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Press Summary (English) Press Summary (Chinese) FACV Nos. 3 and 5 of 2019 [2020] HKCFA 32 FACV No. 3 of 2019 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO. 3 OF 2019 (CIVIL) (ON APPEAL FROM CACV NO. 158 OF 2012) FACV No. 5 of 2019 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO. 5 OF 2019 (CIVIL) (ON APPEAL FROM CACV NO. 158 OF 2012) (HEARD TOGETHER) J U D G E M E N T Mr Justice Ribeiro PJ: 1. The present cross-appeals arise out of the same transaction. The first appeal, FACV3 of 2019, is brought by Eton Properties Limited and Eton Properties (Holdings) Limited, both Hong Kong companies. I will refer to them as D1 and D2 respectively and jointly as D1-D2, this being how they were referred to as defendants in the first instance proceedings and throughout. Their appeal is brought against the Plaintiff, Xiamen Xinjingdi Group Co Ltd,[1] a PRC corporation. 2. The second appeal, FACV5 of 2019, is brought by the Plaintiff as appellant against D1 and D2 as well as three others who were also named as defendants at first instance. They are Eton Properties Group Limited, a BVI company (D3), Legend Properties (Xiamen) Company Limited, a Hong Kong company (D4) and Mr Lucio C Tan (D6), an individual who established and controlled the Eton Group. 3. Another entity and five other individuals were previously joined as defendants but are no longer parties. Two of them will, however, be mentioned and can conveniently continue to be referred to as D5 (Legend Properties (Xiamen) Company Limited, a foreign-owned enterprise incorporated in the PRC) and D10 (Cheung Chi Ming, D6’s brother-in-law, a director of D4 and D5 and described as one of the key senior management personnel of the group). 4. These are appeals from the judgment of the Court of Appeal[2] which allowed in part an appeal from DHCJ Stone QC who had entirely dismissed the Plaintiff’s claims.[3] 5. In this judgment, I set out the somewhat lengthy course of events leading to these appeals and deal with the issues arising in FACV3, the first appeal. Lord Sumption NPJ deals with FACV5, the second appeal. I have read his judgment in draft and respectfully agree with his reasons and conclusion. A. The transactions between the parties A.1 The Agreement 6. On 4 July 2003, D1-D2 and the Plaintiff entered into an agreement which lies at the root of these proceedings (“the Agreement”). In it, D1 and D2 declared that each owned one share in D4, comprising the whole of D4’s issued capital and that D4 had incorporated and owned D5 which had the right to develop and use Lot 22, a piece of land in Xiamen comprising an area of 11,994.59 sq m. D1-D2 warranted that they had “absolute control” over D4 and D5. The Plaintiff agreed to purchase those development and use rights by acquiring the shares in D4 and thus D5. Article 3 provided: “[The Plaintiff] for the purpose of obtaining the right to develop [Lot 22] in the name of [D5] and obtaining the right to profits, and at the same time for the purpose of compensating [D1-D2] the investment which it has put into the two companies [D4] and [D5] and [Lot 22], agrees to pay [D1-D2] the transfer price of RMB 120,000,000. After [the Plaintiff] has settled the transfer price in full, [D1-D2] agree to transfer all the shares in [D4] for HK$2 to a legal entity or individual outside the territory of China designated by [the Plaintiff] and exempt repayment of all shareholders’ loans advanced to [D4] and [D5].” 7. The Agreement provided for the Plaintiff’s payment of a deposit of RMB5,000,000 on signing (which was duly paid) and payment of the balance of the transfer price by instalments. Delivery of the land was to take place within 6 months of the date of the Agreement,[4] after current residents had moved out and certain structures had been demolished. The Agreement provided for a significant degree of supervision by D1-D2 in the event that the development process should occur. Their consent would, for instance, be required for construction plans, “project finance index” and “change of land use area”.[5] Pending payment of the transfer price in full, D1-D2 would have the right to “supervise [the Plaintiff’s] development and operation activities”, in respect of a series of specified matters.[6] 8. As provided by Article 8, after full payment, D1-D2 were to transfer their shares in D4 to the Plaintiff’s nominee: “When [the Plaintiff] has settled the total transfer price and fulfilled the obligations according to the Agreement, [D1-D2] will agree to transfer all the shares of [D4] to an approved individual or an approved legal entity outside the territory of China designated by [the Plaintiff], the two parties shall jointly sign the ‘Sale and Purchase Agreement for Transfer of Shares and Debts of [D4] [annexed].” 9. Importantly for present purposes, Article 13 provided for arbitration and choice of law: “1. Parties shall make every effort to negotiate to resolve the disputes arising from the performance of this Agreement. In the case where no agreement is reached through negotiation, any party has the right to submit the dispute to the China International Trade Arbitration Commission [“CIETAC”] in Beijing for arbitration, the arbitration rules of the Arbitration Commission effective at the time when the dispute occurs should be adopted. 2. The Agreement is governed by the laws of the People’s Republic of China, but the procedure and validity related to the transfer of shares of [D4] is governed by the laws of Hong Kong Special Administrative Region.” A.2 Renunciation of the Agreement 10. D6 did not give evidence. However, D10 testified that in September 2003, a mere two months or so after concluding the Agreement, D6 decided to terminate it and instructed D10 to implement his decision.[7] D10 also testified that at around this time, he proposed setting up a real estate investment holding company in the PRC and D6 agreed, leaving it up to D10 to determine when this should be done.[8] 11. On 14 November 2003, D1-D2 wrote to the Plaintiff giving notice that performance of the Agreement would be discontinued, alleging that issues of illegality had arisen and seeking to return the deposit. The Plaintiff replied on 8 December 2003, refusing to accept the termination or return of the deposit. 12. The land should have been delivered to the Plaintiff by 4 January 2004, being six months after the date of the Agreement. That did not occur and, on 17 January 2004, the Plaintiff wrote making a demand for delivery which was not met.[9] 13. Instead, the Defendants took steps to develop Lot 22 themselves, obtaining regulatory and town planning approvals between November 2004 and February 2005. In March 2005, D10 set about incorporating a real estate holding company as discussed with D6 back in September 2003. This led to D3 being incorporated and introduced into the scene. A.3 The restructuring 14. On 8 August 2005, the Plaintiff commenced the CIETAC arbitration in Beijing against D1 and D2.[10] And on 24 October 2005, the tribunal served notice that the first hearing would take place on 23 November 2005. 15. On 16 November 2005, a week before that hearing, the restructuring of the corporate shareholdings relating to Lot 22 began. D3, Eton Properties Group Limited, a BVI company, was brought into the picture and on that date, 9,998 newly-issued shares in D4 were allotted to D3. The restructuring was completed when, on 6 April 2006, D1 transferred its single share in D4 to D3 and D2 declared itself trustee of its single share in D4 in favour of D3. Consequently, D4’s 10,000 issued shares were held beneficially by D3 (in place of D1-D2) so that D3, via D4, held D5 which owned the rights to Lot 22. It followed that the promise contained in the Agreement that D1-D2 would, at completion of the development, transfer their shares in D4 to the Plaintiff could not be performed. The Plaintiff was unaware of the restructuring which was not disclosed by D1-D2 until 2 January 2008. B. The arbitration – the First Award 16. The first arbitration hearing took place as scheduled on 23 November 2005 and a second hearing was held on 18 May 2006. Even though by the start of the arbitration, D1-D2’s interest in D4 had been diluted to 0.02% after the allotment of shares to D3, they referred to themselves as the parent companies of D4 and D5.[11] On 30 June 2006, D5 started pre-sales of the units being developed on the site. 17. On 27 October 2006, the tribunal made its First Award.[12] It noted the terms of the Agreement including D1-D2’s warranty that they had absolute control over D4 and D5; the Plaintiff’s agreement to pay RMB120,000,000 to obtain the right to develop Lot 22 in D5’s name; the undertaking to deliver Lot 22 to the Plaintiff within 6 months from the date of the agreement; the obligation on D1-D2, after full payment to transfer all the shares in D4 to the Plaintiff for HK$2; and the Plaintiff’s freedom to decide on the details of the development while D1-D2 maintained certain rights of supervision pending settlement of the full transfer price. 18. The tribunal recorded that D1-D2 had repudiated the Agreement and that the Plaintiff refused to accept termination. It noted that D1-D2 asserted that the Agreement was illegal and invalid and claimed that even if it was valid, it had become impossible to perform. This was because construction activities on the ground and sales of the residential units meant that they were unable to transfer Lot 22 to the Plaintiff for development. 19. The tribunal held that PRC law was applicable. It described the Agreement as “neither an agreement of share transfer nor an agreement of transfer of land-use right”. It held, rather, that – “The subject matter of the Agreement is the contractual right to buy and sell the shares in [D4] that has an indirect effective control over [Lot 22]. The amount of RMB 120 million is the consideration for [the Plaintiff] to obtain the contractual right to acquire all the shares in [D4] for HK$2, and also the consideration for [D1-D2] to obtain the contractual right to sell all the shares in [D4] for HK$2.” 20. So characterised, the tribunal concluded that D1-D2’s challenge to the legality and validity of the Agreement failed. It also rejected the argument that performance was impossible: “Even though any change in circumstances makes it difficult to perform the agreement during its performance, the parties shall exert reasonable efforts in good faith to perform the Agreement completely and fully other than purely emphasize external causes. In this case, as stated by [D1-D2], the Agreement is a framework agreement, whose performance may be difficult due to various uncertainties. This needs close cooperation between the parties and reasonable efforts to seek alternative approaches to meet the purpose of the Agreement. [D1-D2’s] allegations cannot constitute justifiable reasons for impossibility to perform the Agreement and discontinuing performance of the Agreement without the consent of [the Plaintiff].” 21. The tribunal decided that the Plaintiff’s claim for continued performance of the Agreement should be supported and dismissed D1-D2’s counterclaim seeking confirmation that the Agreement was invalid. The tribunal awarded the Plaintiff damages for breach of contract of RMB 1,275,000 (representing damages for delay in delivering the land) and ordered that “[D1-D2] shall continue to perform the Agreement…” C. Attempts at enforcement of the First Award 22. The Plaintiff applied to enforce the First Award in Xiamen but, on 30 July 2007, the Xiamen Municipal Intermediate Court dismissed the application principally because D1-D2 were Hong Kong companies whose assets were outside the jurisdiction.[13] 23. The Plaintiff then applied ex parte to the Hong Kong Court (in Action HCCT 54/2007) for leave to enforce the award, invoking the statutory procedure provided by section 2GG of the Arbitration Ordinance (“the Ordinance”).[14] Adopting such procedure, an arbitral award is enforceable with the court’s leave in the same way as a judgment of the court and, if leave is given, the court may enter judgment in terms of the award. By order dated 31 October 2007, Mr Justice A Cheung[15] granted leave to enforce the award and entered judgment in its terms, ordering that D1-D2 “shall continue to perform the [Agreement]…” 24. On 2 January 2008, D1-D2 applied to set aside the aforesaid order and judgment. As the trial Judge noted,[16] it was only in an affirmation filed on that date in support of D1-D2’s application that it was first disclosed that the restructuring had taken place. While the Plaintiff had been aware of D5’s construction activities and sales of units in the development, this was the first that the Plaintiff had learned that D1-D2 had divested themselves of their shareholding in D4 and of D3’s acquisition of that company.[17] 25. With that realisation, on 27 May 2008, the Plaintiff started a fresh action (initially listed as HCA 961/2008 and re-listed as HCCL 13/2011 – “the Action”) from which the present proceedings flow. It was a common law action to enforce the First Award. Additionally, it was brought also against D3, D4 and D5 who were not parties to the Agreement or the arbitration. The Plaintiff sought declarations that D3 and D2 each held the D4 shares registered in their names on constructive trust for the Plaintiff and obtained interim injunctions restraining the defendants from further changing the shareholding structure of D4 and restraining D5 from disposing of or diminishing the value of its assets. 26. Meanwhile, the application by D1-D2 to set aside the order granting leave to enforce the award and the statutory judgment came on for hearing before Reyes J.[18] The applicants’ main argument was that the outstanding non-monetary obligations imposed on them by the First Award could no longer be performed so that it was contrary to public policy to enforce that part of the award.[19] They contended that performance had become impossible because some 99% of the residential units built by D5 on the Lot had been sold and consequently, that neither D1-D2 nor D5 could deliver possession of the land to the Plaintiff. Furthermore, D1-D2 could no longer transfer the D4 shares to the Plaintiff since the structure of the shareholding had changed and they no longer held those shares, all of D4’s 10,000 shares now being held by D3, save one held by D2 on trust for D3.[20] 27. Reyes J rejected the impossibility argument and dismissed the application. He was not persuaded that the Agreement was substantially incapable of performance.[21] Although the viability and merits of the Action were not issues before him, his Lordship took notice of the Action and considered it arguable that execution of the Agreement and payment of the deposit may have given rise to an equitable interest in the shares in favour of the Plaintiff, resulting in a constructive trust being imposed on the D4 shares in the hands of D3 and D2.[22] He noted the Plaintiff’s willingness to pay the RMB120,000,000 and the HK$2 nominal fee and also to bear the properly audited construction costs of the development in seeing through enforcement of the award.[23] 28. Dissatisfied with Reyes J’s decision, D1-D2 lodged an appeal to the Court of Appeal where once again, their main argument was that the award had become impossible to perform so that enforcement was contrary to public policy. Le Pichon JA, writing for the Court,[24] held that the impossibility argument was misguided since there was no insuperable impediment to the transfer of the shares registered in D3’s name to the Plaintiff and since the “impossibility (if any) [was] self-inflicted”. D. The Second Award 29. Having failed before Reyes J, D1-D2 returned to the tribunal, applying for a determination that the Agreement could no longer be performed and seeking a ruling that the parties be discharged therefrom. The hearing was held on 21 January 2009 and the tribunal gave its Second Award on 22 April 2009.[25] 30. D1-D2 argued that the Agreement had lawfully terminated in accordance with its terms because there had been a substantial change involving completion of the development; sale of more than 90% of the units; and a change in the shareholding of D4, making the transfer of the shareholding impossible as a matter of fact. This was rejected by the tribunal which held that the change of shareholding was a breach of the Agreement and not a ground for lawful termination. The unilateral notice of termination was invalid and the tribunal was not satisfied that the objectives of the Agreement were incapable of being met. It reiterated that it had made an order for continued performance. The Second Award therefore dismissed D1-D2’s application. 31. D1-D2 made one further approach to the tribunal. It will be recalled that in the First Award, the tribunal had pointed out that the Agreement “... needs close cooperation between the parties and reasonable efforts to seek alternative approaches to meet the purpose of the Agreement”. Seizing on this, by letter dated 19 June 2009, D1-D2 wrote to the tribunal seeking a ruling on those “alternative approaches”. They returned to their familiar theme, saying that directions from the tribunal as to how to proceed were needed because “… [the] objective circumstances of this case have changed significantly, the two contracting parties are unable to continue to perform the Agreement according to the original provisions”. 32. The tribunal gave this application short shrift, stating: “The arbitral tribunal adjudicated the case fully... After investigation, the [First Award] is final, there was no mistake in relation to writing, typing or calculation which needs to be corrected. Also the arbitral tribunal in the Award did not leave out any matter which would need to be further determined according to the PRC Arbitration Law and the Arbitration Rules of the Arbitration Commission. Accordingly, the arbitral tribunal does not accept the abovementioned application of [D1-D2]”. E. Interlocutory rulings in the present proceedings 33. The focus of the litigation switched to the Action. Fok J (as Fok PJ then was) noted in his judgment dated 16 March 2010[26] that the Plaintiff asserted proprietary rights over the D4 shares in the hands of D3. Those rights were said to have arisen out of alleged breaches of fiduciary duty by D1-D2 committed in effecting the restructuring, with D3 the recipient of the shares knowing that they were the product of those breaches and thus subject to a constructive trust in the Plaintiff’s favour. A series of interlocutory applications were placed before his Lordship. 34. He allowed the Plaintiff’s application for leave to amend the Writ and Statement of Claim, thereby expanding the Action to add claims in tort for inducing breach of contract and conspiracy against six additional individuals named as D6 to D11, who were associated with D1-D2 and the defendant companies. He also permitted the Plaintiff to add a plea of fraud in connection with the allotment of D4 shares to D3. 35. Fok J dismissed the Defendants’ applications to strike out the Action, holding that it was not plain and obvious that the constructive trust claim was bound to fail. However, he granted the application of D1-D2 to stay the constructive trust and conspiracy claims to arbitration holding that they were disputes that fell within the arbitration clause in the Agreement.[27] He dismissed the application for a stay in the Court’s inherent jurisdiction mounted by D3-D5.[28] 36. The Plaintiff’s appeal against Fok J’s order staying the Action against D1-D2 to arbitration succeeded in the Court of Appeal (“the Stay Appeal”).[29] Rogers VP considered the effect of the arbitration awards and held that the time and scope for arbitration had clearly passed and that it was now for the Hong Kong courts to enforce the award.[30] 37. Kwan JA elaborated upon this, holding that “the claim against the 1st and 2nd defendants in this action is primarily an action on an arbitration award, not an action on the performance and obligations of the Agreement”.[31] As her Ladyship explained: “The plaintiff has brought this action against the 1st and 2nd defendants on the basis that these defendants were in breach of their implied promise to perform a valid arbitration award. This is within the enforcement jurisdiction and powers of the court ...”[32] 38. Kwan JA did not consider the statutory judgment obtained by the Plaintiff under sections 2GG and 40B of the Ordinance an obstacle, holding that the Plaintiff “is at liberty to bring an action on the award against the 1st and 2nd defendants, combined with other claims against other entities and individuals.”[33] She also held that an action on the award did not need to be “mechanistic in nature”, the remedies available depending on the scope of the issues raised.[34] 39. The applications of D1-D2 and D3, D4 and D5 respectively for leave to appeal to this Court against the Court of Appeal’s decision in the Stay Appeal were dismissed by the Appeal Committee,[35] Ma CJ holding that, so far as D1-D2 were concerned, the Action was brought by way of enforcement of the award and that the arbitrators had treated the arbitration agreement as spent.[36] Since the application of D3, D4 and D5 for leave was contingent on the stay of D1-D2’s proceedings being upheld, it was also dismissed.[37] 40. Having staved off the Defendants’ attempts to strike out or stay the Action, the Plaintiff sought to expand its scope further. On 21 December 2011, it obtained leave from Reyes J to re-amend its pleadings to add an alternative claim (in paragraph 35(5)) for damages or equitable compensation in the event that the relief it had been pressing for, namely, transfer of the D4 shares and through them, acquisition of the benefits earned by D4, should prove unachievable. Reyes J also gave directions for expert evidence regarding the valuation of D4 to be adduced in connection with that plea. 41. On the Defendants’ appeal against Reyes J’s orders, the Court of Appeal[38] noted that the loss and damage pleaded involved “the difference between (i) the existing value of the entire shareholding in [D4] and (ii) the sum of RMB120,000,000 which the Plaintiff agreed to pay under the agreement for acquisition of the same”, the Plaintiff alleging that “each of [D1 to D11] is jointly and severally liable whether by means of an award of equitable compensation or by means of an award of damages” in respect of such loss and damage. 42. The Court of Appeal held that those amendments were properly allowed by Reyes J, as they raised arguable issues as to whether such relief was available. However, because of the lateness of the amendments, they ordered a split trial with the issues of quantum raised by paragraph 35(5) to be dealt with, in so far as necessary, after the outcome of the trial was known. F. The judgment of DHCJ Stone QC[39] 43. The Action finally came on for trial before Deputy High Court Judge William Stone QC on 8 March 2012. The hearing lasted 22 days and, on 14 June 2012, his Lordship delivered a meticulous and comprehensive judgment running to 135 pages. 44. The Judge dealt first with what he called the “derivative claim” whereby the Plaintiff sought to enforce the Award against D1-D2. Secondly, he addressed what he called the “original action” involving causes of action and equitable claims in the expanded Action against various combinations of the Defendants based on the torts of conspiracy, inducing breach of contract and constructive trust.[40] F.1 The enforcement claim against D1-D2 45. In approaching the enforcement claim, his Lordship was troubled by the existence, alongside the Action, of the statutory judgment entered pursuant to leave granted to enforce the Award on 31 October 2007.[41] He described the Award and judgment as languishing in “procedural limbo” and as the “elephant in the courtroom”.[42] 46. He was puzzled at the Plaintiff’s persistence in pursuing continued performance of the Agreement when, as he saw it, after its breach, which had occurred when it was “torn up” some 21 months before the arbitration was commenced,[43] such performance had become impossible. The Agreement: “... had been rendered physically incapable of continued performance by reason of the plain fact that site at Lot 22 by then had been fully developed by the 5th defendant – which, as earlier noted, had been built in a configuration strikingly different from the development plan as earlier proposed by the plaintiff – and in turn the vast majority of the units as erected had been on-sold to third party purchasers.”[44] 47. It may be observed that his Lordship’s view as to impossibility ran counter to the finding of the tribunal in the First and Second Awards. It was also at odds with the views of Reyes J and the Court of Appeal in their judgments refusing to set aside the statutory judgment on the basis of impossibility and public policy, even after the restructuring had been disclosed. Le Pichon JA could see “[no] insuperable impediment to the transfer of the shares registered in D3’s name to [the Plaintiff]”.[45] 48. While DHCJ Stone recognised that the Action was brought to enforce the implied promise to honour the Award at common law, he regarded this as being “no different in specie” from, and permitting no greater latitude in terms of remedy than,the statutory procedure. He held that on either approach, the Court is limited to “mechanistically” converting the award into a judgment in terms of the award.[46] 49. In bringing the Action, his Lordship held that the Plaintiff was seeking to go far beyond such mechanistic enforcement. It sought: “... to substitute for the ‘continuous performance’ award of the CIETAC tribunal a new claim for damages/equitable compensation, which not only goes beyond the scope of the award as it now exists, but never was contemplated by the tribunal, which was not asked even to consider/countenance such a remedy.”[47] 50. This, he held, was an attempt to “subvert the integrity of the arbitral process” and to get the Hong Kong Court “to usurp the designated dispute resolution body and impose its own remedy under the purported guise of ‘enforcement’” by asking it “to rule upon an issue relating to breach of the Agreement which must lie solely within the jurisdiction of the Beijing arbitral tribunal (or, if ultimately became necessary, in the Beijing court of supervisory jurisdiction)”.[48] The enforcement claim against D1-D2 was accordingly held to fall outside the Court’s jurisdiction.[49] 51. The Judge went on to hold that even if, contrary to his conclusion, one were to assume that jurisdiction exists, the enforcement claim would still have to be dismissed since the proper law of the Agreement is PRC law which has no concept of the constructive trust.[50] Moreover, even if one were to assume that Hong Kong law applies, the Agreement was not specifically enforceable because it was a contract requiring constant supervision and conditional in nature. Thus, no equitable interest in the D4 shares passed to the Plaintiff on execution of the Agreement, so that no basis existed for any constructive trust to be imposed on those shares in the hands of D1-D2 and D3.[51] 52. On the assumption that Hong Kong law applied and that the Award could be treated as if it were an order for specific performance, the Judge regarded the principle in Johnson v Agnew[52] as a further obstacle to the Plaintiff’s claim against D1-D2. He accepted the argument that since the Award and statutory judgment were obtained on the footing that the contract remained alive, a claim for damages or equitable compensation was excluded by that principle unless the Plaintiff first applied for discharge of the order for continued performance so as to terminate the Agreement.[53] 53. The enforcement action was therefore held to fail.[54] The Judge observed that it was up to the Plaintiff to return to the tribunal and, if necessary, to the Beijing supervisory court, to try to obtain substitute orders providing for the relief it sought in the Action.[55] F.2 The other claims asserted in the Action 54. The Judge proceeded also to dismiss the Plaintiff’s claims against all the other Defendants. 55. As to the claims based on constructive trust or fiduciary duty (against D3-D6), his Lordship held that those concepts were unknown to PRC law which he found to be applicable.[56] On the alternative basis that the issue was governed by Hong Kong law, he held that the Agreement was not specifically enforceable, requiring constant supervision and being conditional in character, so that no equitable interest passed upon its execution and no constructive trust arose.[57] 56. It was an important premise of the Judge’s approach to the Plaintiff’s economic tort claims that the only breach of contract committed by D1-D2 was their renunciation of the Agreement in November 2003. He rejected the suggestion that the restructuring which took place two years later entailed any breach or other unlawfulness: “... I am unwilling to characterize such restructuring as ‘unlawful’ or ‘illegal’ or ‘fraudulent’. It certainly was not a contractual breach, which breach itself had taken place some two years earlier with the tearing up of the Agreement by the 1st and 2nd defendants.”[58] 57. One might pause to observe that this was at odds with the tribunal’s ruling in the Second Award that the changes in shareholdings were a breach of the Agreement, referred to above. 58. Nevertheless, in the context of inducing breach of contract, the Judge held that no overt acts of inducement and no causal link to the November 2003 breach had been proved against D3-D5 or any of the individual Defendants (D6-D11).[59] 59. Similarly, the Judge’s rejection of the restructuring as involving any unlawfulness led to his decision that neither the alleged conspiracy by unlawful means nor the alleged conspiracy to injure were established for want of any unlawful means and want of a predominant motive to injure.[60] 60. His Lordship also held that since the overt acts relied on had occurred on the Mainland and, since the economic torts in question were not known to PRC law, the Plaintiff failed to meet the double actionability requirement and the causes of action in tort were not actionable in Hong Kong.[61] 61. The Judge further accepted that the principle in Said v Butt[62] excluded the individual Defendants, acting as directors and company officials, from being held personally liable for the tort of procuring the relevant company’s breach of the Agreement.[63] 62. And quite apart from the aforesaid legal arguments held to have barred the Plaintiff’s claims, the Judge also found fatal evidential weaknesses in the respective conspiracy and inducement cases, especially regarding the elements of intention and purpose.[64] 63. Accordingly, DHCJ Stone dismissed the Action in its entirety. G. Judgment of the Court of Appeal[65] G.1 The common law action on the award 64. Giving the judgment of the Court of Appeal, Yuen JA allowed the Plaintiff’s appeal against DHCJ Stone’s dismissal of the common law action on the award against D1-D2. 65. Her Ladyship noted that an arbitration award might be enforced by invoking the statutory procedure (under section 2GG of the Ordinance) or by bringing a common law action and proceeded to examine the juridical nature of such an action. 66. Yuen JA pointed out that an action on an award could be brought at common law where there had been a valid submission of a dispute to arbitration; an award had been made in favour of the plaintiff and the defendant had failed to honour that award.[66] Hong Kong law (following English law) implied a mutual promise to honour the award. Failure to do so constituted a fresh cause of action separate and independent from an action based on breach of the underlying contract (which contained the arbitration clause).[67] 67. In reaching her conclusion, Yuen JA had to deal with three issues which are presently relevant. First, D1-D2 sought to argue that in a common law action, the court has no jurisdiction to order damages where the arbitrators had not made any award of damages. Her Ladyship did not agree, holding that, unlike in cases involving the statutory procedure, the Court was not limited in a common law action to granting relief which simply mirrors the terms of the award.[68] Accordingly, the Court had jurisdiction to order damages or equitable compensation even though the tribunal had only made an award for “continued performance”. 68. Secondly, D1-D2 contended that the Action was an invalid attempt at circumventing the arbitral process so that the Hong Kong Court ought to refuse relief and stay the Action to arbitration. Yuen JA left open the question whether an issue estoppel, arising out of the decision of the Court of Appeal in the Stay Appeal,[69] prevented D1-D2 taking this point. She held that even if an issue estoppel did not arise, the present action operated at the enforcement phase and was distinct from any dispute falling within the arbitration clause so that no stay was called for.[70] 69. Finally, D1-D2 sought to argue that, by invoking the statutory procedure and entering judgment on the award, the Plaintiff had elected for a remedy involving “continued performance” of the Agreement which was premised on the continued existence of that contract, a position inconsistent with the present claim for damages or equitable compensation which had to be premised on the Agreement having come to an end.[71] 70. Yuen JA held that in entering judgment under the statutory procedure, the Plaintiff had not made an informed irrevocable election since it had done so while material information concerning the restructuring had been withheld by D1-D2.[72] However, her Ladyship decided that the inconsistent remedies of ordering continued performance of the Agreement on the one hand, and damages or equitable compensation on the other, could not stand together. She therefore gave directions that the Plaintiff, when in a position to make an informed choice, was required to make an election which would determine what orders the Court of Appeal might make as to the further conduct of these proceedings. G.2 The other claims in the Action 71. The Court of Appeal dismissed all the other claims. Her Ladyship held that whether breach of the Agreement was constituted by its renunciation or by the restructuring, the Plaintiff had failed to prove that any of D3-D5 or D6 had caused such breach so as to constitute the tort of inducing breach of contract.[73] Moreover, since such a tort was not known to PRC law, the claim fell foul of the double actionability requirement.[74] 72. Similarly, the conspiracy claim involved alleged overt acts occurring on the Mainland where, under PRC law, tortious liability for conspiracy was unknown so that by reason of the double actionability rule, the tort was not actionable in Hong Kong.[75] Furthermore, the Judge had found that there was no common intention to injure by the restructuring, which was fatal to the claim.[76] 73. Yuen JA held that the constructive trust claim failed because, there being no concept of constructive trust in PRC law, execution of the Agreement gave rise to no equitable interest in the Plaintiff’s favour and no constructive trust. She held that even if Hong Kong law were applicable, the claim would fail since the Agreement, requiring constant supervision and mutual cooperation at various stages, was “only a framework agreement” and not susceptible to specific performance and thus provided no basis for imposing a constructive trust on D1-D2 or D3-D5. 74. Having allowed the Plaintiff’s appeal in relation to the common law action on the award, but having held that an informed election had to be made between an order for “continued performance” and an order awarding damages (or equitable compensation), the Court of Appeal directed that the Plaintiff should make up its mind and then propose a suitable order after consulting D1-D2 or restore the matter before the Court of Appeal.[77] 75. D1-D2 issued a motion applying for leave to appeal to this Court. The Plaintiff notified the Court of its election and, on 20 October 2017, the Court of Appeal ordered that the statutory judgment[78] be set aside and that judgment be entered in favour of the Plaintiff for damages against D1-D2 for breach of the implied promise to honour the Award under HCCL 13/2011. Assessment was to await the quantum stage of the split trial. H. Application for leave to appeal to this Court 76. Having unsuccessfully sought leave to appeal from the Court of Appeal,[79] leave to bring the present cross-appeals was granted by the Appeal Committee[80] as follows. 77. D1-D2 were granted leave to appeal[81] confined to the following questions of law, namely: “Whether the jurisdiction of the Hong Kong court as an enforcement court under a common law action to enforce a Mainland arbitral award is circumscribed or otherwise affected by the statutory regime for enforcement of international awards covered by the New York Convention and Mainland awards; and if the answer is ‘yes’, what should the approach of the court be? Whether the rule in Johnson v Agnew [1980] AC 367 and/or legal principle prevents an enforcing court from awarding damages on the basis that the underlying contract was no longer subsisting when there was an extant award for continued performance of the underlying contract?” 78. As for the cross-appeal, the plaintiff was granted leave to appeal[82] in respect of the following questions of law, namely: “Under the tort of inducing a breach of contract, where the inducement takes the form of the conclusion of a dealing inconsistent with an existing contract, what is the requirement of causation as regards the breach of contract? In particular, where the contracting party is determined to breach the contract with or without the inducement of the defendant, what is the requirement of causation? Where the obligation owed by a defaulting vendor to a purchaser to continue to perform an agreement for the sale and purchase of shares in a private company is governed by a foreign law, is the Hong Kong court entitled to grant the remedy of a constructive trust pursuant to its equitable jurisdiction over such obligation notwithstanding that the foreign law which governs the agreement does not recognise the concept of constructive trust? If so, what is the correct approach of the Hong Kong court in granting such remedy? Where an agreement for the sale and purchase of shares in a Hong Kong private company is by agreement governed by foreign law, does that preclude the law of property and the law of trust under Hong Kong law from operating to transfer the equitable title or interest in the shares to the purchaser upon the making of the agreement or upon the agreement becoming specifically enforceable? 79. Leave to appeal was also granted on the “or otherwise” basis in connection with the following question: “In circumstances where an agreement for the sale and purchase of the entire issued shares in a private company which ultimately holds land or development rights in land situated outside Hong Kong contains provisions to the effect that: (a) pending completion of the sale, possession of the land be given to the purchaser, with liberty to, but no obligation upon, the purchaser to develop or sub-sell interests in the land in the meantime; and (b) in the event that prior to completion of the sale, the purchaser does take possession of the land and does carry out development of the land, express powers be reserved to the vendors to regulate the development activities, but the purchaser does not opt to carry out any development or sub-sale activities prior to completion, is the agreement one which is amenable to specific performance?” I. The appeal brought by D1-D2 80. D1-D2’s basic contention on the present appeal is that the Court of Appeal were wrong because, in awarding the Plaintiff damages to be assessed, they went beyond the relief that can properly be awarded in a common law action on the award. In support, they advance three main arguments which may be referred to as (1) the “mechanistic argument”; (2) the “outflanking argument”; and (3) the “extant award argument”. At the hearing, the submissions advanced by Mr Steven Gee QC[83] predominantly involved variants of the outflanking argument. J. The mechanistic argument 81. D1-D2 argue that the Court of Appeal acted beyond its jurisdiction in awarding the Plaintiff damages because its power to enforce the arbitration award, whether pursuant to the statutory summary procedure or to a common law action on the award, is subject to the same restriction: A court may only enforce an award “mechanistically” by making an order which mirrors and does not go beyond the award.[84] In the present case, the First Award stipulates that D1-D2 “shall continue to perform the [Agreement]…” It says nothing about damages so, the argument runs, awarding damages against D1-D2 exceeded the Court’s powers. It will be recalled that this is a proposition that found favour with DHCJ Stone[85] but not with Yuen JA and the Court of Appeal.[86] 82. This argument is advanced as one of statutory construction. Having referred to the statutory procedure, D1-D2 submit that: “... as a matter of proper statutory interpretation and having regard to the public interest in giving effect to the parties’ choice of arbitration for dispute resolution, the same mechanistic approach must apply to a common law action on an award.”[87] It is therefore necessary to examine the applicable provisions. J.1 The statutory procedure 83. The scheme for the enforcement of Mainland awards in the HKSAR, including CIETAC awards, is the result of the Arrangement concerning Mutual Enforcement of Arbitral Awards between the Mainland and the HKSAR[88] entered into pursuant to Article 95 of the Basic Law[89] (“the Arrangement”). 84. The Arrangement provides that a party may enforce an award with which the other party has failed to comply.[90] It specifies that the enforcing court “shall handle the application and enforce the award according to the legal procedure of the place of enforcement”.[91] It also provides that the limitation period is governed by the law of the place of enforcement.[92] 85. The Arrangement was implemented by amendments to the Ordinance[93] with section 40B providing for two alternative methods of enforcement, namely, either by a court action or by the summary procedure. It states: “(1) A Mainland award shall, subject to this Part, be enforceable in Hong Kong either by action in the Court or in the same manner as the award of an arbitrator is enforceable by virtue of section 2GG. (2) Any Mainland award which is enforceable under this Part shall be treated as binding for all purposes on the persons between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set off or otherwise in any legal proceedings in Hong Kong, and any references in this Part to enforcing a Mainland award shall be construed as including references to relying on a Mainland award”.[94] 86. Section 2GG referred to in section 40B(1) provides for conversion of the award into a judgment of the court so that it becomes enforceable “in the same way as a judgment”: “(1) An award, order or direction made or given in or in relation to arbitration proceedings by an arbitral tribunal is enforceable in the same way as a judgment, order or direction of the Court that has the same effect, but only with the leave of the Court or a judge of the Court. If that leave is given, the Court or judge may enter judgment in terms of the award, order or direction. (2) Notwithstanding anything in this Ordinance, this section applies to an award, order and direction made or given whether in or outside Hong Kong.” 87. As the Rules of the High Court provide, the party seeking to invoke section 2GG may apply ex parte for leave to enforce the award,[95] supporting the application with an affidavit which exhibits the arbitration agreement and the original award, states the addresses of the parties and deposes that the award has not been complied with.[96] Upon leave being granted, judgment is entered “in terms of the award”. After being served with the order granting leave, the other party may apply to set the order aside, but only on limited grounds which bear directly on the validity or enforceability of the arbitration agreement or the award itself. Grounds for refusing to enforce an award include incapacity of a party to the arbitration agreement; invalidity of the arbitral agreement under its proper law; lack of notice to the other party of the hearing; the award or the composition of the tribunal falling outside the scope of the arbitration agreement; the award not being binding; and the existence of public policy grounds for refusing enforcement.[97] 88. The section 2GG procedure is therefore summary in nature. The object of the exercise is for the enforcing court to endow the award with the status of a compulsorily executable judgment without itself scrutinising the merits of the arbitrators’ award and only entertaining challenges within the limits laid down in the Ordinance. 89. It is therefore unsurprising that the enforcing court is enjoined by section 2GG to confine itself to entering judgment “in terms of the award”. Thus, for example, where the award did not grant the successful claimant post-award interest, it was held that under the summary procedure, the enforcing court could not enter judgment including such a sum of interest.[98] It is in that context that the court’s task has been said to be “as mechanistic as possible”.[99] As Cheung CJHC (as Cheung PJ then was) put it, the “plain intent behind the relevant provisions [is] to make awards to which they apply enforceable with ease, subject to the narrowly confined exceptions, almost ‘as a matter of administrative procedure’”.[100] J.2 Is the common law action on the award similarly restricted? 90. The alternative modes of enforcing awards provided for by section 40B(1) of the Ordinance – by court action or under section 2GG – are quite separate and procedurally very different. Unlike under section 2GG, an action on the award does not involve the plaintiff obtaining a judgment after an ex parte application. The plaintiff must sue on the award and prove his case. As MacKinnon J explained in Norske Atlas Insurance Co Ltd v London General Insurance Co Ltd:[101] “In order to sue on an award, it is, I think, necessary for the plaintiffs to prove, first that there was a submission; secondly, that the arbitration was conducted in pursuance of the submission; and, thirdly, that the award is a valid award, made pursuant to the provisions of the submission, and valid according to the lex fori of the place where the arbitration was carried out and where the award was made.” 91. The rationale for restricting the court to entering judgment mechanistically therefore does not apply to the common law action. There is no reason for thinking that the statutory intent is that remedies which may be granted in a common law action on the award must be circumscribed by requirements designed for judgments entered under the summary procedure. 92. The object of the Ordinance is, as section 2AA states, “to facilitate the fair and speedy resolution of disputes by arbitration without unnecessary expense”. The intent is to facilitate and not to place obstacles in the way of the arbitral process, including the process of enforcing arbitral awards. 93. Indeed, the purpose of the summary procedure itself is to facilitate enforcement – “ensuring the effective and speedy enforcement” of arbitration awards.[102] It is incongruous to construe a provision forming part of such a facilitative scheme as having a constricting effect on an alternative mode of enforcement which is quite separate from, and not regulated by, a summary procedure. 94. While no authorities supporting the mechanistic argument have been put forward, various decisions can be found which demonstrate that, in a common law action on the award, the Court is not constrained by the requirement that the judgment must be “in terms of the award”. 95. A clear illustration is provided by the Dalmia judgments of Kerr J, upheld by the English Court of Appeal.[103] The plaintiff Dalmia, an Indian company, obtained arbitration awards which it sought to enforce against the defendant Bank in London, invoking the statutory summary procedure.[104] The awards directed the Bank to pay the amounts to the plaintiff “in India”. In his first judgment, Kerr J posed the central question as follows: “... whether [the Act’s] summary procedure for enforcement is available in relation to awards which specifically require payment in a foreign country, or whether the plaintiff's only remedy in these circumstances is to bring actions on the awards because the bank has failed to pay in India.”[105] 96. He held that the summary procedure was not available. Entering judgment in terms of the award requiring payment in India would not be a judgment that an English court would issue so that it would not be a judgment enforceable in the same manner as a judgment of the High Court. However, Kerr J held that in these circumstances, “[the] appropriate remedy of the plaintiff ... would be an action for the payment of damages here on account of the defendant’s breach in not making payment abroad”.[106] That would obviously involve bringing an action seeking relief going beyond the terms of the award. That is precisely what Dalmia then did. It brought an action for damages against the Bank, “present and served within the jurisdiction of [the English] Court, for non-compliance with the awards.”[107] In contrast with the summary procedure, those proceedings involved a trial which lasted over two months[108] where various arguments attacking the validity of the award were advanced. Dalmia’s action succeeded and the judgment was upheld in the Court of Appeal.[109] 97. For the aforesaid reasons, I would reject the mechanistic argument. K. The outflanking argument K.1 Action on implied promise caught by arbitration clause 98. Mr Gee’s outflanking argument has two versions. The first is an argument in favour of a stay. The contention is that, instead of awarding damages against D1-D2, the Court of Appeal ought to have stayed the Action to arbitration because the claim is in truth a claim to enforce the matrix agreement and is caught by the arbitration clause contained in Article 13 of the Agreement. Two reasons are advanced for this. First, it is said that suing for breach of an implied promise to perform the award is an action based on and arising out of the Agreement and so is caught by the arbitration clause. Secondly, D1-D2 argue that the damages claimed in the Action are actually damages for loss of the profits of the development flowing from breach of the Agreement and so that the claim comes within Article 13. To award the Plaintiff such damages would be to allow it to outflank the arbitral regime agreed to by the parties: “... any argument that P’s claim for damages falls outside the ambit of the Agreement overlooks the principle that an essential element in a common law action on the award is the implied promise to perform the award. That promise is contractual and the cause of action is based on and arises from nothing but the contract ... The fact that P chooses to advance its claim as damages in an ‘action on the award’ concerns the cause of action, and does not prevent the damages claim from being within the arbitration agreement ... The damages awarded by the CA are closely connected with and overlap what would be the damages for breach of the Agreement for its non-performance or repudiation. Payment of one would be payment on account of the other. Both are subject to the arbitration agreement.”[110] K.1a The arbitration clause 99. I shall deal first with the proposition that the Action falls within the arbitration clause because it is based on and arises out of the Agreement. This requires consideration of the scope of Article 13 which relevantly provides: “Parties shall make every effort to negotiate to resolve the disputes arising from the performance of this Agreement. In the case where no agreement is reached through negotiation, any party has the right to submit the dispute to [CIETAC] in Beijing for arbitration, the arbitration rules of the Arbitration Commission effective at the time when the dispute occurs should be adopted.” 