Thursday, March 15, 2007

The World’s Strangest Appellate Hearing: Hong Kong Law, Part 2

(This is the second of three posts about the unique legal universe of Hong Kong. Part One is here, and Part Three is here.)

Hong Kong, China

I expected a Court of Appeal hearing in Hong Kong to be a little different from what I was used to in California. I didn’t expect it to be a through-the-looking-glass fantasia that challenged everything I knew about appellate procedure.

This is what happens when you appeal a judgment in the United States: The parties prepare and submit transcripts and copies of the important trial documents; that’s called “the record.” Each side submits legal arguments in writing; these are called “briefs” and run from 25 to 50 pages. About a year after the attorneys submit the paperwork, they argue their respective clients’ cases in front of three judges; each side gets anywhere from 10 to 30 minutes to talk and answer questions from the bench. Sometimes, the judges think the case is so simple that they send the attorneys a letter stating that the case will be decided on the papers and that they needn’t bother coming to the courthouse, thank you very much. The attorneys who do argue before the court spend several weeks thereafter dissecting the questions and mannerisms of the judges for clues on how they might rule. About two to six months after the oral arguments, the attorneys receive in the mail a decision which is usually different from what anybody expected.

This is not what happens in Hong Kong.

In my quest to watch barristers in robes and wigs plying their trade, I decided to visit a Court of Appeal hearing. I figured it would be a light and enjoyable way to spend a morning. I could not have been more wrong.

But, first, the background of the case I watched, because this is the type of dispute that gives law and courts a bad name.


Man Fai Tai Enterprise Ltd. had been operating a concrete batching plant in a part of Hong Kong called Sha Ling. There isn’t really a good place to put a concrete batching plant, but this one was wedged between an animal rendering facility and a cemetery, so that’s as a good a place as you’re likely to find. Problem: the land was zoned for agricultural use, not industrial use. Solution: Man Fai Tai applied for a waiver. It’s called a “non-conforming use,” it’s done all the time, and, in this case, a series of temporary waivers had allowed Man Fai Tai to be in the concrete business for the past 15 years.

When the waiver came up for renewal in 2003, Man Fai Tai said in its application that it was expanding its product line to include asphalt. No problem, said the city, here’s a three-year waiver and may the Chinese New Year be prosperous. So Man Fai Tai is happy to sell a new product, the city’s happy to have a tax-paying employer on some grotty land, and there aren’t any (living) neighbors to complain. Who’s sad?

The people who already make asphalt in a different part of Hong Kong, that’s who. They leased industrial land, which costs a lot more than agricultural land, and they’re deeply peeved to have a new competitor, especially one that’s paying markedly less for land. Why, with its lower costs, Man Fai Tai could sell comparable asphalt at a lower price! “This will not stand!” screamed the Asphalt and Macadam Association of Hong Kong, which is a fancy way of saying “The Other Companies That Make Asphalt In Hong Kong.”

So – despite the fact that they are not parties to this transaction and do not even contend that they are located near the property in question -- four asphalt companies filed suit against the city, seeking to have the waiver quashed. They argued, among other things, that the city did not properly investigate whether the asphalt production would truly be a temporary use, as opposed to a permanent use pretending to be temporary.

This is what is called a “process argument,” because it claims that the process was flawed. The problem with a successful process argument is that, at the end of the court proceedings, all the victor has won is another chance to make its argument. The city planning board would then be required to follow the process ordered by the court, but the board could still come to the same conclusion. Unless there has been an intervening change in the identity of the decision makers, process arguments often aren’t worth the expense.

The trial court judge, Andrew Chung, told the asphalt men to get out of his courtroom. He ruled that the asphalt companies did not have a sufficient interest in the board’s decision to have standing (which is called locus standi in the English tradition) to challenge the waiver.

Another trial court judge, A. T. Reyes, adjudicating a later, different challenge filed by the asphalt companies, went further and derided the companies as “busybodies.”

“To put it bluntly, the Applicants’ grievance is that, by the Director’s decision, persons occupying the relevant lots may conceivably be able in the short term to produce asphalt more cheaply than the Applicants,” ruled Judge Reyes. “The Applicants’ choice to use industrial land was one made of their own volition. Nothing prevented the Applicants in the past and nothing hinders them now or in the future from themselves leasing agricultural land and applying for waivers similar to those granted here.”

So, having twice been handed their hats for transparently anti-competitive legal maneuvers, the asphalt companies did what anybody would do after two public dressings-down: they appealed.

In Which Our Hero Finds What He Has Been Looking For

Robes and wigs! Four barristers were standing in the front row, preparing for the hearing, and they were wearing robes and wigs! My quest to watch bona fide English-style barristers was over.

The tableau was decipherable to any litigator. The two barristers in the middle were older gentlemen, probably in their 50s, one Chinese, one European -- the lead counsel. Both were silks, the most senior lawyers. Each was flanked by a younger attorney -- the co-counsel.

