Case Summary (A.M. No. RTJ-09-2200)
Key Dates
Filing of Original Complaint: January 21, 2008
Filing of Supplemental Complaint: April 14, 2008
CA’s Report and Recommendation: January 4, 2010
OCA Memorandum: September 4, 2013
Supreme Court Decision: April 2, 2014
Applicable Law
1987 Philippine Constitution; Interim and 2008 Rules of Procedure on Corporate Rehabilitation; Code of Judicial Conduct (New Code); Rules of Court, Rule 140 (as amended).
Summary of Administrative Complaints
Lorenzana alleged that Judge Austria committed:
– Gross ignorance of the law and grave abuse of authority by dictating and modifying SCP’s rehabilitation plan, usurping the receiver’s functions, and approving the plan beyond the reglementary period.
– Gross misconduct, grave bias and partiality in favor of Equitable-PCI Bank (EPCIB) through secret meetings and intimidation of SCP’s counsel.
– Irregular performance of duty by appointing conflicted individuals (receiver, financial adviser) and refusing evidentiary hearings.
– Conduct unbecoming and impropriety by posting suggestive photographs on Friendster and revealing personal judicial details.
Respondent’s Comments
Judge Austria denied bad faith, citing judicial discretion to hold informal meetings, the non-adversarial nature of rehabilitation, and her authority to modify plans under Section 23, Rule 4. She maintained that no mandatory reglementary‐period violation occurred and that social media posts were neither vulgar nor prohibited under existing standards.
Investigating Justice and OCA Recommendations
The Court of Appeals’ Investigating Justice found no bias or abuse in rehabilitation decisions but noted:
– Unnecessary arrogance and snide remarks toward counsel (conduct unbecoming).
– Impropriety in maintaining a publicly viewable Friendster account with provocative photos.
– Gross abuse of discretion in ordering a management committee without an evidentiary hearing (gross ignorance of law).
She recommended a fine of ₱20,000 and admonition.
The Office of the Court Administrator concurred on sanctions for conduct unbecoming and impropriety, declined disciplinary action for other allegations, and recommended noting of the CA report.
Supreme Court’s Analysis: Abuse, Bias, Incompetence
– Grave Abuse of Authority, Bias, Partiality, Irregularity: Dismissed. Complainant failed to prove malice, bad faith or clear prejudice; mere conjecture insufficient. Errors correctible by judicial remedies, not disciplinary action.
– Gross Ignorance of Law (Rehabilitation Plan Modification): Dismissed, absent proof of bad faith or corruption. Judicial errors alone do not establish gross ignorance.
– Gross Ignorance of Law (Creation of Management Committee): Upheld. Ordering a management committee without an evidentiary hearing violated due process and basic adversarial requirements, amounting to gross ignorance and professional incompetence.
Supreme Court’s Analysis: Reglementary Period
Judge Austria’s approval of the plan beyond 180 days was justified. The Interim Rules were ambiguous on extension authority; new 2008 Rules clarifying Supreme Court extension did not apply. No sanction warranted.
Supre
Case Syllabus (A.M. No. RTJ-09-2200)
Parties
- Complainant: Antonio M. Lorenzana, Executive Vice President and Chief Operating Officer of Steel Corporation of the Philippines (SCP).
- Respondent: Judge Ma. Cecilia I. Austria, presiding judge of Regional Trial Court, Branch 2, Batangas City.
Underlying Proceedings
- Case: SP. Proc. No. 06-7993, “In the Matter of the Petition to have Steel Corporation of the Philippines Placed under Corporate Rehabilitation with Prayer for the Approval of the Proposed Rehabilitation Plan.”
- SCP under rehabilitation; Lorenzana represented its interests; respondent judge conducted hearings, formulated and approved the rehabilitation plan.
Complaint and Allegations (January 21, 2008)
- Gross ignorance of the law, grave abuse of authority, gross misconduct, grave incompetence, irregularity in performance of duty, grave bias and partiality, lack of circumspection, conduct unbecoming of a judge, failure to observe reglementary period, and violation of the Code of Professional Responsibility.
- Key instances cited:
- Appointment of Atty. Santiago T. Gabionza, Jr. as rehabilitation receiver despite conflict of interest.
- Informal “consultative” meetings in golf club/hotel premises outside Batangas jurisdiction, where respondent dictated terms of the plan.
- Secret off-the-record meetings and communications favoring Equitable-PCI Bank (EPCIB) without SCP’s participation.
- Appointment of Gerardo Anonas as financial adviser for both receiver and judge, at SCP’s expense, with familial ties to Gabionza.
- Denial or delay of evidentiary hearing and subpoenas requested by SCP.
- Intimidation of SCP counsel, refusal to recognize appearances, use of snide and condescending remarks during hearings.
- Approval of the rehabilitation plan beyond 180-day period without Supreme Court extension.
- Misinterpretation of Section 23, Rule 4 of the Interim Rules on Corporate Rehabilitation to amend and pre-empt receiver’s functions.
- Refusal to inhibit despite alleged personal interest and partiality.
Supplemental Complaint (April 14, 2008)
- Act of impropriety for maintaining a Friendster account as an RTC judge with personal details and photographs:
- Display of social-networking photos in off-shoulder attire, implyi