the trouble to inform himself on all matters that are relevant before he takes a balanced approach to any information given. He is able to put the information into its overall context and will appreciate that the context forms an important part of the material considered before passing judgment (Helow, para. 3).

The relevant circumstances

48.Most of the relevant circumstances are given in the declaration of member Kwok in court. I will set out his statement in full:

“Mr Wong and I attended the same secondary school, Shau Kei Wan Government Secondary School. In 1967, when I was in Form 5, Mr. Wong was admitted to Form 1. At that time, I was a school prefect and was very active in extracurricular activities. I used to give guidance to the junior schoolmates and came to know Mr. Wong and his classmates. We played football together.

After the certificate of education examination in 1968, I continued to study Form 6 and Form 7 in the same school. I was the chairman of the camp leader’s club, and organised camps which Mr. Wong and his classmates took part.

After leaving secondary school, I saw Mr. Wong occasionally at old school functions or in the street. Mr. Wong and I lost contact for a few years. I was not aware Mr. Wong became a building surveyor until I met him at Swire Properties, which he joined around 1980. In Swire Properties, Mr. Wong was in the Projects department and I was in the Hong Kong East department. We didn’t have any contact at work and we had different reporting lines. I was never asked to comment on Mr. Wong’s work performance. In Swire Properties, we played football together in the company’s football team and saw each other in the company’s annual dinners.

Other than this, we have different social life. I cannot remember when Mr. Wong left Swire Properties to establish his own practice. Since then, Mr. Wong and I met occasionally in Swire Properties’ office when he had business dealings with Swire Properties. But I cannot recall any direct dealings with him on business. Each were made mainly by my subordinates or through other department colleagues. Socially, Mr. Wong and I met casually on the street or in group social functions, but we never had any meals together alone.

Mr. Wong and I did not have any family relationship. I hardly know Mr. Wong’s family. For example, I don’t know the name of Mr. Wong’s wife, nor how many children Mr. Wong has. I cannot recall seeing Mr. Wong since my retirement from Swire Properties in 2006.”

49.Other relevant circumstances are set out in the subsequent letters of the Lands Tribunal to the respondents’ solicitors dated 18 and 19 January 2011, the letters of Swire Properties Ltd. (“Swire”) to the applicant’s solicitors dated 18 and 19 January 2011 and are as follows:

(1) Swire had, through its subsidiary companies, made an application in 2001 for an order for sale in respect of Melbourne Industrial Building under Land Compulsory Sale Main Application No. LDCS 1000 of 2001 pursuant to Cap. 545 (“the Melbourne case”). Mr. Wong was engaged as an expert witness for Swire in the Melbourne case.

(2) As Senior Development Manager in Swire, member Kwok was in charge of the acquisition of units in Melbourne Industrial Building in the early 1990s. During the course of the acquisition, he did not consult or engage the services of Mr. Wong. In 2000, his role was passed to other colleagues when he took up his new position as Senior Manager, Advisor to the Managing Director of Swire. Since then, he was no longer involved in the acquisition of units in Melbourne Industrial Building.

(3) 6 wholly-owned subsidiaries of Swire were the applicants in the Melbourne case. From time to time, some employees of Swire were appointed as directors of these companies. As a Swire employee, member Kwok was appointed one of the 2 directors of Boomfit Co. Ltd., the 6^th applicant in Melbourne case, and he was a director of this company in 2001. He had no personal interest in it as he acted merely as a nominee director for Swire.

(4) Member Kwok was not a member of the Swire working team in the Melbourne case and had no role to play in the litigation. The working team did not report to him. He did not participate in any discussion about the selection and appointment of Mr. Wong as an expert witness in that case. He did not read any report produced by Mr. Wong in that case, nor was he asked to comment on it. All decisions relating to the conduct of the case were made by the working team without any involvement of member Kwok.

50.There was also placed before us a letter dated 18 January 2011 of Mr. Wong to the court, giving information of his relationship with member Kwok in secondary school and when they were working in Swire. What Mr. Wong said about the relationship is not of consequence, as we are concerned with member Kwok’s recollection and how he sees the relationship. The only relevant matter to note from Mr. Wong’s letter is that he was a Swire employee during 1980 to 1985.

51.Swire has no interest of any kind in the present proceedings.