Behind the barristers were the solicitors and clients, and, spread out across the second and third rows was what looked like an array of assistants and paralegals. The counters were covered with black three-ring binders, red folders, brown files and law books with yellow Post-It notes sticking out. The quantity of materials looked more like what you would bring to a trial than an appeal, and I soon found out why.

The court personnel were present. Three women sat at the clerk’s table, organizing papers. A young man sat alone in the jury box, holding a notebook; I assumed he was the judges’ law clerk.

Twenty-one people were in the courtroom, including myself. “This is an awful lot of people for an appeal,” I thought. In California, it’s common for one attorney to appear per side, and a retinue of four people – including transactional counsel and client – is large.

The barristers’ robes looked great. The black robes lent an air of dignity and authority to the wearers. The barristers most in favor of maintaining the ultra-formal dress are reportedly young barristers and women, because they believe the costumes place them visually on par with their more experienced opponents.

I watched the city’s lead barrister, Simon Westbrook, S.C., and I noticed that, when he walked, the robe punched out in the back like a cape, making him look like the hero of a swashbuckling 1930s serial. In his spare time, Westbrook races a vintage TVR Roadster and, if he did that in his robe, he would look like an Errol Flynn character.

To my American eyes, the wigs looked ridiculous. Imagine Johnnie Cochran giving his closing argument in the O.J. Simpson trial while wearing a little old lady’s wig. The curly, white-haired headpieces were particularly incongruous atop Chinese men and women with straight black hair. The wigs are reportedly hot and itchy, and courtroom jousting is complicated enough without having a hunk of horsehide on your head.

”May It Please The Court”

This is what would have happened if this case were being heard by the California Court of Appeal:

The attorney for the asphalt companies would have stood up and said,

“May it please the Court, the city was under a legal obligation to consider whether the stated use was truly temporary. My brief, which I will not here repeat, cites the case law which recognizes the obligation, and the brief also cites to the board minutes and other evidence in the record which demonstrates that the city didn’t bother to consider the issue. End of case. Standing, your honors? My clients are directly and adversely impacted by the illegal actions of the city, acting illegally, to grant an illegal waiver to Man Fai Tai. And it was illegal.”

The judges would have asked some questions, and the attorney for the asphalt companies would have answered by adroitly returning to the main arguments in the clients’ favor. After about 20 minutes of this, the attorney for the city would have stood up and said,

“Busybodies! Interlopers! Meddlers! And, by the way, the city had no obligation to investigate the temporary nature of the use, and, even if it did have an obligation, the city did so in fact or is presumed to have done so as a matter of law, and anyway it’s way too late for these protectionist clowns to raise the issue now. Why, your honors, are these sore losers wasting your time when we could all be outside racing vintage motorcars?”

The judges would have asked some more questions, and, half an hour later, at the most, everybody would have been outside, stuck in traffic.

Appeal by Way of Re-Hearing

The lead barristers were discussing vacations to Indonesia and – I kid you not – Rumpole of the Old Bailey. The junior lawyers were nervously writing and preparing, but the two silks had an easy, clubby manner. In a U.S. courtroom, the two lead counsel would have been ignoring each other to show they were tough.

Three loud knocks. “It always sounds like they’re checking for woodworm,” Westbrook joked to his opponent, Benjamin Yu, S.C., the counsel for the asphalt producers.

Everyone rose, and three judges walked out and bowed. Everyone in the courtroom bowed and sat down.

In addition to their robes, the three judges were wearing "bench wigs,” which looked like albino versions of early 80s bubble perms. They arguably looked more preposterous than the barristers’ bar wigs, but that’s a matter of personal preference, like “What tastes worse? Shasta or Tab?”

As the barrister for the asphalt companies, Yu spoke first. I immediately sensed something was different, because Yu was not speaking in the rapid bullet points of U.S. litigators. Rather, Yu embarked on a detailed and not-at-all rushed discussion of the law and the various points of evidence supporting the law. At one point, he quoted at length from a prior court decision, something American judges would not allow.

Judge Geoffrey Ma Tao-li, the chief judge of the High Court, dominated the questioning, and he nailed the weaknesses of the case. “There’s since been a new application. Why isn’t this case academic?” “Why does the switch to asphalt mean the use is now permanent?” “Couldn’t a permanent structure be torn down at the end of three years?”

Yu would give lengthy answers, and I kept waiting for one of the judges to hurry him along. But it never happened. After one hour, the city’s barrister had yet to speak, and Yu had plenty more to say. Then Judge Ma asked a blood-curdling question.

“Mr. Yu, do you think you are going to finish today?”

What!?! The hearing was going to take all day? The oral arguments for one side were going to take all day?