100. What the parties have thus agreed to refer to arbitration are “disputes arising from the performance of the Agreement”. Is an action to enforce the implied promise to honour the Award a “dispute arising from the performance of the Agreement”? 101. The language of Article 13 suggests that the answer is “No”. The disputes referred to the tribunal arose from D1-D2’s renunciation of the Agreement on 14 November 2003, their failure to deliver the land to the Plaintiff by 4 January 2004 and their failure to transfer their shares in D4 to the Plaintiff.[111] Those were the disputes that arose from D1-D2’s refusal and failure to perform the Agreement. The First Award was issued on 27 October 2006, representing the outcome of the arbitration. When D1-D2 failed to comply with it, a fresh dispute giving rise to a fresh cause of action came into existence. But that was a dispute stemming from breach of the implied promise to comply with the Award, rather than a dispute “arising from the performance of the Agreement”. K.1b The separate causes of action 102. It is clear that as a matter of law, the implied promise to honour the Award exists as a contractual obligation separate and distinct from the obligations created by the underlying contract. As Otton J put it in Agromet Motoimport v Maulden Engineering Co (Beds) Ltd:[112] “In my judgment, the action on the award and the action to enforce an award is an independent cause of action. It is distinct from and in no way entangled with the original contract or the breach occurring from it, as reflected in the award.” 103. This is evident when one considers what must be proved to sustain such a claim. As we have seen, MacKinnon J pointed out in Norske Atlas Insurance Co Ltd v London General Insurance Co Ltd[113] that the requirements for suing to enforce an award are that there was a submission; that the arbitration was conducted in pursuance of the submission; and that the award is a valid award, made pursuant to the provisions of the submission, and valid according to the lex fori of the place where the arbitration was carried out and where the award was made. These are obviously elements which are quite different from the matters which must be proved to establish breach of the matrix contract – in the present case, proof of the renunciation, the failure to deliver the land, the restructuring and the failure to transfer the shares in the light of the Agreement. 104. The dissimilarity between the two actions is also clearly brought out by the different limitation periods applicable. As we have seen, the Arrangement provides that the limitation period for enforcement of Mainland awards is governed by the law of the place of enforcement, ie, Hong Kong law.[114] That period is laid down by section 4(1)(c) of the Limitation Ordinance:[115] “The following actions shall not be brought after the expiration of 6 years from the date on which the cause of action accrued, that is to say ... actions to enforce an award, where the submission is not by an instrument under seal”. 105. The cause of action for breach of the implied promise accrues at the date when the losing party ought to have complied with the award. The limitation period therefore begins to run at a date which will necessarily be later than the date of accrual of the cause of action which led to the arbitration. In the present case, the underlying breaches relied on occurred variously in 2003, 2004 and 2005 (and at the latest on 6 April 2006). The First Award was issued on 27 October 2006, which is the earliest date from which the limitation period relevant to the Action began to run. 106. The relevant limitation period was recognised in Agromet Motoimport v Maulden Engineering Co (Beds) Ltd,[116] where Otton J adopted the approach of the learned authors of Mustill & Boyd, Commercial Arbitration,[117] who stated: “... for the purposes of the Limitation Act 1980, it is necessary to classify an action on an award either as ‘an action to enforce an award, where the submission is not by an instrument under seal,’ for which the limitation period is six years, or as ‘an action upon a specialty,’ for which the limitation period is 12 years. But we submit that time begins to run from the date on which the implied promise to perform the award is broken, not from the date of the arbitration agreement nor from the date of the award.” 107. In National Ability SA v Tinna Oils & Chemicals Ltd (“The Amazon Reefer”),[118] Thomas LJ adopted the same approach. He regarded enforcement using the statutory procedure and by a common law action as two procedurally different methods of enforcing the same contractual cause of action, both triggered by breach of the implied contractual promise, to which the same limitation period applies. 108. Moreover, in the present case, the two claims are governed by different systems of law. Suing for breach of the implied promise is an aspect of enforcement (to which I shall return), regulated by the enforcing court according to the lex fori (here, Hong Kong law), to be distinguished from the arbitration concerning performance of the Agreement which was governed by PRC law, expressly chosen by the parties. K.1c The Bremer decision and the importance of context and purpose 109. In making the argument that the Action must be stayed because the implied promise to perform the award is “based on and arises out of” the Agreement, D1-D2 place reliance on Bremer Oeltransport GmbH v Drewry,[119] in particular, on the passage in Slesser LJ’s judgment where his Lordship states: “It would appear, therefore, that the greater weight of authority is in favour of the view that in an action on the award the action is really founded on the agreement to submit the differences of which the award is the result.”[120] 110. Bremer involved a dispute between parties to a charterparty entered into in London with an arbitration clause providing for arbitration in Hamburg. A dispute arose and the arbitration duly took place, leading to an award made in Hamburg. The plaintiff issued a writ in England seeking to enforce that award and sought leave to serve it on the defendant, a British subject resident in Paris. The question at issue was whether the English court could assume jurisdiction by permitting service of the writ out of the jurisdiction on the ground that the action was brought “to enforce a contract made within the jurisdiction” pursuant to what was then Order XI r. 1(e).[121] 111. Bremer was therefore not a case about staying to arbitration an action to enforce an award. Slesser LJ’s characterisation of the action as “founded on” the agreement in the charterparty was made for the purpose of assuming jurisdiction. It was in that context that the action on the implied promise was considered as “founded on” the arbitration agreement in the chaterparty and thus treated as enforcing a contract made within the jurisdiction. 112. Subsequent cases have stressed the importance of context and purpose when characterising the action on the implied promise. Thus, in FJ Bloemen Pty Ltd v Council of the City of Gold Coast,[122] the issue was whether certain sums could be claimed in a common law action to enforce an arbitration award as sums which were, on the contract’s true construction, payable by the defendant under the contract. Lord Pearson, giving the advice of the Privy Council, stated: “It is true ... that when an arbitrator fixes a sum to be paid by one party to the submission by way of damages for breach of contract the award creates a fresh cause of action superseding that arising out of the breach. But it does not appear to their Lordships to follow from that that the cause of action which comes into existence when the award is made cannot be said to arise under the contract which contains the submission. The award of an arbitrator differs materially from a judgment. The plaintiff's right to sue and the court's right to give judgment for him if he proves his case are not derived from the agreement of the parties and the judgment when given is an entirely fresh departure. The award of an arbitrator on the other hand cannot be viewed in isolation from the submission under which it was made. It was this sort of consideration which led the Court of Appeal in the case of Bremer Oeltransport G.m.b.H. v. Drewry [1933] 1 K.B. 753 to hold that an action brought to recover a sum awarded by an award made in Hamburg under a submission contained in a contract made in London was an action brought to enforce a contract made within the jurisdiction and their Lordships think that the same reasoning applies here. The distinction between an award which merely establishes and measures a liability under the contract and so does not create a fresh cause of action and an award of damages which supersedes the liability under the contract and creates a fresh cause of action, whatever its validity in other contexts, does not, in their Lordships' opinion, govern the broad question at issue here.”[123] 113. His Lordship therefore recognised that while, for certain purposes, the distinction between an arbitration award “which merely establishes and measures a liability” under the matrix contract and an action to enforce the award in pursuance of a fresh cause of action, may be important, in other contexts, that difference is immaterial. In FJ Bloemen the fact that the claim for payment was pursued in enforcing the arbitration award did not exclude the amounts claimed from being amounts payable under the contract. Bremer is an example where, for Order XI purposes, the enforcement action was treated as arising out of the charterparty contract made within the jurisdiction. 114. The Bumbesti[124] fell on the other side of the line with the enforcement action characterised as separate and distinct from the matrix contract. There, an attempt was made to establish Admiralty in rem jurisdiction on the basis that an action to enforce an arbitration award arising out of a bareboat charterparty was a claim arising out of an agreement “relating to the use or hire of a ship”.[125] It failed. Aikens J held: “The arbitration agreement is, at least, one step removed from the ‘use or hire’ of a ship. The breach of contract relied upon to found the present claim has nothing to do with the use or hire of the ship: it concerns the implied term to fulfil any award made pursuant to the agreement to refer disputes.”[126] 115. In Harbour Assurance Co (UK) Ltd v Kansa General International Insurance Co Ltd,[127] while discussing the separability of arbitration agreements,[128] Hoffmann LJ (as Lord Hoffmann then was) explained how different characterisations may be appropriate in different contexts for different purposes. The pleaded issues in that case raised the question whether the matrix contract was void for illegality. It gave rise to the collateral question whether, if it was void, it had to follow that the arbitration agreement was also void and of no effect. So characterisation of the arbitration agreement had to be considered: Was it part of the matrix contract or was it separable and capable of continued vigour despite the matrix contract’s illegality? Parallel issues are raised by D1-D2 in their outflanking argument. Hoffmann LJ’s observations are equally applicable to those issues: “Mr. Longmore's argument is extremely simple. He says that the question raised on the pleadings is whether the retrocession agreement was void ab initio. The arbitration clause formed part of the retrocession agreement. Therefore the issue must involve the validity of the arbitration clause itself. Mr. Longmore calls this logic. I call it over-simplification. The flaw in the logic, as it seems to me, lies in the ambiguity of the proposition that the arbitration clause ‘formed part’ of the retrocession agreement. In one sense of course it did. It was clause 12 of a longer document which also dealt with the substantive rights and duties of the parties. But parties can include more than one agreement in a single document. They may say in express words that two separate agreements are intended. Or the question of whether the document amounts to one agreement or two may have to be answered by reference to the kind of provisions it contains. In any case, it is always essential to have regard to the reason why the question is being asked. There is no single concept of ‘forming part’ which will provide the answer in every case. For some purposes a clause may form part of an agreement and for other purposes it may constitute a separate agreement. One must in each case consider the terms and purpose of the rule which makes it necessary to ask the question.”[129] 116. Adopting Hoffmann LJ’s approach, while it may be correct to hold that for certain purposes (such as founding jurisdiction) the action on the implied promise is “based on and arises out of” the underlying contract so as to be treated in the same manner as the matrix agreement, in the present case there is no justification for lumping the action on the implied promise together with the arbitration for breach of the matrix contract for the purpose of compelling a stay of the common law proceedings. They are plainly separate causes of action with different elements and features. More fundamentally, they are causes of action that arise at different phases of the arbitral process in which jurisdiction is allocated differentially to the arbitral tribunal and to the enforcing court, as discussed in the section which follows. K.1d The nature of the claim for damages in the Action 117. I turn next to Mr Gee’s proposition that the damages claimed in the Action should be viewed as damages for loss of the profits of the development flowing from breach of the Agreement and so caught by the arbitration clause. It is a suggestion which fails to recognise the fundamental difference between proceedings at the arbitration as opposed to the enforcement phase, and the range of remedies open to the enforcing court. 118. Lord Hobhouse of Woodborough[130] highlighted the different spheres of arbitrators and the enforcing court: “The essential purpose of arbitration is to determine disputes between the parties to the arbitration. Historically this was what the function of arbitrators was - to say who was right. The decision of the arbitrators could, as a result of the authority given to the arbitrator by the parties’ agreed submission to arbitration, declare what were the rights and liabilities of the parties and bind the parties by that declaration. Enforcement lay with the courts. Common law remedies were available besides statutory ones. It is possible to sue on the award or for damages for failing to honour the award; or to rely upon the award as having conferred a right or determined a fact. ... Statutes and International Conventions have since facilitated the direct enforcement of awards with a minimum of formality but still ultimately requiring the assistance of the judicial system. But the situation remains that the foundation of arbitration is the determination of the parties’ rights by the agreed arbitrators pursuant to the authority given to them by the parties. As section 58 of the United Kingdom Arbitration Act 1996 says, ‘an award made by the tribunal pursuant to an arbitration agreement is final and binding ... on the parties’.[131] It is an implied term of an arbitration agreement that the parties agree to perform the award.” 119. The line drawn is therefore between the determination of the parties’ mutual rights and liabilities, being a matter for the arbitrators, and enforcement of that award, being a matter for the court. 120. Mr David Joseph QC[132] referred to a number of legal texts elaborating upon the two phases of the process.[133] Conceptually, the parties’ submission to arbitration is contractual, giving a mandate to the arbitrators to resolve the disputes specified and containing a mutual promise, usually implied, that they will comply with the award. Once the final award is made, the arbitrators’ mandate is exhausted and, if the award is not complied with, a fresh cause of action arises for breach of the implied promise to honour the award. That cause of action lies within the enforcing court’s jurisdiction and is not within the power of the tribunal. Procedurally, enforcement may be pursued summarily (under section 2GG) or by a common law action on the award, as provided for by section 40B(1). As Thomas LJ noted in National Ability SA v Tinna Oils & Chemicals Ltd (“The Amazon Reefer”) regarding the common law action: “Enforcement of an award by action is by an ordinary action brought in the High Court. The procedure is not subject to any statutory provision, but it has long been established at common law as an action founded upon the implied promise to pay the award.”[134] 121. The split functions of the tribunal and the enforcing court were graphically described extra-curially by Lord Mustill as follows: “Ideally, the handling of arbitral disputes should resemble a relay race. In the initial stages, before the arbitrators are seized of the dispute, the baton is in the grasp of the court; for at that stage there is no other organisation which could take steps to prevent the arbitration agreement from being ineffectual. When the arbitrators take charge they take over the baton and retain it until they have made an award. At this point, having no longer a function to fulfil, the arbitrators hand back the baton so that the court can in case of need lend its coercive powers to the enforcement of the award.”[135] 122. At the enforcement stage, in an action on the implied promise, the enforcing court may grant relief appropriate to the award. If it is a monetary award for payment within the jurisdiction, it may simply be a judgment enforcing the award as a debt. If it is a non-monetary award which has not been complied with, the court may fashion an apt remedy chosen from the full range of remedies available in an ordinary common law action. Thus, in Agromet,[136] Otton J approved the approach of Mustill and Boyd who stated: “Parties to an arbitration agreement impliedly promise to perform a valid award. If the award is not performed the successful claimant can proceed by action in the ordinary courts for breach of this implied promise and obtain a judgment giving effect to the award. The court may give judgment for the amount of the award, or damages for failure to perform the award. It may also in appropriate cases, decree specific performance of the award, grant an injunction preventing the losing party from disobeying the award, or make a declaration that the award is valid, or as to its construction and effect.” 123. The cases involving non-monetary awards granting declarations of rights or specific performance illustrate the remedial flexibility of the enforcing court. Thus, in Selby v Whitbread Co,[137] when the defendant company demolished a building, withdrawing support from the plaintiff’s adjoining building and rendering it dangerous, surveyors appointed under an applicable statute made an award which required the defendant to erect a substantial pier to give support to the plaintiff’s structure and to do certain minor works. The defendant refused to comply and the plaintiff brought the action to enforce that award. McCardie J held that while “... a decree of specific performance can in some cases appropriately be granted in order to carry out the terms of an award”, in the instant case, such a decree should not be made because of difficulties of enforcement and because damages were an adequate remedy. So by way of relief, his Lordship granted the plaintiff a declaration that the award was valid and binding and awarded damages in respect of the erection of the pier and other works.[138] 124. In Birtley and District Cooperative Society Ltd v Windy Nook and District Industrial Cooperative Society Ltd (No 2),[139] an arbitration held pursuant to certain co-operative union rules resulted in an award declaring that the defendant co-operative trading society should not trade in certain geographical areas where the plaintiff was exclusively to provide services. When the defendant refused to be bound by the award, the plaintiff successfully brought an action for a declaration that the award was binding on the defendant, an injunction restraining them from trading contrary to the terms of the award and also an inquiry as to damages. 125. It has been held that a purely declaratory award, including a declaration of non-liability,[140] could be enforced both by a common law action and under the summary procedure. A judgment reflecting such a declaratory award could be relied on by way of an issue estoppel and, if necessary, enforced by suitable methods of execution, including in exceptional cases, a writ of sequestration.[141] 126. In the present case, the tribunal made a non-monetary award requiring continued performance of the Agreement. When it was discovered that the possibility of compelling such performance by requiring transfer of the shares had been frustrated as a result of the restructuring, the enforcing Court granted relief in the form of an award of damages. The fact that there is very likely to be a significant overlap between such damages and whatever damages might have been awarded by the tribunal for breach of the Agreement, does not mean that the Court’s order “usurps” the function of the tribunal. It is an order made at the enforcement phase, exercising the Court’s jurisdiction with a view to fashioning an appropriate remedy to give effect to the award, distinct from any remedy that might have been claimed in the arbitration. K.2 Enforcement action bounded by the scope of the Award 127. The second version of Mr Gee’s outflanking argument takes as its premise what he submits is the limited scope of the Award. He contends that the only issue referred to and decided by the tribunal, concerned the validity of the Agreement. The Award confirmed merely that the Agreement was binding. Referring to Lord Mustill’s analogy, Mr Gee submitted that the parties were only part of the way through the relay race and had not even entered the enforcement phase. Accordingly, the common law action on the award could not legitimately be employed to obtain from the Court of Appeal an order for damages to be assessed. That remedy went far beyond the scope of the Award and fell outside the Court’s enforcement jurisdiction. The judgment entered by the Court of Appeal therefore usurped the function of the arbitrators. If the Plaintiff wanted such damages, he argued, it had to return to the tribunal and persuade it to make such an award. Only then could the enforcing Court enter a judgment for such damages by way of enforcement. 128. In my view, the premise of that argument is untenable. The First Award was not merely about the validity of the Agreement. The tribunal certainly did decide that the Agreement was valid and not illegal. But it went much further. It held that D1-D2 were in breach of the agreement in several ways and rejected the submission that continued performance was impossible, re-affirming the relief awarded. It made it clear that it had fully adjudicated the case and that the First Award was final, recognising that the matter had reached the enforcement phase before the Hong Kong Court. 129. Thus, one sees from the First Award dated 27 October 2006 that the challenge to the Agreement’s validity was unsuccessfully raised by D1-D2 in a counterclaim. The Plaintiff’s claims for relief were based on their allegation that D1-D2 had breached the Agreement. It complained about the renunciation, arguing that “[the] contractual breach of [D1-D2] in unilaterally terminating the Agreement [was] against the principle of good faith and [had] no legal basis”, submitting that they “should continue performing the Agreement”. Such an order, the Plaintiff pointed out, was one form of relief provided for by Article 107 of the PRC’s Contract Law which: “... stipulates that ‘Where one party to a contract fails to perform the contractual obligations or its performance fails to satisfy the terms of the contract, it shall continue to perform its obligations, to take remedial measures, or to bear responsibility for breach of contract such as paying damages’.” 130. In support of an award for such continued performance (bearing in mind that at the stage of the first arbitration, D1-D2 had concealed the fact that they had divested themselves of control by allotting 9,998 shares in D4 to D3), the Plaintiff submitted: “Since the [D1-D2] have absolute control over [D5] and development and operation of [Lot 22], they have the ability to actually perform the agreement”. 131. The Plaintiff also complained about D1-D2’s breach by their failing to deliver the land within six months of the execution of the Agreement and claimed damages accruing at a daily rate totalling RMB 1,275,000 calculated up to 1 June 2005, reserving the right to claim further damages from 2 June 2005 until the date of actual delivery. 132. The Plaintiff argued that the challenge to validity was just an excuse and that D1-D2 had “wilfully breached the Agreement for the purpose of exclusively seizing the commercial benefits”. 133. Those arguments were accepted by the tribunal which held that D1-D2 had no justification for discontinuing performance of the Agreement unilaterally, rejecting the suggestion that performance was impossible notwithstanding the site’s development and the unit sales which had occurred. It also awarded the damages claimed for failure to deliver the land in time. 134. The tribunal saw the Agreement as essentially: “... a share transfer arrangement ... for the contractual purpose of assigning and obtaining the right to develop and obtain earnings from the development of [Lot 22].” To this end, the [Plaintiff] agrees to pay [D1-D2] RMB 120 million by instalments and progressively obtain the right to develop and make earnings from [Lot 22]. After the amount is paid in full, the [Plaintiff] is further entitled and obligated to purchase all the shares in [D4] for HK$2 ...” 135. It was evidently on the basis of a prospective transfer of all the shares in D4 in exchange for payment of RMB 120 million that the tribunal made the award requiring D1-D2 to continue to perform the Agreement. 136. Almost two years later, by an application dated 18 August 2008, D1-D2 returned to the tribunal, asking it “to order termination of the Agreement” on the ground that continued performance was impossible and claiming an award of RMB 6 million against the Plaintiff as compensation for alleged financial loss. This resulted in the tribunal’s Second Award dated 22 April 2009 which underlines the substantive effect of the tribunal’s award disposing of the arbitration. 137. At that stage, the restructuring had been revealed and D1-D2 put this forward as a reason (along with completion of the physical development and sale of most of the units) why continued performance was impossible. They sought to persuade the tribunal that they were entitled to terminate pursuant to Article 11 of the Agreement which specified certain circumstances which would justify termination. 138. The tribunal noted that in the First Award, completion of the development and the unit sales did not satisfy the conditions justifying termination. As to the restructuring, the Second Award stated: “... [D1-D2] by the representations and warranties in Article 2 of the Agreement ... expressly guarantee that they have the absolute control right of [D4]. [D1-D2’s] changes to the shareholding of [D4] during the arbitration procedure of the earlier case have breached the Agreement ... The [tribunal] considers that the change of shareholding of [D4] likewise does not satisfy the condition set out in Clause 2 of Article 11... and cannot be a ground for [D1-D2] to terminate the Agreement.” 139. The Second Award also noted that “the recognition and enforcement of the earlier arbitral award” was being carried out in the Hong Kong Court in accordance with Hong Kong legal procedures and refrained from commenting on the earlier award and the Hong Kong Court’s judgment. 140. Finally, it will be recalled that, by letter dated 19 June 2009, D1-D2 made one last attempt to get the tribunal to accept that continued performance was not possible, asking for directions “on how it should be performed and/or what relief (including damages or other appropriate reliefs)” the Plaintiff should have to meet the purpose of the Agreement. The tribunal replied on 27 July 2009 stating that it had “adjudicated the case fully” that the First Award was final and that the tribunal “did not leave out any matter which would need to be further determined”. 141. It is clear from the foregoing that Mr Gee’s suggestion that the awards were solely concerned with the validity is wholly unsustainable. Quite apart from finding that the Agreement was binding, the tribunal held that D1-D2 were in breach in the abovementioned respects. It awarded damages for the delay in delivering the land and made the order for continued performance as relief for the breaches. The Hong Kong Court translated the award into a judgment under the summary procedure and, after it was discovered that the restructuring had occurred, the Plaintiff started the common law action and sought damages as an alternative remedy in the enforcement proceedings. After failing against D1-D2 at trial but succeeding in the Court of Appeal, the Plaintiff was put to its election and elected for damages which were granted as a remedy within the power of the enforcing court. 142. Mr Gee’s argument that the arbitration was incomplete and that the Plaintiff ought to return to the arbitrators to seek an award of damages ignores the tribunal’s letter 27 July 2009 firmly refusing to entertain further proceedings (including proceedings for “damages or other appropriate reliefs”), asserting that the arbitration was final and comprehensive. 143. While it is conceivable that cases could arise where a remedy sought in a common law action may be refused on the ground that such remedy is unwarranted given the limited scope of the award, the present appeal comes nowhere near to such a case. L. The extant award argument 144. D1-D2 contend that the Court of Appeal was wrong to award the Plaintiff damages because such relief “is fundamentally inconsistent with, and barred by, the extant Award (which requires parties to continue to perform the agreement)”.[142] They argue that: “... according to [Johnson v Agnew], when the decree of specific performance had not been complied with, the innocent party may ‘apply to the court to put an end to the contract’ and the court may, in the exercise of its equitable jurisdiction, order the contract to be dissolved and award damages. In this case, P never applied to the tribunal to give up any of its rights under the Award or for permission to treat the Agreement as terminated. In the circumstances, the enforcing court should not award damages on the basis that the underlying contract was no longer subsisting when there was still an extant award for continued performance of such contract.”[143] 145. The argument is that to enable the enforcing court to grant them damages, the Plaintiff must first return to the tribunal and ask it to rescind its order that “[D1-D2] shall continue to perform the agreement…” Unless that is done, the enforcing Court exceeds its powers in awarding damages which are inconsistent with the extant award. 146. The argument as presently formulated is a modified and diminished version of the argument that had been made before the Court of Appeal. There, the issue was whether the plaintiff was entitled to claim damages in the common law action on the award when it had already entered judgment under the statutory process.[144] D1-D2’s argument was that in entering judgment, the Plaintiff had made its election and could not subsequently seek inconsistent relief in the form of damages. As noted above,[145] Yuen JA held that there had been no election and that the Plaintiff was entitled to an award of damages if a properly informed election for such relief was made. The Plaintiff duly made such election and, on 20 October 2017, the Court of Appeal set aside the statutory judgment and entered judgment in the Action in favour of the Plaintiff for damages against D1-D2 for breach of the implied promise to honour the Award, with quantum to be assessed later. 147. Events have thus overtaken that earlier argument and the present proposition is that there is an inconsistency, not with the statutory judgment (which has been set aside), but with the terms of the award which, D1-D2 argue, is still extant. Johnson v Agnew[146] is relied on by analogy. 148. I do not accept that argument. It fails to recognise that the relief granted in the common law action falls within the enforcement jurisdiction of the Hong Kong Court and is neither a matter for the tribunal nor relief which in some way requires adjustment to achieve consistency with the terms of the award. 149. Johnson v Agnew does not assist D1-D2’s argument. That was a decision concerned with consistency of remedies claimed in the same action and when a party may be held to have irrevocably elected for a particular remedy. It was not concerned with any purported requirement of consistency between relief granted in a common law enforcement action and the content of an arbitral award. In any event, the enforcement proceedings in the present case are perfectly in tune with Johnson v Agnew. Thus, (in relation to remedies sought in a vendor and purchaser action) Lord Wilberforce noted that the vendor may proceed against the defaulting purchaser by action for specific performance or damages in the alternative but would have to elect which remedy to pursue at trial.[147] He went on to point out that “if the order for specific performance is not complied with by the purchaser, the vendor may either apply to the court for enforcement of the order, or may apply to the court to dissolve the order and ask the court to put an end to the contract.”[148] That is essentially the course followed in the present enforcement proceedings. 150. The so-called “extant award” presents no obstacle to the Hong Kong enforcing Court awarding the Plaintiff damages for breach of the implied promise to honour the Award. M. Conclusion as to D1-D2’s appeal 151. For the abovementioned reasons which agree in large measure with the reasons of the Court of Appeal, I would dismiss D1-D2’s appeal. Mr Justice Fok PJ: 152. I agree with the judgments of Mr Justice Ribeiro PJ and Lord Sumption NPJ. Mr Justice Cheung PJ: 153. I agree with the judgments of Mr Justice Ribeiro PJ and Lord Sumption NPJ. Mr Justice Bokhary NPJ: 154. I agree with the judgments of Mr Justice Ribeiro PJ and Lord Sumption NPJ. Lord Sumption NPJ: 155. I gratefully adopt the account of the facts in the judgment of Mr Justice Ribeiro PJ, which is concerned with the arbitration issues in this complex and long-running dispute. I shall also adopt the terminology that he uses. I agree with the order which he proposes in Appeal FACV 3 of 2019, and with his reasons. The present judgment is concerned with the Plaintiff’s appeal (No. 5 of 2019). The object of that appeal is to challenge the comprehensive dismissal by the courts below of the Plaintiff’s non-contractual claims against the D3-D11, who are associated companies of D1-D2 or involved in the management of the group, and were concerned to a greater or lesser degree in the events which have given rise to this dispute. Leave to appeal was granted by this Court, limited to two of those claims. 156. The first is a claim in tort for inducing D1-D2’s breaches of contract. It is nominally directed against all nine of the D3-D11, but in this Court has been pursued only against D3-D6. In this Court, this claim is limited to liability said to arise out of the 2005 restructuring of the group to which D1-D5 belonged. D3-D5 participated in the group restructuring that resulted in D1-D2 ceasing indirectly to control Xiamen Legend (D5), the owner of the land use rights for Lot 22. Mr Tan (D6) was the founder and effective controller of the group. The main issues under this head concern the nature of the knowledge and intent required in order to make an ancillary party liable for inducing a breach of contract. 157. The second claim, which is now pursued against D3 alone, has been given the general label “constructive trust” in these proceedings. What is said is that the contractual obligation of D1-D2 to transfer to a company nominated by the Plaintiff the shares in D5’s parent company Hong Kong Legend (D4) was amenable in Hong Kong law and practice to specific performance. Therefore, it is argued, the Plaintiff acquired by virtue of the Agreement an immediate beneficial interest in the D4 shares which a Hong Kong Court should recognise. When, in the course of the group restructuring of 2005 D1-D2 transferred the shares in D4 to D3, that beneficial interest subsisted and became enforceable against D3, which had notice of the facts giving rise to it. The main issues under this head are whether Hong Kong law is the relevant law for the purpose of deciding whether such a beneficial interest existed and, if so, whether D1-D2’s contractual obligation to transfer the shares was specifically enforceable as a matter of Hong Kong law. 158. Both of these claims were rejected in the courts below. They also rejected a third non-contractual claim of conspiracy to injure the Plaintiff by the use of unlawful means. Leave to appeal was sought from this Court on a limited issue arising under this head, but was refused. We are not therefore concerned in this appeal with the cause of action for unlawful means conspiracy. Inducing a breach of contract 159. At common law, an act sued on in Hong Kong but committed in another jurisdiction can be tortious only if it is actionable under the law of both jurisdictions. The rule, commonly called the “double actionability rule”, is subject to an exception for cases in which the act, wherever committed, is sufficiently closely connected with another jurisdiction. The double actionability rule has been discarded in a number of common law jurisdictions including Australia and Canada, and abolished by statute in others, including England and New Zealand. Its application in Hong Kong may one day need to be reconsidered, but for the moment it is accepted on all sides that the rule, together with the exception, remains the law in Hong Kong. The Judge dismissed the entire claim for inducing a breach of contract on the ground that no such action was recognised by the law of the PRC. The Court of Appeal dismissed the claim on the same ground so far as it arose from the renunciation of the Agreement, and that part of the judgment is no longer in issue. But so far as the cause of action arose from the reconstruction, the Court of Appeal dealt with it purely as a matter of Hong Kong law, presumably on the basis that since the reconstruction was achieved by transactions in the shares of a company incorporated in Hong Kong it happened in Hong Kong. 160. The modern origin of the tort of inducing a breach of contract is the famous decision of the Court of Queen’s Bench in England in Lumley v Gye (1853) 2 E&B 216. The effect of this decision was to make a person who procured a breach of contract liable jointly with the contract-breaker as an accessory to his wrong. The tort, like other economic torts, gives rise to difficult questions of legal policy which are rarely overtly recognised but never far from the surface. The dilemma is how to protect contractual rights against interference from non-parties without unduly limiting the commercial opportunities of businessmen. In the nature of things, commercial competition causes damage to other traders. What limits can the law legitimately place upon it? 161. Since Victorian judges in England first grappled with these questions, most of the world has adopted the statutory regulation of competition, taking its cue from the case-law on the Sherman and Clayton Acts of the United States. Hong Kong has done so since 2012. Statutory regulation has thus come to assume part of the burden of resolving the economic dilemma. But private law, and in particular the economic torts, still has an important role to play. The main difference is that in private law the relationship giving rise to a duty owed by the Defendant to the particular Plaintiff is of critical importance. It commonly arises from the Defendant’s knowledge and intentions in acting as he did. By comparison, public law competition regulation is more concerned with consequences and with objective standards of conduct. 162. The elements of the tort of inducing a breach of contract are (i) a contract, (ii) known to a third party who (iii) does something which induces or persuades a contracting party to break it, (iv) intending to bring about the breach and (v) thereby causing loss. Most of the problems about this area of law have concerned the kind of acts which will be regarded as having “induced” the breach of contract, and the necessary mental state of the alleged inducer. The tendency of much of the case-law until recently was to systematise and assimilate the various economic torts. This may perhaps have made the law more coherent and consistent, but in the process it lost sight of important differences between the various torts, in particular differences between their economic functions and the control mechanisms required in order to keep them within proper limits. In dealing with the tort of inducement, they also overlooked the accessory nature of the liability which had been a cardinal feature of the tort ever since Lumley v Gye. In OBG Ltd v Allan [2008] 1 AC 1 the House of Lords, after reviewing a large body of authority, unbundled the principal economic torts and drew attention to the distinct elements of each. It should now be unnecessary to refer to any older authority on the points which OBG decided. 163. The principal speeches in OBG were delivered by Lord Hoffmann and Lord Nicholls of Birkenhead. They were agreed on the elements of liability for inducing a breach of contract. Lord Walker of Gestingthorpe, Baroness Hale of Richmond and Lord Brown of Eaton-under-Heywood agreed with both of them on that tort, and proceeded to discuss the points on which they differed, all of which related to other torts. 164. Lord Hoffmann dealt separately with knowledge and intent. He dealt with knowledge at §39: “To be liable for inducing breach of contract, you must know that you are inducing a breach of contract. It is not enough that you know that you are procuring an act which, as a matter of law or construction of the contract, is a breach. You must actually realize that it will have this effect. Nor does it matter that you ought reasonably to have done so.” It follows that the alleged inducer must know not just the facts but their legal consequence. This is apparent from Lord Hoffmann’s citation of the House of Lords’ decision in British Industrial Plastics Ltd v Ferguson [1940] 1 All ER 479 as an illustration of his statement of principle. The Defendant was held not to be liable for inducing a breach of an employee’s duty of confidentiality to his employer, because he held the mistaken, indeed unreasonable (“eccentric”) view that there was no such breach as the information disclosed belonged to the employee. 165. The test of intention is related to that for knowledge: “42. … It is necessary for this purpose to distinguish between ends, means and consequences. If someone knowingly causes a breach of contract, it does not normally matter that it is the means by which he intends to achieve some further end or even that he would rather have been able to achieve that end without causing a breach. Mr Gye would very likely have preferred to be able to obtain Miss Wagner's services without her having to break her contract. But that did not matter. Again, people seldom knowingly cause loss by unlawful means out of simple disinterested malice. It is usually to achieve the further end of securing an economic advantage to themselves. As I said earlier, the Dunlop employees who took off the tyres in GWK Ltd v Dunlop Rubber Co Ltd 42 TLR 376 intended to advance the interests of the Dunlop company. 43. On the other hand, if the breach of contract is neither an end in itself nor a means to an end, but merely a foreseeable consequence, then in my opinion it cannot for this purpose be said to have been intended. That, I think, is what judges and writers mean when they say that the claimant must have been ‘targeted’ or ‘aimed at’. In my opinion the majority of the Court of Appeal was wrong to have allowed the action in Millar v Bassey [1994] EMLR 44 to proceed. Miss Bassey had broken her contract to perform for the recording company and it was a foreseeable consequence that the recording company would have to break its contracts with the accompanying musicians, but those breaches of contract were neither an end desired by Miss Bassey nor a means of achieving that end.” 166. Lord Nicholls’ analysis was the same. He spoke at §191 of the inducer’s “intentional causative participation” in the breach. He warned against equating liability under this head with negligence. Ignorance, however careless, is a defence. Lord Nicholls identified the element of intent at §192 as follows: “He is liable if he intended to persuade the contracting party to breach the contract. Intentional interference presupposes knowledge of the contract. With that knowledge the defendant proceeded to induce the other contracting party to act in a way the defendant knew was a breach of that party's obligations under the contract. If the defendant deliberately turned a blind eye and proceeded regardless he may be treated as having intended the consequence he brought about. A desire to injure the claimant is not an essential ingredient of this tort.” To the same effect is the brief statement of Baroness Hale at §306: “[T]he common thread is striking through a third party who might otherwise be doing business with your target, whether by buying his goods, hiring his barges or working for him or whatever. The refinement proposed by my noble and learned friend, Lord Hoffmann, is entirely consistent with the underlying principles to be deduced from the decided cases. It is also consistent with legal policy to limit rather than to encourage the expansion of liability in this area.” 167. The effect of the judgments in OBG is that the act said to constitute the inducement must be targeted at the Plaintiff, in the sense the breach of his contract is either an end in itself or the means to an end. The trade union cases in which the union procures a breach of its members’ contracts of employment are generally cases in which breach of the contract is an end in itself. But, as Lord Hoffmann pointed out, it is more usual for the inducer to be out to serve some commercial interest of his own. He is liable because he knows and intends the breach of contract to be a means to that end. 168. The Agreement included, at Article 2.3, a warranty that D1-D2 “has absolute control over [D4] and [D5]” and an undertaking (not in the event honoured) that after the Agreement had been concluded they would convene a board meeting of those two companies to approve its terms. The purpose of this warranty was manifestly to ensure that D1 was in a position to procure compliance with the terms. It makes sense only on the footing that it related to the position not just at the time of the Agreement but throughout the period when the contract was executory. Moreover, even without such a warranty, it must necessarily be implied that D1 would not put it out of his power to perform. 169. The Judge held that the reconstruction of 2005 was not a breach of the Agreement although it involved D1 parting with control of D4-D5. This was because the relevant breach of contract had already occurred two years before when the Agreement was renounced. This conclusion cannot be correct, and no attempt has been made to defend it in this Court. The renunciation was a repudiation of the Agreement, but the Plaintiff were not obliged to accept it and declined to do so. The contract therefore continued to bind and both sides remained obliged to perform it. That was the overt position of the Plaintiff, who maintained it throughout the two references to arbitration in Beijing and indeed still does. It follows that the reconstruction was a breach of contract. The Court of Appeal accepted that but thought that the prior renunciation of the Agreement by D6 was relevant for a different reason. It explained why at the time of the reconstruction D1-D2 regarded the Agreement as having already been brought to an end for all practical purposes. It followed that the claim for inducing a breach of contract had “no ‘causative’ element” (§249). This was no doubt an echo of Lord Nicholls statement in OBG (§191) about “intentional causative participation” in the breach. 170. Although put as a matter of causation, the Court of Appeal’s point would be better described as a matter of intent. It is, however, the same point albeit with a different label. In cases like British Motor Trade Association v Salvadori [1949] Ch. 556 where the inducement consisted of persuasion, or D.C. Thomson & Co. Ld. v Deakin [1952] Ch. 646 where it consisted of threats, difficult questions arose about what kind of act could be regarded as “inducing” a breach of contract. These difficulties do not arise on the present appeal. The reconstruction undoubtedly caused D1-D2 to be in breach of contract because it was itself a breach of warranty and because it made it impossible to procure the transfer of the shares in accordance with the Agreement. Whether that caused loss or damage so as to complete the tort is a different question with its own difficulties. But this appeal is not concerned with the character of the act constituting the inducement or the question what loss can be said to flow from it. It is concerned with the mental element required of the inducer. The Court of Appeal held that the relevant Defendants cannot have intended the reconstruction to result in a breach of contract because they believed, albeit wrongly, that the contractual obligation to transfer the shares was already at an end once they had already made the decision not to perform it. 171. In my judgment the Court of Appeal was correct. The Judge found that at an early stage, well before the first arbitration award, D6 had directed his brother-in-law Mr. Cheung (D10), a senior member of the group management, to set up an intermediate holding company in the PRC for the property interests of the group in the PRC, in the same way as had been done for its brewery interests in 1995. There were important commercial reasons for doing this, unrelated to the dispute about the Agreement relating to Lot 22. It was necessary in order to make possible intra-group loans and cross-guarantees in a manner consistent with PRC law. The proposal to restructure the group on these lines was set out in a memorandum of 25 August 2005 of Mr. Mok, the group Financial Controller. Mr. Mok’s evidence, which the Judge accepted, was that no one had told him to make the transfer of the D4 sharesimpossible and that this thought never occurred to him. This was mainly because he had read the Agreement and had noted Article 11.3, which provided for purely financial remedies in the event that it was terminated as a result of a breach of the warranty in Article 2. It provided that D1-D2 would be required to refund twice the amount of the deposit, the transfer price paid, and “default compensation” equal to the transfer price paid. D1-D2 disputed the validity of the Agreement in the arbitration proceedings. But even on the footing that it was valid and wrongfully repudiated, Mr. Mok did not believe that there could now be any question of D1-D2 having to transfer the shares. He left the details of the reconstruction to be worked out by Ms. Wong, a senior manager in the company secretarial department. It was she who proposed the form which the reconstruction ultimately took, namely the allotment of the D4 shares to D3 so as to make the latter its majority shareholder. For her, this was a routine transaction of a kind which she had often set up before. The Judge accepted her evidence that her reason for carrying it out in the way she did was that it made for a simpler transaction, with fewer complications as regards stamp duty and accounting. 