If there is apparent bias

52.Mr. Chain submitted that the Lands Tribunal erred in putting the test too high. Even though member Kwok and Mr. Wong are not personal friends with no in-depth relationship, their acquaintance formed in secondary school and in Swire is “close enough” to give rise to a real possibility of bias. They have been acquainted with each other for a long time. They may have shared some sort of collegiate spirit, coming from the same school and some kind of corporate culture, having worked in the same company. It would be unrealistic to suggest that over such a long period of acquaintance, and particularly as they are from the same or related field, member Kwok did not have a view on Mr. Wong, as a person and as a professional.

53.As for the fact that there is no factual dispute on the evidence of Mr. Wong and he is giving his opinion as an expert witness, Mr. Chain submitted this should not make a difference in applying the test. What is important is that the opinion evidence of Mr. Wong is controversial.

54.Member Kwok’s position is more akin to that of a juror than a professional judge. Mr. Chain gave as an example R v. Pintori [2007] EWCA Crim 1700, in which apparent bias was made out for a juror who was a civilian police employee and knew three of the police officers in the case “reasonably well” even though she did not know them socially or personally. The juror had worked with the officers in her old team as a communications officer taking calls from members of the public and radio dispatch and saw them regularly. The appellate court was of the view that the fair-minded observer would have concluded that there was a real possibility the juror was disposed to find the appellant guilty simply because she knew the officers, had worked with them and therefore wished (consciously or subconsciously) to support them in the prosecution.

55.Mr. Mok submitted that member Kwok’s relationship with Mr. Wong is quite superficial, from their days at secondary school and after both had joined Swire. The fact remains member Kwok has never had any direct business dealings with Mr. Wong and has never judged the latter’s work. He made the point that there has never been any social or working relationship between the two that could influence the judgment of member Kwok in his assessment of the opinion evidence of Mr. Wong and the other expert regarding the reasons given by each in his formulation of the respective items of repair. There is nothing objective to justify any inference to be drawn by the fair-minded and informed observer that member Kwok must have a view on Mr. Wong as a person and a professional, and nothing objective to show that member Kwok may not observe his judicial oath as a temporary member to administer justice without fear or favour, self-interest or deceit.

56.It is in rare situations that the court may have straws in the wind as indicating how the mind of a tribunal may be subconsciously affected by a previous acquaintance, such as spontaneous remarks made by the juror in Pintori (who said, “I knew them [the police officers], and because I am in this job, I just found him guilty”), or by the judge in Tse v. Swedish Motors (who said without prompting he “never doubted the ability of the Doctor”). In most contested applications for recusal, the court would have to adopt the vantage point of the fair-minded and informed observer and make an assessment accordingly.

57.I am not prepared to assume that member Kwok did not have any view on Mr. Wong, whether as a person or a professional, over all the years of their acquaintanceship. But the question is not whether member Kwok does or does not have a preconceived opinion of Mr. Wong, the question is whether he is capable of acting impartially notwithstanding any preconceived opinion he might have. “Impartiality does not consist in having no controversial opinions or even prejudices … Impartiality consists in the capacity to be aware of one’s subjective opinions and to place them on one side when one enters the professional field, and the ability to listen patiently to and to weigh evidence and argument and to withhold concluded judgment until the case is over.” (Lord Hailsham in his autobiography “The Door Wherein I Went” p. 256 to 257, quoted in the article “When should a judge not be a judge?” by Sedley LJ, London Review of Books, 6 January 2011).

58.In my assessment as a fair-minded and informed observer, the ties of collegiate spirit and corporate culture in this instance are not such as to give rise to a real possibility that member Kwok may not be able to put to one side any preconceived view he may have formed of Mr. Wong when he comes to consider the expert evidence. Any opportunity for contact between them was greatly reduced when Mr. Wong left Swire more than 25 years ago. I have no real doubt that unconscious bias is not made out in this situation.

Hon Rogers VP:

59.Leave to appeal will, therefore, be given and the appeal will be allowed.  The court will hear the parties as to costs but with the indication that, in the absence of any argument as to costs, it would be disposed to order that the costs of this appeal should be to the first to third respondents.

Mr Mok Yeuk Chi, instructed by Messrs Mayer Brown JSM, for the Applicant/Respondent

Mr Benjamin Chain, instructed by Messrs Leonard K.L. Heung & Co., for the 1^st Respondent/1^st Applicant

Mr Benjamin Chain, instructed by Messrs So, Lung & Associates, for the 2^nd & 3^rd Respondents/2^nd & 3^rd Applicants