Edward Lehman committed to prison for 6 months (suspended for 2 years)
Hong Kong High Court finds Edward Lehman guilty of contempt of court and hands down 6 months prison sentence, suspended for 2 years.
Edward Lehman (“Lehman”), Managing Director and founding partner of Lehman, Lee & Xu, a mainland Chinese law firm, was found guilty of a 2nd contempt of Court by the Hong Kong High Court in HCMP 2524/2011, and committed to six months prison, suspended for two years. The Applicant, Effiscient Limited (“Effiscient”), one of two shareholders (and the only shareholder with voting rights) in LehmanBrown Limited (“Company”), a leading accounting firm in China, sought legal recourse in Hong Kong for contempt of court for inter alia a further breach of an Injunction Order.
In defamation proceedings issued against Edward Lehman in HCA 959/2010 in June 2010, an Injunction Order was granted by The Honourable Mr. Justice To on 23 July 2010, restraining Lehman from publishing defamatory statements and making slanderous statements concerning Russell Brown (“Brown”), Zhou Han Brown (“Zhou Han”), Effiscient, LehmanBrown Limited or any of the employees of the Company. The Honourable Justice To had also ordered Edward Lehman to file and serve an affidavit disclosing a complete list of the identity of the recipients of his defamatory emails and letters.
Despite notice of the Injunction Order being given to Edward Lehman, and in breach of the Injunction Order, Edward Lehman continued to publish defamatory statements about Russell Brown and/or Zhou Han and/or LehmanBrown Limited during August and September 2010, and failed to file and serve an affidavit disclosing a complete list of the identity of the recipients of his defamatory emails, also in breach of the Injunction Order in HCA 959/2010. As such, Edward Lehman was found in contempt of court on 19 April 2011 by The Honourable Mr. Justice To in HCMP 2204/2010, where he narrowly avoided a prison sentence by pleading mercy and showing remorse for his actions.
The 2nd committal hearing took place in open Court in Hong Kong on 11 and 12 July 2012 before The Honourable Mr. Justice Harris in HCMP 2524/2011. The Honourable Mr Justice Harris held that by sending further emails in October 2011 (during the course of him giving evidence at a trial) Lehman further breached the Injunction Order.
In the 2nd committal proceedings, The Honourable Mr. Justice Harris ordered that, for his contempt of Court, Edward Lehman be committed to prison for a period of 6 months. The Honourable Mr. Justice Harris further ordered that the custodial sentence be suspended for a period of 2 years upon the condition that Lehman commits no further contempts of the Court. The Honourable Mr. Justice Harris also ordered Lehman to pay Effiscient their legal costs of the 2nd committal proceedings on an indemnity basis in the sum of HK$800,000.
The Honourable Mr. Justice Harris stated that “… Mr. Lehman is a lawyer. He has behaved in a way which shows a lack of regard for the integrity of the court process. His conduct after being found guilty of contempt by To J has not been consistent with the remorse he expressed at the time to which To J took into account in deciding not to impose a custodial sentence” and held that “In these circumstances a custodial sentence is necessary”.
Commenting on the victory of due process of law over Edward Lehman, Russell Brown (on behalf of Effiscient) said, “The court sets directions which should be followed. Edward Lehman had already flouted the authority of the courts and been found guilty of contempt, and yet he continued to have a disregard for them, and as such I am pleased that the courts have taken this disregard seriously”.
The Orders of The Honourable Mr. Justice Harris in the 2nd committal proceedings are currently the subject of an appeal by Edward Lehman.
On 3 December 2010, Russell Brown, Zhou Han and Effiscient obtained an Interlocutory Judgment against Edward Lehman in the defamation proceedings in HCA 959/2010. Brown, Zhou Han and Effiscient are currently pursuing an assessment of damages against Lehman, which is scheduled to take place during March 2013 and which (they are advised) should result in them obtaining a substantial damages award against Lehman.
HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO. HCMP 2524/2011
Effiscient is one of two shareholders of LehmanBrown. On 15 November 2011, the High Court of Hong Kong handed down a Judgment in HCCW 377/2010 and HCCW 383/2010 ordering the other shareholder, Lehman & Co., a company controlled by Edward Lehman and/or his wife Karolina Lehman, to sell it’s shareholding in LehmanBrown to Effiscient and providing Effiscient with a signed proxy in respect of its voting rights in LehmanBrown, giving Effiscient effectively 100% control over LehmanBrown and all voting rights at shareholder level. Effiscient already had 100% control at board level.
LehmanBrown is a leading China-focused accounting, taxation and business advisory firm. The company operates through offices in Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin and Hong Kong, and employs around two hundred professionals throughout China, all of whom are English-Mandarin bi-lingual.
LehmanBrown is registered with the PCAOB in the USA. LehmanBrown is also an Accredited Employer and Training Partner of many top global accountancy institutes including the Association of Chartered Certified Accountants (ACCA), the Chartered Institute of Management Accountants (CIMA), the Hong Kong Institute of Certified Public Accountants (HKICPA) and CPA Australia.