172. For present purposes it is irrelevant that because of the Plaintiff’s refusal to accept the repudiation the Agreement was still open, because on the findings of fact this was no part of the Defendants’ state of mind. Mr. Mok can fairly be convicted of not having appreciated that an unaccepted repudiation is “writ in water”, or the implications of the House of Lords’ decision in White and Carter (Councils) Ltd v McGregor [1962] AC 413. He has that much in common with many reputable common lawyers. I do not know whether there is a corresponding rule in the law of the PRC, which governed the Agreement. But whether there is or not, Mr. Mok’s view of the effect of Article 11.3 was not so strange as to suggest that he could not have held it. For present purposes it is enough that both the Judge and the Court of Appeal accepted that the group management regarded the contractual obligations as being at an end. That being so, their state of mind was not significantly different from that of the Defendant in British Industrial Plastics Ltd v Ferguson who wrongly believed that in law a trade secret was the employer’s property to dispose of, and was therefore rightly acquitted of inducing its unlawful disclosure. 173. It follows that none of the relevant participants in the reconstruction intended to frustrate the contractual obligation to procure the transfer of the shares, even if that was its effect. In fact, however, it was not its effect. The group had already firmly decided not to transfer the shares and (for reasons which I shall explain below) could not have been compelled to transfer them. The reconstruction did not therefore frustrate the transfer. The question whether that was a foreseeable consequence therefore does not arise on the facts, quite apart from being irrelevant in law. Nor is it relevant that (as the Judge speculated) D6 was likely to have been aware that the reconstruction would make the transfer of the shares to the Plaintiff’s nominee impossible, and to have found this “not unwelcome”. Knowledge of or satisfaction at the result is not the same as intending it. As far as D6 was concerned, the fate of the Agreement was already sealed. Constructive trust 174. A constructive trust can exist only if there is a relevant fiduciary relationship. It may arise on either of two juridical bases. It may be derived from the character of the relationship between the beneficiary or the trustee, where the court recognises that relationship as fiduciary. In such a case the trust gives rise to a true proprietary interest in equity. Or it may be imposed by the court on a purely remedial basis in a case where there is no subsisting proprietary interest (usually because it has been extinguished) but the relevant party is a fiduciary and is before the court. I sought to set out the conceptual framework in Akers v Samba Financial Group [2017] AC 424 at §82. The Plaintiff in this case claims to derive a fiduciary relationship from the executory contract for the sale of the shares. The principle, which was said in 1876 to have been settled law for at least two centuries, is that “the moment you have a valid contract for sale the vendor becomes in equity a trustee for the purchaser of the estate sold”: Lysaght v Edwards (1876) 2 Ch. D. 499, 506 (Jessel MR). This well-known statement of principle related to land. But the same rule has long been applied to contracts for the sale of unquoted shares, which are regarded as unique in the same way as land. It gives rise to a true proprietary interest in equity, arising from the fiduciary character of the relationship between vendor and purchaser under an executory contract of sale. The basis of the rule in both cases, and the essential condition for its operation, is that the contractual obligation to transfer the property should be specifically enforceable. This means that the purchaser’s beneficial interest arises as soon as the contract is made or (if later) as soon as a relevant promissory condition precedent to the transfer has been satisfied. 175. The first question for us is by what law the existence of such beneficial interest is to be determined. The existence and incidents of an interest in property is governed by the lex situs. In the case of shares, this is the law of the jurisdiction in which the company is incorporated: Akers v Samba Financial Group at §19 (Lord Mance), §84 (Lord Sumption). The position is, however, complicated where there is a contract governed by the law of some other jurisdiction. The lex situs determines whether an equitable proprietary interest in the shares is legally capable of existing. If it is legally capable of existing, the next question is whether it has actually been created. Where this is said to be the effect of a contract, the lex situs refers to the proper law of the contract to determine what it means. The question in such a case is not whether its proper law recognises constructive or indeed any trusts. The question is whether the characteristics which the proper law of the contract treats it as having, are such as the lex situs would regard as giving rise to a proprietary interest in equity: Kuwait Oil Tanker Co SAK v Al-Bader (No. 3) [2000] 2 All ER (Comm.) 271, at §§190-193 (Nourse LJ); First Laser Ltd v Fujian Enterprises (Holdings) Co Ltd (2012) 15 HKCFAR 569 at §§66-70 (Lord Collins of Mapesbury NPJ). As applied to the present case, the result of these principles is that the law of Hong Kong, as the situs of the shares, determines whether an equitable interest in shares of a Hong Kong company is capable of subsisting. The answer to that question is that it is, if the contract is specifically enforceable. It is then necessary to refer to the law of the PRC, as the proper law of the Agreement, to determine whether the contract has the characteristics which make it specifically enforceable in the law of Hong Kong. For this purpose, the arbitration award is a decisive source. The D3 was not party to the arbitration agreement. But the D3’s liability as a constructive trustee depends on the position as between D1-D2 and the Plaintiff, all of whom are bound by the arbitration agreement. 176. The Judge and the Court of Appeal found that the law of the PRC did not recognise the concept of trusts. Both of them thought that that was the end of the matter. For the reasons which I have given I do not agree. They should have gone on to ask themselves whether the characteristics of the Agreement in PRC law were such as to make it specifically enforceable in Hong Kong law. But their decision to dismiss the claim in constructive trust was nevertheless correct, because the Hong Kong courts would not specifically enforce a contract with those characteristics. There are, as it seems to me, two related reasons for this. 177. First, subject to limited exceptions, it is a bar to specific performance of a contract that the obligation to be enforced has not arisen because it is subject to a condition precedent which has not been satisfied. Until it is, there is no equitable proprietary interest: Wood Preservation Ltd v Prior [1969] 1 WLR 1077, 1092 (Goff J). The exceptions follow from the logic of the rule. Specific performance may nevertheless be ordered and the purchaser’s beneficial interest will subsist if either (i) it is wholly within the power of the obligee to satisfy or waive the condition, or (ii) the obligor is bound to satisfy the condition and that obligation is itself specifically enforceable. 178. Secondly, it is a bar to specific performance that it would require what the courts have called “supervision”. This is the ground on which the courts refuse to enforce a contract to carry on a business or to build a house. Of course, the court does not literally supervise anything. It makes orders which are enforceable by proceedings for contempt. What is meant by references to supervision in this context is that specific performance will not be ordered if the relevant obligation depends on disputable questions, such as whether a given standard of performance has been achieved, which might have to be referred for decision to a court before it could be known whether the obligation was enforceable. As Lord Lane, delivering the advice of the Privy Council on appeal from Hong Kong, said in Anstalt Nybro v Hong Kong Resort Co. Ltd. [1980] HKLR 76, 82: It is a vain exercise to try to force one person against his will to co-operate with another and it would not be proper to attempt by order to produce that effect. 179. The terms of the Agreement give rise to both problems. The critical feature of the Agreement was that the land comprised in Lot 22 was to be delivered to the Plaintiff well before the shares were to be transferred. The terms contemplate, although they do not expressly require, the development to be begun between delivery of the land and the transfer of the shares. Most of the terms are concerned with the rights and obligations of the parties in relation to the development during that period, the satisfaction of which was a condition precedent to the transfer of the shares. Article 5 provided that the land was to be delivered to the Plaintiff after all the current residents had been moved out, but in any event within six months of the date of the Agreement. D1-D2 were to carry out the demolition of the Legend Commercial Building. It provided that the Plaintiff was to carry out the demolition of other buildings on the site with D1-D2’s assistance. Articles 6 and 7 provided that the Plaintiff was to decide how the land should be developed and the development marketed, but subject to D1-D2’s right to approve certain aspects of the development plans and the financing, and to “supervise” the development and operations on the site. D1-D2 also had a veto on the Plaintiff’s choice of builder “if it has proper ground”. Until the transfer price of the shares was paid there were restrictions on the proportion of the development that the Plaintiff could dispose and the disposal of any proceeds of sale. Article 4 dealt with the payment of the transfer price of the shares. It was to be paid in installment, on signature of the Agreement, on delivery of the land, within a year after the delivery of the land and within two years after the delivery of the land. Under Article 8, the transfer of the shares was to occur “when [the Plaintiff] has settled the total transfer price and fulfilled the obligations according to the Agreement.” The arbitrators, who analysed the terms in detail in the First Award, did not regard the Agreement as a straightforward contract for the transfer of shares or land use rights. They described it as a “complicated arrangement of rights and obligations closely related to the transfer of shares,” and a “framework agreement whose performance may be difficult due to various uncertainties”. For that reason, they considered that it “needs close cooperation between the parties”. 180. Against that background, I return to the question of specific performance. It will be apparent that there were a number of conditions to be satisfied before the shares could be transferred. The satisfaction of those conditions was not within the Plaintiff’s sole control. Nor was the Plaintiff in a position to waive them, since they were inserted at least in partly for the protection of the unpaid vendor. Some of the conditions related to demolition, design and construction and had to be satisfied before the transfer of the shares. They called, as the arbitrators observed, for a high level of cooperative performance, and were inherently disputable. I would not go as far as the courts below did when they described the Agreement as a joint venture for the development of Lot 22. But it clearly had much in common with a joint venture during the period of up to two years which would intervene between the delivery of the land and the transfer of the shares. In my judgment, an agreement with these features was not one which a Hong Kong court applying its own law would specifically enforce. Conclusion 181. For these reasons I would dismiss the Plaintiff’s cross-appeal FACV 5 of 2019. Mr Justice Ribeiro PJ: 182. The Court unanimously dismisses both appeals. The parties are at liberty to lodge written submissions as to costs within 21 days after the date of this judgment, to be dealt with on the papers. FACV 3/2019 Mr Steven Gee QC, Mr Benjamin Yu SC, Mr Richard Khaw SC and Ms Bonnie Y K Cheng, instructed by Mayer Brown, for the 1st and 2nd Defendants (1st and 2nd Appellants) Mr David Joseph QC, Mr Edward Chan SC, Mr Bernard Man SC, Mr Lee Tung Ming, Mr Keith Lam, Mr Justin Ho and Mr James Man, instructed by Anthony Siu & Co., for the Plaintiff (Respondent) FACV 5/2019 Mr David Joseph QC, Mr Edward Chan SC, Mr Bernard Man SC, Mr Lee Tung Ming, Mr Keith Lam, Mr Justin Ho and Mr James Man, instructed by Anthony Siu & Co., for the Plaintiff (Appellant) Mr Steven Gee QC, Mr Benjamin Yu SC, Mr Richard Khaw SC and Ms Bonnie Y K Cheng, instructed by Mayer Brown, for the 1st and 2nd Defendants (1st and 2nd Respondents) Mr Benjamin Yu SC, Mr Paul Shieh SC and Ms Elizabeth Cheung, instructed by Wilkinson & Grist, for the 3rd and 4th Defendants (3rd & 4th Respondents) Mr Ronny Tong SC and Ms Kate Poon, instructed by Baker & McKenzie, for the 6th Defendant (5th Respondent) [1] The name in Chinese: 廈門新景地集團有限公司. [2] Yuen, Barma and Poon JJA, CACV 158/2012, [2016] 2 HKLRD 1106 (15 April 2016). Unless otherwise indicated, references in this judgment to paragraphs (§§) in the judgment of the Court of Appeal are references to the aforesaid judgment. [3] HCCL 13/2011 (14 June 2012). [4] Agreement, Article 5. [5] Ibid, Article 6.1. [6] Ibid, Article 7. [7] Court of Appeal §23. [8] Ibid §35. [9] Ibid §30. [10] The Plaintiff nominated Mr Cheng Dejun and D1-D2 jointly nominated Mr Gu Gongyun. The director of CIETAC appointed Mr Liu Yuwu as chief arbitrator. Subsequently, on 3 March 2006, Mr Liu disqualified himself on the ground of conflict of interest and on 7 March 2006, Mr Kou Liyun was appointed as chief arbitrator in his stead. [11] Court of Appeal §56.4. [12] Award [2006] No 0389. References in this judgment to the content of the tribunal’s awards are to English translations thereof. [13] Court of Appeal §64. [14] Then Cap 341, since replaced by the Arbitration Ordinance (Cap 609). Relevant provisions are set out in Section J.1 of this judgment. [15] As Cheung PJ then was. [16] DHCJ Stone §§41 and 105. [17] Court of Appeal §71. [18] In HCCT 54/2007, [2008] 4 HKLRD 972 (24 June 2008). [19] Relying on section 40E(3) of the Ordinance. Reyes J §§2-3. [20] Reyes J §§86-88. [21] Ibid §§95, 111. [22] Ibid §109. [23] Ibid §133. [24] Rogers VP, Le Pichon and Hartmann JJA, cacv 106 and 197/2008, [2009] 4 HKLRD 353 at §31. [25] Award [2009] No 0144. [26] While the Action was listed as HCA 961/2008. [27] Fok J §§137, 149-150. [28] Ibid §§151, 154. [29] Rogers VP, Le Pichon and Kwan JJA, CACV 88 and 89/2010, [2011] 1 HKLRD 781 (15 December 2010). [30] CA Stay Appeal §§15-16. [31] Ibid §29. [32] Ibid §30. [33] Ibid §31. [34] Ibid §32. [35] Ma CJ, Bokhary and Ribeiro PJJ, FAMV 4 and 5 of 2011 (4 May 2011). [36] Determination §§4-5. [37] Ibid §7. [38] Hon Cheung CJHC (as Cheung PJ then was) and McWalters J, HCMP 13, 15, 18, 21/2012 (14 February 2012) at §7. [39] HCCL 13/2011 (14 June 2012). [40] DHCJ Stone §80. [41] By A Cheung J in Action HCCT 54/2007. [42] DHCJ Stone §§51 and 129. [43] Ibid §114. [44] Ibid §117. Italics in the original. [45] cacv 106 and 197/2008, [2009] 4 HKLRD 353 at §31. [46] DHCJ Stone §§140-141, 144. [47] Ibid §145. [48] Ibid §§145-147. Italics in the original. [49] Ibid §170. [50] Ibid §§191 and 195. [51] Ibid §§205, 208-210, 217-219. [52] [1980] AC 367. [53] DHCJ Stone §§220-223, 228. [54] Ibid §§229, 236. [55] Ibid §234. [56] Ibid §§195, 200, 270-271, 327-329. [57] Ibid §§205, 207-211, 331-333. [58] Ibid §114. [59] Ibid §§290, 304, 366-367. [60] Ibid §§253-254, 291, 296, 298, 317-318, 345-346 [61] Ibid §§258-261, 275, 279. [62] [1920] 3 KB 497. [63] DHCJ Stone §§335, 338-340, 354, 356, 358, 365. [64] Ibid §§248, 250-251, 304-306, 364. [65] Yuen, Barma and Poon JJA, CACV 158/2012, [2016] 2 HKLRD 1106 (15 April 2016). [66] Court of Appeal §114. [67] Ibid §§104, 106-108, 111-112. [68] Ibid §§165-167, 177. [69] Rogers VP, Le Pichon and Kwan JJA, CACV 88 and 89/2010, [2011] 1 HKLRD 781 (15 December 2010). [70] Court of Appeal §§179-182. [71] Ibid §§190-192. [72] Ibid §§193-195. [73] Ibid §§213-216, 249, 253. [74] Ibid §§217, 220-233. [75] Ibid §262. [76] Ibid §§264-265. [77] Ibid §278. [78] In HCCT 54/2007. [79] Yuen, Barma and Poon JJA, CACV 158/2012, [2018] HKCA 940 and [2018] HKCA 942 (10 December 2018). [80] Cheung PJ, Bokhary and Chan NPJJ, FAMV 6 and 7/2019, [2019] HKCFA 21 (3 June 2019). [81] In what is now listed as FACV 3 of 2019. [82] In what is now listed as FACV 5 of 2019. [83] Appearing for D1-D2 with Mr Benjamin Yu SC, Mr Richard Khaw SC and Ms Bonnie Y K Cheng. [84] D1-D2 Written Case §50. [85] DHCJ Stone §§140-141, 144. [86] Court of Appeal §§165-167, 177. [87] D1-D2 Written Case §50. The construction argument is developed at §§43-53. See also D1-D2 Supplemental Case §§9-12. [88] People’s Republic of China Supreme Court Notice of 24 January 2000. [89] “The Hong Kong Special Administrative Region may, through consultations and in accordance with law, maintain juridical relations with the judicial organs of other parts of the country, and they may render assistance to each other.” [90] Article 1. [91] Article 6. [92] Article 5. [93] Arbitration (Amendment) Ordinance 2000, entering into force on 1 February 2000. [94] Now section 92 of Cap 609. [95] See Order 73, r 10(1)(b). [96] Order 73, rr 10(3)(a)(ii), 3(b) and 3(c). [97] Ordinance section 40E. [98] Walker v Rome [1999] 2 All ER (Comm) 961 at 968. It should, however, be noted, that post-judgment interest stands on a different footing: Gater Assets Ltd v Nak Naftogaz (No 2) [2009] 1 All ER (Comm) 667. [99] Norsk Hydro ASA v State Property Fund of Ukraine [2009] Bus LR 558 at §12, per Gross J. [100] Petrochina International (Hong Kong) Corp Ltd [2011] 4 HKLRD 604 §12. [101] (1927) 28 Ll L R 104 at 106-107. [102] Per Gross J in Norsk Hydro ASA v State Property Fund of Ukraine [2009] Bus LR 558 at §17; cited in PetroChina International (Hong Kong) Corp Ltd [2011] 4 HKLRD 604 at §12. [103] Dalmia Cement Ltd v National Bank of Pakistan [1975] 1 QB 9; Dalmia Dairy Industries v National Bank of Pakistan [1978] 2 Lloyd’s Rep 223. Other illustrations include Selby v Whitbread & Co [1917] 1 KB 736 and Birtley and District Cooperative Society Ltd v Windy Nook and District Industrial Cooperative Society Ltd (No.2) [1960] 2 QB 1. [104] Under section 26 of the Arbitration Act 1950, our equivalent being section 2GG(1). [105] [1975] 1 QB 9 at 23-24. [106] Ibid at 24. [107] [1978] 2 Lloyd’s Rep 223 at 225. [108] Ibid. [109] Ibid at 277 et seq. [110] D1-D2 Written Case§74. Authorities cited in this passage have been omitted. Material decisions are discussed below. [111] The First Award was made without the tribunal or the Plaintiff being aware of the restructuring which occurred between 16 November 2005 and 6 April 2006. [112] [1985] 1 WLR 762 at 772. [113] (1927) 28 Ll L R 104 at 106-107. [114] Article 5. [115] Cap 347. [116] [1985] 1 WLR 762 at 770-771. [117] 1982 Edition, at p 368-369, cited by Otton J in [1985] 1 WLR 762 at 771. [118] [2010] 1 Lloyd’s Rep 222 at §14. [119] [1933] 1 KB 753. [120] Ibid at 764. [121] The current Hong Kong equivalent is Order 11 r 1(e) which is in the same terms. [122] [1973] AC 115. [123] Ibid at 126. [124] [2000] QB 559. [125] Jurisdiction pursuant to Supreme Court Act 1981, section 20(2)(h). [126] [2000] QB 559 at 571. [127] [1993] QB 701. [128] As to which see Heyman v Darwins Ltd [1942] AC 356; and Fiona Trust v Privatov [2008] 1 Lloyd’s Rep 254. [129] [1993] QB 701 at 722. [130] Associated Electric & Gas Insurance Services Ltd v. European Reinsurance Company of Zurich [2003] 1 WLR 1041 at §9. [131] The equivalent for present purposes is section 40B(2) of the Ordinance, set out in Section J.1 above. [132] Appearing for the Plaintiff with Mr Edward Chan SC, Mr Bernard Man SC, Mr Lee Tung Ming, Mr Keith Lam, Mr Justin Ho and Mr James Man. [133] Quintin McGarel Hogg, The Law of Arbitration (Butterworth, 1936) pp 120-122, 159; Mustill and Boyd, The Law and Practice of Commercial Arbitration in England (Butterworths, 2nd Ed, 1989) pp 416-418. [134] [2010] 1 Lloyd’s Rep 222 at §5. [135] Cited in Redfern and Hunter on International Arbitration (OUP, 6th Ed), §7.07. [136] Agromet Motoimport v Maulden Engineering Co (Beds) Ltd [1985] 1 WLR 762 at 770, approving the Mustill and Boyd approach at 772. See also Merkin Op cit at §19.6, citing authorities illustrating the grant of a range of remedies. [137] [1917] 1 KB 736. [138] Ibid at 753-754. [139] [1960] 2 QB 1. This decision was held by Bellshill and Mossend Co-operative Society Ltd v Dalziel Co-operative Society Ltd [1960] AC 832 to be wrong on an unrelated ground. [140] West Tankers Inc v Allianz SpA (“The Front Comor”)[2012] 2 All ER (Comm) 113. [141] African Fertilizers & Chemicals NIG Ltd (Nigeria) v BD Shipsnavo GmbH & Co Reederei KG [2011] 2 CLC 761 at §18. [142] D1-D2 Written Case §2(4). [143] Ibid §2(6). [144] Court of Appeal §190. [145] Section G.1 above. [146] [1980] AC 367. [147] Ibid at 392. [148] Ibid at 394. |
Chief Justice Cheung: 1. I agree with the judgment of Lord Neuberger of Abbotsbury NPJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Lord Neuberger of Abbotsbury NPJ. Mr Justice Fok PJ: 3. I agree with the judgment of Lord Neuberger of Abbotsbury NPJ. Mr Justice Lam PJ: 4. I agree with the judgment of Lord Neuberger of Abbotsbury NPJ. Lord Neuberger of Abbotsbury NPJ: A. Introduction 5. The basic issue of principle raised on these appeals is whether a person other than the Secretary for Justice (“the SJ”) who wishes to bring proceedings for criminal contempt of court (an “applicant”) must obtain the consent of the SJ before commencing such proceedings. The Court of Appeal (Cheung JA, Yuen JA and Barma JA) reversing the decision of DHCJ Saunders, although agreeing with him on this point, held that such consent is not required[1]. 6. The appellants, Sun Min (“Sun”), Chang Dafa (“Chang”), and Pacific Bulk Shipping (Cayman) Ltd (“PBSC”) (together “the appellants”), contend that the courts below were wrong, and that such consent is required. More particularly, as Mr Yu SC refined his argument orally, the appellants’ contention was this, that an applicant must inform the SJ of the alleged criminal contempt, whereupon the SJ has the following options, namely (i) to decide to bring contempt proceedings himself, or (ii) to decline to do so and either (a) refuse or (b) grant consent to the applicant to start such proceedings; and it is only if option (ii)(b) applies that the applicant can bring contempt proceedings without joining the SJ. 7. The respondent, Chu Kong (“the respondent”), with the support of the SJ (who was given leave to intervene by Lam PJ on 12th October 2022), argues that the courts below were right, and that, although (as is common ground) an applicant requires the leave of the court to bring criminal contempt proceedings, such proceedings require the consent of no other person. 8. After setting out the factual background, I will consider the nature of contempt proceedings, and will then address the basic issue on these appeals as a matter of principle. I will then turn to consider whether there are any domestic statutory or regulatory provisions, or any decided cases or other material which bear on the issue, following which I will address the case law and other relevant material in other common law jurisdictions. I will then express my conclusions and answer the four questions which are said to be raised on these appeals. B. The factual background 9. For the purpose of this judgment, it is unnecessary to set out the detailed history leading up to these appeals: it is described in paragraphs 8 to 31 of Barma JA’s judgment. The following is therefore a brief, simplified summary. 10. The action underlying the instant contempt application[2] (“the underlying action”) arose from a dispute concerned with the control of the motor vessel “Grain Pearl” (“the Vessel”), which was owned by Joint Silver Limited (“JSL”), a company (i) 50% owned by the respondent and two associates, and (ii) 50% ultimately owned by Lau Wing Yan and his associates, Sun and Chang (“Lau and associates”). 11. The respondent fell out with Lau and associates, and the disagreements between them included a dispute as to what, if anything, had been orally agreed as to how decisions relating to JSL would be made, as to the role of PBSC in managing the Vessel, and as to PBSC’s fee entitlement. Lau and associates contended that the respondent had wrongly (i) appointed himself sole director of JSL, and (ii) caused JSL (a) to terminate PBSC’s Vessel management role, and (b) to issue a lien notice over certain cargo on board the Vessel. 12. These disagreements led to the commencement of the underlying action by Lau and associates and PBSC (“the plaintiffs”) against the respondent, and in the course of those proceedings, the plaintiffs applied ex parte for, and obtained, an injunction against the respondent. 13. In support of their application, the plaintiffs relied, inter alia, on three emails (“the emails”) which were exhibited to Sun’s first affirmation. The emails had been altered by one Yan Donghai (“Yan”) so as to bolster the case of Lau and associates as to PBSC’s role and fee entitlement. The respondent contends that Sun and PBSC were aware of these alterations, whereas Sun, while accepting that the emails were altered by Yan, says that she was unaware of this until January 2016. 14. After making an unsuccessful application to cross-examine Sun and Yan, the respondent applied on 17th August 2016 for leave to commence contempt proceedings (“the Contempt Proceedings”) against the appellants and Yan, based on the alteration of the emails, and also on allegedly false statements in affirmations by Sun and Yan, and an invoice allegedly fabricated by Chang on behalf of PBSC. 15. DHCJ Kent Yee granted the respondent leave to bring the Contempt Proceedings on 20th December 2016, and the appellants then applied to set aside the grant of leave. On 5th July 2017, DHCJ Saunders set aside the grant of leave on the ground of material non-disclosure, based on his view that there had been a failure to explain to DHCJ Kent Yee “the context in which the emails were used”. However, DHCJ Saunders also held that it would have been unnecessary for the respondent to obtain the SJ’s consent to the Contempt Proceedings. 16. On 25th July 2018, the Court of Appeal allowed the respondent’s appeal against DHCJ Saunders’s setting aside of leave, for reasons contained in a judgment given by Barma JA, with which Cheung JA and Yuen JA agreed. The Court of Appeal overruled DHCJ Saunders’s finding of material non-disclosure, but agreed with him that the SJ’s consent to the bringing of the Contempt Proceedings was not needed, although they considered that those proceedings would not be for civil contempt, but for criminal contempt. 17. After the Court of Appeal had refused them leave to appeal on 31st January 2022, the appellants issued notices of motion applying for leave from this Court on 28th February 2022, contending that the projected appeals would raise four “Questions of great general or public importance”. Those Questions were as follows: 1) Does the [SJ] have the exclusive right to bring proceedings against an alleged contemnor in respect of criminal contempt? 2) If the answer to the first question is in the negative, then, if a private litigant seeks to commit another for criminal contempt under Order 52 of the Rules of the High Court (Cap 4A), is he or should he be required (in the absence of exceptional circumstances such as urgency) to consult the [SJ] before he can bring an application for leave to commit under Order 52 rule 2? 3) If the answer to the second question is in the affirmative, and, assuming the [SJ], having been so consulted, declines to bring proceedings in respect of the said criminal contempt, is the private litigant required to join the [SJ] as party, and/or lay the relevant facts before the Court including any expressed views of the [SJ], when bringing proceedings for criminal contempt under Order 52? 4) In the event that the answer(s) to any of the above questions is/are in the affirmative, should the leave granted to Mr Chu to commence committal proceedings against the Defendants herein (by Deputy High Court Judge Kent Yee on 20th December 2016) be set aside and these contempt proceedings be dismissed on the basis that they are procedurally defective, and/or that there has been material non-disclosure in respect of Mr Chu’s failure to consult the [SJ] before commencing these proceedings and/or his failure to join the [SJ] to these proceedings. 18. On 18th July 2022, this Court (Fok PJ, Lam PJ and Tang NPJ) granted the appellants’ applications for leave to appeal on Questions 1 to 4. 19. Meanwhile, to complete the story, the underlying action came on for trial in April 2021, and, on the seventh day of the hearing, the plaintiffs applied for and obtained leave to discontinue the action. C. Civil and criminal contempt of court Contempt of court 20. There is no more important aspect of a civilized society than an effective, independent judiciary whose orders are respected and obeyed. The public interest in the law being properly administered by the courts is plain and well-established. In the 1974 House of Lords case of Attorney-General v Times Newspapers Ltd[3],Lord Cross of Chelsea said that “the due administration of justice is something which all citizens, whether on the left or the right or in the centre, should be anxious to safeguard”. And to much the same effect, some two years earlier, Salmon LJ had said in the English Court of Appeal that “[t]he public at large no less than the individual litigant have an interest and a very real interest in justice being effectively administered”[4]. 21. An essential ingredient of “justice being effectively administered” is the ability of a court to entertain applications for contempt of court (“contempt”) and the power to punish those who commit contempts. This power exists to enable judges to maintain the authority of, and public confidence in, the courts, by preventing and punishing abuse or obstruction of the process of the courts. This power represents a very well-established aspect of the court’s inherent jurisdiction, and it was described by Sir Jack Jacob in an article on “The Inherent Jurisdiction of the Court”[5], as part of “the authority of the judiciary to uphold, to protect and to fulfil the judicial function of administering justice according to law in a regular, orderly and effective manner”. However, it is always salutary for judges to bear in mind that, rather than existing “to protect the dignity of the judges”, the function of the contempt jurisdiction is “to prevent or punish conduct which tends to obstruct, prejudice or abuse the administration of justice” – per Lord Ackner in the 1992 case, Attorney-General v Times Newspapers Ltd[6]. 22. The importance of the contempt jurisdiction was described in ringing terms by Wilmot J in R v Almon[7], where he wrote that it was “a necessary incident to every Court of Justice … to fine and imprison for a contempt to the Court”, and such a power was “intrinsic in a superior court; it is its very life-blood, its very essence, its immanent attribute”.[8] As Lord Simon of Glaisdale explained in the 1974 Times Newspapers case[9], there is “public interest in due administration of justice – that is, in the resolution of disputes … by independent adjudication in courts of law according to an objective code”, as the “alternative is anarchy”. Unless court orders are, and are seen to be, enforced, and those who disobey court orders are, and are seen to be, punished, the independent adjudication in courts to which Lord Simon referred will cease to be, or to be regarded as, effective. For this reason, Lord Steyn, speaking for the Privy Council in Ahnee v DPP[10], an appeal from Mauritius, described the court’s “power and [duty] to enforce its orders and to protect the administration of justice against contempts which are calculated to undermine it” as “an integral part of [the court’s] constitutional function”. 23. In the light of these observations, it is clear that the law on contempt is founded entirely on public policy as was rightly stated by Poon JA giving the judgment of the Court of Appeal in Secretary for Justice v Wong Ho Ming[11], citing Lord Reid in the 1974 Times Newspapers case[12] to the same effect. The two types of contempt 24. The authorities also establish that there are two categories of contempt, civil contempt and criminal contempt. 25. A civil contempt involves the breach of a court order (or of an undertaking to the court), and the sanction for such a contempt is primarily directed towards ensuring that court orders are obeyed (and undertakings to the court are observed). The civil contempt procedure therefore exists ultimately for the benefit of the party in whose favour the order was made or undertaking given. Thus, a civil contempt can therefore, at least normally, be effectively waived by the person for whose benefit the order was made (or undertaking was given) [13]. Further, as Sir Gerard Brennan NPJ explained in Kao, Lee & Yip v Koo Hoi Yan[14],a civil contempt can be committed without the contemnor having the intention of breaching a court order or otherwise interfering with the due administration of justice. 26. A criminal contempt, by contrast, is one which “so threatens the administration of justice that it requires punishment from the public point of view” - per Arlidge, Eady & Smith on Contempt (“Arlidge”)[15].Accordingly, a criminal contempt engages a much wider public interest, and it cannot be waived by anyone. As the Court of Appeal (Cheung CJHC, Lam V-P, and Macrae JA) said in Secretary for Justice v Cheung Kai Yin (No 2)[16], a criminal contempt has been accurately described as being “conduct which goes beyond mere non-compliance with a court order or undertaking and involves a serious interference with the administration of justice”[17].And, before a person can be liable for criminal contempt, it must be established that he intended to interfere with or impede the due administration of justice. 27. The difference between the two types of contempt was described in the recent UK Supreme Court judgment in Attorney General v Crosland[18], which distinguished between “a case involving a breach of an order by a party to litigation where the order has been made at the instance of an opposing party and its purpose is simply to protect the private rights of that other party”, and a case involving breach of an order made “to protect the administration of justice and its breach involves a general interference from which the administration of justice must be safeguarded”. 28. In practice, the distinction between criminal and civil contempts is rather less clear than may appear from the above discussion. Thus, as Poon JA said in Secretary for Justice v Wong Ho Ming[19], it would be “inappropriate to regard an order for committal in civil contempt as no more than a form of execution. For the court still has a very substantial interest in seeing that its orders are upheld”. And it appears that, even where a civil contempt is “waived” by the party with the benefit of the order or undertaking, the court still has jurisdiction to take action of its own motion in respect of the contempt in exceptional circumstances[20]. 29. As Arlidge rightly records[21], “the two types of contempt … overlap to a considerable degree”, a view supported by the Court of Appeal in Cheung Kai Yin (No 2)[22]. Indeed, the distinction between the civil contempt and criminal contempt has been seen by a number of judges as being unsatisfactory. Thus, in the 1988 case of Attorney-General v Newspaper Publishing Plc, Lloyd LJ said that the distinction led to differences which represented “the sort of nonsense which does no credit to the law”[23], and Sir John Donaldson MR suggested that the distinction “now tends to mislead”[24]. And in the 1992 Times Newspapers case[25], Lord Oliver of Aylmerton mentioned that the distinction had been “variously described as ‘unhelpful’ or ‘largely meaningless’”. Further, as pointed out by Hayne J in Re Colina ex p Torney[26]¸ “four members of the [Australian High] court [in Witham v Holloway[27]] concluded that the distinction between civil and criminal contempt was based upon differences that are ‘in significant respects, illusory’”.It is also worth mentioning that the Phillimore Committee[28] doubted the value of the distinctions between the two types of contempt and recommended the abolition of those distinctions. However, the distinction is well-established, and it has (understandably) not been challenged on these appeals. Criminal contempt proceedings 30. Although criminal contempt constitutes a common law misdemeanour, it does not fall within the scope of the ordinary criminal law. The point was fully considered by the Court of Appeal in Secretary for Justice v Cheung Kai Yin (“Cheung Kai Yin (No 1)”)[29].Relying on a number of Hong Kong, UK, and Australian cases, Lam V-P (as he then was) concluded that: “Notwithstanding that the proceedings are ‘prosecutions’ for criminal contempt, we have come to the conclusion that these appeals are properly characterised as civil appeals. In other words it is correct to have the appeals intituled as CACVs and they are civil causes or matters”[30] As he went on to say: “[T]he jurisdiction of the court to punish contempt is sui generis and in many respects principles applicable to criminal cases are applicable to contempt proceedings (both proceedings for civil as well as criminal contempt)”[31] 31. The fact that criminal contempt proceedings are civil in nature is also illustrated by the following observation of the Court of Appeal in Cheung Kai Yin (No 2)[32]: “Criminal contempt proceedings brought under Order 52 are the means for the court to ensure that conduct or activities calculated to undermine the administration of justice are properly addressed. In terms of the time limit for commencement of proceedings, these considerations are not present in a criminal prosecution of an offence under s.23 of the SOO or other offences in the Magistrates’ Courts” The Court of Appeal went on to say[33] that they did not accept, “for the same reasons, that the sentencing court on a committal for contempt is confined or constrained by the sentence which would be appropriate to the statutory offence”. 32. Among a number of authorities which Lam V-P cited in Cheung Kai Yin (No 1) in support of his conclusion was a decision of the High Court of Australia in a 2015 case[34], in which French CJ, Kiefel, Bell, Gageler and Keane JJ said this: “In Witham v Holloway[35], the plurality expressly noted that the process whereby a contempt proceeding is resolved is a civil ‘hearing’ not a criminal ‘trial’. McHugh J also expressed the view that proceedings for contempt of court to punish a respondent are ‘civil and not criminal proceedings’.” Equally clearly, in a concurring judgment, Nettle J expressed himself as follows[36]: “A proceeding for punishment for contempt constituted by disobedience of an injunction granted in a civil proceeding is not part of the criminal justice system in the [normal sense]. Although ‘all proceedings for contempt “must [now] realistically be seen as criminal in nature”’, not all contempts are criminal. Failure to obey an injunction is not a criminal offence unless the failure to comply is defiant or contumacious. A proceeding for contempt is not a proceeding for criminal contempt if the proceeding appears clearly to be remedial or coercive in nature as opposed to punitive. A criminal contempt is a common law offence, albeit not part of the ordinary common law. But even a proceeding for criminal contempt is not a criminal proceeding” 33. The fact that criminal contempt proceedings are not criminal proceedings is underlined by the very well-established fact that a criminal contemnor is liable to be dealt with both in criminal proceedings for the crime involved in the criminal contempt, as well as in civil proceedings for the contempt involved in the criminal contempt. This leads to potential tensions in a case where there are two sets of proceedings, and two English Court of Appeal judgments on the topic are usefully discussed in Cheung Kai Yin (No 2)[37]. However, the essential point for present purposes is that criminal contempt proceedings cannot be criminal proceedings, as otherwise it would be impossible to justify both criminal proceedings in the criminal courts and criminal contempt proceedings in the civil courts being conducted against the same party in respect of the same action or conduct. 34. Thus, the only appropriate way to bring an alleged contempt before the court is through civil proceedings. Prosecuting contempts by way of indictment has become obsolete, as Hartmann and Suffiad JJ explained in Secretary for Justice v Choy Bing Wing[38]. The same is true in England: as Lord Judge LCJ explained in Attorney General v Dallas[39]: “It should now be clearly understood that trials for contempt of court on indictment are obsolete, and of historical interest only. Neither the Attorney General, nor the alleged contemnor, has any right to seek trial by jury on indictment” 35. It therefore seems clear that criminal contempt proceedings, while sui generis, are ultimately civil in nature, and therefore, as Arlidge points out[40], the initiation of contempt proceedings should not be described as a “prosecution”. However, a party bringing an alleged contempt before the court is often referred to as a “prosecutor” (and it is right to bear in mind that civil proceedings can be correctly described as being “prosecuted”). Whatever descriptive noun or adjective one adopts to describe criminal contempt proceedings, the basic function of a party bringing such proceedings is to draw the attention of the court to the facts and matters which are said to give rise to the contempt, leaving it to the court to decide whether there was a criminal contempt, and, if so, what is the appropriate sanction. 36. Thus, in the 1974 Times Newspapers case, Lord Cross said that the role of the Attorney General (“the AG”) in English contempt applications was similar to that of an “amicus curiae” who brings “to the notice of the court some matter of which he considers that the court shall be informed in the interests of the administration of justice”[41]. It is right to mention that Lord Diplock (with whom Lord Morris agreed) put it slightly differently when he described the AG’s role[42] as “[acting] on behalf of the Crown as ‘the fountain of justice’ and not in the exercise of its executive functions”, adding that this involved “the exercise of his personal judgment” as to whether “the conduct … falls into the category of contempts which the court would regard as deserving of some punishment”. 37. While it is open (and indeed normal) for criminal contempt proceedings to be initiated by a prosecutor, commonly an individual interested in the proceedings or the responsible member of the executive (in Hong Kong the SJ, in England the AG), it is very well established that the court can punish a person for criminal contempt of its own motion – see for instance per Rigby LJ in Seaward v Paterson[43], per Lord Denning MR in Balogh v St Albans Crown Court[44] (a most unusual case), and per Mustill LJ in R v Griffin[45]. The most obvious examples of such cases would be contempts in the face of the court or actions such as impeding or attacking officers of the court. 38. Having considered the background, it is now appropriate to address the central issue in this case, namely whether criminal contempt proceedings can only be brought by, or with the consent of, the SJ, or whether they can be brought simply with the leave from the court. It seems appropriate to consider this question as a matter of principle, and then to turn to the case law and other relevant material in this and other common law jurisdictions. D. The central issue as a matter of principle 39. Given that the contempt jurisdiction (i) goes to the heart of the court’s function and role, (ii) is an aspect of the court’s inherent jurisdiction, and (iii) has been authoritatively described as “constitutional” in nature, it would be surprising if any entity other than the court itself was able to fetter the ability of any person to bring an alleged contempt, whether civil or criminal, to the attention of the court. 40. The SJ obviously has a vital and fundamental role in supporting the rule of law, and therefore in supporting the role and authority of the courts. However, it seems highly questionable whether he, as a member of the executive, should have a power which enables him to prevent the court from hearing a criminal contempt application, and therefore from upholding its own authority. The notion that the SJ could stop a criminal contempt being brought before the court thus seems wrong in principle. 41. Even more surprising is the notion, which was advanced as part of the appellants’ case, that the SJ can prevent a court from initiating and prosecuting criminal contempt proceedings of its own motion, even when the court considers it right to do so. That is, to put it politely, a very ambitious submission, which runs wholly counter to the important constitutional principle of separation of functions. Even if this extreme aspect of the appellants’ case is ignored, however, it still seems inappropriate that the SJ should be able to prevent an applicant from drawing the court’s attention to an alleged criminal contempt, as I have just explained. 42. This view is in no way undermined by the fact that the SJ can initiate or take over the conduct of criminal contempt proceedings, and that he may play an important part in connection with some contempt applications – e.g. by intervening in any criminal contempt proceedings, or as a result of the court referring to him matters arising in connection with criminal contempt proceedings. In bringing criminal contempt proceedings the SJ is acting like any other citizen – although, obviously, with greater authority, and taking over criminal proceedings is an ancillary aspect of that function. And in playing a part in contempt proceedings brought by another, the SJ is assisting the court (as on these appeals), but that in no way supports the notion that he should be able to prevent an alleged contempt being put before the court. 43. It is fair to say that there is some initial attraction in the notion of the SJ being able to weed out misconceived or vengeful contempt applications before the court is troubled by them. However, the court, which will often have had the conduct of the underlying action, and which would be determining the alleged contempt if the application succeeds, would normally be in at least as good a position as the SJ to decide whether to let an application proceed, and the court indeed has that role as its leave is needed to bring contempt proceedings. And, as already mentioned, if the court considers that it would benefit from the assistance of the SJ (including at the leave stage), it can request it. 44. The notion that criminal contempt applications require the consent of the SJ also appears to sit a little oddly with the fact that the Court can initiate criminal contempt proceedings of its own motion. Judges generally have no power to initiate civil, or indeed criminal, proceedings themselves, and the reason why they have this unusual power when it comes to criminal contempt is because of the nature and purpose of the contempt jurisdiction as discussed above. This point reinforces the notion that the only gatekeeper controlling access to the court to a party seeking to bring criminal contempt proceedings should be the court itself. 45. Further, the fact that (unless of course there are constitutional or legislative rules which provide otherwise) civil contempt proceedings can freely be brought to court without the consent of the SJ or any other third party also supports the proposition that the same should be true for criminal contempt proceedings. Given that the contempt jurisdiction is based on the court’s duty to protect its own efficacy and authority, it would be strange if the court was free of any third party’s constraint to entertain civil contempt proceedings, but was more restricted when it came to entertaining the more serious criminal contempt proceedings. It would perhaps be more understandable if criminal contempt proceedings were truly criminal in nature, as the SJ has a central role when it comes to bringing criminal proceedings, but as explained, criminal contempt proceedings are ultimately civil in nature. 46. The appellants justify a restriction on criminal, as opposed to civil, contempt proceedings on the ground that civil contempt proceedings are (at least normally) intended to be for the benefit the prosecutor, who should therefore be free to issue civil contempt proceedings, whereas the criminal contempt jurisdiction exists for the public benefit, and so it is appropriate that a prosecutor needs the consent of the SJ. However, that argument suffers from the problem that the bringing of criminal contempt proceedings does need consent in the form of leave from the court. (The fact that civil contempt proceedings may also need such leave does not undermine the force of the point). Quite apart from this, the somewhat unsatisfactory nature of the distinction between civil and criminal contempts discussed above[46] would render it difficult in some cases to decide whether the SJ’s consent was needed, and could lead to arid arguments. 47. In addition to these points, the fact that it is very well established that all members of the public have an interest in the proper administration of justice tends to support the contention that there should be no fetter imposable by any entity other than the court itself on a member of the public seeking to bring criminal contempt proceedings. Seeking the leave of the court can involve no or little loss of time or extra effort, as an application for leave can no doubt be made “ex parte on notice”, so that, if the court gives permission, it can give directions immediately thereafter. If consent has to be sought from the SJ by contrast, it would involve extra delay and expense. 