Falcon Private Bank Ltd v. Borry Bernard Edouard Charles Ltd and Another

CACV 42/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 42 OF 2013

(ON APPEAL FROM HCA NO. 1934 OF 2011)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Kwan JA (giving the Reasons for Judgment of the Court):

1.This is an application for leave to appeal to the Court of Final Appeal. The application was made on the basis that the proposed appeal raises questions of great general public importance and on the “or otherwise” limb. We dismissed the application with costs at the conclusion of the hearing and declined to give a certificate of two counsel for the defendants. These are the reasons for our judgment.

2.On 10 September 2013, we allowed the defendants’ appeal against the decision of To J in the defendants’ application to recuse himself for apparent bias.  We held that the judge was plainly wrong in refusing the application.  The detailed reasons appeared in our judgment.  In a nutshell, the judge repeatedly criticised the defendants’ counsel severely for misleading the court, and that counsel had done so deliberately.  As we had pointed out[1], such conduct, if established, would amount to professional misconduct.  We applied the test of the informed and fair-minded observer, and came to the view that such an observer would have concluded there was a real possibility the judge would not consider the arguments presented by the defendants fairly and that disqualifying bias was made out.

3.In the appeal, it was common ground[2] that the test for determining apparent bias was the test accepted by the Appeal Committee of the Court of Final Appeal in Deacons v White & Case [2004] 1 HKLRD 291 at para 20.  What was in dispute was how that test should be applied to the present case.

4.One would have thought that the grounds to be raised on appeal, which relate to the manner in which the undisputed test was applied to the case in question, must be fact-sensitive and it could not be said there are questions of great general public importance arising from the proposed appeal. As the Appeal Committee had stated in Deacons v White & Case at para 30, whether the court below had misapplied the proper test for determining apparent bias is not a question of great general public importance.

5.Mr Jason Karas, who did not appear for the plaintiff in the appeal[3], acknowledged in his written reply submission it is not the plaintiff’s task to re-argue the appeal or to persuade us that our judgment is wrong.  His task is merely to persuade us there are questions of great general public importance arising from the proposed appeal and that the proposed appeal is reasonably arguable.  In serving the court with two written submissions totalling 15 pages with two box files of authorities, it seems to us he came very close to doing what he said he should not do.

6.The questions he formulated are as follows:

“(1) Does the Court have jurisdiction to censure or reprimand a barrister or solicitor for professional misconduct in the course of the proceedings before it, or is such jurisdiction limited to wasted costs orders or complaint to professional bodies?

(2) If so, does it “logically follow” that such criticism of a barrister’s or solicitor’s professional integrity gives rise to apprehended bias requiring recusal, or must the Court examine all of the facts and circumstances including whether or not the criticism was fair, proportionate or justified?”

7.For the proposed appeal, Mr Karas raised the following arguments:

(1)  The applicable law in this situation is what he described as the Bahai principle, namely, that a judge properly exercising his judicial function by criticising the conduct of a party’s legal representative in the course of his judgment on a matter which he considers relevant to his decision, cannot be said to be biased, nor can there be reasonable apprehension of bias (Bahai v Rashidian [1985] 1 WLR 1337 at 1346F to G and 1342H).  The Court of Appeal failed to apply this principle.

(2)  The Court of Appeal failed to undertake a detailed examination of all of the prevailing facts and circumstances in determining what a fair-minded and informed observer would have concluded. In particular, it did not consider the full transcript of all the hearings, not just the two hearings before To J on 27 January 2012 and 22 February 2012, but also the hearing before Deputy Judge Lok on 6 January 2012.  There being no reference to these transcripts in our judgment.

(3)  The Court of Appeal wrongly considered facts and circumstances which post-dated the recusal decision of To J, namely, his August 2013 judgment.

(4)  The Court of Appeal failed to give weight to matters which would show that To J’s strong criticism of the defendants’ counsel was entirely justified, fair and proportionate.  It did not make any finding if To J’s statements that counsel had attempted to deliberately mislead the court on a trite proposition of law were justified.

8.It could readily be seen that the apart from (1), the other arguments are all fact-sensitive.  As to (1), we do not think there is this principle of law, as is apparent from Ma So So v Chin Yuk Lun & Anr (2004) 7 HKCFAR 300 at para 19, in which the court discussed the proper procedure concerning an application against a solicitor personally for wasted costs.  Li CJ said in this context: “The application should usually be heard by the judge who dealt with the proceedings, unless there are exceptional circumstances which render this inappropriate; for example where apparent bias is established” and Bahai v Rashidian was cited.

9.As to the arguments in (2) to (4), we do not propose to add to or explain further what was set out in our judgment, save to say that the transcripts of all three hearings were in fact considered by the court, although not referred to in our judgment.

10.We do not think the questions formulated in (1) and (2) are really engaged by what was decided in our judgment, properly read and understood.

11.As we have noted in our judgment[4], the mere fact that a judge has criticised the conduct of a party’s lawyer will rarely if ever be a ground of recusal.  We took the view that the present case is one of those rare instances.

12.We decline to exercise our discretion to grant leave as we are not satisfied there are questions of great general public importance arising from the proposed appeal.  We also decline to grant leave on the “or otherwise” limb, as we are not satisfied this is an appropriate case for such an exceptional course to be taken (Bill Chao Keh Lung v Don Xia (2004) 7 HKCFAR 260 para 9).

Mr Jason Karas (Solicitor Advocate), instructed by Lipman Karas, for the plaintiff (applicant)

Mr Gerard McCoy SC and Mr Colin Wright, instructed by Stephenson Harwood, for the defendants (respondent)

[1] Judgment of the Court of Appeal, para 61

[2] Judgment of the Court of Appeal, para 50; Skeleton Argument of the plaintiff dated 13 August 2013, paras 8 and 12

[3] The plaintiff appeared by Mr Clive Grossman, SC and Mr Douglas Lam in the appeal

[4] Judgment of the Court of Appeal, paras 57 and 59