HSBC was dealt with unfairly in liability case, court hears

HSBC had been dealt with unfairly during a civil trial in which a judge described as 'the devil's work' its behaviour towards a struggling company, lawyers for the bank said yesterday.

John Jarvis QC, for the bank, said that going into the trial, which examined HSBC's liability for the downfall of Esquire (Electronics), the bank had not been made aware of the prospect that serious findings could eventually be made against it and its officers. As a result it had not called a number of witnesses to tell its side of the story.

'The findings of the judge could have been very affected had the bank called all those witnesses,' Mr Jarvis said.

Mr Justice William Waung Sik-ying found in July last year that the bank had acted with a 'total lack of morality and legality' in forcing Esquire (Electronics) to sell its flagship property and then having the company liquidated when it questioned the sale. 'It was the devil's work,' Mr Justice Waung said in his judgment. 'The bank ... by unfair and improper means, coercive and overreaching and deceiving, secured the sale of the property. Misrepresentations were made by the bank. Lies were told by the bank. Threats were uttered by the bank.'

The bank could potentially face damages of more than $400 million as a result of the judgment.

Yesterday's hearing was the first day of a directions hearing regarding the penalty phase of the trial, due to take place next March. Mr Justice Waung recused himself from those proceedings and the case is now before Mr Justice Johnson Lam Man-hon.