27.09.1999 South China Morning Post
Headline:Mr Justice Michael Hartmann tells Jane Moir of his passion for hiswork ... Insider finds in favour of paper trails
Two things strike you about insider dealing inquiries: the endless financial data verges on the tortuous, and the fluorescent strip lighting, white padded walls and lack of windows belong in a Kafka novel.
Anyone trying to convince you it is in fact a riveting experience to wade through the never-ending, intricate paper trail would invariably have a hard time. The present tribunal chairman, Mr Justice Michael Hartmann, did not. His career so far has included politically-charged legal battles, being arrested, refereeing bitter family dramas, sending rapists to jail and writing adventure novels.
You thus have to allow him credibility when he says of the insider dealing chair: "This is not in any way a dry job. This is a fascinating job."
The 55-year-old High Court judge is instantly likable. A one-time journalist, his conversation is lucid, candid, amusing and ultimately a rare change from the daily grind of business or lawyer-esque rhetoric. He also has an eventful past.
In his late teens, the judge worked as a reporter on the Sunday Mail in Zimbabwe. The writing side was enjoyable, but the intrusive nature of the job was unappealing: he was swayed to enter the legal fraternity instead. This went down well with his mother. However, his legal career in Africa took on a political twist when he represented two alleged saboteurs. The clients were members of the Zimbabwe air force charged with conspiring to blow up aircraft and destabilise the country. "It had a very political edge from the beginning," said Mr JusticeHartmann, who ended up being arrested himself. "The arrest originally was for political detention, but then they didn't actually take me for the detention," he said. "Then I was re-arrested later for contempt of court [for holding a press conference on the case]." The result was a small fine. "It was a very difficult one. We took legal advice before giving the press conference, so it wasn't a rash statement, but it was a very political time," he said.
During the case, Mr Justice Hartmann also became a witness. This involved testifying as to the torture marks on his clients: electric prods had been used on their spines. The clients walked free, but were later re-arrested for political reasons. International outcry saw them released eight to nine months later. The case over, discussions with government officials suggested he might want to consider his future elsewhere.
He came to Hong Kong. Starting off at the legal department in 1983 as crown counsel, he prosecuted the "run-of-the-mill" cases before working in the extradition unit. He was made a District Court judge in November 1991, most notably working in the family courts. "It's not work for everybody. I think it can be taxing emotionally. There are rarely any black and whites in family matters, and therefore it's often impossible to come to a perfect solution. You're hoping to do the best you can for troubled people." Child custody cases are obviously the hardest. "Judgment in its purest sense is required, and you know, no matter what, one loving parent is going to be hurt," Mr Justice Hartmann said. Ironically, the family court provided a commercial groundwork. By the time family disputes come to litigation, it becomes a "money court", he said. "Family law and financial law do run side by side. "I think what surprises you in family matters in Hong Kong - after urban lifestyle experiences elsewhere - in a very positive sense is the degree of complexity financially of people's lifestyles."Where I came from the average family had one current bank account and a building society mortgage. You had to move up several classes in the financial stakes before it really changed. Here, almost everybody has five to six bank accounts, and are playing the futures markets." Financial resolution in divorce matters could thus be tricky. The judge noted the "sense of pride Hong Kong people have, being highly sophisticated in monetary terms, certainly in divorce matters".
Last year, the judge was promoted to the High Court. His most memorable case is that of an alleged rape where the victim was deaf and dumb. She did not speak any classic sign language, so there were problems finding an interpreter."There was a lot of pre-trial argument as to whether anybody could properly interpret what she was saying," he said. She also could not write classic Chinese characters. Her evidence was given with the aid of dolls. Cases like this prompt the question: how does a judge reconcile his own conscience with such adversity?
"You are a judge of the law, you are not a judge of your own conscience.All you can do at the end of the day is administer the law," Mr Justice Hartmann said.
