Falcon Private Bank Ltd v Borry Bernard Edouard Charles Ltd And Another

CourtCourt of Final Appeal (Hong Kong)
Judgment Date13 May 2014
Citation(2014) 17 HKCFAR 281
Judgement NumberFAMV49/2013
Subject MatterMiscellaneous Proceedings (Civil)

FAMV No. 49 of 2013







(1st Respondent)
(2nd Respondent)


Appeal Committee: Mr Justice Ribeiro PJ, Mr Justice Tang PJ and Mr Justice Chan NPJ
Date of Hearing and Determination: 5 May 2014
Date of Reasons for Determination: 13 May 2014




Mr Justice Ribeiro PJ:

1. We dismissed this application for leave to appeal at the hearing, reserving our reasons which we now provide.

A. The background

2. The plaintiff is a Swiss bank with a Hong Kong branch. The 1st defendant is a Hong Kong company having the 2nd defendant as its sole shareholder and director. The plaintiff alleges that it mistakenly paid a large sum to a named company which then transferred US$10 million to the 1st defendant resulting, it contends, in the defendants being constituted trustees of the sum received. The plaintiff issued a Writ against the defendants in November 2011 and obtained a Mareva injunction and an order for disclosure of the whereabouts of the sum received.

3. Between November 2011 and January 2012, the defendants repeatedly failed to give proper disclosure, resulting in the plaintiff having to obtain a series of orders, including unless orders, aimed at compelling disclosure especially in relation to relevant banking documents. The defendants countered by issuing summonses to discharge the injunction and to strike out the plaintiff’s claim. They also complained that the plaintiff had obtained a "secret order" ex parte from Sakhrani J authorising it to release affidavits filed to the Swiss and Hong Kong Police.

4. The "secret order" complaint was relied on as a basis for seeking more time for complying with the disclosure orders on the footing that the defendants wanted an assurance that disclosed documents would not be provided to the Swiss and Hong Kong Police. In his judgment dated 27 January 2012 (“the January judgment”),[1] To J held that there had not been any breach of the plaintiff’s undertaking since it had disclosed the documents with the Court’s leave. He described the abovementioned arguments for deferring disclosure as “illusory and an obvious delaying tactic”, calling the defendants’ delay in compliance “contumelious”.[2] He made an unless order requiring the defendants to comply.

5. In purported compliance, the defendants filed an affidavit stating that the banking documents were not in their possession and that they had been unable to obtain them from the banks concerned. They provided no evidence of written communications with the banks. This led the plaintiff to issue a summons dated 10 February 2012 for an order that the unless order should take effect or alternatively for a further unless order requiring the defendants to write to the banks to obtain the records.

B. The decisions leading to applications for recusal

6. The plaintiff’s summons was heard by To J on 22 February 2012. Mr Colin Wright appeared as counsel for the defendants and sought to resist enforcement arguing that the defendants had duly complied with To J’s order. He submitted that “A party required to make an affidavit disclosing documents can only do so if the documents are in his possession at the time of the deadline for making the affidavit.”[3] And that: “Once a party from whom specific discovery is sought swear[s] an affidavit that he does not have the documents sought, that is the end of the matter.”[4] To J made it clear that he considered that argument unsustainable: the disclosure obligation obviously extended to documents in the defendants’ power or control so that, if not in their possession, they should have taken steps to obtain them from the banks.[5] Mr Wright, however, persisted in making the submission although he was told several times to “move on”.[6] To J made a further unless order requiring the defendants to write to the banks requesting specified documents and to make specified disclosures.

7. In To J’s judgment dated 22 February 2012 (“the February judgment”), he severely criticised Mr Wright for pressing what the Judge considered to be the wholly unarguable proposition that compliance merely required disclosure of documents actually in the defendants’ possession:

“Such submission is as much an insult to the intelligence of the court as it is a disgrace to the counsel of such seniority who utters it. This comment is made not without regard to counsel’s duty to fearlessly uphold the interest of his client; but such duty does not excuse counsel from misleading the court.”[7]

8. He described as “ludicrous” the argument that he had not allowed adequate time for the defendants to obtain the documents adding:

“The way this matter was conducted by the defendants was to engender to delay. It appears that very experienced counsel and reputable solicitors are part of it.”[8]

9. Holding that the defendants had been guilty of unsatisfactory and inadequate disclosure against a background of contumelious delays and breaches, he ordered them to pay the plaintiff’s costs on an indemnity basis.[9]

10. Stung by those criticisms, the defendants’ solicitors wrote to the plaintiff’s solicitors asking them to agree to apply for the Judge’s recusal.[10] The latter firm replied that they saw no reason whatsoever for arguing bias.[11] The defendants’ solicitor then wrote to the Judge asking him to recuse himself from hearing the pending summonses to strike out the plaintiff’s claim and to discharge the injunction.[12] The plaintiff’s solicitors wrote suggesting that the recusal application should not be entertained[13] and the Judge refused to recuse himself.[14] The defendants thereupon took out a summons seeking an order for recusal from hearing the pending summonses on the ground of apparent bias. That recusal summons was heard and dismissed at the start of the hearing on 15 May 2012 and To J proceeded to deal with the striking-out and discharge summonses, dismissing them (save for striking out one sentence in the Statement of Claim) after a four-day hearing on 7 June 2012.

11. On 9 July 2012, To J handed down his reasons (“the July reasons”). We are only concerned with his dismissal of the recusal summons. It was common ground that the test was that referred to by the Appeal Committee in Deacons v White & Case Limited Liability Partnership,[15] as follows:

“… The court must first ascertain all the circumstances which have a bearing on the suggestion that the judge was biased. It must then 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.”

12. The central question was whether the Judge’s criticisms of counsel and solicitors mentioned above were such as to raise a question of apparent bias. In the July reasons, To J elaborated on his previous criticisms, stating:

“... Mr Wright’s conduct was a deliberate attempt to mislead the court. Not only did he not apologise for what was a very obvious mis-statement of the law, he stood by his submission and now uses the occasion to attack my impartiality. That is a very serious accusation to make against a judicial officer.”[16]

13. He criticised the solicitors for an unfairly selective quotation from the February judgment[17] and, returning to Mr Wright, stated:

“Mr Wright’s conduct was either sheer incompetence or a deliberate attempt to mislead the court. The legal principle was so trite that a counsel of his seniority and experience of twenty-five years since call to the English bar could not have got it wrong. He obstinately insisted on his misleading proposition of the law despite his mistake had been pointed out to him. The only inference is that he deliberately attempted to pull wool over the court’s eyes. That is why I said it was an insult to the court’s intelligence and a disgrace to the counsel. In the circumstances, it was appropriate for the court to express its strong sense of disapproval of such misconduct in the hope that such misconduct will not be repeated and future proceedings will be conducted in a more lawyerly manner.”[18]

14. To J recognized that Mr Wright had a “duty to fearlessly uphold the interest of his client” but, he held that such duty “does not excuse him from deliberately misleading the court”.[19]

15. The Judge...

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