48. Further, given that contempt proceedings require the leave of the court, it would seem somewhat surprising if the consent of a third party was also required. It is not easy to see why there should be two gatekeepers as a matter of course in relation to every potential criminal contempt proceedings. In an appropriate case, the SJ could make representations at the leave stage, and, if he did not do so, then, as already mentioned, the court, if it thought fit to do so, could no doubt consult the SJ, or ask if he had any submission to make. 49. Quite apart from these points, as well as being inappropriate from the perspective of the court and an applicant, it would represent an unnecessary burden on the SJ if he had to vet every proposed contempt application. In that connection, it is relevant to invoke what, when considering the role of the SJ in charity proceedings, Lam V-P (as he then was) referred to as “[t]he stark reality” that “under our present system, those in the Department of Justice have no resource or power to carry out an investigation” [47]. Indeed, what was effectively that very point was made in relation to the issue on these appeals by Mr Dawes SC on behalf of the SJ. 50. As the arguments developed, the appellants put forward as their “core proposition”, the point that “there is an inherent conflict between the conduct of criminal contempt proceedings which are public law proceedings concerned solely with the administration of justice and public interest, and the notion that a private party with his own agenda and motive can bring such proceedings”. The answer is that there is no such conflict as a private party can only bring criminal contempt proceedings with the leave of the court, and all judges are well aware of the need to scrutinise applications to bring such proceedings by a litigant who may want to put pressure on an alleged contemnor for his own commercial benefit or to get revenge on the alleged contemnor[48]. The appellants contend that this is a weaker protection than would be accorded to the accused in a criminal court. Even if that is right, it is well established that many of the protections accorded in criminal cases are not available in contempt proceedings[49]. However, an alleged contemnor is not without substantial protection: as Mr Mok SC submitted, on behalf of the respondent, quite apart from being able to contest criminal contempt proceedings, and to rely on the criminal burden of proof[50], an alleged contemnor can apply to have an ex parte grant of leave set aside if there was abuse[51], and at any stage, the court may of its own motion, or at the instigation of a party, seek assistance from the SJ. 51. Analogies are always dangerous, and that must be particularly true in relation to criminal contempt proceedings which have been consistently described as sui generis[52]. However, it is not uninstructive to consider privately brought criminal proceedings. The appellants’ submission that the consent of the SJ is required before a private person can bring criminal contempt proceedings is hard to reconcile with the fact that a private person is free to bring a private prosecution, a proposition recently confirmed in clear terms by Poon CJHC giving the judgment of the Court of Appeal in Kwok Tak Ying v HKSAR[53]. Whether a criminal prosecution may be proceeded with is a matter ultimately for the SJ (pursuant to Article 63 of the Basic Law, as referred to below), whereas whether criminal contempt applications can be brought is ultimately a matter for the court. 52. An analogy which seems to me to be misleading for present purposes is that of a relator action, which was pressed by Mr Yu SC. He relied on the reasoning of the House of Lords in Gouriet v Union of Post Office Workers[54], where it was held that in England and Wales only the AG could bring proceedings to restrain the commission of an offence (unless the action or inaction complained of also represented a breach of a private party’s rights). A relator action is an action on behalf of the public, and the law clothes the AG with the authority to decide whether to bring, and actually to bring, proceedings on behalf of the public, whereas a private citizen, however well intentioned, can have no such authority. By contrast, all that a private citizen is doing by initiating criminal contempt proceedings is drawing an alleged contempt to the attention of the court, whereupon it is for the court to decide whether to allow him to proceed, and, if it does allow him to do so, to decide how matters should proceed. In any event, if the logic of Gouriet applies in relation to criminal contempts, it would mean that a party to the underlying action could not bring contempt proceedings, and that is plainly not the law. 53. The appellants also contended that, if criminal contempt proceedings could be brought without the consent of the SJ, then the system would be open to abuse. To the extent that that is right, it is equally true of civil contempt proceedings, and indeed any other proceedings. More importantly, if a filter is required to consider whether contempt applications should be allowed to proceed, it is more appropriate that it is the court itself rather than the SJ, which applies the filter. As already explained, (i) contempt is very much a matter for the court and not for the executive, (ii) in many cases, the court will have a much better idea of the background, as there will almost always be an underlying action, and (iii) all citizens have an interest in courts and court orders being respected, and there should be as few as possible barriers in the way of bringing alleged contempts to the attention of the court. 54. Accordingly, it appears to me that, if these appeals are to succeed, the appellants would have either (i) to identify a legislative provision which imposes a requirement that an individual seeking to bring criminal contempt proceedings must first obtain the consent of the SJ, or else (ii) to establish that the case law has developed in such a way as to demonstrate that the courts themselves have recognised that such a requirement should be recognised or imposed. 55. It is right to say that the point made in paragraph 54 above would be appropriate even in the absence of the discussion in the preceding fifteen paragraphs, on the basis that, once it is accepted that any person can bring criminal contempt proceedings with the leave of the court, it is for the party asserting that there is a further fetter on the bringing of such proceedings to show that such a fetter exists. However, the preceding discussion underscores the force of that point in this particular case, and suggests that any alleged statutory or judicial fetter should be considered with particular scrutiny. 56. Accordingly, I turn first to consider whether there is any domestic legislative provision or case law which mandates or indicates that the SJ’s consent is required before a private person can initiate criminal contempt proceedings. E. Domestic constitutional, legislative, and other material Rules of the High Court 57. As one would expect, the procedure to be adopted on contempt applications is dealt with in The Rules of the High Court (Cap 4A) (“The Rules”). Many of The Rules which apply to applications generally apply to contempt applications, but it has not been suggested that there is anything in those generally applicable rules which assist for present purposes. 58. However, and again as one would expect, The Rules include an Order, namely Order 52 (“O.52”), which deals specifically with applications for committal for contempt. It is headed “Committal”, and is based very closely on the English Order 52 of the Rules of the Supreme Court (“RSC Order 52”). 59. O.52 rule 1 provides that “a single Judge or … a single justice of appeal” has the power “to punish for contempt of court … by an order of committal”. O.52 rule 2(1) states that “[n]o application for an order of committal” can be made “unless leave to make such an application has been granted in accordance with this rule”. Rule 2 goes on to provide that such an application should initially be “made ex parte to a judge”, and should comply with certain other formalities, and that the judge may dispose of the application without a hearing. O.52 rule 3 deals with the procedure to be adopted by the applicant after an application is granted under rule 2, and O.52 rule 6 is concerned with the hearing of the contempt application. There is no rule 4, but O.52 rule 5 makes it clear that nothing in O.52 affects the court’s power “to make an order of committal of its own motion”. 60. It is to be noted that, in the light of its title and the provisions of rules 1 and 2, O.52 appears to be limited to contempt applications seeking committal. However, O.52 rule 9 provides: “Nothing in the foregoing provisions of this Order shall be taken as affecting the power of the Court to make an order requiring a person guilty of contempt of court … to pay a fine or to give security for his good behaviour, and those provisions, so far as applicable, and with the necessary modifications, shall apply in relation to an application for such an order as they apply in relation to an application for an order of committal.” Accordingly, it seems clear that, if a fine or some form of security, rather than committal, is the sanction sought in a contempt application, the court’s leave would still be required under O.52 rule 2. And if sequestration is the sanction sought, then the court’s leave would be required under Order 45 rule 5(i)(b)(i) and (ii) of The Rules. 61. It is also to be noted that O.52 applies to civil as well as criminal contempt applications, as Hartmann and Suffiad JJ observed in Choy Bing Wing[55]. Committal is almost always sought in criminal contempt applications, and, where it is not sought, the application would presumably seek a fine, security or sequestration, and therefore would require the court’s leave. Accordingly, it seems clear that the respondent’s contention (not challenged by the appellants) that criminal contempt applications would always need leave from the court before being commenced, is well founded. 62. Committal is often, and in my experience usually, sought in civil contempt applications, although, as recorded in Arlidge[56], while “[i]mprisonment has always been a sanction in cases of contempt”, it is regarded by the courts today “as a matter of last resort, especially in cases of civil contempt”. In civil contempt applications where committal is not sought, one would expect some other sanction, such as a fine, security or sequestration to be sought, in which case, as just explained, the court’s leave would be required. However, given the purpose of civil contempt proceedings, it is possible to envisage the making of an application which sought a different remedy, at least initially – e.g. simply requiring the alleged contemnor to appear before the court. Thus, while the leave requirement under O.52 will apply to the great majority of civil contempt applications, it may be that it would not necessarily apply to them all. 63. The way in which O.52 is drafted has avoided parties or the court having to delve into the sometimes difficult question whether the alleged contempt is civil or criminal. Rather, the sole question is whether the application seeks the imprisonment, the imposition of a fine, the provision of security or sequestration: if it does, then whether the alleged contempt is criminal or civil, the court’s leave must be obtained. If it does not, then it would seem that leave would not be needed, unless it was required under another rule of court, or another legislative provision. 64. Clearly, there is not even a hint or suggestion in O.52 that an applicant seeking to commit someone for contempt needs to apply to the SJ, or indeed that the SJ has any gatekeeping function in respect of contempt applications. And, particularly given that O.52 expressly provides for the obtaining of leave from the court, it is a reasonable inference that, unless there is any other legally enforceable rule which clearly so provides, there is no requirement for the consent of the SJ before any contempt proceedings, whether criminal or civil, are commenced. 65. The appellants also drew attention to Order 41A rule 9 of The Rules (“O.41A rule 9”), paragraph (1) of which permits proceedings for contempt against a person who makes or causes to be made “a false statement in a document verified by a statement of truth without an honest belief in its truth”. Paragraph (2) of O.41A rule 9 provides that: “(2) Proceedings under this rule may be brought only – (a) by the Secretary for Justice or a person aggrieved by the false statement; and (b) with the leave of the Court.” 66. It is common ground that O.41A rule 9 does not apply in this case, and I do not see how it helps the appellants. Indeed, I consider that, if anything, it is actually unhelpful to their case. O.41A rule 9 is a provision which deals with contempt applications, and which not only specifically requires in sub-paragraph (b) an applicant to obtain leave of the court while saying nothing about the SJ’s consent, but it also has the SJ well in mind as shown by sub-paragraph (a). Constitutional provisions 67. Casting their sights more widely, the appellants relied on Article 63 in Section 2 of Chapter IV of the Basic Law (“Article 63”) which states that “[t]he Department of Justice … shall control criminal prosecutions, free from any interference”. Although the appellants are right in arguing that the cases show[57] that this important provision should be given a purposive, rather than a narrow, effect, it seems to me clear that the Court of Appeal was right to reject their contention that Article 63 extends to applications for criminal contempt. The constitutional basis of the criminal contempt jurisdiction as explained above (protecting the efficacy and authority of the court) is different from that of the criminal jurisdiction, as is perhaps most graphically illustrated by the court’s undoubted power to initiate and prosecute contempt proceedings of its own motion, but is also clear from the differences in procedure between criminal contempt proceedings and criminal proceedings in the criminal courts. 68. It was the appellants’ reliance on Article 63 which led Mr Yu SC to argue, as he logically had to, that the SJ could prevent the court from considering an alleged contempt, whether of its own motion or otherwise, even if the court was of the view that it should do so. I mentioned earlier that any legislative or other provision which was said to cut down the court’s freedom to consider any alleged contempt should be considered with “particular scrutiny”[58]. I would go further in relation to this particular argument: very clear and unambiguous words would be required before it would be appropriate to conclude that a legislative provision, or even a provision in the Basic Law, had the effect of enabling the SJ to prevent the court from considering an alleged contempt which the court wished to consider. The wording of Article 63 falls a very long way short of satisfying that requirement. To put the point the other way round, as observed by Lam V-P in Cheung Kai Yin (No 1)[59], the reason that the requirement for leave of the court in O.52 is not incompatible with the Basic Law is that Article 63 does not apply to the proceedings covered by O.52. 69. As was pointed out on behalf of the SJ, this conclusion is supported by the fact that the Basic Law, as explained by Ribeiro PJ[60], “aims to provide for continuity between the pre-existing and the present courts and judicial systems”. And the role of the AG, the SJ’s effective predecessor before the Basic Law, was discussed in paras 3 and 4 of Appendix 1 to an authoritative 1987 Final Report[61] which led to the drafting of some provisions of the Basic Law, including Article 63. In paragraph 3, the Report referred to the “overall authority for the initiation of criminal proceedings” being vested in the AG, and the fact that “[h]is specific consent is required under a number of statutes”. After summarising his role in relator actions, paragraph 4 stated (reflecting the views expressed in the House of Lords in the 1974 Times Newspapers case[62]): “The [AG] also has a more general public interest role as amicus curiae, the most important example of which is the bringing of alleged contempts to the notice of the courts” The reference to “criminal proceedings” in paragraph 3 of the 1987 Final Report was thus clearly not envisaged as extending to criminal contempt proceedings, and it is significant “criminal proceedings” is the relevant expression in Article 63. 70. Of course, some changes would have had to be made as a result of the introduction of the Basic Law, but there appears to be no conceivable reason why it would have been thought to be appropriate to transfer control over criminal contempt proceedings to the Department of Justice, and there is no trace of any suggestion that such a transfer was contemplated, let alone intended. 71. It is right to mention that, in relation to this argument, the appellants placed some reliance on the drafting history of the Basic Law. I mean no disrespect to them by not addressing the argument other than to say that there is nothing in that history which casts doubt on the views expressed in the preceding four paragraphs. Accordingly, I conclude that Article 63 does not apply to criminal contempt proceedings. Legislative provisions 72. The appellants also sought to draw some support for their argument from section 3(3) of the Judicial Proceedings (Regulation of Reports) Ordinance (Cap 287) (“JPRRO”). Subject to certain specified exceptions, section 3(1)(b) of JPRRO forbids the publication of information “in relation to any judicial proceedings for dissolution of marriage, for nullity of marriage or for judicial separation”, and section 3(2) states that anyone who “contravenes the provisions of [section 3(1)] shall be guilty of an offence”. Section 3(3) provides: “A prosecution under this section shall not be instituted except by or with the consent of the Secretary for Justice” 73. The appellants argue that a breach of section 3(1) of the JPRRO is a species of contempt, and that section 3(3) shows that contempt applications need the consent of the SJ. I disagree. A breach of section 3(1) of the JPRRO is a breach of an Ordinance, which is rendered a crime by section 3(2), and it is not a contempt of court – unless, of course, the publication concerned also breaches a court order. However, in agreement with the respondent’s argument, I would go further and say that section 3(3) is actually unhelpful to the appellants’ case, as it shows that, where the SJ’s consent is required, it is actually spelled out in the relevant legislation; in other words, the contrast between section 3(3) of JPRRO and O.52, so far as the need for the consent of SJ is concerned, reinforces the notion that such consent is not needed for an application to which O.52 applies. Case law and other domestic material 74. So far as other relevant domestic material is concerned, it is noteworthy that in this case the Court of Appeal considered that there was no domestic case which assisted the appellants’ argument, and that, treating the issues as one of principle, they held that[63]: “[T]here [is] no good or compelling reason why it should not be open to a litigant in civil proceedings in which the opposing party has committed a criminal contempt … to pursue the matter by way of criminal contempt proceedings. … The existing procedure under [O.52], with a requirement that leave be obtained, provides a suitable and time-tested process for the vetting of intended claims for contempt, such that obviously unsustainable or abusive proceedings will be weeded out at an early stage.” 75. The appellants point out that in Choy Bing Wing,Hartmann and Suffiad JJ said[64] that a “criminal contempt is a matter for the [SJ] to raise, acting as the guardian of the public interest”. But this statement is not expressed in exclusive terms; and it cannot have been so meant, as it would exclude applications for criminal contempt being made by any party other than the SJ, and, as the appellants rightly accept, private parties can bring contempt proceedings: the question at issue is whether they need the SJ’s consent. Indeed, a little later in the same judgment[65] the court said that “an applicant (be it an aggrieved litigant or the [SJ]) may seek committal for contempt … whether the contempt is … civil or criminal”. Although that statement could just about be said to be neutral on the question at issue, it seems to me that it implies that no consent from the SJ is needed, as “an aggrieved litigant” and the SJ are referred to as if they are in the same position, and anyway if the SJ’s consent was required, one would have expected the judgment to have said so. 76. So far as other domestic material is concerned, in its 1986 Report on Contempt of Court, the Hong Kong Law Reform Commission stated[66] that “in general, contempt proceedings … may be instituted by a private individual”. When one reads those words together with the recommendation[67] that “it should be a requirement before proceedings alleging a contempt other than one arising out of a breach of an order of the court are begun, that notice of the intention to proceed be given to the [AG]”, it is clear that the members of the Commission (who included the then-Chief Justice and the then-AG) considered, indeed took it for granted, that the consent of the AG to the bringing of criminal contempt proceedings was not required. And, as explained above[68], the Basic Law was intended generally to continue the previous law. F. Case Law and other material from other jurisdictions 77. All three parties cited a number of judicial observations in cases decided in England, Scotland, Australia, Ireland, Uganda, and Singapore to support their respective positions on the central issue on these appeals, and they have also cited other material. In a case such as this where a specific point of practice is raised, care must be taken before one gives weight to a statement in a judgment which appears to deal with the point, but which was given in a case where the point was not in fact in issue, and may well not have been the subject of much, if any, argument or citation of authority. In some cases, the statement may be intended to be no more than a very short summary of the relevant law, with irrelevant over-simplification, and in other cases the statement may simply be wrong. Of course, it is very different in a case where the point was fully argued, or it was in issue, or where the statement is consistent with statements in other judgments. 78. Turning to the English cases, the question whether criminal contempt proceedings could only be brought by the AG was considered by the Law Lords in the 1974 Times Newspapers case[69]. Although the appellants suggested that some of the speeches indicated the criminal contempt proceedings could not be brought freely by a private party, it seems to me that all five members of the panel accepted that this was the case. 79. After saying that the AG “has a right to bring before the court any matter which he thinks may amount to a contempt”, Lord Reid said that the “party aggrieved has the right to bring before the court any matter which he alleges amounts to a contempt but he has no duty to do so”[70]. While he thought that “[i]n the situation which presented itself … it was in accordance with desirable practice for the [AG] to be concerned and to consider what course in the public interest he should follow”, and whether to bring contempt proceedings, Lord Morris of Borth-y-Gest added “though it would have been open to [a party in the underlying action on whom pressure was being put by the alleged contemnor] to initiate proceedings had they so decided”[71]. Lord Diplock considered that the AG was “the appropriate public officer to represent the public interest in the administration of justice”[72], he said in terms that if the AG “declines to move, the party complaining can bring the motion on his own behalf”, and, in the immediately preceding paragraph he referred to the court being “vigilant to see that the procedure for committal is not lightly invoked” partly because “it is a procedure which if instituted by one of the parties to litigation is open to abuse”[73]. Lord Simon did not expressly address the point, but he began his speech by saying that he “admiringly agree[d]” with Lord Diplock[74]. Lord Cross said[75] that, save in exceptional cases (such as those involving urgency) it was “most desirable” that a private party should first give the AG the opportunity of applying, thereby strongly implying that a private party could proceed without first doing so. 80. It is fair to say that all these observations were obiter, but they are five consistent views from the United Kingdom’s highest court, and they all support the contention that, in England, the consent of the AG need not be sought by a private person before issuing criminal contempt proceedings. 81. The appellants point out that in an unreported Court of Appeal case in 2000, Pelling v Hammond[76] Laws LJ (sitting on his own) said that it was “certainly desirable and perhaps necessary for the [AG] to be approached to see whether he should bring contempt proceedings”. Given the word “perhaps”, the observation can be of no assistance to the appellants. But, quite apart from this, the observation was made in the context of an application for permission to appeal which Laws LJ dismissed as being “totally without merit”. Accordingly, this is a classic case of an obiter observation which, despite the eminence of the judicial source, cannot be given any weight, because the point was not in issue and apparently not argued, and the judge was not referred to any relevant authority. 82. Of much more relevance is the 2009 case of KJM Superbikes Ltd v Hinton[77], in which the Court of Appeal reversed the refusal of the trial judge to grant leave to the claimant to issue criminal contempt proceedings[78] against the defendant under CPR 32.14 (the English equivalent of O.41A rule 9), on the ground that the defendant had provided a dishonest witness statement. Having held that the claimant had locus to bring the proceedings, Moore-Bick LJ (with whom Mummery and Arden LJJ agreed) went on to address a submission very close indeed to that raised by the appellants in this case, namely[79]: “[the] submission that the court should generally decline to give permission to a private litigant to pursue proceedings for contempt in cases of this kind and should instead direct that the matter be referred to the [AG] for her to consider whether proceedings should be instituted. Such a course was said to be more likely to promote consistency of approach and thus greater confidence in the administration of justice.” While accepting that consistency of approach was “highly desirable” Moore-Bick LJ said[80]: “I do not think that to refer all cases of this kind to the [AG] is the only way in which it can be achieved. Cases are bound to differ widely, … and whether the matter is determined by the [AG] or the court, each will have to be considered on its own facts. In practice complete consistency is unlikely to be unattainable, but it is possible for the courts through individual decisions to establish and develop a body of principles which will provide guidance to judges who have to deal with applications of this kind and which will by their nature promote the necessary degree of consistency. …The court is free to take whichever course appears most appropriate in the circumstances and I can see no good reason for saying that the most appropriate course is normally to direct that the matter be referred to the [AG].” 83. The appellants point out that CPR 32.14 is a separate code from the normal English contempt rules (originally RSC Order 52 and now CPR rule 81). I do not accept that as a relevant distinction for present purposes; CPR 32.14, like O.43A rule 9, refers to “[p]roceedings for contempt of court”, and therefore the usual principles applicable to contempt applications apply, and in any event Moore-Bick LJ’s judgment plainly proceeded on that basis. 84. As to the English rules of court, since October 2020, RSC Order 52 – on which O.52 is based, as mentioned above – has been replaced by CPR Part 81, which permits civil contempt proceedings to be brought as of right, while criminal contempt proceedings require the permission of the court.[81] Like RSC Order 52, CPR Part 81 contains no suggestion that criminal contempt proceedings brought by a private person require the consent of the AG. 85. The Phillimore Report[82] stated that “[i]n general, contempt proceedings, like most other proceedings, civil or criminal, may be instituted by a private individual”. When read together the recommendation that “the normal practice should be … that the attention of the [AG] should be drawn to the matter before any private proceedings are begun”[83], it seems clear that the Committee believed that the AG’s consent need not be sought before criminal contempt proceedings are instituted. 86. Turning to English textbooks on the issue, Borrie & Lowe: The Law of Contempt[84] states that “the consent of the [AG] is not required for the institution of contempt proceedings at common law (although the usual practice is for the complaining party to refer the matter and for the [AG] to initiate contempt proceedings)”. As the authors go on to point out, section 7 of the Contempt of Court Act 1981 specifically requires a party to obtain the AG’s consent to “[p]roceedings for a contempt of court under the strict liability rule”. It is hard to make much of that provision in this case with any confidence as its ambit is unclear, as the discussion in Borrie & Lowe explains. However, the fact that the section specifically requires the consent of the AG in the types of contempt applications to which it applies, strongly implies that such consent is not needed for other types of contempt applications (unless they are subject to some other similar legislative provision). 87. Arlidge is somewhat more elliptical on the point. It describes “institution of proceedings in relation to criminal contempts” as being “primarily a matter for the [AG], or for the court of its own motion”[85]: this suggests that others have the right too, which presumably would include an aggrieved party in the underlying litigation. That the authors consider that such a person could bring proceedings without first informing the AG is I think confirmed by a later passage which states that “it is therefore desirable that the aggrieved party should place the facts before the [AG] prior to instituting proceedings himself”[86]. Other common law jurisprudence 88. As to Scots law, the point at issue was considered in Robb v Caledonian Newspapers Ltd, where Lord Justice-General Hope, sitting with Lord Cowie and Lord Wylie considered an argument that as an application for criminal contempt by a private party was made “without the concurrence of the Lord Advocate the application was incompetent”[87]. The court rejected the submission, saying that, in addition to being able to deal with such a contempt “at its own hand”, a court “may also deal with a contempt which is brought to its notice by means of a petition and complaint by the Lord Advocate or by any other interested party”[88]. 89. In Australia, it was said by Street CJ in DPP v Australian Broadcasting Corporation[89], that “[T]he only way in which[a person] can ensure that [an interference with the administration of justice] is brought to the notice of the court and the integrity of the administration of justice in respect of the litigation maintained is by having the power himself to institute proceedings for contempt” And in Witham v Holloway[90], McHugh J sitting in the High Court stated that “proceedings for criminal contempt could be initiated by the [AG], by the court of its own motion or any person with an interest in the subject matter of the proceedings”. And in the later High Court case, Re Colina ex p Torney[91], Hayne J said that “[t]he function that is exercised when a court proceeds against an alleged contemnor is not one to be exercised or controlled by the executive”. 90. In Canada, Allen CJ said in R v Ellis[92], “I do not find it laid down anywhere that the [criminal contempt] application must be made by the [AG]”, and accordingly a party in the underlying litigation could make the application. 91. The same conclusion was reached by McKechnie J sitting in the High Court of Ireland in Murphy v British Broadcasting Corporation[93]. 92. I also note that in the Ugandan High Court case AG v Kiwanuka[94]Ssekaana Musa J said that: “[w]hereas contempt proceedings are between the Court and alleged contemnor, the contemptuous acts can be brought to the attention of the Court by any person, including a person who is not a party to the court proceedings from which the contempt arose.” 93. Finally (not least because the position there is more nuanced), I turn to Singapore. In 2013, the Singapore Court of Appeal decided Aurol Anthony Sabastian v Sembcorp Marine Ltd[95]. In his judgment, Menon CJ concluded[96] that “given the sui generis nature of criminal contempt, there is a compelling interest in the AG being consulted before proceedings are commenced by a private party”, noting Lord Diplock’s observation in the 1972 Times Newspapers case[97] that it was “a procedure which if instituted by one of the parties to litigation is open to abuse”. Menon CJ then went on to reject the applicant’s reliance on “the absence of specific statutory provisions in Singapore that confine the power to initiate certain types of contempt proceedings to the AG”, on the ground that: “In Singapore, as reflected in Art 35(8) of the Constitution, the AG plays a unique and integral role as guardian of the public interest vis-a-vis the institution and conduct of all criminal proceedings. This includes proceedings for criminal contempt.” 94. Accordingly, the Singapore Court of Appeal concluded that the proper course for any applicant was first to consult the AG. As Menon CJ put it, if “the AG then decided to take up the matter”, he would be doing so pursuant to his constitutional power, but if the AG decided not to proceed, the applicant “could then have commenced proceedings of its own accord but in doing so it would have been obliged to join the AG as a party and lay all the facts before the court including any expressed views of the AG”.[98] He then held that the failure to consult the AG in that case was fatal to the criminal contempt proceedings, but nonetheless went on to consider in some detail the conduct of the alleged contemnor, and concluded that it justified his being deprived of any costs, despite succeeding in his appeal.[99] 95. In the course of the judgment in Aurol, reference was made to the US Supreme Court’s decision in Young v United States ex rel Vuitton et Fils SA[100], where it was held to be inappropriate for the legal representatives of the party in the underlying action (who was the party pressing for the contempt application against the other party in the underlying action) to have been charged by the first instance court to prosecute the contempt application. It would, said Brennan J, have “the potential for private interest to influence the discharge of public duty” and “[create] opportunities for conflicts to arise, and [create] at least the appearance of impropriety”[101]. 96. As Menon CJ recognised[102], “the appointment of [one party’s] legal representatives [in Young] as private prosecutors [of the other party] entailed also conferring certain investigatory powers upon them, over and above the power to bring proceedings”. However, he was not impressed by this distinction, although, as Brennan J said in Young[103], as private prosecutors, the legal representatives had “a terrible array of coercive methods”, including “police investigation and interrogation, warrants, … [and] authorized wire-tapping …”. G. Conclusion 97. For the reasons given in Section D of this judgment, it appears to me that, in the absence of any relevant legislative provision or case law to the opposite effect, the answer to the basic issue on these appeals should be that an applicant need not apply to, or otherwise involve, the SJ before issuing an application for leave to proceed with criminal contempt proceedings under O.52 rule 2. 98. Consideration of domestic and other common law jurisprudence on the topic (in Sections E and F of this judgment) seems to me clearly to confirm this preliminary view, in that there is no Hong Kong legislation or case law which has the effect of cutting down an applicant’s right of access to the court in such a case, other than the need to obtain the court’s leave. With one exception, in all the other common law jurisdictions on which we have been addressed, the law seems to be well established that, subject to obtaining the leave of the court, a private party is free to initiate criminal contempt proceedings. 99. The only exception appears to be in Singapore, where the effect of the Aurol case[104] is that a private party cannot initiate criminal contempt proceedings without first giving the AG the opportunity to initiate the proceedings, on the basis that, if the AG elects not to do so, the private party would be free to initiate such proceedings, subject to the leave of the court. But that is not of assistance to the appellants. First, even in Singapore, the AG does not have the power to prevent a private party from bringing criminal contempt proceedings[105]. Secondly, there was no suggestion in Aurol that the AG would not want all projected criminal contempt proceedings brought to his attention, whereas here the SJ has made it clear that that is his position. Thirdly, the court’s reasoning in Aurol was at least partly based on Article 35 of the Constitution of the Republic of Singapore, which of course has no part to play in Hong Kong. And I should add that the powers of lawyers conducting a contempt investigation in the United States means that the decision in the Young case[106] is of no assistance to the appellants. 100. In these circumstances, I have no hesitation in rejecting the appellants’ case. Not only does it conflict with principle, but there is nothing in our legislation or case law to support it. On the contrary, all the indications in The Rules and cases are against it. And when one turns to the position in other common law jurisdictions, the position appears exactly the same – with the exception of Singapore, which is only marginally different. 101. It is worth briefly addressing the question whether, reflecting the recommendations of the Phillimore Report[107] and the Hong Kong Law Reform Commission Report[108], and in accordance with the approach in Singapore and approved in Arlidge[109], it would be appropriate to adopt a practice whereby a private party wishing to bring criminal contempt proceedings should first be required to notify the SJ. If this course were adopted, the SJ would automatically be aware of every criminal contempt application that is to be made, so that he could decide whether to begin the proceedings himself, and, if he decided against, he could make sure that, to the extent that he so wished, he was represented in any proceedings from the start, i.e. from the leave application. 102. While I see the force of that argument (which is a much more limited version of the appellants’ case), I would not favour it. First, I would deprecate imposing any burden on an applicant who wishes to bring criminal contempt proceedings, especially if it could add to cost and delay. Secondly, it is always open to the SJ to apply to take over, or to be a party to, criminal contempt proceedings, and it accords better with the fact that contempt proceedings exist to protect the authority of the courts and are based on the inherent jurisdiction of the court, that it should be for the court to invite the assistance of the SJ when it appears to the court to be appropriate. As Mr Dawes SC said in his submissions, the SJ would be more likely to have a role in some criminal contempt proceedings (e.g. those involving allegedly contemptuous publications giving rise to constitutional rights issues) than in others. Thirdly, the SJ would not be particularly well equipped to deal with every prospective contempt application. 103. As well as being more consistent with principle, it would, I think, also involve a better allocation of resources for the court to act as the initial filter, while seeking the SJ’s assistance if wanted, then for every criminal contempt application to be initially referred to the SJ. And, of course, if the SJ wished to be heard on the leave application, he could always apply. Indeed, if his attitude were to change and he wished to be informed of every application for leave to bring criminal contempt proceedings, he could so inform the court, which would then no doubt comply with his request. H. Disposal of the appeals 104. In these circumstances, I would answer the four Questions[110] as follows: 1) No; 2) No; 3) Not applicable, but no; 4) Not applicable, but no. 105. Accordingly, I would dismiss these appeals. 106. The appellants should pay the respondent’s costs, and there should be no order in respect of the SJ’s costs. Chief Justice Cheung: 107. Accordingly, these appeals are unanimously dismissed and the Court makes an order nisi in terms of paragraph 106 above. Absent an application to vary, the order nisi shall become absolute after the lapse of 14 days from the date hereof. Mr Benjamin Yu SC, Ms Bonnie Y K Cheng and Mr Keith Chan, instructed by DLA Piper Hong Kong, for the 1st to 3rd Appellants in both appeals Mr Johnny Mok SC, Mr Michael Lok and Mr Charlie Liu, instructed by Howse Williams, for the Respondent in both appeals Mr Victor Dawes SC and Mr Cedric Yeung, instructed by Department of Justice, and Mr William Liu, Acting Deputy Law Officer (Civil Law), of the Department of Justice, for the Intervening Party in both appeals [1] [2021] HKCA 1580 [2] HCA 2562/2014 [3] [1974] AC 273, at p. 322 [4] Jennison v Baker [1972] 2 QB 52, at p. 61 [5] (1970) 23 Current Legal Problems 23, at p. 28 [6] [1992] 1 AC 191, at pp. 207-208, quoting from the 1974 Report of the Committee on Contempt of Court (the Phillimore Committee), Cmnd 5794 [7] (1765) Wilm 243, at p. 254 [8] See footnote 5, at p. 27 [9] See footnote 3, at pp. 315-316 [10] [1999] 2 AC 294, at p. 303 [11] [2018] HKCA 173, at para 74 [12] See footnote 3, at p. 294 [13] Roberts v Albert Bridge Co (1873) LR 8 Ch App 753 [14] (2009) 12 HKCFAR 830, at para 45 [15] 5th edition, 2017, at para 3-1 [16] [2016] 5 HKLRD 370, at para 42 [17] Ibid, quoting from Director of the Serious Fraud Office v O’Brien [2014] AC 1246, at para 39, per Lord Toulson [18] [2021] 4 WLR 103, at para 23. Decision affirmed [2022] 1 WLR 367 [19] See footnote 11, at para 82 [20] See Accent Foundation Ltd v Lee [2008] HLR 3, at paras 17 and 18 [21] See footnote 15, at para 3-26 [22] See footnote 16, at para 45 [23] [1988] Ch 333, at p. 377 [24] Ibid, at p. 362 [25] See footnote 6, at pp. 217 [26] (1999) 200 CLR 386, at para 110 [27] (1995) 183 CLR 525 [28] See footnote 6, at para 169 [29] [2016] 4 HKLRD 367, at paras 5 to 24 [30] Ibid, at para 5 [31] Ibid, at para 7 [32] See footnote 16, at para 46 [33] Ibid, at para 47 [34] Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375, at para 45 [35] See footnote 27 [36] Ibid, at para 65 [37] See footnote 16, at paras 47 to 51 [38] [2005] 4 HKC 416, at pp. 441-442 [39] [2012] 1 WLR 991, at para 7 [40] See footnote 15, at para 2-216 [41] See footnote 3, at p. 326 [42] Ibid, at pp. 311-312. Arlidge (see footnote 15) at paras 2-213 to 2-216 does not suggest that there is any conflict between these descriptions, apparently regarding them as complementary. The Court of Appeal in Re Mahesh J Roy (Intervener: Secretary for Justice) [2017] 2 HKLRD 935 at para 17 favoured the view of Lord Diplock and Lord Morris over that of Lord Cross. In so far as there is a difference, it seems to be more one of emphasis than principle, and at any rate, it does not detract from the characterization of criminal contempt proceedings as civil in nature. Indeed, such characterization was acknowledged by the court in Re Mahesh J Roy (No 2) (Intervener: Secretary for Justice) [2017] 5 HKLRD 830 at para 55 [43] [1897] 1 Ch 545, at pp. 559-560 [44] [1975] QB 73, at p. 84 [45] (1989) 88 Cr App R 63, at p. 67 [46] See paras 28 and 29 above [47] Sik Chiu Yuet v Secretary for Justice [2018] 4 HKLRD 194, at para 35 [48] See e.g. the English case Navigator Equities Ltd v Deripaska [2022] 1 WLR 3656 and the cases cited therein [49] See e.g. per Mustill LJ in R v Griffin see footnote 45, at p. 67 [50] See e.g. Re Bramblevale Ltd [1970] Ch 128, at p. 137 and Dean v Dean [1987] 1 FLR 517, at pp. 521 and 522 [51] See e.g. Tiong King Sing v Sam Boon Peng Yee [2015] 1 HKLRD 981; Pan Chung Pat Wo Tong (Hong Kong) Ltd v Law Yan Wai (unreported, HCA 1719/2010, 5th May 2017); China Metal Recycling (Holdings) Ltd v Chun Hei Man [2018] 1 HKLRD 455 [52] See e.g. in Cheung Kai Yin (No 1), footnote 29, at para 7 [53] [2021] 4 HKLRD 841 [54] [1978] AC 435 [55] See footnote 38, at p. 441 [56] See footnote 15, at para 14-5 [57] See e.g. per Li CJ in Ng Ka Ling v Director of Immigration (1999) 2 HKCFAR 4, at p. 28 [58] See para 55 above. In this connection, there is some congruity with the approach of the House of Lords’decision in Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147, affirmed by a majority of the UK Supreme Court in R (on the application of Privacy International) v Investigatory Powers Tribunal [2020] AC 491. Anisminic was analyzed in Privacy International by Lord Carnwath (writing for the majority) as establishing a “strong” and “fundamental” presumption against statutory exclusion of the supervisory role of the High Court over other adjudicative bodies (paras 43 and 99), which can only be displaced by “the most clear and explicit words” (paras 37, 77 and 111). The supervisory jurisdiction of the High Court is an inherent one (paras 38 and 60), so there is hence much to be said of the view that such a presumption should also be applicable to any alleged statutory exclusion or restriction of the court’s contempt jurisdiction, given that it is also an inherent jurisdiction of the court [59] See footnote 29, at para 37 [60] Stock Exchange of Hong Kong Ltd v New World Development Co Ltd (2006) 9 HKCFAR 234, at para 43 [61] Final Report on Some Aspects of Final Adjudication and the Judicial System of the SAR, and the Role of an Independent Prosecuting Authority of 12th June 1987 [62] See paras 35 and 36 above [63] See footnote 1, at para 42 [64] See footnote 38, at p. 441 [65] Ibid, at para 13 [66] At para 9.1 [67] Ibid, at para 9.3 [68] See para 69 above [69] See footnote 3 [70] Ibid, atp. 293 [71] Ibid, at p. 306 [72] Ibid, at p. 311 [73] Ibid, atp. 312 [74] Ibid, at p. 314 [75] Ibid, at p. 326 [76] unreported, (C/2000/2363), [77] [2009] 1 WLR 2406 [78] It is not entirely clear whether they were criminal contempt proceedings, but they were described as such in the subsequent Court of Appeal Navigator case (footnote 48) at para 109 [79] See footnote 77, at para 14 [80] Ibid, at para 15 [81] See Navigator footnote 48, at para 81 [82] See footnote 6, at para 184 [83] Ibid, at para 187 [84] 4th edition (2010), at para 13.13 [85] See footnote 15, at para 3-183 [86] Ibid, at para 3-188 [87] 1994 SCCR 659, at p. 664 [88] Ibid, at p. 665 [89] (1987) 7 NSWLR 588, at p. 595 [90] See footnote 27, at p. 540 [91] See footnote 26, at para 112 [92] (1889) 28 NBR 497, at p. 519 [93] [2005] 3 IR 336, at pp. 354 to 356 [94][2022] UGHCCD 46, at p. 14 [95] [2013] 2 SLR 246 [96] Ibid, at para 51 [97] See footnote 3, at p. 312 [98] See footnote 95, at para 54 [99] Ibid, at para 115 [100] 481 US 787 (1987) [101] Ibid, at p. 806 [102] See footnote 95, at para 50 [103] See footnote 100, at p. 811 [104] See footnote 95 [105] Ibid, at para 66 [106] See footnote 100 [107] See footnote 6 [108] See footnote 67 [109] See footnote 86 [110] See para 17 above |