That same year, the judge took over the helm of the insider dealing tribunal. The body has had a rough ride, most notably from the era of Mr Justice David Yam who presided over the Paragon Holdings debacle. Revelations that the tribunal had taken evidence in secret, held clandestine meetings and asked tribunal counsel to ghost-write the report led to a legal furore. The findings were quashed by a judge and the report was banned from being made public. The Joseph Lau/Chinese Estates inquiry was Mr Justice Hartmann's first case."You certainly have to master the documents quickly. If not, you're going to be left behind," he said."Top rate" counsel and the role of the lay members of the tribunal were abonus, he said. "These are people who have volunteered their time. They arewell-versed in matters of trade and finance and banking; they are able to analyse theevidence much more quickly," the judge said. "They make it quite a joy, actually. I think the presence of lay members who are professionals in the relevant field adds credibility to the tribunal."
Ultimately, for the implicated parties, "they are being judged by their peers". The age-old dilemma of what exactly constitutes insider dealing was still manifest."It's sometimes a case of saying, `I can see through your ruse', it's often also a case of saying, `Yes, I can sympathise. Yes, I can understand that business people quite reasonably do act this way', so they see both sides of the story." Several lay members have mentioned to the judge that friends will approach them and ask their advice on whether a deal constitutes insider dealing."Friends put problems to them, what would you say about this and that?" he said. The judge takes this as an indication that the business community is becoming more educated as to the limits of trading in Hong Kong, and what they fear may become insider trading. "The concept of insider dealing is a fairly new concept," he emphasised."A concept like this is obviously going to have teething troubles. The fact of the matter is, the system works, matters are dealt with fairly . . ." If necessary, through the courts, as was seen with the Paragon case. "Other tribunals have probably been in existence so long that we forget that probably in their early days they had teething troubles too," Mr Justice Hartmann said.
While the US system of tackling insider trading was inherently criminal, in Hong Kong, "it's a civil wrong", he explained. "The problem often is that insider dealing, if it does exist, often arises out of a very complex set of facts." It also results in long, expensive cases. "I know it's been suggested the tribunal doesn't have any teeth. I think it has more than adequate teeth," the judge said. "Remember, it's the integrity of the business person at stake, first and foremost. If that's lost it can have a permanent effect on their business life, personal life." The tribunal also has the power to make someone pay costs, not to mention the profit and penalty."Put bluntly, it could cost you a lot of money and your reputation can be damaged, perhaps beyond repair." How then does he think the tribunal is perceived? "I think it's very difficult, if I can kind of go back to my family law thing and say often the husband's the last man to know," he said. The judge will regularly pose questions to witnesses during tribunal hearings, excusing himself for being "pedantic" when he seeks elaboration. He finds it fascinating. "I think it's really important that any credible financial centre can show that it has sophisticated, competent and fair mechanisms for regulating the market," the judge said. "For me, a success is if a matter has been competently dealt with, a just hearing has been given and a just outcome. It provides a degree of reassurance for the financial community." "So much of Hong Kong's vitality is based on its financial markets. It's so much part of the spirit and the kind of the gung-ho go-get of Hong Kong, that to be intimately involved with it and be learning about it and to help maintain its credibility as a highly efficient market, all of those things to me I think are superb."
If Mr Justice Hartmann was forced to do something else, he might return to writing adventure novels. The judge already has eight under his belt, four African-based, and four Asian adventures. "I like those stories where you put someone in an impossible situation, and he has to get out in an ethical way . . . one of those moral quandaries," hesaid. However, a legal-based adventure novel is not on the cards. "Then you have the difficulty, that if you then cut all the corners, your fellow professionals are going to read it and say, `You've been a lawyer for X amount of years: how could you possibly write this?' " the judge said.
Mr Justice Michael Hartmann was born in Bombay. He obtained his law degree from the University of London's external Rhodesia college and started work as an attorney in Zimbabwe in 1971. He also worked as a part-time lecturer in company law. Mr Justice Hartmann moved to Hong Kong in 1983 and has served as the insider dealing tribunal chairman since last year. He is married with a son and daughter and enjoys writing and tennis.
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