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Edward Lehman Cleared By Hong Kong Court of Appeal Decisions: Black Day for Russell Brown as Edward Lehman Scores Hat Trick of Wins in Hong Kong Legal Proceedings

08.08.13 21:22 Age: 7 yrs
Edward Lehman Cleared By Hong Kong Court of Appeal Decisions: Black Day for Russell Brown as Edward Lehman Scores Hat Trick of Wins in Hong Kong Legal Proceedings

Hong Kong Court of Appeal finds Edward Lehman Not Guilty of contempt of Court, and in separate proceedings dismisses claims for damages for defamation and trademark infringement in separate proceedings. Court of First Instance sees LehmanBrown Ltd. defamation claim withdrawn.

BEIJING, Aug. 7, 2013 /PRNewswire/ -- On Friday, March 22nd 2013, the Hong Kong Court of Appeal in CACV177/12 set aside the conviction and suspended prison sentence (of 6 months) imposed on Mr. Edward Eugene Lehman ("Mr. Lehman") by the High Court in July 2013 for contempt of court. Mr. Lehman is the Managing Director of leading China law firm LEHMAN, LEE & XU as well as a founder of LehmanBrown Limited, a well-known China based accountancy practice. Mr. Lehman has been involved in litigation with his former partner Russell Peter Brown for the purpose of buying out of a 50% shareholding in LehmanBrown Limited since November 2010. The contempt proceedings against Mr. Lehman were brought by Russell Brown's legal team, Howse Williams Bowers, led by Partner Kevin Bowers on the grounds that, inter alia, Mr. Lehman was in breach of an earlier injunction order made in HCA959/10 by sending 3 e-mails outside of Hong Kong which were allegedly defamatory of Russell Brown. 

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 The Court of Appeal found that there was no contempt of Court and therefore no basis for the earlier Court Order of suspended imprisonment. Russell Brown's side was ordered to pay to Mr. Lehman the costs incurred by him in bringing the appeal. 

An earlier contempt proceeding brought by Russell Brown against Mr. Lehman in HCMP2204/10 for breach of the same injunction has also been thrown into doubt by the Court of Appeal's finding that the injunction order did not apply outside of Hong Kong. Mr. Lehman had been advised by his then Hong Kong lawyers to plead guilty and apologise to the Court for breaching the injunction in respect of e-mails published outside of Hong Kong, but had never been advised that the injunction did not apply outside of Hong Kong. The judge in that case found contempt on the basis of the guilty plea on his behalf, and ordered Mr. Lehman to pay HK$600,000 in fines and legal costs.

The decision of the Court of Appeal in the contempt case follows on another success by Lehman & Co Management Limited in its own appeal brought under CACV272/11 in which the Hong Kong Court of Appeal, in its judgment delivered on 13th March 2013, dismissed the claim by Russell Brown's holding company Effiscient Ltd for damages of US$716,055 for alleged defamation and trademark infringement and upheld an award to Mr. Lehman of the sum of US$1.4million as compensation for the 50% shareholding held in LehmanBrown Limited.

The Court of Appeal found that the alleged losses caused by the defamation and trademark infringement were ‘reflective' loss in the value of LehmanBrown Limited's shares, which the judge below had no jurisdiction to even award. In fact, Kevin Bowers, Partner at Howse Williams Bowers, in articles published in the Hong Kong Law Society's Gazette and by Lexis Nexis, had described such remedies as being "novel," which suggests that Russell Brown's legal team had not fully expected the judge at first instance to grant them.

In light of this awaited news, Managing Director of LehmanBrown International Accountants, Davin Torjesen responds that, "LehmanBrown International Accountants is pleased that Mr. Lehman has been awarded 1.4 Million USD by the Hong Kong Courts, and that our founder, Edward Lehman, has been fully exonerated by these appeals. LehmanBrown International Accountants, with the help and guidance of Edward Lehman, continues to go from strength to strength with our accounting practice in the Mainland China, Hong Kong, Macau and Mongolia."

Adding to Russell Brown's legal woes, the Court of First Instance on 24th July 2013 also saw a claim in defamation brought by LehmanBrown Limited withdrawn, in an embarrassing climb-down. Russell Brown's legal team had applied to substitute the 3rd Plaintiff Effiscient Limited in HCA959/10 with LehmanBrown Limited, following on the finding of the Court of Appeal in CACV272/11 that Effiscient Limited could not claim for loss in the value of LehmanBrown Limited's shares. The application had been made by the Plaintiffs (Russell Peter Brown, Zhou Han Brown and Effiscient) in order to take advantage of a default judgment entered in December 2010 against Mr. Lehman (Defendant) on a bare endorsement contained in their Writ. The Plaintiffs' Counsel claimed during the hearing that his clients were withdrawing their application, as they no longer wanted to participate in an expensive legal proceeding over the issue, although as pointed out by the judge, they had only changed their position late in the day, and after most of the legal costs had already been incurred. The Plaintiffs were ordered to pay the bulk of the costs of bringing the application as a result, which included the costs of the Defendant's Senior and Junior Counsel.

Asked to comment on the 3 recent decisions, John Fisher, Assistant Solicitor at Miller Peart, Mr. Lehman's Hong Kong Solicitors, stated that, "The course of the litigations going back since 2010 for our clients suggest that it is important for even experienced international lawyers not familiar with Hong Kong's legal system to obtain professional legal advice as early as possible in order to avoid expensive and damaging losses. Our task as Solicitors, bearing in mind that we were only instructed since October 2011, has been to take over a series of cases where our clients were already in very desperate straits, and at very short notice, and to guide them onto more favourable pathways in very difficult circumstances, to mitigate and to anticipate risk, and to ensure that when their case does come to court, their chances of success were and are optimised. In that sense, it is of course satisfying to see our clients making steady positive progress."

Asked to comment on the recent Court decisions, Edward Lehman stated that, "I am very glad to be exonerated from being in contempt of court. I am also pleased with the fact that Mr. and Mrs. Brown had to pay my fees to be exonerated by the court. Although I had gone through a very difficult time since 2010, I am hopeful that all these litigations in Hong Kong can continue to be positively resolved in the near future."

High Court of the Hong Kong Special Administrative Region

Court of Appeal CACV272 of 2011, CACV177 of 2012, and Court Of First Instance HCA 959 of 2010 and HCMP 2204 of 2010

Davin TorjesenEmail:

John FisherEmail:

SOURCE  LehmanBrown International Accountants

Davin Torjesen



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