Chief Justice Ma: 1. I agree with the judgment of Lord Walker of Gestingthorpe NPJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Lord Walker of Gestingthorpe NPJ. Mr Justice Tang PJ: 3. I agree with the judgment of Lord Walker of Gestingthorpe NPJ. Mr Justice Fok PJ: 4. I agree with the judgment of Lord Walker of Gestingthorpe NPJ. Lord Walker of Gestingthorpe NPJ: Introduction 5. The issue in this appeal is whether the Respondent, CLP Power Hong Kong Limited (“CLP”) is liable to be assessed under the Rating Ordinance, Cap 116, in respect of certain fixed equipment at its generating stations in the New Territories and at its stand-by generating station on Lantau. The Appellant is the Commissioner of Rating and Valuation (“the Commissioner”). 6. The appeal is from the judgment of the Court of Appeal (Cheung, Kwan and Barma JJA) given on 2 February 2016, remitting the matter to the Lands Tribunal for further consideration of the evidence. The nature of the fixed equipment, and the reasons for the Court of Appeal’s decision to make a remission, are considered below. Much turns on the relationship between two sections of the Rating Ordinance, and on the meaning, in the context of those sections, of the words “machinery” and “plant”. 7. This matter has a long history. In 2008 there were no fewer than eight outstanding appeals by CLP against assessments under the Rating Ordinance and the Government Rent (Assessment and Collection) Ordinance, Cap 515, the earliest relating to the 1999-2000 assessment year. But seven of the appeals were stayed by an order of Lam J made on 3 November 2008. The exception was CLP’s appeal against the rating assessment for 2004-5, which was chosen as a suitable “reference year”. Since then further assessments have been made for later years. 8. The appeal in relation to the 2004-5 assessment was heard by the Lands Tribunal (Au J and Mr W K Lo) over 44 days between February 2010 and February 2012, with evidence from numerous expert witnesses. Judgment was given on 24 April 2013. The written judgment extends to 391 paragraphs, of which only three relatively short groups of paragraphs are directly relevant to the issue in this appeal. Paragraphs 28 to 43 summarise the relevant statutory provisions in the context of CLP’s undertaking (part of which is in mainland China). Paragraphs 84 to 93 contain a finding (in the very different context of an argument about “interdependency”, which concerned the relative bargaining positions of the hypothetical landlord and the hypothetical tenant) that the hypothetical landlord’s fixed equipment (the rateability of which is in dispute) and the hypothetical tenant’s machinery (the value of which, as is common ground, is not to be taken into account for rating purposes) “have been designed and built as an integrated system”. Paragraphs 227 to 234 set out the competing arguments on the disputed items of fixed equipment and decide the point in favour of the Commissioner, and paragraph 384 records Mr Lo’s concurrence on that point. 9. However the Lands Tribunal decided other points of more central importance in favour of CLP and the appeal relating to the 2004-5 assessment was allowed to the extent summarised in paragraphs 235 and 387 of the Lands Tribunal’s judgment. On 3 January 2014 its decision was confirmed after a review. On 9 April 2015 the Lands Tribunal refused leave to appeal on any of three grounds relied on by CLP, but on 28 August 2015 the Court of Appeal (Kwan and Barma JJA) granted leave to appeal on one of the three grounds, that is the issue relating to the items of fixed equipment. The facts 10. CLP has four generating stations in Hong Kong, on three different sites. The following summary is based on paragraphs 28 to 37 of the judgment of the Lands Tribunal. (1) Station A at Castle Peak Power Station (“CPPS ‘A’”) consists of four generating units. Their primary fuel is coal but their design is such that they can also burn oil. (2) Station B at Castle Peak Power Station (“CPPS ‘B’”) has four generating units similar to those at CPPS ‘A’, except that two of the units have been modified to burn natural gas. (3) Black Point Power Station (“BPPS”) is on the coast four miles north of Castle Peak Power Station. It has eight generating units with a combined cycle gas-fired system. (4) Penny’s Bay Power Station (“Penny’s Bay”) on Lantau Island has three 100MW gas turbines. It provides stand-by capacity to CLP’s network, to Hong Kong airport and to some other areas. CLP’s assets and interests in mainland China are described in paragraphs 38 to 43. 11. The items of equipment in issue in this appeal are described as follows in paragraph 227 of the Lands Tribunal’s first judgment: “(a) the boilers and supporting steelwork at CPPS ‘B’ and BPPS; (b) the cooling water circuits at CPPS ‘B’ and BPPS; and (c) ancillary pipework and electrical cables within the power stations.” This summary contains at least one, and possibly two, serious errors. It is common ground between the parties that the reference in (a) above to “boilers” is mistaken. The reference should be to steelwork supporting the boilers, which are themselves machinery coming within section 8(b) of the Rating Ordinance (set out in paragraph 14 below). It is regrettable that this serious mistake was not formally corrected with the agreement of the parties when the Lands Tribunal reviewed its first judgment. It is even more regrettable that the other possible error (asserted by CLP and denied by the Commissioner) was not brought to the attention of this Court until the close of counsel’s oral submissions. The parties cannot even agree as to whether there is an issue as to the supporting steelwork at BPPS. It will therefore be necessary to return to this (paragraphs 66 to 69 below). The Rating Ordinance 12. The issue in this appeal turns on the correct construction of sections 8 and 8A of the Rating Ordinance, and their application to the facts as found by the Lands Tribunal. The basic unit of assessment in Hong Kong is a “tenement”, defined in section 2 of the Rating Ordinance as - “any land (including land covered with water) or any building, structure, or part thereof which is held or occupied as a distinct or separate tenancy or holding or under any licence.” 13. In English rating law the corresponding expression is “hereditament”. In Hong Kong, where almost all land is held under a Government lease, the word “tenement” (and its definition as set out above) express the importance of the notion of a holding of land. It has been a basic principle of rating law in Hong Kong that a rateable tenement is held and occupied by one person only. That principle now has two exceptions, one in section 8A (added by amendment in 1991) and the other in section 9 (which relates to advertising stations, and was amended in 1981). As explained below, the main (but not the sole) purpose of section 8A is to keep up with advances in equipment related to information technology, such as fibre-optic cables. 14. Section 8 has been part of the Rating Ordinance since its enactment in 1973 (as a consolidation, with amendments, of legislation going back to the 19th century; there is a summary of the history in the judgment of Cons JA in Commissioner of Rating and Valuation v Yiu Lian Machinery Repairing Works Ltd & Ors [1985] 2 HKC 517, 521-2 – “Yiu Lian”). The section was amended in 1981, but only by adding a reference to the new section 7A. It provides, “For the purpose of ascertaining the rateable value of a tenement under section 7 and 7A - (a) subject to paragraph (b), all machinery (including lifts) used as adjuncts to the tenement shall be regarded as part of the tenement, but the reasonable expenses incurred in working such machinery shall be allowed for in arriving at the rateable value of the tenement; (b) no account shall be taken of the value of any machinery in or on the tenement for the purpose of manufacturing operations or trade processes.” 15. Section 8A provides, “(1) Where any land (including land covered with water) or any building or structure is occupied by a person by means of any plant, such land, building or structure shall, to the extent that the land, building or structure is so occupied, be deemed for rating purposes to be a separate tenement, whether or not such land, building or structure is otherwise a tenement and that person shall be deemed for rating purposes to be the occupier of such tenement and liable for payment of rates assessed thereon. (2) For the purposes of ascertaining the rateable value of such tenement, the plant by means of which the person is occupying the tenement shall be regarded as part of the tenement. (3) In this section “plant” (工業裝置) includes cables, ducts, pipelines, railway lines, tramway lines, oil tanks, settings and supports for plant or machinery.” 16. Section 10, by an amendment made in 1991, modifies the effect of the deeming provision in Section 8A by enabling the Commissioner to treat a number of separate tenements as one single tenement by making what is called an in cumulo assessment. That method of assessment is regularly adopted in the rating of utility companies. 17. Both leading counsel (Mr Benjamin Yu SC for the Commissioner, and Mr David Elvin QC for CLP) made detailed submissions as to the correct construction of sections 8 and 8A, in the context of the Rating Ordinance as a whole, and their submissions are considered below. But it may be useful to make some fairly simple preliminary points about the language of sections 8 and 8A, since the two sections, standing side by side but without any direct reference to each other, present some unusual features. 18. It is to be noted that section 8 refers only to machinery (not to plant), and does not define the term “machinery” (except for indicating that it includes lifts in a building); and conversely section 8A refers only to plant, and not to machinery (except for the final words of subsection (3) referring to “settings and supports for plant or machinery”). Section 8A(3) does not contain a full and comprehensive definition of the term “plant”. It does no more than list a number of items which are to be included in the statutory meaning. 19. That sort of inclusive definition is not necessarily bad drafting practice, especially when the term in question is an ordinary word with a wide but imprecise meaning. Henry Thring, who is often regarded as having been the founder of modern statutory draftsmanship during his time as first parliamentary counsel in the days of Gladstone, gave a warning to over-ambitious draftsmen in his short work, Practical Legislation, first published in 1877 (3rd ed, 2015, p 102): “The proper use of definitions is to include or exclude something with respect to the inclusion or exclusion of which there is a doubt without such definition. No attempt should be made to make a pretence of scientific precision by defining words of which the ordinary meaning is sufficiently clear and exact for the purpose of the Act in which they are used.” 20. Nevertheless the drafting of sections 8 and 8A is rather unusual in that there is no clear explanation of the relationship between the two sections. That omission is particularly surprising because for well over a century the phrase “plant or machinery” (or sometimes “plant and machinery”) has often been used in statutes, in different common law jurisdictions and in different legal contexts (including rating and taxation), as a composite expression similar to other familiar composite expressions such as “repair or maintenance”, “fit and proper”, “health and safety” or “sports and pastimes”. In ACT Construction Limited v Customs and Excise Commissioners [1981] 1 WLR 1542, 1546 Lord Roskill said of “repair or maintenance”, “The two words are not used in antithesis to one another. The phrase is a single composite phrase ‘repair or maintenance’ and in many cases there may well be an overlap between them.” 21. Even when the two words “plant” and “machinery” are not used in a single composite phrase, there is a considerable overlap between them. They are both ordinary words of wide but imprecise meaning, but “plant” normally has a wider meaning than “machinery”. In normal usage “plant” refers to a wide variety of tangible property, other than land or buildings, used as fixed assets (rather than circulating assets) of a business. That point is clearly made in the well-known definition given by Lindley LJ in Yarmouth v France (1887) 19 QBD 647, 658, in which the expression was, at first glance surprisingly, held to include a horse pulling a trolley of goods unloaded from a ship: “There is no definition of plant in [the Employers’ Liability Act 1880]: but in its ordinary sense, it includes whatever apparatus is used by a business man for carrying on his business - not his stock-in-trade which he buys or makes for sale; but all goods and chattels, fixed or moveable, live or dead, which he keeps for permanent employment in his business: see Blake v Shaw.” The vicious nature of the horse which kicked the driver, breaking his leg, was held to be a defect in the employer’s plant within the meaning of the Employers’ Liability Act 1880. 22. Blake v Shaw (1860) Johns 732 is a decision of Page-Wood V-C holding that a large stock of ready-made clothes was not included in a bequest of “plant” in the will of a wholesale clothier. He said at p 734, “In most cases the word ‘plant’ is used to describe something which, if not in direct contrast to stock, is at any rate of an entirely different nature. All the matters permanently used for the purpose of trade, as distinguished from the fluctuating stock, are commonly included in the word ‘plant’. It consists sometimes of things which are fixed, as, for example, counters, heating, gas and other apparatus and things of that kind, and in other cases of horses, locomotives and the like, which are in this sense only fixed that they form part of a permanent establishment intended to be replaced when dead or worn out, as the case may be.” 23. This passage is useful in clarifying two different meanings of “fixed”. Old as it is, it remains relevant today, at any rate if the reference to horses is replaced by a reference to motor vehicles of all sorts. There is of course no question of horses, motor vehicles or locomotives coming within the scope of section 8A, but that is not because “plant” has a restricted meaning. It is because the section applies only to plant by means of which a person occupies some land, building or structure. 24. “Machinery” is also an ordinary word of wide but imprecise meaning. Not all machinery is used for manufacturing purposes, or indeed for any business purpose, as the reference to lifts in section 8(a) reminds us. A passenger lift in a private house or block of flats is machinery but would not normally be described as plant. In this respect, therefore, but only in this respect, the normal meaning of “machinery” covers a larger field than the normal meaning of “plant.” In his judgment in the Court of Appeal Cheung JA cited an instructive case from New Zealand concerned with gasometers and their ancillary pipes and mains, Auckland City Corporation v Auckland Gas Co Ltd [1919] NZLR 561, 586 (“Auckland”), in which Sim J said that “machinery” “... means primarily a number of machines taken collectively, and a machine in its popular sense is a piece of mechanism which, by means of its interrelated parts, serves to utilise or apply power, but does not include anything that is merely a reservoir or conduit, although connected with something which is without doubt a machine.” The majority of the New Zealand Court of Appeal held that each gasometer was to be regarded as machinery, because it was a sort of giant pump, but the pipes and mains were not regarded as machinery. Only Stout CJ followed an old Massachusetts decision that an entire gasworks should be considered to be “one great integral machine”. Each member of the Court recognised that the decision must turn not on dictionary definitions but on the context of the particular statute (see at pp 564, 583, 586-7 and 588-9). The Hong Kong Electric case 25. This appeal is not the first occasion on which this Court has had to consider the rating of a power station generating electricity. In Hong Kong Electric Co Ltd v Commissioner of Rating and Valuation (No 2) (2011) 14 HKCFAR 579 (“Hong Kong Electric”) this court heard an appeal concerned with the rating of the power station on Lamma Island owned by Hong Kong Electric Co Ltd (“HKE”). That appeal might have raised contentious issues about the proper treatment of plant and machinery, and the correct construction of sections 8 and 8A of the Rating Ordinance, such as have been raised in this case. In the event the issues do not seem to have been raised, which is no doubt the reason why the case received little attention in the Court of Appeal. 26. The leading judgment was given by Lord Millett NPJ, with whom the other members of the court agreed. Ribeiro PJ gave a separate judgment dealing with assets under construction, with which the other members of the court (including Lord Millett NPJ) agreed. Lord Millett NPJ discussed the meaning and effect of sections 8 and 8A in some detail, and his considered view, concurred in by the whole court, must carry great weight, even though it was not a contentious issue in that appeal. 27. Cheung JA did cite (and adopt) paragraph 136 of the judgment of Lord Millett NPJ, which is as follows: “Section 8 provides that, for the purpose of ascertaining the rateable value of the tenement, (a) machinery used as an “adjunct” to the tenement is to be regarded as part of the tenement, but (b) no account is to be taken of the value of any machinery in or on the tenement required for the purpose of manufacturing operations or trade processes. Section 8A provides that plant, together with land, buildings or structures occupied by means of any plant, is deemed for rating purposes to be a separate tenement. Cables, ducts, pipelines, oil tanks, and settings and support for plant or machinery fall within the definition of ‘plant’. While plant and fixed machinery both form part of the tenement, therefore, the value of such machinery used for manufacturing operations or trade processes is to be disregarded in ascertaining the rateable value of the tenement.” 28. Cheung JA did not however cite the following paragraphs, which amplify and apply the general description in paragraph 136. They also refer to the official practice of in cumulo assessment under section 10 of the Rating Ordinance. It is useful to see how Lord Millett NPJ continued: “137. It follows that the assets employed by the Company in its undertaking are divided for rating purposes into two categories. The first consists of the rateable assets (‘RA’) being those assets which form part of the tenement and whose value is to be taken into account in ascertaining its rateable value. The second comprises those assets which do not form part of the tenement or whose value is to be disregarded in ascertaining its rateable value and are accordingly non-rateable assets (‘NRA’). 138. The tenement with which the present case is concerned consists of the land, buildings and structures occupied and used on 1 April 2004 by the Company for the generation, transmission, distribution and supply of electricity on Hong Kong Island, Ap Lei Chau and Lamma Island. These comprise a large number of separate tenements but the Commissioner exercised her power to treat them as one single tenement. Such an assessment is described as an in cumulo assessment and its adoption in the present case is not controversial. 139. The assets employed by the Company for the purposes of its undertaking are described at length in the decision of the Lands Tribunal. It was based upon detailed evidence which was not in dispute. On the relevant date: (a) Electricity was generated by means of eight coal fired generating units, five gas turbines and one combined cycle gas turbine installed on a 62 hectare site on Lamma Island. A 22 hectare extension to the site, consisting of reclaimed land, was under construction but not in use. While the land, buildings, structures, plant and some of the machinery are part of the tenement and rateable, the generating station houses a huge amount of machinery and apparatus which, while part of the tenement, fall to be disregarded in assessing its rateable value and are NRA. While the turbines which generate the electricity are NRA, the specially designed reinforced concrete foundations to which they are bolted are rateable. Similarly, while the boilers are NRA, they are held in place within specially designed structures which are part of the tenement and rateable. The moving parts of the coal conveyor system are NRA but the structure which supports them is part of the tenement. The switchgear and transformers are NRA but the cables which are specially designed to connect to them in order to transmit, distribute and supply the electricity are plant and form part of the tenement. (b) Electricity was transmitted at very high voltages by cables which are largely underground or in tunnels, although some are overhead supported by pylons, to 32 substations where it was stepped down for distribution. The cables comprise plant and form part of the tenement. The substation buildings are also part of the tenement but the transformers, switch gear and other apparatus which they contain are NRA. (c) Electricity was then distributed in cables to over 3,000 sub-stations where it was further stepped down to the voltages used by consumers. Most of these sub-stations were located within buildings owned and occupied by third parties. Again, the cables comprise plant and so form part of the tenement. The space within buildings where the sub-station equipment is located is also part of the tenement but the transformers, switch gear and other apparatus installed there are NRA.” 29. This analysis by Lord Millett NPJ, concurred in by the other members of the court, clearly proceeds on the basis that the items of plant specifically brought in by section 8A (“cables, ducts, pipelines” etc) were not “machinery” and so could not obtain the benefit of section 8(b). Machinery which was within the protection of section 8(b) was not deprived of that protection by section 8A merely because it might also be described as plant. The only effect of section 8A on such machinery would be to attract the deeming provision (as to being a separate tenement) in section 8A(1), but that would in practice be undone by an in cumulo assessment under the power conferred by the amended section 10. The Yiu Lian Case 30. The conclusion reached by Cheung JA, and concurred in by the other members of the Court of Appeal, differed from the view which Lord Millett NPJ expressed (I stress again, without it having been a contested issue) in Hong Kong Electric. Cheung JA referred at some length to the case of Yiu Lian [1985] 2 HKC 517. That was a very unusual case in that the Commissioner was seeking to charge rates on a floating dry dock which was attached to the land only by chains attached to concrete blocks on the sea bed. In the Court of Appeal (which reversed the Lands Tribunal’s decision in favour of the Commissioner) there was a good deal of discussion about differences between rating law in Hong Kong and England, and on how far those differences depended on the different concepts of “tenement” and “hereditament”. 31. I am doubtful whether the unusual facts of Yiu Lian would have led to a different result in England. But the case was regarded in Hong Kong as having wider implications for the rating of equipment which could not be classified as machinery, but could be classified as plant. In this way Yiu Lian contributed indirectly to the legislative changes made in 1991, but a more immediate impetus for the changes was a dispute about the rating of fibre-optic cables and ducts installed by the Hong Kong Telephone Company, which in 1990 reached a negotiated settlement with the Commissioner of an appeal commenced in 1988. These cables and ducts formed a very extensive network, passing through public and private property, and presented a new problem as to the reach of the rating legislation. 32. All this is set out in some detail in the legislative history contained in section V (paragraphs 5.1 to 5.6) of the judgment of Cheung JA. Section 5.1 contains an illuminating extract from a work by Mrs Mimi Brown, written in 2013 when she was Commissioner, and paragraph 5.6 contains an extract from the 1991 Legislative Council briefing paper (produced to the Court of Appeal without objection) which also explains (in its paragraphs 5 and 7) the reasons for the amendment of section 10 of the Rating Ordinance. Principles of statutory construction 33. There was little difference between counsel as to the principles of statutory construction to be applied (but a great deal of difference as to the conclusions that should be reached). The classic statement is that of Li CJ in HKSAR v Cheung Kwun Yin (2009) 12 HKCFAR 568, paragraphs 11 to 14, of which there is a full summary in paragraph 9.1 of the judgment of the Court of Appeal. 34. Mr Yu also referred, however, to the warning against an exorbitantly purposive approach given by Lord Millett NPJ in China Field Ltd v Appeal Tribunal (Buildings) (No 2) (2009) 12 HKCFAR 342, paragraph 36: “There can be no quarrel with the principle that statutory provisions should be given a purposive construction; but there has been a distressing development by the courts which allows them to distort or even ignore the plain meaning of the text and construe the statute in whatever manner achieves a result which they consider desirable. It cannot be said too often that this is not permissible. Purposive construction means only that the statutory provisions are to be interpreted to give effect to the intention of the legislature, and that intention must be ascertained by a proper application of the interpretative process. This does not permit the Court to attribute to a statutory provision a meaning which the language of the statute, understood in the light of its context and the statutory purpose, is incapable of bearing: see HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574 per Sir Anthony Mason NPJ at paragraph 63.” 35. The general principles of statutory construction are indeed general principles which apply even in specialised fields such as taxation, rating and compulsory purchase of land. This has a bearing on what Cheung JA (in paragraph 9.14 of his judgment) rightly called “the so-called ‘piecemeal’ principle in rating law”. In a compulsory purchase case which was one of the last appeals heard by the House of Lords before its jurisdiction passed to the Supreme Court, Transport for London Ltd v Spirerose Ltd [2009] UKHL 44, paragraph 25, I cited (with the approval of the other members of the Committee) some observations of Kirby J in a dissenting judgment in Commissioner of Taxation v Ryan (2000) 201 CLR 109, 146: “It is hubris on the part of specialised lawyers to consider that ‘their Act’ is special and distinct from general movements in statutory construction which have been such a marked feature of our legal system in recent decades. The Act in question here is not different in this respect. It should be construed, like any other federal statute, to give effect to the ascertained purpose of the Parliament”. The principal issues in the appeal 36. When leave to appeal to this Court was granted by the Court of Appeal by an order dated 24 May 2016, the order identified six questions of great general or public importance. The first two questions relate to section 8A and are framed as alternatives, and the third question also relates to section 8A. The fourth question relates to the so-called ‘piecemeal’ principle. The fifth question relates to the interaction of section 8 (and especially section 8(b)) with section 8A. The sixth question (if it arises) relates to the issue of remission to the Lands Tribunal. 37. The first three questions can conveniently be considered together, and I think it is more logical to consider the fifth question before the fourth. With that rearrangement, there are four principal issues in the appeal: (1) the correct construction of section 8A, and in particular its statutory purpose and its reach (that is, the extent of its application); (2) the interaction of section 8A with section 8, and especially the relieving provision in section 8(b); (3) the so-called “piecemeal” principle; and (4) the issue of remission. Those issues are considered below in that order. (1) The Construction of Section 8A 38. In paragraph 9.4 of his judgment Cheung JA identified the key issue as: “...whether section 8A is indeed a deeming provision as submitted by CLP. If it is, then, in my view, section 8A has to be discarded in its application in the present case because the disputed items which are said to be rateable are already part of CLP’s tenements and as such it is not necessary to rely on a deeming provision to bring them into the fold of tenements for rating purposes.” 39. Plainly section 8A(1) is in some sense a deeming provision. It uses the words “shall ... be deemed for rating purposes.” But deeming provisions are not all of a kind. They do not all have the same force. As Lord Radcliffe said in St Aubyn v Attorney General [1952] AC 15, 53, the expression may be “used to give a comprehensive description that includes what is obvious, what is uncertain and what is, in the ordinary sense, impossible”. Moreover in paragraphs 9.5 and 9.9 of his judgment Cheung JA seems to me, with great respect, to have interpreted the words “whether or not such land, building or structure is otherwise a tenement” in section 8A(1) in a sense opposite to their natural meaning in this context. The natural meaning of “otherwise”, in this context, is “in the absence of this section” or “but for this section”. The section is to apply to any equipment which is plant by means of which any land, building or structure is occupied by a person “whether or not such land, building or structure is otherwise a tenement. It achieves that result in two stages. Subsection (1) deems the land, building or structure (to the extent of its being occupied by the relevant plant) to be a separate tenement, and subsection (2) provides that the plant is to be regarded as part of that separate tenement for the purposes of ascertaining its rateable value. The word “regarded” in subsection (2) indicates a less emphatic type of deeming. 40. That is not to say that section 8A is without its difficulties. It leaves the reader to puzzle out that “plant” has, in the context of business premises, a wider meaning than “machinery”, even though the very wide meaning given to it in Yarmouth v France (1887) 19 QBD 647 is restricted by the requirement in section 8A(1) that some land, building or structure “is occupied by means of” the item of plant in question. The reader also has to puzzle out that although the principal and immediate legislative purpose of the amendments made in 1991 was to ensure that “plant” should cover the network of fibre-optic cables and ducts of the Hong Kong Telephone Company (cables and ducts being the first two items specified in section 8A(3)), it was also intended (in view of Yiu Lian) to apply to other ancillary equipment that was not naturally described as machinery, especially equipment used for the transmission of electrical current or substances in gaseous, liquid or solid form (that being a common feature of cables, ducts, pipelines, railway lines and tramway lines, the first five items in the list). Sim J may have had the same approach in mind in his comment in Auckland (at p 587) “They are thus conduits and reservoirs, but nothing more.” 41. Land occupied by any of these items is to be treated as a separate tenement, partly to avoid difficulty with the long-standing principle of rating law that a tenement can have only one person at a time in rateable occupation of it. A telephone company’s cables and ducts within (say) an office block are to be regarded as in that company’s occupation, even though the office block is occupied by others. The same treatment can be applied to electricity cables and other equipment forming part of the distribution network of a company generating electricity. As a matter of practical administration, however, the theoretical “separateness” of all the company’s tenements would be overridden by an in cumulo assessment under section 10. 42. Mr Yu challenged the Court of Appeal’s interpretation of section 8A both on linguistic and on contextual grounds. In the first place he drew attention to this passage in paragraph 9.5 of the judgment of Cheung JA: “To emphasise this point, this section further provides that the land is to be deemed to be a separate tenement ‘whether or not such land, building or structure is otherwise a tenement’. Mr Yu submitted the word ‘otherwise’ is quite different from ‘not otherwise’. As will be discussed later, I disagree with this view.” 43. With great respect to Cheung JA, I cannot follow the reasoning in this passage. The words emphasised make clear that some land, etc is to be deemed to be a separate tenement, but the wording of section 8A read as a whole also make clear that that the plant occupying that land, etc may be either plant (for instance, a fibre-optic cable in a duct) that would not otherwise be recognised as a tenement at all, or plant (for instance, a steel support for a boiler) that would otherwise be treated as part of a larger tenement. The later discussion in paragraph 9.9 of the judgment does not to my mind take the point any further. 44. Nor did Mr Elvin provide a satisfactory answer. His written submissions state (at paragraph 23) that in the case of CLP’s power stations there is “no need to apply section 8A to deem a tenement because one already exists”, and he developed the point in his oral submissions. But the argument ignores the “whether or not” words which Cheung JA emphasized. No doubt there were other ways, and perhaps simpler ways, for the legislature to achieve its legislative intention, especially as the separateness of all these tenements is in practice undone by an in cumulo assessment under section 10. But on the plain meaning of the words of the statute Mr Yu’s argument on this point must prevail. 45. In paragraphs 9.12 and 9.13 of his judgment Cheung JA referred to the judicial definition of “plant” in Yarmouth v France and observed that under it machinery comes within the definition of plant. He went on to say, without further explanation, that the Commissioner’s argument would create “... an extremely unsatisfactory situation. This will render section 8 devoid of any true meaning and impose such an absurd result that the Court should strive to avoid giving section 8A such a meaning.” He treated this as confirmation of the view that he had already expressed, that section 8A has only a limited application. But the reasoning depends on an unexplained and questionable assumption about the relationship between section 8 and section 8A, the topic dealt with in the next section of this judgment. 46. As a footnote to the discussion of the first issue, I note that the Lands Tribunal dealt with it in paragraph 233 of their first judgment. The Lands Tribunal did not accept the submissions of leading counsel then appearing for CLP. I agree with their conclusion but not with all their reasoning. In my view paragraph 233(1) overstates the differences between what section 8 is dealing with, and what section 8A is dealing with, by overlooking section 8A(2), which (like section 8) refers to ascertaining the rateable value of a tenement. (2) The relationship of section 8 and section 8A 47. Section 8A does not expressly amend the text of section 8, which must be taken to remain in force unless and except so far as section 8A necessarily alters its effect. Section 8A does alter the effect of section 8, but only in the rather technical way mentioned in paragraphs 40 and 41 above. Machinery which is an adjunct to a tenement within the meaning of section 8(a) (which I shall call “adjunct machinery”) may also be plant occupying some land, building or structure within the meaning of section 8A (which I shall call “occupying plant”). Occupying plant is by section 8A(2) to be regarded as part of the separate tenement established by the deeming provision in section 8A(1). If the occupying plant happens to be adjunct machinery then the words “shall be regarded as part of the tenement” in section 8(a) must be displaced; the plant cannot simultaneously be a separate tenement, and part of another tenement. But that is a technicality with little or no practical significance, since in practice the Commissioner will make an in cumulo assessment under section 10. 48. In other respects section 8 remains in full force. In particular, the relieving provision in section 8(b) continues to apply in respect of “any machinery in or on the tenement for the purpose of manufacturing operations or trade processes.” Section 8(b) does not say that such machinery is to be deemed not to exist, since that might have had unintended implications for the valuation of the tenement as a whole. It simply provides that no account is to be taken of the value of the machinery. Section 8A(2) applies “for the purpose of ascertaining the rateable value of such tenement”, but there that is no more inconsistent with the relieving provision in section 8(b) than the identical opening words of section 8. In my view there is absolutely nothing in section 8A to produce the “extremely unsatisfactory situation” or the “absurd result” referred to in paragraph 9.13 of the judgment of Cheung JA (see paragraph 45 above). I respectfully consider that the Court of Appeal has adopted an unnatural construction of section 8A in order to avoid a supposed problem which does not really exist. 49. The overlap created by the possibility (indeed, the strong probability) that most adjunct machinery falling within section 8(a) will also be occupying plant falling within section 8A could be avoided only by treating the inclusive definition of “plant” in section 8A(3) as limited to ancillary equipment which is not adjunct machinery falling within section 8(a), and is one of (or perhaps is of a kind with) the seven types of ancillary equipment specifically mentioned in the definition. But it would be a strong thing to treat those specific cases, mentioned in an inclusive definition, as if they effectively constituted a full, comprehensive definition (see paragraph 19 above). It is not necessary to go that far in order to make sense of the two sections as a whole (nor would it alter what I regard as the proper outcome of this appeal, although it might affect the outcome of other cases on different facts). (3) The so-called ‘piecemeal’ principle 50. Mr Yu has in his written case (paragraph 37) and orally submitted that it is a rule in the law of rating that in deciding whether an item is plant, it is not permissible to have regard to its function as part of a larger whole. The authorities on which he relies for this proposition are Shell-Mex and BP Ltd v Holyoak [1959] 1 WLR 188 (“Shell-Mex”) and Manchester Marine Ltd v Duckworth [1973] 1 WLR 1431 (“Manchester Marine”). He goes so far as to say (paragraph 38) that in the construction of section 8A of the Rating Ordinance, “the legislature should be assumed to know the law, including the aforesaid principle.” 51. In my opinion there is no such principle. I would not of course accuse Mr Yu of hubris, but the notion that there is some sort of unwritten common law of rating known only to rating specialists must be dismissed for the reasons stated by Kirby J in Commissioner of Taxation v Ryan (paragraph 35 above). It is not a matter of the legislature having to know the law, but of the legislature making the law. If there were anything like the principle for which Mr Yu contends, it would be a principle derived from statute law construed in accordance with the general principles of statutory construction. Despite their common roots, the English statute law of rating is very different, particularly in relation to machinery and plant, from the rating law of Hong Kong set out in the Rating Ordinance. 52. The process of statutory construction can be seen in several of the authorities cited to this Court. In Auckland the Court of Appeal of New Zealand was concerned with that country’s Rating Act 1908, which exempted various categories of property including “machinery, whether fixed to the soil or not”, with no further definition. The majority of the Court decided, on the normal meaning of the word “machinery”, that the gas mains and pipes were not exempted: see Chapman J at p585, Sim J at p587, and Hosking J at p591. 53. In contrast to the simplicity of the New Zealand law a century ago, English statute law on rating has for almost a century adopted a much more detailed and prescriptive approach to machinery and plant. This approach was first introduced by the Rating and Valuation Act 1925, followed by the Plant and Machinery (Valuation for Rating) Order 1927. This primary and secondary legislation followed an unusual technique, which was described and commented on by the English Court of Appeal in BP Refinery (Kent) Ltd v Walker [1957] 2 QB 305 (“BP (Kent)”), a case concerned with BP’s large oil refinery at the Isle of Grain. I am reluctant to go much further into this and later English legislation, since it is so different from the Rating Ordinance. But in view of Mr Yu’s reliance on Shell-Mex and Manchester Marine I feel obliged to do so. 54. The 1925 Act contained a Third Schedule, incorporated into the Act by section 24(1), which set out four classes of plant or machinery, described in some technical detail, which were to be treated as part of the rateable hereditament, though with an exception for machinery or plant “for the purpose of manufacturing or trade processes” (the same wording as is used in section 8(b) of the Rating Ordinance). However (and this is the unusual legislative technique) section 24(3) was in these terms: “For the purpose of enabling all persons concerned to have precise information as to what machinery and plant falls within the classes in the said Third Schedule, there shall be constituted a committee of five persons to be appointed by the Minister...” The committee of experts were to advise the Minister in even more detail about the contents of the Third Schedule, and the Minister had power to reproduce their advice, with or without modification, in a statutory instrument. That was the origin of the 1927 Order. 55. As Lord Evershed MR dryly remarked in BP (Kent) at p315, the parliamentary intention was undoubtedly laudable, but the hope of achieving precise certainty was somewhat over-sanguine. In fact one of the issues in the case was whether the 1927 Order was ultra vires. Nevertheless the same technique, with some modifications, has been used in a succession of later English statutes, including the General Rate Act 1967 (section 21 and the Third Schedule) and the Plant and Machinery (Rating) Order 1960. The distinction drawn in paragraph 39.1 of Mr Yu’s written case is therefore mistaken, but the mistake is understandable since Lord Denning MR’s unreserved judgment in Manchester Marine refers only to section 21. 56. Shell-Mex was a borderline case on relatively simple facts. It was concerned with the rating of a newly-built filling station, which had underground tanks for the storage of petrol. There were four 3000-gallon cylindrical metal tanks, each weighing about two tons when empty. For safety reasons they were housed in rectangular concrete and brick silos, with the space between the silo walls and the tanks filled with a special type of sand. Under the 1925 Act and the 1927 Order this facility was to be treated as part of the rateable hereditament only if it met the two-part test of (a) being a “tank” (which was not in dispute) and (b) being within the words “is, or is in the nature of, a building or structure” (this was the essential issue). The borderline nature of the point is apparent from the course of the litigation. The Lands Tribunal decided in favour of the ratepayer. The Court of Appeal unanimously reversed that decision. The House of Lords, by a bare majority of three to two, restored the decision of the Lands Tribunal. 57. All three law lords in the majority treated the issue as a short (though difficult) question of fact. For instance Viscount Simonds said, at p 193, “... it is not a case of that which was a tank being turned into a structure but of that which was a tank remaining a tank and being housed in a structure made for that purpose.” So the structure of the silo was rateable but the metal cylinder was not. The only point of law in the case was the House's disapproval of a test depending on the notion of a “functional entity,” which had been used as a test in earlier cases, and also alternatively the notion of a “physical entity”. Viscount Simonds referred to the latter test, at p 194, as “obscurum per obscurius,” (the obscure through the more obscure), a Latin phrase which is a shorthand way of describing the futility of trying to explain or define an obscure concept by the use of even more obscure language. Lord Reid, at p199, did say that “the purpose of this legislation is to split up for rating purposes installations which are for practical purposes indivisible,” but I do not read that as laying down any general principle of the need for a “piecemeal” approach. It was his conclusion as to how the detailed provisions of the 1925 Act and the 1927 Order should be applied to the facts of the particular case. 58. In Manchester Marine Lord Denning MR did, in an unreserved judgment, express himself in wide general terms, as he was sometimes inclined to do. At p1435 he said, “Rating law is different from revenue law”, which is a surprisingly broad proposition, not least because rating law can be seen as a branch of revenue law. On the same page he cited the passage from Lord Reid that I have already mentioned, and said that it is legitimate in rating cases to consider the subject piecemeal and to split it up in a way that is not permissible in revenue cases. That is so, but the reason is not because of some quasi-constitutional principle about construing statutes dealing with different fields of law (the strict construction of penal statutes and statutes restricting civil liberties does, by way of contrast, have a constitutional basis: Gurung Kesh Bahadur v Director of Immigration(2002) 5 HKCFAR 480, para 24). The reason is simply that the English rating legislation contains very detailed provisions set out in statutory instruments, whereas the English law on capital allowances for purposes of income tax (or now corporation tax) refers to plant and machinery without further explanation or elaboration (as does the Hong Kong legislation concerned with profits tax: see Inland Revenue Ordinance, Cap 112, sections 36A to 39E). 59. For these reasons Cheung JA was right to refer to the supposed principle as “so-called”. What is needed is reliance on the ordinary general principles of statutory construction. In my view they lead irresistibly to the conclusions set out in the earlier sections of this judgment. (4) The issue of remission 60. The Court of Appeal directed that the Lands Tribunal’s judgment of 24 April 2013 and 3 January 2014 shall be remitted to the Lands Tribunal for consideration of three categories of equipment, referred to as “the disputed items”. These were the items referred to in paragraph 11 above, but (as explained in that paragraph) there is an issue as to whether the disputed items include the supporting steelwork for the boilers at BPPS. That issue should not have been left unacknowledged and unresolved until the close of argument in this Court. 61. I shall first consider items of equipment agreed to be disputed items. CLP had not asked the Court of Appeal to remit the matter to the Lands Tribunal. CLP’s case before the Court of Appeal was that section 8A did not, as a matter of law, apply to any equipment on any land, building or structure which was already (that is, apart from section 8A) a rateable tenement. It accepted, as Mr Elvin has confirmed to us, that the disputed items did come within the definition of “plant” in section 8A(3). The Court of Appeal recognised (para 9.35 of the judgment of Cheung JA) that there are serious practical difficulties about a remission, a full seven years after the beginning of the first Lands Tribunal hearing. 62. As already mentioned (paragraph 8 above) the Lands Tribunal made a finding that the hypothetical landlord’s assets and the hypothetical tenant’s non-rateable assets “had been designed and built as an integrated system”. But the same was no doubt true of the gasworks in Auckland, the petrol tanks and their silos in Shell-Mex, and the dry dock in Manchester Marine. Moreover this discussion was in the different context of “interdependency” and the relative bargaining positions of the hypothetical landlord and tenant. It was not expert evidence as to whether all or any of the disputed items were “machinery” falling within section 8(b), as the question- begging reference to non-rateable assets indicates. 63. If expert evidence on that point was required, it was for CLP, rather than for the Commissioner, to adduce it. But I doubt whether much if any expert evidence about the disputed items was required. Supporting steelwork for boilers falls squarely within the definition in section 8A(3) and cannot reasonably be described as a machine, or part of a machine, even though the steelwork was carefully designed to be suitable for the boilers. The same is true of the ancillary pipework and electrical cables. 64. As to the water-cooling systems at CPPS B and BPPS, the Lands Tribunal held (paragraph 234) that they fall within the definition of “plant”, and the fact that they are (as was said by Mr Jupp, one of CLP’s experts) designed to suit the capacity of the steam turbines does not make them part of the steam turbines. It appears from Mr Jupp’s report, mentioned in paragraph 9.30 of the judgment of Cheung JA, that each system includes a pump house with a pump extracting water from the sea. The pumps are no doubt machines, but the Order of the Court of Appeal (paragraph 2(2)) indicates that the pump houses are not treated as part of the systems. In any event, the water-cooling systems as a whole cannot be regarded as a machine, or part of a machine, falling within section 8(b). 65. Apart from the issue of the supporting steelwork at BPPS, therefore, I would not make a remission to the Lands Tribunal. It is unfortunate that because of their construction of sections 8 and 8A (see paragraph 46 above) the Lands Tribunal did not make clear, specific findings on these points. But the answers are clear and in all the circumstances a remission would not be appropriate. 66. It remains to consider the supporting steelwork at BPPS. I have already described how the issue was left unresolved before the Lands Tribunal, even on review. The matter came before the Court of Appeal under an order (at A6 of the Record) which refers in general terms to “non-rateable machinery”. CLP’s notice of appeal (at A8 of the Record) refers to paragraph 227 of the Lands Tribunal’s first judgment without drawing attention to any special problem about steelwork at BPPS. The Commissioner’s respondent’s notice (at A9 of the Record) refers to (inter alia) “the boiler supporting steelwork at CPPS ‘B’ and BPPS.” 67. It is correct (as stated in a letter dated 3 March 2017 from CLP’s solicitors) that CLP’s skeleton argument in the Court of Appeal (at B5 of the Record, and apparently objected to by CLP) referred in paragraph 3(1) only to “the integral supporting steelwork from which the boilers hang at Castle Point (sic) Power Station B” and footnote 2 stated that “the Commissioner has not contested that at BPPS, the heat recovery boilers and their supporting steelwork are all non-rateable.” (This sentence is misquoted in the solicitors’ letter of 3 March 2017, possibly through confusion of “contested” and “contended”.) But this assertion was directly challenged in paragraph 1 and footnote 1 of the Commissioner’s skeleton argument (not included in the Record, but annexed to a letter dated 3 March 2017 from the Department of Justice). 68. Despite this direct conflict between the parties’ skeleton arguments, the Court of Appeal appears to have been unware that the identification of the disputed items was itself a contentious issue. Paragraph 1.2 of the judgment (although purporting to set out the Commissioner’s view) seems to have been taken word for word from CLP’s skeleton argument. The difference between the parties on this point is not mentioned in paragraph 1, paragraphs 9.30 to 9.32, or elsewhere in the judgment. 69. The solicitors’ letter of 3 March 2017 raises various points of fact about coal-fired and gas-fired boilers. There are no findings of fact about these points in either of the Lands Tribunal’s judgments and it is not appropriate for this Court to enquire into them now, not least because the reference year 2004-5 is now so long ago. Moreover, the Court of Appeal’s order at A10 of the Record, drafted (as the Court has been informed in the Department of Justice’s letter of 3 March 2017) by CLP’s solicitors without reference to the Commissioner, does not set aside or direct remitter of the Lands Tribunal’s judgment so far as it affects the structural steelwork at BPPS. The judgment of the Lands Tribunal on that issue has remained in force throughout. The right course is for this Court to leave it in force. 70. I would therefore allow this appeal and make an order nisi for CLP to pay the Commissioner’s costs of this appeal. Any submissions as to costs or as to the form of the order should be made in writing to be served and lodged with the Registrar within 21 days after the handing down of this judgment, and any submissions in reply should be made in writing, to be served and lodged within 14 days afterwards. In the absence of any submissions as to costs, the order nisi will become absolute. Chief Justice Ma: 71. For the reasons contained in the judgment of Lord Walker of Gestingthorpe NPJ, this appeal is allowed. The orders as to costs and the form of the formal order are as set out in paragraph 70 above. Mr Benjamin Yu SC and Ms Yvonne Cheng SC, instructed by the Department of Justice, for the Appellant Mr David Elvin QC and Mr John Litton, instructed by Holman Fenwick Willan, for the Respondent |