The hearing was, in fact, calendared for two days. In Hong Kong, an appeal is heard “by way of re-hearing,” which means that the attorneys and the Court of Appeal methodically review the law and the evidence. The barristers walk the judges through their clients' cases, reading from transcripts or quoting precedent at length. No witnesses are called, and fresh evidence is generally not allowed. The tenor of the proceedings is akin to a trial based only on documents.

In the United States, the written brief is the principal vehicle for appellate argument. Lawyers learn early to put everything in the brief. New arguments aired for the first time in the courtroom will be met with a raised judicial eyebrow and a demand for an explanation of why the argument wasn’t in the brief. The hearing has an essentially auxiliary role. In American courts of appeal, it is entirely proper for an attorney to say, “Your honors, all of my clients’ arguments are in the brief, and I am here solely to answer questions. Do you have any?”

In the Hong Kong Court of Appeal, the hearing is the pre-eminent appellate event. A “skeleton” of the arguments is submitted to the court – sometimes only days in advance – but its purpose is to aid the judges in preparation. The barristers are expected to make their case in the courtroom, which is why the rows were packed with assistants carrying documents and clients available for consultation. In Hong Kong, the hearing is the appeal.

Oral arguments in the asphalt zoning case lasted seven hours and forty-five minutes, spread over two days. This is unheard of in America. The U.S. Supreme Court arguments in Bush v. Gore lasted one and a half hours -- and there was slightly more at stake than a zoning decision. Seven hours and forty-five minutes is longer than many American attorneys spend preparing for oral arguments.

I stayed for every minute. It became a test of endurance, and I resolved that I was not going to let the tedium of the proceedings win. Besides, I thought, something interesting might happen. It did.


Neither Yu nor Westbrook were the second coming of Clarence Darrow or even Bill Clinton, but their sometimes soporific speaking style made sense. Expected to speak for hours, they paced themselves.

“The application is bogus on its face. It’s bogus,” said Yu, implying that Man Fai Tai secretly intended to make asphalt permanently on the site. Yu discussed several Hong Kong and English court decisions, noting the facts and the holdings in a detail I had not seen since law school. Discussion of precedent is rarely so intensive in American courts and, if it is, the debate is usually confined to one or two pivotal cases. Yu was plowing through more than half a dozen.

Westbrook responded in kind. He distinguished Yu’s cases by noting that all were from denials of waiver applications, while this dispute was based on the granting of an application. A decent point. He then struck at the heart of the asphalt companies’ case by noting that none of Yu’s court decisions stated that the city was required to consider whether the use was temporary or permanent. The one court decision which noted the distinction did not use it as a basis for its ruling, which means the city was not obligated to follow it. An excellent point.

This went on for hours. On the afternoon of the second day, the judges put their heads together and whispered. I had never seen appellate judges in America do that.

“We will allow the appeal,” Judge Ma said.

That was it. The asphalt companies had won. Judge Ma promised to write a decision quickly. Everyone bowed as the judges left the courtroom.

I was stunned. Appellate judges in California never announce their decision from the bench at the end of oral arguments. The trade off in Hong Kong was a much longer hearing in exchange for an immediate ruling.

I was surprised at the judgment. While I thought Yu had done a somewhat better job as an advocate, I thought Westbrook had the better case. To my literalist American mind, the question of whether Man Fai Tai’s intended use was temporary or permanent was irrelevant, since the company only had three years of permission in any event. The next time Man Fai Tai applied for a waiver, the city could deny it and order the company to raze the asphalt plant. Therefore, the asphalt making was, as a matter of law, a temporary use. It could only be permanent if the city granted a permanent waiver.

Hong Kong is a loser-pays jurisdiction, which means that the city is currently on the hook for the asphalt companies’ attorneys’ fees. The city will therefore probably request leave to appeal to Hong Kong’s highest court, the Court of Final Appeal, to have the issue decided once and for all. As it happened, I visited the Court of Final Appeal several days later and . . . .


UPDATE: The Hong Kong Court of Appeal issued its written judgment on March 31, 2007.

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Blogger Earl said...

"The attorney for the concrete companies would have stood up and said,"
Shouldn't that be _asphalt_ companies?

12:15 PM  
Blogger Paul Karl Lukacs said...

Good catch. I'll correct that when I have full access to Blogger again. Thanks.

4:25 PM  
Blogger mausekopf said...

I liked how you summarized the case. I guess this must be an important case, since Ma, CJHC was sitting in this case (he only sits in the important cases).

As regards "the young man sat alone in the jury box, holding a notebook; I assumed he was the judges’ law clerk" - he should be Reyes J's marshall.

Let me read your other posts now.

By the way, those wigs are itchy after 1 hour of wearing them. However, it seems that clients love seeing us in wigs!

11:06 PM  
Anonymous Just so you know... said...

Very few people use 3-ring binder in Hong Kong. The standard is two-ring

1:13 PM  

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