A. INTRODUCTION 1. A member of the Legislative Council (“LegCo”) is constitutionally mandated under Article 104 (“BL104”) of the Basic Law (“BL”), upon assuming office, to take an oath to swear to uphold the BL and to swear allegiance to the Hong Kong Special Administrative Region of the People’s Republic of China. 2. For the purpose of BL104, a LegCo member is required under section 19 of the Oaths and Declarations Ordinance (Cap 11) (“ODO”) to take the Legislative Council Oath (“LegCo Oath”)in the form as prescribed under section 16(d) and Schedule 2 thereof. Part IV of Schedule 2 prescribes the form of the LegCo Oath as follows: “THE LEGISLATIVE COUNCIL OATH I swear that, being a member of the Legislative Council of the Hong Kong Special Administrative Region of the People’s Republic of China, I will uphold the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, bear allegiance to the Hong Kong Special Administrative Region of the People’s Republic of China and serve the Hong Kong Special Administrative Region conscientiously, dutifully, in full accordance with the law, honestly and with integrity. (name of person making the oath)” (emphasis added) 3. Section 21 of the ODO further provides that if a LegCo member “declines or neglects” to take the LegCo Oath “when requested” to do so, he “shall” (meaning he must) vacate the office if he has already entered on it, or he “shall” be disqualified from entering on the office if he has not. 4. In the present cases, Mr Leung and Ms Yau were elected in their respective constituencies in the general election held in September this year to be a LegCo member. As mandated under BL104 and section 19 of the ODO, they were asked to take the LegCo Oath before the Clerk to the LegCo (“the Clerk”) at the first meeting of the LegCo on 12 October 2016. 5. There is no dispute that they purported to take the LegCo Oath before the Clerk on that occasion in the following way and manner: (1) Each of them used the term “Hong Kong nation” right at the outset of oath-taking: (a) Mr Leung declared in open public that he shall keep guard over the interest of the Hong Kong nation; (b) Ms Yau declared in open public that she will be faithful and bear true allegiance to the Hong Kong nation. (2) The Clerk interrupted each of them and said he could not administer their respective oath-taking as that was not taken in compliance with the LegCo Oath. (3) Each of them then purported to take the oath again. (4) In doing so, each of them mis-pronounced the word “China” consecutively for three times, as “Geen-na” or “Sheen-na” (“支那”). (5) Further, Ms Yau mis-pronounced “People’s Republic of China” as “the People’s Refucking of Sheen-na” consecutively for three times. (6) Each of them also intentionally unfolded and displayed a blue banner bearing the words “HONG KONG IS NOT CHINA”. (7) Mr Leung adopted a contrast in the tone of his voice between his initial words before the interjection by the Clerk and his subsequent words after such interjection (which shows a dismissive and not serious attitude). He further crossed the index and middle fingers of his right hand over the Bible in seeking to take the oath again after the initial interjection by the Clerk. (8) Ms Yau emphasized “Hong Kong” with a distinctly loud tone of voice but adopted a lower voice and hurried manner for the rest of the oath. 6. Moreover, Mr Leung said to the press immediately after the LegCo meeting on 12 October 2016 as follows: “今日我哋 [referring to himself and Ms Yau] 成個誓詞嗰個部份我哋有，我自己啦，我有3 part係做咗啦，呀，有個手勢啦，有一個係呀披肩咁樣嘅野啦，亦都有一個說法，咁而3樣野係一個組合嚟嘅”. 7. In light of the above undisputed way and manner in which Mr Leung and Ms Yau purported to take the oath, on 18 October 2016, the President of the LegCo (“the President”) decided (on legal advice) that the oath purported to be taken by each of them on that day is invalid. However, the President then further decided (also on legal advice) to allow each of them to re-take the LegCo Oath at the next LegCo meeting if they made a written request to do so. I would call this second part of the decision for convenience as “the President’s Decision”. 8. Mr Leung and Ms Yau later on that day did make a written request to re-take the oath. 9. The Chief Executive of the HKSAR (“the CE”) and the Secretary for Justice (“the SJ”) (collectively, “the applicants”) however contend that Mr Leung and Ms Yau already declined or neglected to take the LegCo Oath on 12 October 2016. As a result, under section 21 of the ODO, as a matter of law, they must be regarded as having vacated their office of a LegCo member or alternatively be disqualified from entering on it. On the same basis, the CE and the SJ also say that the President misdirected himself on the law in making the President’s Decision as there is no question that Mr Leung and Ms Yau could re-take the oath again after they have so vacated the office or having been disqualified from entering on it. 10. Thus, on the same day of the President’s Decision (ie, 18 October 2016), the CE and the SJ commenced the present action under HCMP 2819/2016 against Ms Yau, Mr Leung and the President; and this judicial review against the President (joining Mr Leung and Ms Yau as interested parties).[1] 11. In HCMP 2819/2016, the applicants seek against Ms Yau and Mr Leung (respectively as the 1st and 2nd defendants) the principal reliefs of (a) a declaration that the oaths taken by them on 12 October 2016 contravened BL104 and the relevant provisions of the ODO, and are invalid and void as the LegCo Oath as required under the law; (b) a declaration that they are disqualified from assuming or entering on the office of a LegCo member, or have vacated that office, and are not entitled to act as a LegCo member; and (c) injunctions to restrain them from acting or claiming to be entitled to act as a LegCo member. 12. In the judicial review, the applicants seek against the President the principal reliefs of (a) a declaration that the President has no power to re-administer or allow for re-administration of any oaths to be taken by Mr Leung and Ms Yau as they are disqualified from assuming or entering on the office of a LegCo member or have already vacated it; (b) a declaration that the office of member of the LegCo previously occupied by each of Mr Leung and Ms Yau is now vacant; (c) an order of certiorari to quash the President’s Decision; and (d) an injunction to restrain the President from administering or allowing to be administered the making of oaths of Mr Leung and Ms Yau under section 19 of the ODO. 13. It is important to note that, notwithstanding the CE and the SJ’s above forefront contentions made in these applications, Mr Leung and Ms Yau have not put forward any positive case by way of submissions (primary or alternative) or evidence that the oaths they purported to take on 12 October 2016 complied with BL104 or the requirements under the ODO. They also have not put forward any positive arguments by way of submissions or evidence that they did not “decline or neglect” to take the LegCo Oath when requested to do so on that day. 14. Instead, Mr Leung and Ms Yau oppose these applications on two principal grounds. They are that (a) matters concerning the oath taking by a LegCo member and the validity thereof are “internal business” of the LegCo and, under the non-intervention principle in common law, the court should and could not intervene in these matters or any decisions made by the President or the Clerk relating to them; and (b) the words spoken in relation to the “oaths” taken by Mr Leung and Ms Yau are protected by the immunity provided under BL77 and sections 3 and 4 of the Legislative Council (Powers and Privileges) Ordinance (Cap 382) (“LCPPO”), and they are therefore immune from suit, including the present ones. Mr Leung and Ms Yau have also raised some other ancillary arguments in aid of the above principal grounds, including an objection that the CE has no locus to bring these proceedings. I would elaborate on all these grounds and arguments in greater detail later. 15. Insofar as the President is concerned, his only objection to these proceedings is that he should not be joined as a party. It is submitted that he has not made any substantive decision as to whether Mr Leung and Ms Yau have declined or neglected to take the LegCo Oath, and the President’s Decision is only a procedural decision in nature. There are thus no extant substantive decisions that are amenable to judicial review. The judicial review should therefore not be brought against him. Further, in relation to HCMP 2819/2016, it is said that there are no suggestions that the President would not abide by the ruling of this court if it decides to grant the reliefs as sought against Mr Leung and Ms Yau. In that case, there is also no basis for the CE and the SJ to join the President in this action. 16. Before I deal with all these grounds of opposition, it is important for me to first look at the relevant constitutional and statutory frameworks and their proper meanings which provide for the legal context mandating a LegCo member to take the LegCo Oath and as to when he would be disqualified in failing to do so. B. THE RELEVANT CONSTITUTIONAL AND STATUTORY FRAMEWORKS B1. The constitutional framework 17. The BL is the written mini-constitution for Hong Kong. BL104 provides as follows: “When assuming office, the Chief Executive, principal officials, members of the Executive Council and of the Legislative Council, judges of the courts at all levels and other members of the judiciary in the Hong Kong Special Administrative Region must, in accordance with law, swear to uphold the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China and swear allegiance to the Hong Kong Special Administrative Region of the People's Republic of China.” (emphasis added) 18. It is thus a constitutional requirement under BL104 that LegCo members (as well as the CE, principal officials, Executive Council members and judges of the Hong Kong Special Administrative Region) are mandatorily required to take an oath when assuming office. 19. On 7 November 2016, the Standing Committee of the National People’s Congress of the People’s Republic of China (“NPCSC”) in the exercise of its power under BL158(1) pronounced an interpretation (“the Interpretation”) of the meaning of BL104. The Interpretation is as follows: (1) Oath-taking is the legal prerequisite and required procedure for public officers specified in the Article to assume office. No public office shall be assumed, no corresponding powers and functions shall be exercised, and no corresponding entitlements shall be enjoyed by anyone who fails to lawfully and validly take the oath or who declines to take the oath. (2) Oath-taking must comply with the legal requirements in respect of its form and content. An oath taker must take the oath sincerely and solemnly, and must accurately, completely and solemnly read out the oath prescribed by law, the content of which includes “will uphold the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, bear allegiance to the Hong Kong Special Administrative Region of the People’s Republic of China”. (3) An oath taker is disqualified forthwith from assuming the public office specified in the Article if he or she declines to take the oath. An oath taker who intentionally reads out words which do not accord with the wording of the oath prescribed by law, or takes the oath in a manner which is not sincere or not solemn, shall be treated as declining to take the oath. The oath so taken is invalid and the oath taker is disqualified forthwith from assuming the public office specified in the Article. (4) The oath must be taken before the person authorized by law to administer the oath. The person administering the oath has the duty to ensure that the oath is taken in a lawful manner. He or she shall determine that an oath taken in compliance with this Interpretation and the requirements under the laws of the Hong Kong Special Administrative Region is valid, and that an oath which is not taken in compliance with this Interpretation and the requirements under the laws of the Hong Kong Special Administrative Region is invalid. If the oath taken is determined as invalid, no arrangement shall be made for retaking the oath. 20. Although the courts in Hong Kong are authorised by BL158(2) and (3) to interpret provisions of the BL in adjudicating cases, the NPCSC has the final power of interpretation of the BL as provided under BL158(1) and (3) and Article 67(4) of the Constitution of the People’s Republic of China. An interpretation made by the NPCSC is binding on all the courts of Hong Kong, and the courts are under a duty to follow it. This has been well recognised by the Court of Final Appeal in Director of Immigration v Chong Fung Yuen (2001) 4 HKCFAR 211, where Li CJ said at pp 222G and H as follows: “…where the [NPCSC] has made an interpretation of the [BL] pursuant to its power under art 67(4) of the Chinese Constitution and art 158 of the Basic Law, the courts in Hong Kong are under a duty to follow it. … That power of the [NPCSC] extends to every provision in the Basic Law and is not limited to the excluded provisions referred to in art 158(3).” 21. In the premises, the Interpretation is binding on this court. In this judgment, unless otherwise stated, whenever I refer to the meaning of BL104, it is a reference to the meaning as set out in the Interpretation. 22. Hence, essentially for the present purposes, under BL104, a LegCo member when assuming office must take the LegCo Oath as prescribed under the ODO (being the laws of the Hong Kong Special Administrative Region).[2] He shall take it solemnly and sincerely and in compliance with the LegCo Oath both in substance and in form. If he intentionally declines or fails to so take the LegCo Oath, whether in form or in substance, the oath taken is invalid and he shall be disqualified from assuming the office. 23. On the other hand, as submitted by Mr Yu SC for the CE and the SJ, independent of the Interpretation, the laws of Hong Kong as set out in the relevant provisions ODO, when properly construed, indeed carry effectively the same meanings and legal effects as these essential meanings of BL104. This is what I would turn to next. B2. The ODO 24. Sections 16 and 19 of the ODO provide as follows: “Section: 16 Forms of Oaths The Oaths referred to in this Ordinance as- … (d) the Legislative Council Oath; … shall be in the respective forms set out in Schedule 2. … Section: 19 Oath of Legislative Councillors A member of the Legislative Council shall, as soon as possible after the commencement of his term of office, take the Legislative Council Oath which- (a) if taken at the first sitting of the session of the Legislative Council immediately after a general election of all members of the Council and before the election of the President of the Council, shall be administered by the Clerk to the Council; (b) if taken at any other sitting of the Council, shall be administered by the President of the Council or any member acting in his place.” (emphasis added) 25. Section 21 of the ODO further provides for the legal consequence of non-compliance by a person who is requested to take an oath as required under the ODO as follows: “Section: 21 Consequence of non-compliance Any person who declines or neglects to take an oath duly requested which he is required to take by this Part, shall- (a) if he has already entered on his office, vacate it, and (b) if he has not entered on his office, be disqualified from entering on it.” (emphasis added) 26. The construction of the meaning of these provisions of the ODO is for this court, and under common law the court should adopt a purposive construction, read in their proper context of the whole statue.[3] 27. In this respect, as rightly submitted by Mr Yu, on a proper purposive construction of sections 16, 19 and 21 of the ODO, they have the following meanings and legal effects in relation to the taking of the LegCo Oath by a LegCo member. 28. First, the relevant provisions in the ODO are to reflect and underline the constitutional requirements in BL104. If a LegCo member swears his oath in a manner or form that is inconsistent with the requirements set out in the ODO, his oath offends the constitutional requirements under BL104: Leung Kwok Hung, supra, at paragraph 22, per Hartmann J. 29. Second, a LegCo member has to take the LegCo Oath “as soon as possible” after the commencement of his term of office, and that must be done before he assumes his office. This is borne out by the plain and express words of BL104 and section 16 of the ODO, and supported by Leung Kwok Hung, supra, at paragraph 22. 30. Third, a LegCo member must take the oath in the same form, manner and substance as the LegCo Oath as expressly prescribed under section 19 and Schedule 2 of the ODO. It is not any oath that may be devised by a LegCo member provided that the “oath” meets the two obligations set out in BL104: Leung Kwok Hung, supra, at paragraphs 24 - 27. A fortiori, if the “oath” taken does not even meet any of the two obligations set out in BL104, it is not a valid oath. 31. Fourth, an oath is a solemn declaration. In its original form it was invariably a promise to one’s deity. The ODO does not allow for any real difference in the form and substance of the oath itself as to how a person wishes to take it. Hence, a LegCo member who seeks to alter the form, manner or substance of the oath when taking it will offend BL104 and therefore be unlawful and of no effect: Leung Kwok Hung, supra, paragraphs 36 - 40. 32. An oath must be taken solemnly and sincerely is consistent with the trite position under common law that taking an oath is a form of attestation by which a person signifies that he is bound in conscience to perform an act faithfully and truthfully. Similarly an affirmation in lieu of oath binds a person to live by what he undertakes. In particular, an oath of allegiance or loyalty means that a person promises and binds himself to bear true allegiance to a particular sovereign and government and to support its constitution.[4] The obvious purpose is to ensure the person concerned (such as a member of legislature) makes a commitment to live by the constitutional process; he has to owe allegiance to the constitution, and he has to uphold the sovereignty and integrity for the country. It is not a mere formality or empty form of words. The purpose of prescribing the form is to induce a sense of subordination to the constitution in men of all faiths. It has to be followed “in letter and spirit”. See: Haridasan Palayil v The Speaker, Kerala Legislative Assembly AIR 2003 Ker 328, 2003 (3) KLT 119 at paragraphs 21, 24, 30 and 31; AG v Bradlaugh (1885) 14 QBD 667 at 696 - 698, per Brett MR, at 707 - 709, per Cotton LJ, and at 716 - 717, per Lindley LJ. 33. In the premises, the fundamental and essential question to be answered in determining the validity of the taking of an oath is whether it can be seen objectively that the person taking the oath faithfully and truthfully commits and binds himself or herself to uphold and abide by the obligations set out in the oath. 34. Fifth, read together with the above provisions and context, section 21 of the ODO when properly construed means that if a LegCo member “declines or neglects” to take the LegCo Oath whether in form or in substance when he is requested to do so, he “shall” (thus must)vacate his office if he has entered upon it, or must be disqualified from entering upon his office if he has not done so. In other words, under the clear and express words of section 21 of the ODO, once it is shown that a LegCo member declines or neglects to take the LegCo Oath when requested to do so, he can no longer continue to be qualified as a LegCo member and act as such; in which case, there is no question that he could seek to take the oath again. 35. In this respect: (1) The ordinary and natural meaning of the word “decline” is to refuse or object.[5] This is consistent with the natural meaning of its Chinese translation “拒絕”. Read in the context of section 21 of the ODO, which entails the serious consequence of disqualification, the word refers to an intentional act to refuse or object to the taking of the oath as prescribed by law. As submitted by Mr Yu, such an act would also include conduct which objectively manifests itself an intentional refusal. (2) The word “neglect” has been defined as “an omission to perform a duty which the person owing the duty is able to perform”.[6] Again, when properly read in the context of section 21 of the ODO, it should mean a deliberate or wilful (in contrast to an inadvertent or accidental) omission to perform the duty to take the oath as prescribed when requested to do so. 36. The above proper meanings and effects of the relevant ODO provisions are reached by application of common law principles of construction and supported by authorities, independent of the Interpretation. They are in any event not disputed or challenged in any material way by counsel for the President, Mr Leung and Ms Yau whether by way of primary or any alternative submissions. C. WHETHER MR LEUNG AND MS YAU DECLINED TO TAKE THE LEGCO OATH WHEN REQUESTED TO DO SO OR AS REQUIRED UNDER BL104 37. As mentioned above, Mr Leung and Ms Yau in these proceedings have not put forward any positive arguments that they did not decline or neglect to take the LegCo Oath when requested to do so on 12 October 2016. 38. The applicants submit that objectively viewed at, it must be clear and beyond debate that Mr Leung and Ms Yau have declined to take the LegCo Oath when requested to do so. I agree with the applicants as that is incapable of dispute in light of the following. 39. The objective and undisputed evidence shows that Mr Leung and Ms Yau had been duly requested to take the LegCo Oath at the first meeting of the LegCo on 12 October 2016. They had also been reminded repeatedly that they must take the oath in accordance with the form as prescribed by the ODO.[7] 40. Further, objectively viewed against the undisputed acts and manner in how Mr Leung and Ms Yau purported to take the oath on 12 October 2016 as summarised in paragraphs 5 and 6 above, they must be regarded as having manifested an intentional refusal (and thus their “decline”) to take the LegCo Oath, whether in form or in substance. My reasons are these. 41. It is plain that, in referring to “Hong Kong nation” when they first sought to take the oath, and later in mis-pronouncing the words “Republic” and “China”, they did not take the oath in the same form of the LegCo Oath as prescribed by law, and they did that intentionally. Mr Leung and Ms Yau have not suggested otherwise. 42. Further, as submitted by Mr Yu, they also did not objectively intend to take the LegCo Oath in substance as they did not seriously, faithfully and truthfully intend to abide by a declaration to pledge allegiance to the Hong Kong Special Administrative Region of the People’s Republic of China and to uphold the BL. It is so as in adopting the way and manner they purported to take oath, they expressed the position that they did not recognise the fundamental constitutional model of “one country, two systems”, which underpins and underlines the BL, and under which the Hong Kong Special Administrative Region was established. 43. As recognised by the Court of Final Appeal in Ng Ka Ling v Director of Immigration (1999) 2 HKCFAR 4 at 28G-H, the purpose of the BL is to establish the Hong Kong Special Administrative Region being an inalienable part of the People’s Republic of China under the principle of “one country, two systems” in accordance with China’s basic policies regarding Hong Kong as set out and elaborated in the Joint Declaration. The Court of Final Appeal also recognises the fundamental importance of the “one country” in this model as observed by Li CJ in HKSAR v Ng Kung Siu (1999) 2 HKCFAR 442, at 460C-E as follows: “… In these circumstances, the legitimate societal interests in protecting the national flag and the legitimate community interests in the protection of the regional flag are interests which are within the concept of public order (ordre public). As I have pointed out, the national flag is the unique symbol of the one country, the People’s Republic of China, and the regional flag is the unique symbol of the Hong Kong Special Administrative Region as an inalienable part of the People’s Republic of China under the principle of ‘one country, two systems’. These legitimate interests form part of the general welfare and the interests of the collectivity as a whole.” 44. Indeed, as emphasized by Mr Yu, the theme and policy of “one country, two systems” runs throughout the BL, as reflected in particular in the following articles: (1) The Preamble states that Hong Kong has been part of the territory of China since ancient times. The resumption of the exercise of sovereignty by China over Hong Kong with effect from 1 July 1997 fulfils the long cherished common aspiration of the Chinese people for the recovery of Hong Kong. Upholding national unity and territorial integrity, and maintaining the prosperity and stability of Hong Kong, the People’s Republic of China has decided that upon China’s resumption of the exercise of sovereignty over Hong Kong, a Hong Kong Special Administrative Region will be established and that under the principle of “one country, two systems”, the socialist system and policies will not be practiced in Hong Kong. The BL was enacted by the NPCSC in accordance with the Constitution of the People’s Republic of China. (2) The Preamble, BL1 and 12 all state that the Hong Kong Special Administrative Region is an inalienable part of the People’s Republic of China. It shall be a local administrative region of the People’s Republic of China which shall enjoy a high degree of autonomy and come directly under the Central People’s Government (“CPG”). (3) BL 16, 17 and 19 provide the constitutional foundation for Hong Kong Special Administrative Regions to enjoy executive, legislative and judicial power; and BL66 provides the constitutional foundation that the LegCo of the Hong Kong Special Administrative Region shall be the legislature of the Region. (4) The importance of territorial integrity is also underscored by BL23, which imposes a constitutional obligation on the Hong Kong Special Administrative Region to enact laws on its own to, among others, prohibit secession, sedition, subversion against the CPG. 45. Bearing the above in mind, again as rightly submitted by Mr Yu, the manner and way in which Mr Leung and Ms Yau purported to take the LegCo Oath on 12 October 2016 demonstrate objectively and clearly their intention not to recognise this fundamental constitutional model of “one country, two systems” and the importance under this model of the “one country”: (1) In the case of Ms Yau, she used an “f” word to replace the word “Republic”. The inevitable inference is the contempt she showed for the People’s Republic of China as the “one country” in the “one country, two systems” concept which is fundamental to the BL and her repudiation of any allegiance to the Hong Kong Special Administrative Region as an inalienable part of the People’s Republic of China. She has not sought to suggest otherwise in these proceedings. (2) The deliberate mis-pronunciation of China as “Geen-na” or “Sheen-Na” (“支那”) and the use of the banner bearing “Hong Kong is NOT China” by both Mr Leung and Ms Yau assumes particular significance: (a) The unchallenged evidence is that the meaning of “支那” has a historical background and is widely or commonly understood to carry a derogatory, disparaging meaning and is used in mockery when referring to China and the People’s Republic of China; was used by the Japanese to refer to China during the Japanese invasion; and was used to mock China in an offensive way.[8] (b) By seeking to make a mockery of China and the People’s Republic of China in a derogatory and humiliating manner, it is objectively plain that Mr Leung and Ms Yau refused to pledge allegiance to the Hong Kong Special Administrative Region as an inalienable part of the People’s Republic of China. (c) The unchallenged evidence is also that the term “支那人” is commonly used by anti-Chinese organizations such as “台獨”, “港獨” groups to refer derogatorily or disparagingly to Chinese people.[9] Mr Leung and Ms Yau thus conveyed the message that they advocated independence of Hong Kong (港獨), as exemplified in their reference and pledge to the “Hong Kong nation”. (d) The unchallenged evidence is further that “Hong Kong is NOT China” also has reference to the use of the same banner at a local football match between Hong Kong and China held on 17 November 2015, which expresses the meaning, in context, that the Hong Kong Special Administrative Region is not part of the People’s Republic of China.[10] (3) The expression “支那” was uttered three times, by each of Mr Leung and Ms Yau. It cannot be the result of mere inadvertence, ignorance or mistake. Objectively looked at, and coupled with the absence of any explanations (let alone any credible explanations) by them, it was part of the wilful and deliberate attempt by both of them (sharing the same political affiliation) to insult China and the People’s Republic of China, advocate the political message of “港獨” and make a mockery of the contents of the LegCo Oath, by praying in aid the derogatory meaning of the expression “支那” commonly subscribed to it by the general public and the overseas Chinese community.[11] Mr Leung and Ms Yau have not sought to suggest otherwise in these proceedings. (4) Mr Leung in crossing his index and middle fingers with his hand placed over the Bible in purporting to take the oath must objectively be regarded as intending to send the message of not taking the oath seriously or with a clear conscience, and that he was intending to tell a lie or to signify that the oath he was making should be invalidated.[12] Mr Leung has not suggested otherwise. (5) It is also obvious that Mr Leung and Ms Yau acted in concert and did so deliberately: see paragraphs 6 and 39 above. (6) In the midst of repeated reminders, the manner in which Mr Leung and Ms Yau took their oath demonstrates that they not only refused and deliberately failed to take the LegCo Oath as an oath, with due solemnities of the mode of taking an oath,[13] but also manifested a clear intention not to be bound in conscience to perform faithfully and truthfully the oath as required by BL104 and the ODO. Again, Mr Leung and Ms Yau have not sought to suggest otherwise in these proceedings. 46. In the circumstances, as submitted by the applicants, Mr Leung and Ms Yau and each of them manifestly refused (and thus declined) to solemnly, sincerely and truly bind themselves to uphold the BL or bear true allegiance to the Hong Kong Special Administrative Region of the People’s Republic of China. Alternatively, at the least, they must have wilfully omitted (and hence neglected) to do so. 47. Section 21 of the ODO should therefore apply and operate to disqualify Mr Leung and Ms Yau from continuing to be a LegCo member, and the court should proceed to declare as such. 48. However, Mr Pun SC and Mr Dykes SC respectively raise a number of grounds for Mr Leung and Ms Yau to submit that the court should not and cannot intervene in these matters. I will now look at these grounds in turn. D. MR LEUNG AND MS YAU’S GROUNDS OF OPPOSITION D1. The court should not intervene in these cases under the non-intervention principle 49. Under this ground, Mr Pun argues that the taking of the LegCo Oath by LegCo members and the President’s Decision to allow Mr Leung and Ms Yau to take the oath again belong to the “internal business” of the LegCo. In the premises, under the established non-intervention principle, the court should and could not intervene in them. In support of these submissions, Mr Pun relies heavily and principally on the authority of Bradlaugh v Gosset (1884) 12 QBD 271. 50. With respect, I am unable to agree with Mr Pun for the following reasons. 51. The non-intervention principle has its origin in common law and is premised on the doctrine of separation of powers in England, where there is no written constitution, and where there is supremacy of the Parliament. However, the scope of this principle as applied in a different jurisdiction must be understood in and limited to the proper context of that jurisdiction, in particular where there is a written constitution.[14] Thus, in present day Hong Kong, where there is the written constitution of the BL and where the BL is supreme instead of the legislature, the court does have jurisdiction under the BL to determine, by declaratory relief, questions such as whether the internal Rules of Procedure enacted by the LegCo (which would be regarded as “the internal matters” of the Parliament under the non-intervention principle in the UK) are consistent with the BL. This has been explained by A Cheung J (as the learned CJHC then was) in Cheng Kar Shun v Li Fung Yung [2011] 2 HKLRD 555 at paragraph 217 as follows: “217. After 1997, in Leung Kwok Hung v President of Legislative Council [2007] 1 HKLRD 387, a case concerning the prohibition of members of the Legislative Council from introducing bills to the Legislative Council which have a charging effect under art.74 of the Basic Law, Hartmann J (as he then was) noted that being subordinate to the Basic Law, the Legislative Council must act in accordance with that law. His Lordship pointed out that in the United Kingdom, Parliament is supreme. The courts there are confined to interpreting and applying what Parliament has enacted. Parliament has exclusive control over the conduct of its own affairs. The courts will not permit any challenge to the manner in which Parliament goes about its business. If there are irregularities, that is a matter for Parliament to resolve, not the courts. However, in Hong Kong, the Basic Law is supreme. But subject to that, the Basic Law recognises the Legislative Council to be a sovereign body under that law. In setting Rules of Procedure to govern how it goes about the process of making laws, provided those rules are not in conflict with the Basic Law, the Legislative Council is ‘answerable to no outside authority’. The learned Judge concluded that so far as jurisdiction is concerned, the courts of the Hong Kong Special Administrative Region do have jurisdiction under the Basic Law to determine, by way of declaratory relief, whether Rules of Procedure enacted by the Legislative Council are consistent with the Basic Law. Yet, it is a jurisdiction which, having regard to the sovereignty of the Legislative Council under the Basic Law, ‘should only be exercised in a restrictive manner’. See p.390 para.5, p.391 paras.9-10, p.393 para.24, p.394 paras.28, 31.” (emphasis added) 52. In this respect, the scope of the non-intervention principle as applied in Hong Kong in the context of BL has recently been authoritatively explained by the Court of Final Appeal in Leung Kwok Hung v The President of the Legislative Council (No 1) (2014) 17 HKCFAR 689 (“Leung Kwok Hung CFA”), where the Court said theseat paragraphs 28 - 32 and 39: “28. In construing and applying the provisions of the BL, it is necessary not only to apply common law principles of interpretation but also principles, doctrines, concepts and understandings which are embedded in the common law. They include the doctrine of the separation of powers and, within it, the established relationship between the legislature and the courts. This relationship includes the principle that the courts will recognise the exclusive authority of the legislature in managing its own internal processes in the conduct of its business, in particular its legislative processes. The corollary is the proposition that the courts will not intervene to rule on the regularity or irregularity of the internal processes of the legislature but will leave it to determine exclusively for itself matters of this kind (‘the non-intervention principle’). 29. The strength of this proposition rests not only on principle and authority but also on public policy. In Hong Kong, LegCo has as its primary responsibility its law-making function. It also has vested in it other important powers and functions under art 73, for example: ‘(2) To examine and approve budgets introduced by the government; (3) To approve taxation and public expenditure; (4) To receive and debate the policy addresses of the Chief Executive; (5) To raise questions on the work of the government; (6) To debate any issue concerning public interests;’ 30. The important responsibilities of LegCo, notably its law-making function, require, as with other legislatures, that it should be left to manage and resolve its own internal affairs, free from intervention by the courts and from the possible disruption, delays and uncertainties which could result from such intervention. Freedom from these problems is both desirable and necessary in the interests of the orderly, efficient and fair disposition of LegCo’s business. 31. The adoption of the principle of non-intervention by the courts will reduce, if not eliminate, the prospect of pre-enactment challenge to proceedings in LegCo. It will also reduce, if not eliminate, post-enactment challenges to the validity of laws made by LegCo based on irregularity in its proceedings, unless such an irregularity amounts to non-compliance with a requirement on which the validity of a law depends. 32. In this respect it is important to recognise that the principle of non-intervention is necessarily subject to constitutional requirements. The provisions of a written constitution may make the validity of a law depend upon any fact, event or circumstance they identify, and if one so identified is a proceeding in, or compliance with, a procedure in the legislature the courts must take it under its cognizance in order to determine whether the supposed law is a valid law. In Australia, Cormack v Cope was such a case. There s 57 of the Australian Constitution provided a means of resolving a deadlock between the two Houses of Parliament culminating in a joint sitting of the two Houses to deliberate and vote upon a proposed law. But the section prescribed a procedure to be followed and compliance with that procedure was a condition of the validity of the proposed law when enacted. … 39. This qualification arises from the circumstance that, in the case of a written constitution, which confers law-making powers and functions on the legislature, the courts will determine whether the legislature has a particular power, privilege or immunity. In R v Richards, ex p Fitzpatrick and Browne,Dixon CJ, speaking for the High Court of Australia and with reference to the two Houses of the Australian Parliament, said: it is for the courts to judge of the existence in either House of Parliament of a privilege, but, given an undoubted privilege, it is for the House to judge of the occasion and of the manner of its exercise.” (emphasis added) 53. Distilled from these principles as laid down by the Court of Final Appeal are the following ones which are particularly relevant for the present purposes: (1) The principle of non-intervention as applied in Hong Kong is necessarily subject to the constitutional requirements of the BL. The provisions of the BL may make the validity of a law depend on any fact, event or circumstance they identify, and if one so identified is a proceeding in, or compliance with, a procedure in the legislature, the court must take it under its cognizance in order to determine whether the supposed law is a valid law. See Leung Kwok Hung CFA, paragraph 32. (2) Further, in the case where the written constitution which confers (as the BL in Hong Kong does) law-making powers and functions on the legislature, the court will determine whether the legislature has a particular power, privilege or immunity. See Leung Kwok Hung CFA, paragraph 39. (3) In the premises, what can be properly regarded as the “internal business” or “internal process” of the LegCo must be viewed under the above caveat prescribing the non-intervention principle in Hong Kong. 54. Bearing these principles in mind, it is clear to me that the non-intervention principle as applied in Hong Kong does not prohibit the court from determining the matters under challenge in these proceedings. 55. The constitutional requirement to take the oath under BL104 is of fundamental importance. All the most important public officials under the executive, legislative and judicial branches of the Hong Kong Special Administrative Region must take the oath as prescribed and in accordance with the laws set out in BL104 and the ODO before each of them can assume his or her office. As I have explained above, an intentional failure to do so would result in his or her disqualification from assuming the office. In the premises, given that BL104 (incorporating the ODO) has identified and provided for the legal parameters under which the oath-taking requirement is to be complied with, under the principle of non-intervention as explained in Leung Kwok Hung CFA, the court must still“take it under its cognizance in order to determine whether”that act of the oath-taking is valid and compliant with BL104 (together with the ODO). 56. In the same vein, the court must also have the jurisdiction to determine whether the Clerk or the President has the power under BL104 (and the ODO) to make a decision (such as the President’s Decision in the present case) to allow a LegCo member to take the LegCo Oath again if and when it is challenged that the member has already been disqualified in law from doing so under BL104 and the ODO. 57. When considered in the above context, the oath-taking by a LegCo member as mandated by BL104 and a decision made by the Clerk or the President relevant to that act also cannot be properly regarded as the “internal business” of the LegCo for the purpose of the non-intervention principle. 58. In respect, it must also be remembered that BL104 mandates constitutionally not just LegCo members but also the CE, principal officials, Executive Council members and judges of the Hong Kong Special Administrative Region to take the oath before each of them can assume the office. Further, section 21 of the ODO also provides the same consequence for non-compliance of the oath-taking for all these categories of persons, and not just the LegCo members. As such, it does not make sense that somehow only LegCo members (but not all the others) would be excluded from the courts’ jurisdiction to determine whether an oath is taken in compliance with the constitutional requirement implemented through the provisions of the ODO. 59. The authority of Bradlaugh v Gossett relied on by Mr Pun does not assist him. 60. In Gossett, Mr Bradlaugh was returned by election as a member of the House of Commons (ie, the Parliament). Under the Parliamentary Oaths Act 1866, he had to take a parliamentary oath in the House before the Speaker as prescribed by that Act. However, in light of the disruptive conducts he had had before in the House, the House passed a resolution “that the Serjeant-at-Arms do exclude Mr Bradlaugh from the House until he shall engage not further to disturb the proceedings of the House”. In other words, under the resolution, he could not enter the House to take the oath unless he had stopped any acts disturbing the proceedings of the House. Mr Bradlaugh applied to the court for an injunction to restrain the Serjeant-at-Arms from carrying out the resolution. In support of the application, Mr Bradlaugh argued that he had a legal right conferred by the Act to take the oath before the Speaker, and the resolution deprived him of that right. The court therefore should intervene and grant the injunction to protect his legal right provided by the Act. 61. However, the court (Coleridge CJ, Mathew J and Stephen J) refused to grant the injunction on the basis that the resolution was a matter relating to the internal management of the House, and thus the court had no power to intervene whether that resolution was valid or invalid in law. 62. Mr Pun submits that the circumstances of Gossett are similar to the present one. Leading counsel therefore submits that if, under the non-intervention principle, the court cannot intervene in the Parliament’s decision to prevent a member from exercising his statutory right to take the oath, a decision of the President to allow a member to take the LegCo Oath (as in the present case) must similarly be regarded under that principle as a matter relating to the internal management of the LegCo. The court therefore has no power to intervene. 63. I am unable to agree. Gossett is clearly distinguishable and does not apply to Hong Kong directly for two reasons. First, in Hong Kong, the binding authority on the scope and applicability of the non-intervention principle is Leung Kwok Hung CFA. I have already explained above why under the principles laid down in Leung Kwok Hung CFA, the courts have jurisdiction to intervene in the present matters. Second, and in any event, Gossett was decided in the context of parliamentary supremacy and the absence of a written constitution in England. These constituted an important rationale underlying the English court’s decision in that case. As explained above, Hong Kong is very different as we have a written constitution of the BL and legislature is not supreme. These are important material differences in determining the scope and extent of the non-intervention principle. Hence, one cannot simply apply that authority to Hong Kong. 64. Mr Pun also relies on the authorities of R v Chaytor [2011] 1 AC 684 and Baron Mereworth v Ministry of Justice [2012] Ch 325 to support his submissions for the application of the non-intervention principle in the present cases. These cases are similarly concerned with the discussions and determinations of the application of that principle in the UK. For the same reasons I have explained above, they are not directly applicable to Hong Kong and must be read subject to the principles laid down in Leung Kwok Hung CFA. They therefore also do not take Mr Pun’s case any further. 65. Finally, as an ancillary and supporting argument, Mr Pun says, given the non-intervention principle, on a proper interpretation of BL104 and sections 19 and 21 of the ODO, the person administering the oath is the final arbiter of the questions of (a) whether an oath taken is in compliance with the legal requirements; and (b) whether the oath taker has declined or neglected to take the oath when requested to do so. This reinforces, says Mr Pun, the submissions that these matters and questions are related to the “internal business” of the LegCo and hence not subject to the court’s scrutiny under the non-intervention principle. After the issue of the Interpretation, Mr Pun further submits that paragraph (4) of the Interpretation supports this construction. 66. There is no substance in these submissions. 67. Mr Pun’s submissions are in fact a circular one, which is premised on the correctness of his contention that the non-intervention principle applies in the present case. For the reasons I have explained above, that contention is incorrect. The submissions that the Clerk or the President is the final arbiter in relation to these questions therefore also fall away. 68. Further and in any event, it is plain and obvious that the courts of law in the society are regarded generally and in principle as the final arbiter in adjudicating questions of law, including important questions of constitutional compliance with the provisions of the BL and the questions of compliance with statutory provisions. This is also consistent with our constitutional model where our courts are given the powers and authority to adjudicate cases in accordance with the law: see BL81 - 85.[15] In the premises, a statutory provision could not be construed with the intention to oust the courts’ role in being the final arbiter of questions of law, unless it is clearly and expressly provided for. 69. In this respect, BL104 and sections 19 and 21 of the ODO simply have not provided in any express and clear way that the person who administers the oath is the final arbiter of the questions of the validity of the oath taken and whether someone has declined or neglected to take the oath and therefore has to vacate his office or to be disqualified from entering on it under section 21. Of course, as a matter of necessary implication, that person would have the power incidental to his duty to administer the oath to make a decision on those questions as and when circumstances may practically require. But that is different from saying that it is intended by BL104 or the provisions of the ODO that the person administering the oath is the final decision-maker on those questions. 70. Paragraph (4) of the Interpretation does not assist Mr Pun. It only provides that the person administering the oath has the power to determine whether “an oath taken is in compliance” with BL104 and laws of Hong Kong. It does not provide expressly or impliedly that that decision is a final one. It is consistent with the court’s above observation. 71. On a proper analysis and construction, the courts in Hong Kong must be objectively intended in BL104 and the provisions of the ODO to be final arbiter of those questions. 72. For all the above reasons, I am of the clear view that the non-intervention principle as applied in Hong Kong does not cover the matters under the present challenges in these proceedings. The courts therefore have jurisdiction to adjudicate them. 73. Alternatively, and in any event, I accept Mr Yu’s submissions that section 73 (“section 73”) of the Legislative Council Ordinance (Cap 542) (“LCO”) confers an express jurisdiction to the court to determine matters such as whether a LegCo member has been disqualified from being a LegCo member or has ceased to be one. In the premises, the non-intervention principle in any event should give way to this express jurisdiction conferred to the court by statute in relation to these matters. 74. Section 73 provides as follows: “Section: 73 Proceedings against persons on grounds of disqualification (1) An elector, or the Secretary for Justice, may bring proceedings in the Court against any person who is acting, claims to be entitled to act, as a Member on the ground that the person is disqualified from acting as such. (2) Proceedings under this section may not be brought after 6 months from the date on which the person concerned acted, or claimed to be entitled to act, as a Member. (3) If, in proceedings brought under this section, it is proved that the defendant acted as a Member while disqualified from acting in that office, the Court may- (a) make a declaration to that effect; and (b) grant an injunction restraining the defendant from so acting; and (c) order the defendant to pay to the Government such sum as the Court thinks appropriate, not exceeding $5000 for each occasion on which the person so acted while disqualified. (4) If, in proceedings brought under this section, it is proved that the defendant claimed to be entitled to act as a Cap 542 - Legislative Council Ordinance 47 Member while disqualified from acting in that office, the Court may- (a) make a declaration to that effect; and (b) grant an injunction restraining the defendant from so acting. … (7) Proceedings against a person on the ground that the person has, while disqualified from acting as, or claimed to have been entitled to act, as a Member may be brought only in accordance with this section. (8) For the purposes of this section, a person is disqualified from acting as a Member if the person- (a) is not qualified to be, or is disqualified from being, a Member; or (b) has ceased to hold office as a Member.” 75. As submitted by Mr Yu, section 73 therefore expressly gives jurisdiction to the court to determine proceedings brought by the SJ or an elector against a LegCo member who has been disqualified or who has ceased to be one but continues to act or claims to be entitled to act as a member. In the section 73 proceedings, the court can declare that the member so acts or seeks to act while disqualified, and restrain him from doing so. In considering granting those reliefs, the court must be entitled to determine the underlying essential question as to whether the member has been so disqualified.[16] This includes the question of whether a member has been so disqualified under section 21 of the ODO. 76. Thus, even if (which I disagree) the non-intervention principle were initially to cover the questions raised under the present actions, by section 73, the LegCo has expressly conferred jurisdiction to the court to determine them in the proceedings brought thereunder. The non-intervention principle must hence be subject and limited to that extent, and would not prevent the court from determining such a question under section 73 proceedings. 77. Mr Dykes and Mr Pun however argue that section 73 is objectively intended to apply only to those circumstances of disqualification as provided under section 15(1) of the LCO. To supplement this submission, Mr Pun also says section 15 intends to provide exhaustively the circumstances when a member can be disqualified from his office. 78. Section 15(1) provides as follows: “Section: 15 When Member ceases to hold office (1) A Member’s office becomes vacant if the Member- (a) resigns in accordance with section 14 or is taken to have resigned from that office in accordance with section 13; or (b) dies; or (c) subject to subsection (2), alters either the Member’s nationality or the fact as to whether the Member has a right of abode in a country other than the People’s Republic of China as declared under section 40(1)(b)(ii); or (d) is the President and has been found under the Mental Health Ordinance (Cap 136) to be incapable, by reason of mental incapacity, of managing and administering his or her property and affairs; or (e) is declared in accordance with Article 79 of the Basic Law to be no longer qualified to hold that office.” 79. With respect, I am unable to agree with Mr Dykes and Mr Pun: (1) Section 15 of the LCO does not provide expressly that the circumstances listed thereunder are all and the only circumstances when a member can be disqualified. There is also nothing in the submissions that can suggest why necessarily it should be implied that the provision intends to exhaustively provide for the circumstances of disqualification. In the premises, I cannot see how it could be construed objectively and purposively that this is intended to provide exhaustively all the circumstances of disqualification of a LegCo member. (2) Section 73 also does not provide expressly that the circumstances of disqualification are limited to only those under section 15 of the LCO. It is not even provided that section 73 is subject to section 15. Again, nothing has been submitted to show why it is necessary to imply that section 73 is intended only to cover disqualification circumstances provided under section 15 of the LCO. I therefore also cannot see how it could be construed objectively that section 73 is intended to cover only section 15’s disqualification circumstances. 80. I note that Mr Dykes and Mr Pun have also raised the point that even if section 73 proceedings can be brought against Mr Leung and Ms Yau in relation to the present challenges, the CE has no locus to bring a section 73 action in HCMP 2819/2016 when suing in his capacity as the CE. I think counsel is right in this part of the submissions. However, this cannot constitute a valid ground to oppose the section 73 action as the SJ (being a party entitled to bring the action under section 73) is also a plaintiff in the action. 81. In the premises, notwithstanding the non-intervention principle, the court must alternatively in any event have jurisdiction to look at and determine the underlying question of whether a LegCo member has been disqualified to be a member under section 21 of the ODO when section 73 proceedings are brought against him, as in the present case.[17] D2. Mr Leung and Ms Yau’s oath-taking conducts are immune from suit 82. Under this ground, Mr Dykes submits that what were said by Mr Leung and Ms Yau in the oath-taking process are protected by the immunity provided under BL77 and sections 3 and 4 of the LCPPO. Hence, Mr Leung and Ms Yau cannot be sued upon in relation to these matters, and the court cannot even look at them. 83. With respect, I do not accept these submissions. 84. BL77 provides as follows: “Article 77 Members of the Legislative Council of the Hong Kong Special Administrative Region shall be immune from legal action in respect of their statements at meetings of the Council.” 85. Sections 3 and 4 of the LCPPO provide as follows: “Section: 3 Freedom of speech and debate There shall be freedom of speech and debate in the Council or proceedings before a committee, and such freedom of speech and debate shall not be liable to be questioned in any court or place outside the Council. Section: 4 Immunity from legal proceedings No civil or criminal proceedings shall be instituted against any member for words spoken before, or written in a report to, the Council or a committee, or by reason of any matter brought by him therein by petition, Bill, resolution, motion or otherwise.” (emphasis added) 86. In its proper context and read together with BL104, the plain and ordinary meaning of the word “statements” used in BL77 is to mean statements made by a LegCo member in the course of official debates on the floor of the LegCo when exercising his powers and discharging his functions as a LegCo member. See also: A v The United Kingdom (App No 35373/97, 17 March 2003), ECHR, at paragraph 84. It cannot be seriously suggested that a member can enjoy such immunity even before he has validly assumed the office of a LegCo member, as it is only after the assumption of office that he could validly exercise his powers and functions as a LegCo member. 87. Thus, the word expressed by a LegCo member in purporting to take an oath (when he has not yet validly assumed office) cannot be properly regarded as falling within the meaning of “statements” in BL77. 88. Once understood that way, sections 3 and 4 of the LCPPO do not add anything further, as they must be read consistently with the constitutional provision of BL77. In fact, in my view, the plain words of sections 3 and 4 of the LCPPO[18] (as italicized above) make it even clearer that the immunity provided attaches only to words and speeches (spoken or written) in relation to debates in the LegCo meetings. 89. Moreover and in any event, as submitted by Mr Yu, section 73 also constitutes an alternative answer to Mr Dykes’ arguments based on the immunity provided under BL77 and sections 3 and 4 of the LCPPO. 90. By granting jurisdiction to the court to adjudicate proceedings brought under section 73, LegCo members must have regarded to have consented to subject themselves to the court’s jurisdiction in circumstances where someone who has been disqualified as LegCo member but continues to act as such. Thus, even if (which I disagree) the word “statements” used in BL77 and the phrases “speeches and debates” and “words” used respectively in sections 3 and 4 of the LCPPO were intended to cover the reading out of the LegCo Oath in the process of taking an oath, the court would still have jurisdiction and power to look into them in a section 73 proceedings to determine the question of whether someone has been disqualified as a member of the LegCo under section 21 of the ODO or otherwise. 91. I therefore also reject this ground of opposition. D3. Section 21 of the ODO does not operate automatically as a matter of law 92. Finally, Mr Pun argues that on a proper construction of section 21(a) of the ODO, even if a person has declined or neglected to take the LegCo Oath as prescribed and that he “shall” vacate the office as a member of the LegCo, the vacating of the office does not operate automatically as a matter of law as contended for by the SJ and the CE. This is so because the provision is phrased in active voice in that the person “shall vacate” the office, instead of passive voice such as that the person “shall be vacated from his office”. Mr Pun therefore submits that although the person must vacate the office, it can only take effect either by the person resigning under section 14(1) of the LCO[19] or, if he fails to do so, by the President exercising his power under BL73(1) or (7) to declare that person to be disqualified. 93. There are no merits in this argument. 94. In light of the use of the word “shall”, Mr Pun accepts, as he must, that once the condition of “decline or neglect” under section 21 of the ODO is established, the legal effect intended in section 21 is that the person must vacate the office or be disqualified from entering on it, with the clear intended inevitable consequence that he cannot continue to act as a member of the LegCo. In the premises, I see no basis at all (let alone any reasonable basis) to construe section 21 to require any further intervening steps to be taken to achieve that inevitable effect and result. 95. Further, as pointed out by Mr Yu, a LegCo member who tenders a resignation under section 14(1) of the LCO is entitled to specify in the resignation notice the date upon which he intends the resignation to take effect. See: section 14(3)(b).[20] In other words, if Mr Pun’s above submissions are correct, it would be entirely up to the disqualified member to decide when he would effectively vacate the office by resigning. That cannot be consistent with the above objective meaning of section 21 of the ODO. 96. BL79(1) and (7) provide as follows: “Article 79 The President of the Legislative Council of the Hong Kong Special Administrative Region shall declare that a member of the Council is no longer qualified for the office under any of the following circumstances: (1) When he or she loses the ability to discharge his or her duties as a result of serious illness or other reasons; … (7) When he or she is censured for misbehaviour or breach of oath by a vote of two-thirds of the members of the Legislative Council present.” 97. It is plain that BL79(1) provides for the situation where the President shall declare a LegCo member to be disqualified when the member is either physically or mentally unable to discharge his duties as a member. This is supported by the Chinese version of BL79(1), which states: “因嚴重疾病或其他情況無力履行職務”, in particular the words “無力履行職務”. The plain and ordinary meaning of these words refers to the circumstances where, although it is open to the member concerned to carry out the duties, he is unable to do so. This does not cover the circumstances where the member is mandated to vacate his office under section 21 of the ODO, and hence it is no longer open to the member to carry out the duties as a LegCo member. 98. BL73(7) similarly does not cover a section 21 circumstance as it is again plain that the a person who declines or neglects to take the LegCo Oath cannot be regarded as to be “in breach of the oath”. 99. The word “misbehaviour” (“行為不檢”) under BL73(3) also cannot be objectively intended to cover the conduct of intentionally refusing or failing to take the LegCo Oath. It is so as, given the context that such “misbehaviour” has to be “censured” for by two-thirds of the LegCo members before the President could declare the member to be disqualified: (1) It objectively makes no logical or common sense to require such a procedure of censure to disqualify someone from being a LegCo member when he or she is not even capable of assuming the office given BL104. (2) It would be up to the other LegCo members to decide whether this would happen, which is by no means certain. This again cannot be and is clearly inconsistent with the above objective intention of section 21 of the ODO. 100. In the premises, on a proper construction of section 21 of the ODO, a LegCo member who has already entered on the office but declined or neglected to take the LegCo Oath shall, by the operation of law, be regarded as having vacated his office. Similarly, the LegCo member will be as a matter of law disqualified from entering that office if he has not entered on it. This does not require any further steps to be taken by that person himself, the President or any other person. D4. The CE’s locus 101. Finally, it has been raised by Mr Leung and Ms Yau that the CE has no locus to bring either the judicial review or HCMP 2819/2016. 102. Mr Yu however submits that the CE clearly has a locus to bring these proceedings given his constitutional role and duty under BL48(2). 103. Under BL48(2) provides as follows: “Article 48 The Chief Executive of the Hong Kong Special Administrative Region shall exercise the following powers and functions: (1) … (2) To be responsible for the implementation of this Law and other laws which, in accordance with this Law, apply in the Hong Kong Special Administrative Region; …” 104. Thus, under BL48(2), the CE has a constitutional role and duty to implement the BL and other laws of the Hong Kong Special Administrative Region. 105. Given this constitutional role, I agree with Mr Yu that the CE has a proper locus to bring these proceedings to implement BL104 and the relevant provisions of the ODO and to ensure that they are complied with. In this respect, it must be noted that the action brought under HCMP 2819/2016 is not premised only on a section 73 cause of action. 106. I therefore also reject Mr Leung and Ms Yau’s contention on locus. D5. Conclusion under Mr Leung and Ms Yau’s grounds of opposition 107. For all the above reasons, I do not accept any of the grounds of opposition advanced by Mr Leung and Ms Yau. 108. Thus, as a matter of law under BL104 and section 21 of the ODO, they shall be regarded as having already vacated their office in declining to take the LegCo Oath in form and in substance on 12 October 2016.[21] Their respective office as a member of the LegCo has become vacant. E. THE PRESIDENT’S ARGUMENTS 109. As mentioned above, the President’s only objection in these proceedings is that he should not be joined as the respondent in the judicial review application and as a defendant in HCMP 2819/2016. 110. The principal arguments advanced by Mr Jat SC for the President are these: (1) The President’s Decision is in nature not a substantive decision determining whether Mr Leung and Ms Yau declined or neglected to take the LegCo Oath on 12 October 2016 and whether therefore they had vacated their office as a LegCo member. It is also not a substantive decision to say whether the re-taking of the oath again by them, if it is to proceed, would be a valid one. The President has simply not yet made any decisions of substance. The President’s Decision is therefore simply a procedural one, allowing Mr Leung and Ms Yau to seek to procedurally retake the oath, which is by itself not amenable to judicial review. There is no extant substantive decision that is amenable to judicial review. The judicial review should be dismissed. (2) Insofar as the HCMP 2819/2016 is concerned, the substantive reliefs sought therein are only against Ms Yau and Mr Leung (as the 1st and 2nd defendants). There are no reliefs sought against the President (who has been joined as the 3rd defendant). However, there is nothing to suggest that there is a likelihood that the President would not abide by the decision of and the reliefs granted by the court under this action. In the premises, there are no reasons and basis for the CE and the SJ to join the President as one of the defendants in HCMP 2819/2016. 111. I do not accept the President’s submissions. 112. I agree with Mr Yu that in making the President’s Decision, the President impliedly has decided that Mr Leung and Ms Yau did not decline or neglect to take the LegCo Oath on 12 October 2016 and thus shall not be regarded as having disqualified under section 21 of the ODO to continue to act as a LegCo member. This is so since there would be no practical and useful purpose to be served to allow them to re-take the oath in another occasion if the President has not already effectively come to the view under the President’s Decision that they have not been so disqualified. Whether or not they already declined or neglected to take the LegCo Oath on 12 October 2016 should not be dependent on how they would take the oath again on a subsequent occasion. If they declined or neglected to take the LegCo Oath on 12 October 2016, as a matter of law, they shall be regarded as having vacated their office or been disqualified from that. There is no question that they can do it again as a member of the LegCo. 113. In the premises, I am satisfied that the President’s Decision is amenable to judicial review, and the President has been properly joined as a respondent. 114. Given my above conclusion that in law Mr Leung and Ms Yau should be regarded as having already vacated their office as a member of the LegCo on 12 October 2016 in declining or neglecting to take the LegCo Oath, I agree with Mr Yu that the President had misdirected himself on the law in making the President’s Decision. On that basis, I would quash the President’s Decision. 115. In relation to HCMP 2819/2016, given the President’s Decision and its effect as explained above, I am similarly satisfied that it is reasonable and necessary for the CE and the SJ to join the President as the 3rd defendant to ensure that he would be bound by the ruling in that case. F. SUPPLEMENTAL SUBMISSIONS RELATING TO THE INTERPRETATION 116. As the Interpretation was issued by the NPCSC on 7 November 2016 after the hearing of the present proceedings, the court subsequently directed the parties to provide supplemental written submissions, if they so wished, on the effect of the Interpretation relevant to the present cases or arguments already advanced by the parties. The parties provided their written supplemental submissions on 10 November 2016. 117. The CE and the SJ submit in their supplemental submissions that the Interpretation is binding on this court. 118. However, Mr Yu for the CE and the SJ emphasises in their supplemental written submissions that the Interpretation does not affect their original submissions made to this court on the proper purposive construction of BL104 and sections 16, 19 and 21 of the ODO insofar as the time and manner of oath-taking and the consequences of declining to take the oath are concerned (which have been accepted by this court above in paragraphs 24 - 36 and 92 - 100 above). 119. In this respect, it must be noted, as this court has repeatedly emphasised above, Mr Leung and Ms Yau have not advanced any arguments by way of submissions or evidence seeking to rebut the applicants’ submissions on the proper meaning and effects of BL104 and the provisions in the ODO, construed independently of the Interpretation.[22] They have also not advanced any submissions or evidence to say that they did not decline or neglect to take the LegCo Oath falling within the meaning of section 21. Their principal grounds of opposition raised in these cases based on the non-intervention principle and the immunity also have nothing to do with, and thus would not be affected in any material way by, the Interpretation. 120. Thus, I agree with Mr Yu’s submissions that the outcome of this case as regards Mr Leung and Ms Yau is the same with or without referring to the terms of the Interpretation. 121. Insofar as Mr Leung and Ms Yau are concerned, their supplemental submissions also say that the Interpretation does not affect and has no impact on their arguments raised under the non-intervention and the immunity grounds. This is correct. I have for the above reasons rejected these grounds without reference to or relying on the Interpretation. 122. Mr Leung and Ms Yau in their supplemental submissions further raise two main observations concerning the Interpretation itself. 123. First, Mr Pun for Mr Leung submits that paragraph (4) of the Interpretation supports his submissions that the person administering the oath is the final arbiter to determine the taken oath’s validity and compliance with BL104 and the ODO, hence also in support of his submissions under the non-intervention principle. I have rejected this submission above in paragraph 70. 124. Second, Mr Dykes for Ms Yau submits that, construed in the eyes of common law, the Interpretation goes further than merely as an interpretation of the meaning of BL104 and thus amounts to effectively a legislative act to amend BL104. As such, it is not made in compliance with BL158 and thus not binding on this court. In any event, given that it is effectively an amendment, it also has no retrospective effect under common law. 125. Given my acceptance of the CE and the SJ’s above submissions that the court would reach the same above conclusion for reasons I have explained above with or without referring to the terms of the Interpretation, this submission is irrelevant to the present proceedings and it is unnecessary for me to determine it. I however think that it may be open to arguments that whether the Interpretation falls within the proper meaning and scope of “interpretation” as intended under BL158 is a final matter for the NPCSC, given that the NPCSC has the ultimate power to interpret the BL. However, since this issue has not been argued substantively before me, I would refrain from saying anything further. 126. Finally, the President accepts that the Interpretation is binding on this court but also submits that it does not affect their submissions that the President should not be joined in these proceedings. For the reasons stated above, I have already rejected those submissions. 127. The President further asks this court to clarify the date from which the vacation or disqualification took effect if the court shall declare that Mr Leung or Ms Yau have vacated their office or disqualified from taking office. 128. In my view, given the plain meaning of section 21 of the ODO, the vacation took effect from the time when Mr Leung and Ms Yau declined to take the LegCo Oath when requested to do so. That would be 12 October 2016. 129. This is also consistent with BL104 and the Interpretation. Under BL104 and the Interpretation, a person can only “assume the office” of a LegCo member after he has validly taken the LegCo Oath, but would be disqualified from “assuming” the office after he has intentionally declined to take the LegCo Oath. Insofar as the present cases are concerned, Mr Leung and Ms Yau could only seek to “assume office” on 12 October 2016 when they purported to take the LegCo Oath. As they declined to take the LegCo Oath on that day, they have thus been disqualified from assuming the office since that day. G. DISPOSITIONS 130. For all the above reasons, the CE and the SJ succeed in the judicial review and HCMP 2819/2019. I would grant the following reliefs:[23] (1) Under HCMP 2819/2016: (a) A declaration that the oaths that Mr Leung and Ms Yau purported to take on 12 October 2016 contravened BL104 and/or sections 16(d) and 19(a) and Schedule 2 of the ODO and are invalid and void and have no legal effect as an oath of a member of the LegCo required by BL104 and as a LegCo Oath required by the ODO. (b) Further: (i) a declaration that the Mr Leung and Ms Yau have been disqualified from assuming the office of a member of the LegCo, and have vacated the same since 12 October 2016, and are not entitled to act as a member of the LegCo; (ii) an injunction restraining Mr Leung and Ms Yau from acting as a member of the LegCo; (iii) a declaration under section 73 of the LCO that Mr Leung and Ms Yau claimed to be entitled to act and/or acted as a member of the LegCo while disqualified from acting in that office since 12 October 2016; and (iv) an injunction under section 73 of the LCO to restrain Mr Leung and Ms Yau from claiming to be entitled and/or acting as a member of the LegCo. (2) Under the judicial review: (a) A declaration that the President has no power to re-administer or allow for re-administration of any further oath(s) to be taken by Mr Leung and Ms Yau under section 19 of the ODO on the basis that Mr Leung and Ms Yau have already vacated the office as a member of the LegCo, and are not entitled to act as a member of the LegCo. (b) A declaration that the office of member of the LegCo previously occupied by each of Mr Leung and Ms Yau is now vacant. (c) An order of certiorari to quash the President’s Decision. (d) An injunction that the President be restrained from administering or allowing to be administered the making of oaths of Mr Leung and Ms Yau under section 19 of the ODO. 131. Finally, I make an order nisi that costs of these applications be to the CE and the SJ, to be taxed if not agreed, with certificate for three counsel. Given the limited scope of the opposition raised by the President in these proceedings, the President shall bear one-fifth of the applicants’ costs, while Mr Leung and Ms Yau shall bear four-fifth of the costs. 132. Lastly, I must thank counsel for their helpful assistance in these matters. High Court Mr Benjamin Yu SC, Mr Johnny Mok SC, Mr Jimmy Ma and Mr Jenkin Suen, instructed by Department of Justice, for the 1st and 2nd applicants in HCAL 185/2016 and the 1st and 2nd plaintiffs in HCMP 2819/2016 Mr Jat Sew-tong SC and Mr Anthony Chan, instructed by Lo and Lo, for the respondent in HCAL 185/2016 and the 3rd defendant in HCMP 2819/2016 Mr Hectar Pun SC and Mr Anson Wong Yu-yat, instructed by Ho Tse Wai and Partners, for the 1st interested party in HCAL 185/2016 and the 2nd defendant in HCMP 2819/2016 Mr Philip J Dykes SC and Mr Jeffrey Tam, instructed by Khoo & Co, for the 2nd interested party in HCAL 185/2016 and the 1st defendant in HCMP 2819/2016 [1] The applicants also sought on the evening of 18 October 2016 urgent interim injunctions to restrain the President from allowing Mr Leung and Ms Yau to proceed to re-take the oath, and to also restrain them from proceeding to do so. I refused to grant the interim injunctions after hearing the parties for the reasons now recorded in the written decision dated 18 October 2016. [2] It has been held in Leung Kwok Hung v Clerk to the Legislative Council (HCAL 112/2004, 6 October 2004, Hartmann J) at paragraph 22 that the phrase “in accordance with the law” under BL104 refers to the legal requirements provided in the relevant provisions of the ODO. [3] See: T v Commissioner of Police (2014) 17 HKCFAR 593, at paragraphs 4 and 48; Vallejos v Commissioner of Registration (2013) 16 HKCFAR 45 at paragraphs 75 - 77; Town Planning Board v Society for the Protection of the Harbour Ltd (2004) 7 HKCFAR 1 at 13I-J. [4] As submitted by the CE and the SJ, similar constitutional requirement to swear an oath of allegiance to the sovereign and/or the constitution exists in other jurisdictions like the, Australia, Canada and New Zealand. In the UK, members of both Houses of Parliament are required by section 3 of the Parliamentary Oaths Act 1866 to swear an oath of allegiance to the Queen. [5] See: The New Shorter Oxford Dictionary. [6] See: Jowitt’s Dictionary of English Law (4th Edn). [7] See: the circular paper issued by the Clerk to the LegCo on 20 September 2016; circular paper issued by the Clerk dated 7 October 2016 reminding members to take the oath in the form and manner as prescribed by ODO; circular paper dated 11 October 2016 issued by the Clerk once again reminding members to take the LegCo Oath in the form and manner prescribed by the ODO; on 12 October 2016, they were requested by the Clerk to walk up to the table at the centre of the LegCo Chamber to take the Legislative Council Oath in accordance with the pre-determined order (see Affirmation of Wong Hwa Yih filed in HCMP 2819/2016 at paragraph 7); while Mr Leung and Ms Yau were at the centre table, the Clerk orally requested and reminded them to take the Legislative Council Oath in accordance with the statutory form of words. [8] See: paragraphs 11 - 12 of the Affirmation of Wong Hwa Yih in HCMP 2819/2016, paragraphs 10 - 11 of the Affirmation of Wong Hwa Yih in HCAL 185/2016 and paragraph 20 of the 2nd Affirmation of Rosanna Law in HCMP 2819/2016. [9] See: paragraph 13 of the Affirmation of Wong Hwa Yih in HCMP 2819/2016 and paragraph 12 of the Affirmation of Wong Hwa Yih in HCAL 185/2016 [10] See: paragraphs 14 - 19 of Affirmation of Rosanna Law. [11] See: a public statement (“嚴正聲明”) jointly published by a group of scholars and workers in the field of history, culture and education in various newspapers on 18 October 2016, exhibited as “WHY-7” to the Affirmation of Wong Hwa Yih in HCMP 2819/2016. [12] See: paragraphs 8 - 10 of the Affirmation of Wong Hwa Yih in HCMP 2819/2016; paragraphs 7 - 9 of the Affirmation of Wong Hwa Yih in HCAL 185/2016. [13] See also AG v Bradlaugh, supra, at 701 - 702, 719. [14] See also Sir Anthony Mason’s extra-judicial views in “The place of comparative law in developing the jurisprudence on the rule of law and human rights in Hong Kong” (2007) HKLJ299 at 304 - 305, where it is expressed that, given the obvious differences in the meaning and constitutional model of the doctrine of separation of powers between UK and other common law jurisdictions with a written constitution, such as Australia, Canada and the Untied States, “judicial decisions on the separation of powers need to be treated with great care before they can be imported from one jurisdiction to another. This proposition has significance for Hong Kong… It would not follow that the Basic Law, when construed in the light of its context and the preservation of the English common law by Article 8 of the Basic Law, necessarily mandates a separation of powers that confirms either to the United States or Australian model.” [15] Subject to BL158 where the power of interpretation of the BL is vested in the NPCSC, where the Hong Kong courts have been authorised by the NPCSC to interpret the BL when adjudicating cases. [16] Cf: AG v Bradlaugh, supra, is in relation to a statutory action brought under the Parliamentary Oath Act 1866 by the Attorney General against Mr Bradlaugh as a member of parliament for a statutory penalty for an offence in voting and setting in any debate of the Parliament “without having made and subscribed” to the parliamentary oath in the form as required under the Parliamentary Oath Act 1868. Although the 1866 Act only gives the AG the right to bring an action against such a member to recover the penalty, in determining whether Mr Bradlaugh was liable for the penalty, and notwithstanding the non-intervention principle as considered in the earlier related case of Gossett,the court had to and did determine the underlying necessary question as to whether Mr Bradlaugh as an antitheist could validly take and subscribe to the oath. [17] There is no question that Mr Leung and Ms Yau did purport to act or claim to be entitled to continue to act as a LegCo member. See: Affirmation of Law Shuk Pui Rosanna filed under HCMP 2819/2016, at paragraphs 29 - 31. Further, the fact that they sought to proceed to take the oath again after the President’s Decision must also amount to their acting or claiming to be entitled to act as a LegCo member. [18] The Chinese version of section 4 of LCPPO is even clearer in this meaning. It states “不得因任何議員曾在立法會或任何委員會席前發表言論，或在提交立法會或委員會的報告書中發表的言論，或因他曾以呈請書、條例草案、決議、動議或其他方式提出的事項而對他提起民事或刑事法律程序。”. [19] Section 14(1) of the LCO provides “A Member may, at any time, resign from office as a Member by giving written notice of resignation to the Clerk to the Legislative Council.” [20] Section 14(3)(b) of the LCO provides “ A notice of resignation takes effect – (a) …; or (b) if a later date is specified in the notice, on that later date.” [21] In light of sections 4 and 13(1) of the LCO, the CE and the SJ in these proceedings proceed primarily on the basis that Mr Leung and Ms Yau, for the purpose of section 21 of the ODO, had entered on their respective office of a member of the LegCo by the time when they purported to take the LegCo Oath on 12 October 2016. No one has submitted or argued otherwise in these proceedings. The court would therefore also proceed on that basis. However, to avoid any doubts, it must be noted that, to be consistent with BL104, the meaning of “entered on the office” in section 21 of the ODO, and the meaning of “having accepted office” under section 13(1) of the LCO should not be treated as the same meaning of “assuming office” under BL104. [22] Save as to Mr Pun’s contention that section 21of the ODO does not operate automatically as a matter of law to vacate a member’s office after the member has declined or neglected to take the LegCo Oath. A contention I have rejected at paragraphs 92 - 100 above. [23] For completeness, I would also grant leave to the CE and the SJ (a) to amend respectively the Form 86 and the Originating Summons in the form of the draft attached to the respective summons issued under HCMP 2819/2016 and HCAL 185/2016 both dated 24 October 2016; and (b) to file and rely on the 2nd Affirmation of Law Shuk Pui Rosanna affirmed on 27 October 2016 in both actions. All these have been considered at the hearing on an debene esse basis. The proposed amendments and the further evidence are clearly relevant to the present proceedings and do not cause any real prejudice to the respondents. No real objections have been taken by the respondents. The costs of all these summonses shall be in the cause. |
Chief Justice Ma: 1. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Ribeiro PJ: 2. At the hearing, the Court dismissed this appeal with reasons to follow. These are my reasons. 3. The District Court Ordinance (“DCO”)[1] gives a limited right of appeal from decisions of the District Court in civil cases. Section 63(1)[2] provides that such appeals can only proceed with leave of a judge or the Court of Appeal. By section 63A(2),[3] such leave shall not be granted unless the appeal has a reasonable prospect of success or there is some other reason in the interests of justice for hearing the appeal. And section 63B[4] provides that no appeal lies from the Court of Appeal’s decision to refuse (or grant) leave. 4. The appellant seeks to challenge the constitutionality of section 63B in respect of a refusal of leave, contending that it is inconsistent with Article 82 of the Basic Law which materially states: “The power of final adjudication of the Hong Kong Special Administrative Region shall be vested in the Court of Final Appeal of the Region...” A. How the issue arises 5. The appellant is the owner of a shop on the ground floor of Po Hang Building, of which the respondent is the Incorporated Owners’ corporation (“IO”). The appellant erected a metal fence and door enclosing a service lane running adjacent to the building and forming a portion of its common parts. The IO brought proceedings against the appellant in the District Court alleging breach of the Deed of Mutual Covenant (to which the appellant is a party)[5] and seeking mandatory injunctions requiring the fence and door to be removed and the lane reinstated. 6. The appellant failed to file a defence in time, leading to the IO’s application for judgment in default. This was met by the appellant’s application for an extension of time to file its defence and counterclaim, contending that the IO’s claim was defeated by limitation and that the appellant had acquired title to the service lane by adverse possession. 7. His Honour Judge Kent Yee[6] refused the appellant leave to file its pleadings out of time and entered judgment in favour of the IO. He held that on the relevant authorities,[7] the defence of adverse possession was not reasonably arguable because breach of the DMC remained actionable by the IO notwithstanding the appellant’s purported acquisition of a possessory title. 8. The appellant then applied to his Honour for a stay of execution and for leave to appeal to the Court of Appeal. That application was dismissed[8] on the basis that an appeal had no reasonable prospect of success and there was no other reason why the appeal should be heard in the interests of justice. 9. The appellant next applied to the Court of Appeal for leave to appeal against the Judge’s decision refusing leave to file out of time and entering judgment in the IO’s favour. This was dealt with on the papers and Chu JA, writing for the Court,[9] held that the threshold criteria for granting leave to appeal were not made out and refused leave. The application was renewed at an oral hearing[10] but the Court of Appeal remained unpersuaded that the appellant’s case was reasonably arguable. 10. The appellant proceeded to seek the Court of Appeal’s leave to appeal to this Court against that Court’s refusal to grant the appellant leave to appeal to itself against Judge Kent Yee’s decision. As Lam VP (giving the judgment of the Court) pointed out,[11] given the finality provision in DCO section 63B, this was on its face an incompetent application. However, the appellant sought to contend that section 63B is inconsistent with Article 82 of the Basic Law and thus unconstitutional. Applying an earlier Court of Appeal decision[12] and the reasoning of the Appeal Committee in HLF v MTC,[13] Lam VP upheld the constitutionality of section 63B as a proportionate restriction and dismissed the application. 11. Leave to appeal to this Court was sought from the Appeal Committee[14] on both the constitutionality and adverse possession issues. It granted leave only on the following questions: (1) Is s 63B of the District Court Ordinance, Cap 336 inconsistent with Article 82 of the Basic Law of the Hong Kong Special Administrative Region and thus unconstitutional? (2) Does the CFA have jurisdiction to entertain an appeal from a judgment of the CA refusing leave to appeal to it? The application seeking to raise issues regarding adverse possession and advanced on the “or otherwise” basis was adjourned until after determination of the aforesaid questions. B. The effect of Article 82 12. In most cases, constitutional challenges are founded on an applicant’s claim that his or her constitutional rights have been violated. Thus, the analysis usually begins by identifying the constitutional rights engaged.[15] However, this approach is inapplicable in the present case. This is because Article 82 of the Basic Law operates to vest the power of final adjudication in the Court of Final Appeal. It does not confer on parties to litigation any constitutional right of appeal to the final court. As Li CJ pointed out: “... it is obvious that the intent of the Basic Law was not to give every party to every dispute a right to have the dispute resolved by final adjudication by the Court. By its very nature, the Court's power of final adjudication vested by art.82 calls for and indeed requires regulation, which may include limitation. Such limitation is permitted by implication, having regard to the nature of the power. It may be dealt with by the enactment of statutes by the legislature or it may be dealt with by rules of court made by the rules committee exercising subordinate legislative powers.”[16] 13. Article 83 reflects this by providing that “the structure, powers and functions of the courts of the Hong Kong Special Administrative Region at all levels shall be prescribed by law”. 14. However, any restrictions on rights of appeal (eg, by finality provisions confining appeals to intermediate courts) have a limiting effect upon the Court’s constitutional power of final adjudication and cannot be arbitrarily imposed. As was held in Solicitor v Law Society:[17] “... The limitation imposed must pursue a legitimate purpose and there must be reasonable proportionality between the limitation and the purpose sought to be achieved. ... it is the duty of the courts to review any legislation enacted which seeks to impose any limitation on the power of final adjudication vested in the Court by art.82 and to consider whether the limitation satisfies the proportionality test.” 15. This approach is well-established and was endorsed by the Court in Mok Charles v Tam Wai Ho.[18] To apply it in the present case, one must first ascertain precisely what (if any) restriction the legislature has enacted affecting the Court’s constitutional function of final adjudication. This requires the relevant provisions to be construed. C. Construction of the statutory provisions C.1 The appellant’s argument 16. The appellant seeks to argue that on the true construction of the relevant statutory measures, the finality provision in DCO section 63B does not take effect: “... as a matter of statutory construction, a Refusal of Leave, being a ‘decision’ or ‘order’ of the CA, is a ‘judgment’ as defined by s.19 of the Hong Kong Court of Final Appeal Ordinance, Cap 484... , and is therefore within the jurisdiction of the CFA by virtue of s.22(1)(b) of the HKCFAO ...; and thus BL82 is not engaged.”[19] 17. The argument runs as follows: (a) Section 22(1)(b) of the Court’s statute (the “HKCFAO”)[20] confers a discretionary jurisdiction on the Court of Final Appeal to hear appeals in the following terms: “An appeal shall lie to the Court ... at the discretion of the Court of Appeal or the Court, from any judgment of the Court of Appeal in any civil cause or matter, whether final or interlocutory, if, in the opinion of the Court of Appeal or the Court, as the case may be, the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to the Court for decision...” (b) HKCFAO section 19 provides: “In this Part, unless the context otherwise requires ... ‘judgment’ includes decree, order or decision...” (c) DCO section 63B purports to exclude appeals “from a decision of the Court of Appeal as to whether or not leave to appeal to it should be granted.” (d) But such a “decision” comes squarely within HKCFAO section 22(1)(b) read together with section 19, and therefore is a decision falling within the Court’s discretionary jurisdiction, notwithstanding what DCO section 63B says. 18. This argument involves two main propositions: (i) that section 63B is inconsistent with section 22(1)(b); and (ii) that section 22(1)(b) is the controlling provision which trumps section 63B. If it is accepted, then the first question on which leave was given does not arise and the second question must be answered “Yes”. I am, however, unable to accept this argument. C.2 Later law prevails 19. Assuming, for present purposes, that section 63B is inconsistent with sections 19 and 22(1)(b) read together, it does not follow that section 63B is overridden by the latter sections. 20. The scope of the Court’s discretionary jurisdiction was established by sections 19 and 22(1)(b) upon their enactment in HKCFAO on 1 July 1997. The DCO amendments came later, enacted on 5 February 2008.[21] They include section 63(1), laying down the requirement for leave to appeal to the Court of Appeal, replacing an earlier provision; and adding section 63B which excludes any appeal from a decision of the Court of Appeal on the grant or refusal of leave to appeal. Those amendments thus expressly exclude that class of “decision” by the Court of Appeal from the ambit of section 22(1)(b). 21. There is no basis for thinking that section 63B has no effect. In so far as it cannot be reconciled with section 22(1)(b), the rule is that the earlier provisions give way to the later. Bennion states the principle as follows: “Where a later enactment does not expressly repeal an earlier enactment which it has power to override, but the provisions of the later enactment are contrary to those of the earlier, the later by implication repeals the earlier in accordance with the maxim leges posteriores priores contrarias abrogant (later laws abrogate earlier contrary laws).”[22] 22. It follows that section 63B is not somehow trumped by section 22(1)(b) but (subject to its constitutional validity) operates as a finality provision qualifying the latter section. It is true that section 22(1)(b) was amended in 2014.[23] That was, however, a minor amendment to reflect abolition of appeals to this Court as of right.[24] It merely substituted “any judgment” for “any other judgment” since there was no longer a separate class of judgment entitling the parties to appeal as of right. The 2014 amendment is not in any way inconsistent with section 63B and does not impliedly override or qualify that section. C.3 The reasoning in Lane v Esdaile 23. Quite apart from the lex posterior rule, a line of authority beginning with Lane v Esdaile[25] leads compellingly to the conclusion that sections 63(1), 63A(2) and 63B read together should be construed as investing with finality a decision of the Court of Appeal refusing leave to appeal to itself from a first instance judgment of the District Court. 24. Lane v Esdaile was concerned with a rule of court which relevantly provided that no appeal lay to the Court of Appeal after the expiration of one year without special leave of the Court of Appeal.[26] After a tortuous procedural history, the appellants sought leave to appeal against the order of Kay J at first instance made some three years earlier. The Court of Appeal refused leave.[27] The appellants applied to the House of Lords for leave to appeal against such refusal, relying on a statutory provision which stated: “... an appeal shall lie to the House of Lords from any order or judgment of … [the] Court of Appeal”,[28] arguing that refusal of leave was such an “order or judgment”. 25. The House of Lords held that on a purposive construction of the provisions, given the requirement to obtain the Court of Appeal’s leave to appeal from the first instance judgment, that Court’s refusal of leave was final and there was no jurisdiction to entertain the appeal. Lord Halsbury LC stated: “... when I look not only at the language used, but at the substance and meaning of the provision, it seems to me that to give an appeal in this case would defeat the whole object and purview of the order or rule itself, because it is obvious that what was there intended by the Legislature was that there should be in some form or other a power to stop an appeal—that there should not be an appeal unless some particular body pointed out by the statute... [that is, the Court of Appeal[29] ], should permit that an appeal should be given.”[30] 26. His Lordship pointed out[31] that the rule was “intended as a check to unnecessary or frivolous appeals” and held that allowing an appeal from a refusal of leave to appeal would render the leave requirement “absolutely illusory”. Lord Bramwell held that if a refusal of leave could be called an “order” at all, “it is not such an order as it was intended by the Statute of 1876 should be appealable”.[32] As Lord Macnaghten put it: “... according to the true construction of the Judicature Act and Orders, the Court of Appeal are constituted the sole and final judges of the question whether an appeal to them should or should not be admitted when the proposed appellant has allowed the prescribed period to elapse, and therefore that there can be no appeal from the grant or refusal of that indulgence.”[33] 27. The House of Lords’ decision was succinctly summarised a year later by Lord Esher MR in Ex p Stevenson[34] who stated: “...the very nature of the thing really concludes the question; for, if, where a legal authority has power to decide whether leave to appeal shall be given or refused, there can be an appeal from that decision, the result is an absurdity, and the provision is made of no effect.” 28. As Lord Dyson MR pointed out in Sarfraz v Disclosure and Barring Service,[35] the reasoning of Lane v Esdaile has repeatedly been applied for more than 100 years. Thus, giving the advice of the Privy Council, Lord Hoffmann explained Lane v Esdaile’s approach to construction as follows: “Their Lordships consider that the principle in [Lane v Esdaile as explained in Ex parte Stevenson], is that a provision requiring the leave of a court to appeal will by necessary intendment exclude an appeal against the grant or refusal of leave, notwithstanding the general language of a statutory right of appeal against decisions of that court. This construction is based upon the ‘nature of the thing’ and the absurdity of allowing an appeal against a decision under a provision designed to limit the right of appeal.”[36] 29. The aforesaid approach was adopted by the Appeal Committee in HLF v MTC,[37] where the Court of Appeal had refused to give the applicant leave to appeal (required by DCO section 63) against ancillary relief orders made at first instance in matrimonial proceedings. The Court of Appeal also refused leave to appeal to this Court against its aforesaid decision, prompting the applicant to apply to the Appeal Committee for leave to appeal. DCO section 63B had not yet been enacted, so that no express finality provision was in existence. Just as in the House of Lords in Lane v Esdaile, the question was whether, given the requirement for leave to appeal laid down by section 63(1) and the Court of Appeal’s refusal of leave, “an application for leave to appeal to the Court of Final Appeal against the refusal by the Court of Appeal to give leave to appeal from a District Court judgment to itself [could] be entertained.”[38] 30. Adopting the reasoning in Lane v Esdaile, and noting that no constitutional challenge was being mounted, the Appeal Committee concluded that no appeal lay to this Court. In so holding, I stated: “Where the Court of Appeal refuses leave to appeal, it declines to hear the appeal at all and no judgment of that court, whether final or interlocutory, comes into being. Therefore no appeal lies under s.22 to the Court of Final Appeal ...”[39] It would have been preferable to state (as their Lordships did in Lane v Esdaile) that “no appealable judgment” comes into being. 31. In my view, the approach to construction in Lane v Esdaile is entirely apt in the present case. Not only does the DCO (by section 63(1)) lay down a requirement of obtaining the Court of Appeal’s leave to appeal from the first instance judgment, section 63B expressly provides for finality where such leave is refused. It is thus unnecessary in the present case to imply a finality provision by a process of purposive construction. Sections 63(1), 63A(2) and 63B are plainly intended, inter alia, to enable the Court of Appeal to filter out unnecessary, unmeritorious or frivolous would-be appeals. For this Court to entertain an appeal against the Court of Appeal’s refusal of leave to appeal to itself would be to render those sections illusory and would result in absurdity. Such a construction of HKCFAO section 22(1)(b) cannot have been intended. 32. For the foregoing reasons, I conclude that on its true construction, DCO section 63B operates as a finality provision excluding appeals to this Court against a refusal by the Court of Appeal to grant leave to appeal from a decision of a District Judge. I turn then to the question whether such a finality provision is constitutionally valid. D. Constitutional validity - Proportionality 33. A finality provision which prevents a class of cases from reaching the Court of Final Appeal limits the Court’s exercise of the power of final adjudication vested in it by Article 82 of the Basic Law. The combined effect of DCO sections 63(1), 63A(2) and 63B is to create such a limitation. It is a constraint which has to be justified on a proportionality analysis, as held in Solicitor v Law Society and Mok Charles.[40] 34. This Court’s approach to proportionality was recently reviewed in Hysan Development Co Ltd v Town Planning Board.[41] In summary, the proportionality test in the present case requires the limitation on this Court’s function of final adjudication (i) to pursue a legitimate aim; (ii) to be rationally connected to advancing that aim; (iii) to be no more than is necessary to accomplish that aim;[42] and (iv) to strike a fair balance between the general interest and any individual rights intruded upon. D.1 Steps (i) and (ii): Legitimate aims and rational connection 35. In identifying the aim of the restriction with a view to considering its legitimacy and the rationality of the measures adopted to achieve it, section 63B should not be viewed in isolation. The statutory purpose emerges from the scheme created by sections 63(1), 63A(2) and 63B in the context of other relevant provisions of the DCO.[43] 36. The scheme has two broad aims. First, in line with the Lane v Esdaile line of authorities, by having the Court of Appeal screen out cases which have no reasonable prospects of success on appeal, it promotes the proper and efficient use of judicial resources and the avoidance of oppressive and unproductive appeals. It avoids the squandering of resources by the Court of Appeal or this Court on hearing appeals which cannot be expected materially to benefit either party, merely causing delays to others in the queue waiting for suitable appeals to be dealt with. By filtering out unfit cases, the scheme aims to enable this Court to play its proper role. As Li CJ pointed out in Solicitor v Law Society:[44] “The limitations serve a legitimate purpose namely, to prevent the Court at the apex of the judicial system from being unduly burdened with appeals so as to enable it to focus on appeals, the judgments on which will be of importance to the legal system.” 37. Secondly, in the context of a court of limited jurisdiction, the statutory scheme aims to maintain reasonable proportionality between litigation costs and the amounts at stake by restricting the available tiers of appeal. 38. The aim of economic proportionality in litigation is generally recognized. Thus, the Rules of the District Court state as two of their underlying objectives, promotion of “a sense of reasonable proportion and procedural economy in the conduct of proceedings” and ensuring “that the resources of the Court are distributed fairly.”[45] As part of the scheme for regulating appeals, the DCO empowers the Judge or the Court of Appeal to subject grant of leave to appeal “to such conditions as ... [they consider] necessary in order to secure the just, expeditious and economical disposal of the appeal.”[46] It should be noted in this context that the District Court’s general civil jurisdiction is limited to claims which do not exceed $1 million.[47] 39. The statutory restrictions seek to avoid the kind of situation that arose in Piglowska v Piglowski,[48] where the modest amount of a couple’s joint matrimonial assets in issue was wholly exceeded by the costs of successive appeals. Lord Hoffmann described the situation as follows: “... there is the principle of proportionality between the amount at stake and the legal resources of the parties and the community which it is appropriate to spend on resolving the dispute. In a case such as the present, the legal system provides for the possibility of three successive appeals from the decision at first instance. The first is as of right and the second and third are subject to screening processes which themselves may involve more than one stage. If one includes applications for leave, the facts of this case, by the time it reached the Court of Appeal, had been considered by five differently constituted tribunals. This cannot be right. To allow successive appeals in the hope of producing an answer which accords with perfect justice is to kill the parties with kindness.”[49] His Lordship added: “... even if a case does raise an important point of practice or principle, the Court of Appeal should consider carefully whether it is fair to have it decided at the expense of parties with very limited resources or whether it should wait for a more suitable vehicle.”[50] 40. Similar points were made in Hong Kong Housing Society and Secretary for Justice v Wong Nai Chung,[51] and in HLF v MTC.[52] 41. It is plain that the two broad aims discussed above are legitimate aims and that the restriction of rights of appeal by sections 63(1), 63A(2) and 63B is rationally connected to their achievement. D.2 Step (iii): No more than necessary 42. Two main arguments have been advanced on the appellant’s behalf to contend that the finality provision in the present case goes disproportionately beyond what is necessary. 43. The first is the suggestion that section 63B imposes an absolute ban so that, in line with this Court’s decisions in Solicitor v Law Society of Hong Kong[53] and Mok Charles v Tam Wai Ho,[54] it ought to be held to fail the proportionality test. That argument must be rejected. 44. In Solicitor v Law Society, the restriction contained in section 13(1) of the Legal Practitioners Ordinance[55] as it then stood was indeed absolute. It provided that an appeal would lie from the Solicitors Disciplinary Tribunal to the Court of Appeal and that “the decision of the Court of Appeal on any such appeal shall be final”.[56] As Li CJ pointed out,[57] the exclusion of further appeals was absolute and precluded any appeal to this Court even if the discretionary criteria under HKCFAO section 22(1)(b) were satisfied. That total ban was held to be disproportionate: “... s.22(1)(b) permits an appeal from the Court of Appeal only in narrowly defined circumstances: where the question is one which should be submitted to the Court by reason of its great general or public importance, or otherwise. The total ban imposed by the finality provision where questions of this order of importance arise cannot, in my view, be said to be reasonably proportionate to any legitimate purpose which may underlie the finality provision.”[58] 45. The same is true of the restriction imposed by section 67(3) of the Legislative Council Ordinance (“LCO”)[59] as it stood when its proportionality was examined in Mok Charles v Tam Wai Ho. That section provided that at the end of the trial of an election petition in the Court of First Instance, that Court: “... must certify the determination of the Court in writing. ... The determination as certified is final as to the matters at issue concerning the election petition.”[60] 46. Section 14(3)(c) of the High Court Ordinance[61] provides that no appeal shall lie to the Court of Appeal “from a judgment or order of the Court of First Instance, where it is provided by any Ordinance or by rules of court that the same is to be final”. Thus, the effect of section 14(3)(c) in combination with LCO section 67(3) was to exclude appeals from decisions of the Court of First Instance regarding election petitions. As was the case in Solicitor v Law Society, that provision was absolute, there having been no mechanism to vet the arguability or importance of any potential appeal. It was held to be a disproportionate restriction and thus constitutionality invalid. 47. Ma CJ stated: “... it is important to understand the nature of the restriction contained in s.67(3). That provision not merely restricts an appeal, it actually eliminates it: under no circumstances can an appeal be launched.”[62] His Lordship added: “... s.67(3) goes much further than is necessary to deal with the said aim of speedy determination in election petitions. ... the nature of the restriction is absolute: there is simply no avenue of appeal, however much in error the Court of First Instance may have been. Further, the following point was raised by Sir Anthony Mason NPJ in the course of submissions that, for my part, has considerable significance: it is perhaps easy to see the possibility of points of constitutional importance being raised in the course of an election petition and yet the effect of a provision such as s.67(3) is that no appellate court (and in particular the Court of Final Appeal) will have an opportunity to deal with them.”[63] 48. In the present case, the DCO provisions limiting the right of appeal plainly do not erect a total ban on appeals. The Court of Appeal is entrusted with vetting the prospects of a potential appeal and enjoined to refuse leave unless the criteria specified in section 63A(2) are met. Conversely, if the application relates to an appeal which does have a reasonable prospect of success or in respect of which there is some other reason in the interests of justice for hearing the appeal, the Court of Appeal may be expected to grant leave. If leave is granted and the appeal is determined, the parties could, if so advised, apply for leave to appeal to this Court. If the section 22(1)(b) criteria are satisfied, leave could be expected to be granted and the final appeal duly heard by the Court in the exercise of its power of final adjudication. 49. The appellant’s second argument takes objection to the fact that it is the Court of Appeal rather than the Court of Final Appeal itself which decides what cases should be excluded as having no reasonable prospects of appeal. It argues that this Court has its own filtering rules comprising HKCFAO section 22(1)(b) and rule 7 of its Rules[64] which the Court ought itself to operate in the exercise of its power of final adjudication. The contention is that allocating the screening process to the Court of Appeal in itself constitutes an unnecessary and disproportionate restraint on the Court’s power of final adjudication. 50. Mr Martin Lee SC[65] went so far as to argue that any rule which permits any case (save for decisions of a purely interlocutory nature) to be screened out as unfit for appeal by an intermediate court would constitute a disproportionate derogation from the Court’s power of final adjudication. He did not shrink from the logic of this argument and made the extravagant submission that the Court of Final Appeal, by its Appeal Committee, was bound to vet for itself every application for leave to appeal, including applications originating in decisions of tribunals like the Small Claims Tribunal. 51. That argument involves a complete departure from the proportionality analysis. The DCO’s restriction of the Court’s power of final adjudication by assigning the filtering process to the Court of Appeal is the starting-point in the proportionality analysis, raising questions as to the aims, rationality and proportionality of that measure. It is not, as Mr Lee SC submitted, the end of the inquiry, in itself justifying a conclusion of unconstitutionality. 52. The appellant’s argument thus ignores or loses sight of the legitimate aims identified above as the first step of the analysis, namely, the aims of promoting the proper use of judicial resources, the proper role of the Court of Final Appeal and economic proportionality in litigation. And in extending the argument to cover applications for leave to appeal from all judicial tribunals, it ignores other important legitimate aims. For example, rules which limit rights of appeal from tribunals like the Small Claims and Labour Tribunals are aimed in part at fostering an equality of arms between parties such as well-resourced employers or businesses on the one hand and employees and consumers with modest means on the other. Such rules seek to provide a cheap and quick means of resolving small claims. Access to justice afforded by such tribunals would be wholly undermined if a well-resourced litigant were able to drag poorer opponents up successive appellate levels all the way to this Court’s Appeal Committee, requiring unaffordable costs to be incurred and greatly delaying resolution of their claims. 53. Mr Lee SC’s argument fails to address the crucial question at step (iii), that is, whether the relevant statutory measures go beyond what is reasonably necessary to accomplish the legitimate aims identified. It fails in particular to examine that question with regard to the legitimate aim of preventing the apex Court from being unduly burdened with appeals so as to enable it to concentrate on appeals of importance to the entire legal system. The appellant’s contention that all applications for leave to appeal should be allowed to proceed unrestricted from the courts or tribunals below to be adjudicated upon by this Court necessitates abandonment of that aim. The appellant’s objection to the appellate process being halted at the level of the Court of Appeal is thus not an argument about the proportionality of the statutory measures designed to achieve the aforesaid aim but an argument which disavows that legitimate aim itself. It misapprehends the issue at the core of the proportionality analysis. D.3 Step (iv) the overall balance 54. The fourth step in the proportionality analysis is not of direct significance in the present case. No individual constitutional rights are infringed. The filtering mechanism, while a restriction on the Court’s power of final adjudication, is beneficial since it screens out unfit applications for leave to appeal, helping to ensure that the Court of Final Appeal is able to exercise that power effectively. It is in the general interest to avoid the waste of judicial resources and to promote economy in litigation. It is beneficial both to the parties and to the courts that appeals which have no reasonable prospects of success should not be allowed to proceed. E. Conclusion 55. For the aforesaid reasons, I conclude that the restrictions in question do not go beyond what is reasonably necessary for the achievement of the legitimate aims identified. They are proportionate and constitutionally valid limitations on the Court’s power of final adjudication. The questions on which leave was given should therefore be answered in the negative. The appeal was accordingly dismissed and the appellant ordered to pay the respondent’s costs.[66] It follows that restoring the adjourned aspects of the leave application would serve no purpose. Mr Justice Tang PJ: 56. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Fok PJ: 57. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Gleeson NPJ: 58. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Martin Lee SC, Ms Queenie Ng and Mr Lee Siu Him, instructed by K. H. Lam & Co., for the Defendant (Appellant) Mr Lawrence Ng, instructed by Lam & Partners, for the Plaintiff (Respondent) Mr Wong Yan Lung SC, instructed by the Department of Justice, and Mr William Liu SGC, of that Department, for the Intervener (Intervener) [1] Cap 336. [2] Section 63(1): “Subject to subsection (3) [presently not relevant], an appeal can, with leave of a judge or the Court of Appeal, be made to the Court of Appeal from every judgment, order or decision of a judge in any civil cause or matter.” [3] Section 63A(2): “Leave to appeal shall not be granted unless the judge ... or the Court of Appeal hearing the application for leave is satisfied that (a) the appeal has a reasonable prospect of success; or (b) there is some other reason in the interests of justice why the appeal should be heard.” [4] Section 63B: “No appeal lies from a decision of the Court of Appeal as to whether or not leave to appeal to it should be granted.” [5] As well as breach of section 34I(1) and (2) of the Building Management Ordinance (Cap 344). [6] DCCJ 2259/2013 (23 December 2013). [7] Incorporated Owners of Man Hong Apartments v Kwong Yuk Ching [2001] 3 HKC 116; Incorporated Owners of No 27A Chatham Road, Kowloon v Lee Kai Kong [2001-2003] HKCLRT 273; Incorporated Owners of Mountain View Mansion v Heart Cuisine and Ors. [2012] 4 HKLRD 628; and Wong King Lim v Incorporated Owners of Peony House [2013] 4 HKC 295. [8] DCCJ 2259/2013 (7 February 2014), §§23-24. [9] Lam VP and Chu JA, HCMP 415/2014 (6 August 2015), §32. [10] Lam VP and Chu JA, HCMP 415/2014 (18 September 2015), referred to in the Court of Appeal’s judgment dated 8 April 2016. [11] Hon Cheung CJHC, Lam VP and Chu JA, HCMP 415/2014 (8 April 2016) at §3. [12] Hong Kong Housing Society and Secretary for Justice v Wong Nai Chung HCMP 880/2009 (unreported, 22 September 2010) (CA). [13] (2004) 7 HKCFAR 167. [14] Ma CJ, Tang and Fok PJJ, FAMV No 21 of 2016 (19 August 2016). [15] See Catholic Diocese of Hong Kong v Secretary for Justice (2011) 14 HKCFAR 754 at §65. [16] Solicitor v Law Society of Hong Kong (2003) 6 HKCFAR 570 at §30. [17] At §§31-32. [18] (2010) 13 HKCFAR 762 at §§21-29, per Ma CJ. [19] Appellant’s Case §9 (Emphasis in the original). [20] Hong Kong Court of Final Appeal Ordinance (Cap 484). [21] As part of the Civil Justice (Miscellaneous Amendments) Ordinance (Ord No 3 of 2008). [22] Oliver Jones, Bennion on Statutory Interpretation,6th Ed (Lexis Nexis, 2013), p 279. The qualification stated in the text regarding the maxim generalia secialibus non derogant (a general provision does not derogate from a special one) is not applicable. [23] Administration of Justice (Miscellaneous Provisions) Ordinance 2014, section 8(2). [24] By section 8(1). [25] [1891] AC 210. [26] Order LVIII r 15. [27] (1889) 40 Ch D 520. [28] Appellate Jurisdiction Act 1876, section 3. [29] See 213. [30] At 211-212. [31] At 212. [32] At 213. Lord Herschell took the same view (at 214). [33] At 215-216. “... the Legislature intended that the matter should not go beyond the Court of Appeal, and therefore they have used the words that leave is to be given ...” per Lord Field at 216. [34] Re Housing of the Working Classes Act 1890 Ex p Stevenson [1892] 1 QB 609 (CA) at 611. [35] [2015] 1 WLR 4441 (CA) at §25. [36] Kemper Reinsurance Co v Minister of Finance (Bermuda) [2000] 1 AC 1 (PC) at 13. [37] (2004) 7 HKCFAR 167. Followed by the Appeal Committee in Lau Luen Hung Thomas v Insider Dealing Tribunal (2009) 12 HKCFAR 955 at §5. [38] At §15. [39] At §23. [40] Discussed in Section B above. [41] (2016) 19 HKCFAR 372 in Sections E, F and G of the judgment. [42] This is not a case in which the “manifestly without reasonable foundation” standard should be applied, as discussed in the Hysan case at Section G of that judgment. [43] In particular DCO sections 32 and 63A(1)(b) and Order 1A r 1(c) and (d) of the Rules of the District Court discussed below. [44] At §36. [45] RDC Order 1A r 1(c) and (f). [46] DCO section 63A(1)(b). [47] DCO section 32. [48] [1999] 1 WLR 1360 (HL). [49] At 1373. [50] At 1373-1374. [51] HCMP 880/2009 (unreported, 22 September 2010) (CA) at §§25 and 31. [52] (2004) 7 HKCFAR 167 at §26. [53] (2003) 6 HKCFAR 570. [54] (2010) 13 HKCFAR 762. [55] Cap 159. [56] (2003) 6 HKCFAR 570 at §5. [57] Ibid at §39. [58] Ibid at §40. [59] Cap 542. [60] (2010) 13 HKCFAR 762 at §14(7). [61] Cap 4. [62] (2010) 13 HKCFAR 762 at §52. [63] Ibid at §§61-62. The Court also noted that no such finality provision existed in respect of the elections under the Chief Executive Election Ordinance (Cap 569). [64] Hong Kong Court of Final Appeal Rules (Cap. 484A) Rule 7 provides for disposal of leave applications on the papers: “(1) Where the Registrar is of the opinion either on the application of the Respondent or of his own motion that an application discloses no reasonable grounds for leave to appeal, or is frivolous or fails to comply with these Rules, he may issue a summons to the applicant calling upon him to show cause before the Appeal Committee why the application should not be dismissed. (2) The Appeal Committee may, after considering the matter, order that the application be dismissed or give such other directions as the justice of the case may require.” [65] Appearing with Ms Queenie Ng and Mr Lee Siu Him for the appellant. [66] It was agreed that there would be no order as to the Intervener’s costs. |
The Court: A. Introduction 1. These appeals were against sentences imposed by the Court of Appeal following a review of sentence pursuant to section 81A of the Criminal Procedure Ordinance.[1] This Court has recently considered the Court of Appeal’s powers on, and the proper approach to, such a review of sentence in Secretary for Justice v Wong Chi Fung (“Wong Chi Fung”)[2]and, as will be seen, the Court’s judgment in that case governs the disposition of these appeals. 2. The appellants in these appeals were convicted of the offence of unlawful assembly in the circumstances described below. As will be seen, it was, on any view, a violent incident. Upon conviction, the appellants were sentenced by the magistrate to community service orders. The Secretary for Justice applied to review those sentences on the basis that they were wrong in principle or manifestly inadequate. The Court of Appeal acceded to the Secretary for Justice’s application and substituted sentences of imprisonment in respect of each of the appellants. 3. The appellants sought leave to appeal against the sentences imposed by the Court of Appeal upon review of the magistrate’s original sentences. In the light of Wong Chi Fung (CFA), the points of law sought to be raised by way of appeal had already been answered and so leave to appeal to this Court was granted by the Appeal Committee on the limited basis described below. 4. At the conclusion of the hearing, indicating that we would hand down our reasons for doing so in due course, the Court allowed the appeals and made orders in respect of each of the appellants, substituting, for the Court of Appeal’s sentences of imprisonment, sentences of imprisonment corresponding to the period of time already served in prison by each. These are the Court’s reasons for allowing the appeals and making the orders we did. B. The offences and proceedings below B.1 The unlawful assembly 5. The facts out of which the appellants’ convictions arose have already been the subject of a previous appeal to this Court (FACC 5/2017) on a discrete point of law.[3] 6. To re-state the facts briefly, on 13 June 2014, about 300 to 400 protesters objecting to development works in the North East New Territories New Development areas were engaged in a demonstration outside the Legislative Council (“LegCo”) Chamber at a designated demonstration area. At that time, LegCo’s Finance Committee was in session to discuss a funding application relating to advanced works at the development areas. At around 8.45pm that day, protesters in the demonstration area started to rush towards the entrances of the LegCo building in an attempt to gain entry through the glass doors. These doors, in front of which Mills barriers had been set up, had been locked to prevent unauthorised entry. The protesters started to pull away the Mills barriers and to use them, as well as bamboo poles and metal bars, which were wielded with considerable violence, to try to force their way into the LegCo complex by prising open or battering the doors. The situation was sufficiently serious to cause the President of LegCo to request police assistance to maintain the order and safety of the LegCo complex. The police had to use riot shields and pepper-spray to prevent the protesters from gaining entry to LegCo. The break-in attempt, which was recorded on CCTV footage, was sustained, involved “hundreds of demonstrators”[4] and lasted for nearly half an hour. As a result, damage was caused to a number of LegCo facilities, costing over HK$400,000 to repair. One of the security officers was injured by a falling Mills barrier and sustained broken toes, for which he was granted 85 days’ sick leave. 7. The acts of each of the appellants were summarised in tabular form in paragraph [26] of the judgment of the Court of Appeal, which we set out below: B.2 The proceedings before the magistrate 8. Each of the appellants was charged with unlawful assembly, contrary to section 18(3) of the Public Order Ordinance[5] based on the facts summarised above (Charge 1). Based on the same facts, they were also each charged with attempted forcible entry, contrary to section 23(1) of the Public Order Ordinance and section 159G of the Crimes Ordinance[6] (Charge 2). The 1st and 2nd appellants were each additionally charged with a further offence of obstructing an officer of the Legislative Council in the execution of his duty, contrary to section 19(b) of the Legislative Council (Powers and Privileges) Ordinance[7] (Charges 3 and 4 respectively).[8] 9. The 12th appellant pleaded guilty to Charges 1 and 2, whilst the charges against the other appellants proceeded to trial at the Eastern Magistrates’ Court.[9] After a trial lasting 13 days, on 30 December 2015, the magistrate found the appellants guilty of Charge 1 and not guilty of Charge 2.[10] 10. On 19 February 2016, the magistrate sentenced the appellants on their convictions in respect of Charge 1: the 1st to 9th and 11th appellants were sentenced to 120 hours of community service[11] and the 10th and 13th appellants were sentenced to 150 hours of community service; the 12th appellant, having pleaded guilty, was sentenced to 80 hours of community service.[12] Of relevance to one of the issues in these appeals is the fact that the 5th and 6th appellants were both under the age of 21 as at the date of the unlawful assembly and the 6th appellant was also under 21 as at the dates of conviction and sentence by the magistrate.[13] B.3 The review of sentence by the Court of Appeal 11. The Secretary for Justice was dissatisfied with the sentences imposed and applied for leave to appeal to the Court of Appeal for a review of those sentences pursuant to section 81A of the Criminal Procedure Ordinance. The procedural course of the application was somewhat convoluted. On 11 March 2016, Cheung CJHC granted such leave but the review could not proceed for the time being because, on 2 March 2016, the 1st to 3rd, 6th and 13th appellants had appealed to the Court of First Instance against their convictions.[14] 12. On 25 January 2017, Albert Wong J dismissed the appeals against conviction. This led to an application by the 1st and 2nd appellants for a certificate of points of law in order to seek leave to appeal to this Court. On 23 February 2017, Wong J refused that application and so, on 6 April 2017, the Court of Appeal directed that the review of sentence should be heard on 21 June 2017.[15] On that date, however, the hearing of the review as a whole was adjourned, since the 1st and 2nd appellants had applied to this Court, on 16 June 2017, for leave to appeal against their convictions and so the review of their sentences could not, in any event, proceed.[16] 13. On 10 August 2017, the Appeal Committee granted leave to the 1st appellant to appeal against his conviction on Charge 3[17] but dismissed his and the 2nd appellants’ applications for leave to appeal against their convictions on Charge 1. At that point, the review of sentence in respect of Charge 1 could proceed against all the appellants as a whole and so, on 14 August 2017, the hearing before the Court of Appeal resumed.[18] 14. At the conclusion of the hearing of the review of sentence on 15 August 2017, the Court of Appeal allowed the Secretary for Justice’s application, set aside the community service orders that had been imposed by the magistrate and substituted, for them, (i) in respect of Charge 1, on the 1st to 11th and 13th appellants, 13 months’ imprisonment, and (ii) in respect of both Charges 1 and 2, on the 12th appellant, 8 months’ imprisonment for each offence, to run concurrently. The Court of Appeal subsequently handed down its Reasons for Judgment (“CA Reasons”) on 11 September 2017. 15. It is relevant to note that, shortly prior to the hearing of this review of sentence on 15 August 2017, the same division of the Court of Appeal heard the review of sentence in Wong Chi Fung on 9 August 2017,[19] at the conclusion of which judgment was reserved. The Court of Appeal handed down its reserved judgment in Wong Chi Fung on 17 August 2017 (“Wong Chi Fung (CA)”) by which it increased the sentences of the three appellants in that case. 16. In paragraph [67] of the printed case for the 2nd and 6th appellants, it was submitted that the Court of Appeal failed to take into account that almost 18 months (from 19 February 2016 to 15 August 2017) had passed between the dates of sentence and review. As the above chronology shows, however, the review could not proceed until after the dismissal on 10 August 2017 of the 1st and 2nd appellants’ applications to the Appeal Committee for leave to appeal against their convictions. So the hiatus during the period from 11 March 2016 until 10 August 2017 was effectively the result of the statutory bar on the review proceeding pending an appeal against conviction. Since those appeals, which were consistently held to be unmeritorious, were instituted by the appellants themselves, the submission that there was undue harshness to them in the imposition of custodial sentences so long after their original sentences were imposed is a point of little merit. B.4 The application for leave to appeal to this Court 17. The 13 appellants all applied to the Court of Appeal for certification of various questions of law for the purpose of an application for leave to appeal to this Court. Before that application was resolved by the Court of Appeal, the Appeal Committee granted leave to appeal in Wong Chi Fung on 7 November 2017.[20] 18. In the light of that grant of leave by the Appeal Committee, the Court of Appeal certified, by its judgment dated 14 November 2017 (“CA Certification Judgment”),that four questions of great and general importance were involved in the proposed appeal. They were of the view that these four questions were the same as issues (1), (2) and (3) for which leave to appeal had been granted by the Appeal Committee in Wong Chi Fung.[21] 19. By its Determination dated 21 March 2018, after judgment in Wong Chi Fung was handed down by this Court, the Appeal Committee granted leave to appeal to this Court on a limited basis, stating: “2. We grant leave to appeal to each of the applicants confined to the ground that it is reasonably arguable that substantial and grave injustice has been done to the applicants by reason of the Court of Appeal’s departure from the principle that an offender is to be sentenced on the existing or prevailing guideline or tariff of sentence existing at the time of the commission of the offence. 3. We also grant leave to appeal to the 5th and 6th applicants on the additional ground that it is reasonably arguable that substantial and grave injustice has been done to them by reason of the Court of Appeal’s failure properly to consider section 109A of the Criminal Procedure Ordinance. 4. We are otherwise satisfied that the four questions of law certified by the Court of Appeal have already been fully answered in the Court’s judgment in Secretary for Justice v Wong Chi Fung & Others and, in the circumstances, we therefore refuse leave to appeal in respect of those questions. 5. We also refuse leave to appeal on the various other grounds advanced in support of the application under the substantial and grave injustice limb since they lack sufficient merit.” B.5 The appellants’ status as at the date of these appeals 20. It is material to note that, immediately following the review of sentence in the Court of Appeal, each of the appellants commenced their sentences of imprisonment on 15 August 2017 and served part of their sentences until granted bail by a single permanent judge of this Court. For convenience, the following table sets out, in respect of each appellant, (a) the length of sentence imposed, (b) the date on which they commenced their sentence, (c) the date on which each was granted bail and (d) the period of imprisonment served: * The 13th appellant was found to be in breach of the community service order imposed on him and so, on 15 December 2016, his original sentence was substituted with a sentence of imprisonment of 3 weeks which he served. It is therefore necessary to add, in respect of his time served, an additional 21 days, making a total of 3 months 30 days. C. The issues in this Court 21. In light of the limited basis on which leave to appeal to this Court was granted, there are three principal issues for determination in these appeals, namely: (1) Did the magistrate make a relevant error so as to justify the Court of Appeal exercising its jurisdiction under section 81A of the Criminal Procedure Ordinance to review the sentences of community service orders imposed by the magistrate? (2) In substituting sentences of imprisonment for the community service orders imposed by the magistrate, did the Court of Appeal retrospectively apply the Wong Chi Fung sentencing guidelines?[22] (3) Did the Court of Appeal fail properly to consider section 109A of the Criminal Procedure Ordinance in respect of the 5th appellant and/or the 6th appellant before imposing custodial sentences on them? C.1 Issue (1): Was the Court of Appeal’s jurisdiction under section 81A engaged? 22. In Section D of Wong Chi Fung (CFA), this Court addressed the jurisdiction of the Court of Appeal under section 81A of the Criminal Procedure Ordinance. We held, at [47]: “47. As the wording of section 81A shows, the grounds on which the Court of Appeal may interfere with a sentence passed by a lower court are restricted to the four grounds specified, namely that it is (i) not authorised by law, (ii) wrong in principle, (iii) manifestly excessive, or (iv) manifestly inadequate. If any of these grounds exists, the original sentence may be set aside, increased or reduced. Plainly, therefore, a review of sentence may be either advantageous or disadvantageous to the respondent to the application.” 23. In asking whether the magistrate made a relevant error so as to justify the Court of Appeal exercising its jurisdiction under section 81A of the Criminal Procedure Ordinance to review the sentences of community service orders imposed by the magistrate, the relevant inquiry is to ascertain whether the magistrate could be shown to have erred in principle or to have imposed sentences that were manifestly inadequate and “outside the ambit of appropriate sentences which would be reasonably imposed by a judge having considered all the relevant factors”. This was the basis of the Secretary for Justice’s application for review.[23] 24. The Court of Appeal analysed the magistrate’s sentencing in Section H of the CA Reasons. It rejected the argument advanced by the appellants[24] to the effect that the Court of Appeal was limited only to those facts found by the magistrate (Section H2). The Court of Appeal found (in Section H4) that the magistrate made a number of errors in law and principle. These were, in summary, as follows: (1) The magistrate erred in saying that the appellants did not use violence nor did they inflict any injuries. In so saying, the magistrate ignored the fact that the appellants intentionally and deliberately charged at and tried to force their way into the LegCo Complex by violent means.[25] (2) The magistrate failed to take into account that charging at the LegCo Complex with violence was an aggravating factor warranting more weight being given to deterrence.[26] (3) The magistrate failed to give due consideration to deterrence in accordance with applicable sentencing principles and gave unduly heavy weight to the appellants’ personal circumstances, their motive and rehabilitation. This was reflected in the magistrate’s view expressed at the initial sentencing hearing that he would not consider a deterrent sentence.[27] (4) The magistrate erred in taking the view that community service orders were appropriate despite none of the appellants (apart from the 12th appellant who pleaded guilty) showing remorse and his understanding on genuine remorse was seriously flawed.[28] (5) The magistrate’s reasoning for imposing community service orders on the 10th and 13th appellants, namely “so that they could through their act demonstrate that they were willing to shoulder legal responsibility” was thoroughly unsound.[29] (6) “All in all, the trial magistrate erred in not following the applicable approach to sentencing as explained by us above.” [30] 25. Leaving to one side points (3) and (6) in the above list for the time being, the other reasons given by the Court of Appeal for concluding that the magistrate erred in principle and imposed manifestly inadequate sentences are, in our view, sound and therefore engaged the jurisdiction of the Court of Appeal to increase the sentences on review pursuant to section 81A. 26. In Wong Chi Fung (CFA), we made it clear, in Section D.1, that the Court of Appeal is permitted, in a review of sentence, to have regard to all the evidence available to the sentencing court. It may not give different weight to relevant factors taken into account by the sentencing court unless that court has made an error in principle or imposed a manifestly inadequate sentence. But if the sentencing court has done so, then the Court of Appeal is entitled to assign a different weight to a particular relevant factor. 27. Thus, as regards point (1) above, although in his Reasons for Sentence the magistrate nominally referred to the fact that violence was involved in the unlawful assembly resulting in injuries,[31] he was wrong, as a matter of fact, in discounting that factor and, in effect, giving it no weight at all. This flies in the face of the clear evidence that the appellants were themselves violent and intentionally and deliberately charged at and tried to force their way into the LegCo complex by violent means. It is also inconsistent with the finding of injuries sustained by one of the security guards and the physical damage caused to the LegCo premises. Accordingly, as regards point (2) above, the magistrate having wrongly effectively proceeded on the footing that the appellants did not use violence, he did not give sufficient weight to the need for a deterrent sentence. 28. In Wong Chi Fung (CFA) at [122], we held that the Court of Appeal was justified in clarifying the principles on which it would be appropriate to impose a community service order and the factors to be considered in determining if an offender is genuinely remorseful. These principles and factors were set out by the Court of Appeal in Wong Chi Fung (CA) in Section H6 and especially at [140] to [141] and [147] respectively. Those principles and factors were also set out in the CA Reasons in this case at [100] and [102] in virtually the same terms. It should be noted, for the avoidance of doubt, that the Court of Appeal did not there say that genuine remorse must always be present in every case before a community service order may be imposed. Rather, the Court of Appeal was stating that, normally, one would expect genuine remorse to be present before a community service order is imposed. Obviously, there may be exceptions. 29. As regards points (4) and (5) above, in the CA Reasons at [29], the Court of Appeal recorded the stance taken by each of the appellants when the magistrate heard their preliminary mitigation on the date of conviction (30 December 2015), as follows: “(1) The 1st, 4th and 10th respondents did not have anything to say in respect of mitigation; (2) Save and except stating some basic background information, the 3rd and 5th respondents also had nothing to say in mitigation; (3) The 2nd respondent said, ‘I would say clearly to you at this moment that I do not feel any remorse’; (4) The 6th and 9th respondents indicated through their lawyers that ‘they would not have any regrets’; (5) The 7th respondent said, ‘I have no remorse for what I did on that day’; (6) The 8th respondent indicated through his lawyer that he ‘did not feel regret’; (7) Save and except stating some basic background information, the 11th respondent had no submission in mitigation; and (8) The 13th respondent told the magistrate that, if he was sentenced to imprisonment, ‘there would be serious consequences’. He also told the magistrate that the verdict of his conviction would ‘make all people angry’.” 30. The Court of Appeal also set out, at some length in Section C2 of the CA Reasons, a summary of the contents of the community service order suitability reports that were obtained in respect of the appellants and then made the following observations in respect of the magistrate’s reasons for sentence: “72. In respect of both respondents’ mitigation and indication in the Community Service Order Suitability Reports that they had no remorse, the trial magistrate considered that they should continue with their pursuit of justice or to voice for the needy and the neglected, and should not have any regrets about that, otherwise they would be shown as being unprincipled. However, he considered that the respondents should reflect on their means of resistance, so that their views could be expressed without sacrificing other people or putting them in danger. 73. The trial magistrate considered that most of the respondents did not deny their acts and were willing to accept the consequences and responsibility. That was considered to be part of the remorse. 74. The trial magistrate considered that the aggressive acts in this case were not the most serious of its kind. Having considered all the circumstances, he took the view that, although the most appropriate sentence for Charge (1) was a short term of immediate imprisonment, community service order in lieu of imprisonment was also a sentencing option. 75. In respect of the 10th and 13th respondents, although the Community Service Order Reports did not recommend that they receive community service orders, and at first, the trial magistrate also considered imposing custodial sentences, he eventually decided to give them a chance to demonstrate that they would bear the legal consequences through their action and sentenced them to 150 hours of community service. Subsequently, the 13th respondent was found to be in breach of the community service order, his sentence was substituted with an imprisonment of 3 weeks on 15 December 2016.” 31. In the circumstances, and with regard to the applicable principles regarding the relevance of genuine remorse referred to above, the lack of remorse on the part of the appellants was plainly a relevant consideration as to whether to impose a community service order rather than a sentence of imprisonment. In the present case, the absence of genuine remorse was plainly a relevant factor weighing against the imposition of community service orders in respect of the appellants. This was all the more so, in the case of the 10th and 13th appellants, who were not recommended for community service orders. We are therefore satisfied that the magistrate erred in principle in the manner set out by the Court of Appeal in points (4) and (5) above. In his Reasons for Sentence, the magistrate simply omitted to take into account the fact that the appellants were not remorseful.[32] 32. In any event, we accept the submission of the Secretary for Justice that, given the scale of the unlawful assembly and the degree of violence involved, the community service orders imposed by the magistrate in the present case were manifestly inadequate sentences for the appellants in respect of Charge 1. We are satisfied that, even disregarding the sentencing guidance laid down by the Court of Appeal in Wong Chi Fung, a custodial sentence of imprisonment was called for. In Wong Chi Fung (CFA) at [95], we gave illustrations of the range of sentences imposed for the offence of taking part in an unlawful assembly. As a review of those cases shows, unlawful assemblies involving the scale of participants and the degree of violence involved in this case generally result in sentences of imprisonment rather than community service orders. The case of The Queen v To Kwan-hang and Another[33] in which community service orders were apparently imposed[34] does not affect this conclusion: although also a case of unlawful assembly involving some violence, it is distinguishable on the facts as to the scale of violence; moreover, that decision was an appeal against conviction and the Court of Appeal did not address the question of the appropriateness of the particular sentence imposed. We are therefore satisfied that, in the present case, given the scale of the unlawful assembly and the violence deployed, the appropriate sentence was a custodial sentence rather than community service. We shall address below whether sentences of the length imposed by the Court of Appeal were appropriate but, for the purposes of the review of sentence under section 81A, we are satisfied that the Court of Appeal was entitled to substitute increased sentences in the form of sentences of imprisonment. 33. In conclusion on this issue, we consider that the Court of Appeal was right to conclude that the magistrate erred in principle and that he imposed sentences that were manifestly inadequate in the circumstances. Having reached the conclusion that the magistrate did so err and that his sentences were manifestly inadequate even by reference to the pre-Wong Chi Fung approach because they were, as contended by the Secretary for Justice, outside the ambit of appropriate sentences which would be reasonably imposed by a judge having considered all the relevant factors,[35] the Court of Appeal was entitled to exercise its discretion to review the sentences. 34. It was submitted in the printed case of the 3rd, 5th, 10th, 11th and 12th appellants[36] that the Court of Appeal is not required to exercise its discretion to increase an original sentence where it is wrong in principle unless it is also manifestly inadequate and that there was no good reason for the Secretary for Justice to apply for a review of sentence simply on the ground that the sentence is wrong in principle if it is not also manifestly inadequate.[37] We reject this submission which flies in the face of the plain language of section 81A which clearly states that the jurisdiction to review a sentence exists where any of the four grounds there set out is established. It is only necessary for one of those grounds to be established in order for the jurisdiction to be engaged: see Wong Chi Fung (CFA) at [47] and [53]. 35. It is convenient at this point of the judgment to address a number of discrete points raised by various of the appellants which the Court determined were not open to them on these appeals in view of the limited basis on which leave to appeal to this Court was granted. 36. It was submitted in Section D of the printed case for the 1st, 4th, 9th and 13th appellants,[38] that the Court of Appeal’s review of the appellants’ sentences was contrary to the principle of double jeopardy. The argument sought to be advanced was that, since the community service orders had been completed by the appellants (or, in the case of the 13th appellant, since he had already served the 3-week term of imprisonment ordered in place of community service upon his failure to perform the community service order imposed on him), the Court of Appeal’s imposition of terms of imprisonment amounted to punishing the appellants twice for the same offence, contrary to Article 11(6) of the Hong Kong Bill of Rights. 37. This point was not open to the 1st, 4th, 9th and 13th appellants to argue on this appeal for a number of reasons: (1) This point was not argued on behalf of the appellants below, as it could have been: see the CA Reasons at [81] et seq. describing the issues that were argued. (2) This point did not form the basis of any question of law sought to be certified by the Court of Appeal (or the Appeal Committee) for determination by this Court, nor the basis of any substantial and grave injustice argument in this Court: see the CA Certification Judgment at [5(1)]. (3) Question 3 raised before the Appeal Committee loosely raised the question of the court’s approach in terms of whether the CA “should take into account the fact that the original sentence has already been fully served”. That, however, is not the same as the double jeopardy point now sought to be argued. In any event, the CA’s Certification Judgment at [18] explained its reasoning (in our view, correct) for refusing to certify Question 3. (4) This argument was newly introduced into the submissions before the Appeal Committee in the submissions for these appellants before the Appeal Committee (at pp.13-17). (5) The Appeal Committee was not minded to accede to an application for leave to appeal on this ground, either as a point of law or as a basis for arguing substantial and grave injustice. 38. It was submitted that the probation officer responsible for seeing that the 1st, 4th and 9th appellants completed their community service orders satisfactorily should have suspended the order pending the hearing of the review of sentence, under section 6(1)(a) of the Community Service Orders Ordinance[39], to avoid the possibility of double punishment. This submission was also not open to the appellants since it was part and parcel of the double jeopardy argument in Section D of the printed case for the 1st, 4th, 9th and 13th appellants. However, in not addressing it, we should not be taken to accept the correctness of the submission as to the scope of section 6(1)(a). 39. In Section E.3 of the printed case of the 2nd and 6th appellants,[40] it was submitted that, when an offender’s criminal conduct was “intertwined with his exercising his fundamental rights to expression or assembly, the Court should consider if the sentence imposed is proportionate to the legitimate aim of protecting public order”. These submissions on proportionality sought to re-argue the same point that was raised before the Appeal Committee and which, including the reference to Barabanov v Russia,[41] addressed Question 2 and Question 3 for which leave to appeal was sought, the Court of Appeal having certified those questions. The Appeal Committee having refused leave to appeal in respect of those questions, it was not open to the appellants to pursue this submission. C.2 Issue (2): Did the Court of Appeal retrospectively apply the Wong Chi Fung guidelines? 40. In Wong Chi Fung (CFA), the Court addressed the approach when the Court of Appeal gives guidance for future cases in Section D.3 of its judgment. We held (at [77]) that: “77. As a reflection of the principle of legal certainty, it is settled law that the sentence for an offence should be in accordance with the practice prevailing at the time of the commission of the offence: see HKSAR v Tsoi Shu & Ors [2005] 1 HKC 51 at [39], citing R v Chan Ka Wai, CACC 530/1988, unrep., 9 May 1989 at [6]-[7].” 41. Although this Court endorsed the guidance for future cases laid down by the Court of Appeal in Wong Chi Fung, we held (at [126]) that: “126. In accordance with the principles discussed in Section D.3 above, it would not, however, have been appropriate to apply the Court of Appeal’s guidance to the appellants here. The increase in sentences intimated by the Court of Appeal represented a sentence significantly more severe than the range established by the courts’ existing sentencing practice and so, to avoid retrospectively imposing a more severe sentence based on a new sentencing guideline, the new level of sentence should not have been applied to them.” 42. The appellants contended that the Court of Appeal had, in this case, applied the guidance laid down in Wong Chi Fung (CA) and that, in accordance with the above statements of principle in Wong Chi Fung (CFA), this was a departure from an accepted norm occasioning substantial and grave injustice by (to quote the submission made in the printed case of the 7th and 8th appellants[42]): “(a) subjecting them to a substantially more severe term of imprisonment than the range of sentences existing at the time of their offences; as well as (b) denying them the protection under the principles of legal certainty and non-retroactivity.”[43] 43. Reference to points (3) and (6) of the list of points set out above (at [24]), summarising the Court of Appeal’s conclusions as to the magistrate’s errors in law and principle, demonstrates that there is substance in this complaint. 44. In referring to the “applicable sentencing principles” in point (3) (CA Reasons at [140]), the Court of Appeal did not expressly state that it was referring to the post-Wong Chi Fung principles. However, in point (6) (CA Reasons at [144]), the Court of Appeal clearly referred to the magistrate being in error “in not following the applicable approach to sentencing as explained by us above”. Read in context, we are satisfied that that must be a reference to the sentencing principles addressed in Section G1 of the CA Reasons. In that section, the Court of Appeal clearly applied the post-Wong Chi Fung principles applicable to unlawful assemblies involving violence. 45. Indeed, the following passages in the CA Reasons clearly support the contention that the Court of Appeal must have applied the new Wong Chi Fung guidelines in this case. In the CA Reasons at [87], the Court of Appeal said: “87. On 17 August 2017, this Court handed down the judgment in Wong Chi Fung & Others, CAAR 4/2016. In part H of that judgment, we expounded the legal propositions and sentencing principles applicable to unlawful assembly involving violence similar to the present case. Those propositions and principles are equally applicable here. They may be reiterated as follows.” Moreover, in Section G1 of the CA Reasons (entitled “Applicable legal propositions and sentencing principles”), at sub-section (8) (in turn entitled “Applicable sentencing principles for unlawful assembly involving violence”), the Court of Appeal set out at [106] to [108] a list of principles in virtually identical terms to those set out in Wong Chi Fung (CA) at [151] to [153]. 46. Thus, when the Court of Appeal referred in the CA Reasons at [140] to “the applicable sentencing principles” and at [144] to “the applicable approach to sentencing as explained by us above”, these are clearly, in our view, references to those passages in Wong Chi Fung (CA) we have identified in the preceding paragraph. 47. Furthermore, although we are satisfied that the Court of Appeal would have been entitled, on the existing authorities on unlawful assembly, to conclude that it was necessary in this case to impose a term of imprisonment as a deterrent sentence, we do not think (for the reasons set out in Section D below) that the starting point of 15 months’ imprisonment can be justified on the state of previous sentences imposed for this offence (see CA Reasons at [145]). None of the various earlier cases to which reference was made in Wong Chi Fung (CFA) at [95], and which represented a summary of the range of sentences previously imposed (prior to Wong Chi Fung (CA)) for that offence, approached (save for that arising in the context of the 1967 riots) a starting point of 15 months’ imprisonment. The case of HKSAR v Tai Chi Shing & Ors,[44] which involved acts described as “‘riotous’ in nature, if not a ‘riot’ by legal definition” and very similar to the facts of the present case, attracted sentences based on a starting point of 6 months’ imprisonment and therefore resulted in significantly shorter sentences than those imposed in the present case. The facts of HKSAR v Yip Po Lam,[45] involving a group of persons charging at a police cordon, resulted in a sentence of four weeks’ imprisonment suspended for 12 months. 48. Given the previous range of sentences for this offence, in arriving at the 15 month starting point here, it is reasonably clear, in our view, that the Court of Appeal must have been applying the new guidelines that it laid down (or was very shortly to lay down) in Wong Chi Fung (CA). Those principles, it will be recalled, were stated by the Court of Appeal in Wong Chi Fung (CA) “to provide guidance to the sentencing courts in the future”.[46] The Director of Public Prosecutions, Mr David Leung SC,[47] in his oral submissions on behalf of the Secretary for Justice, fairly accepted that this must have been the case. Given the chronology of the respective proceedings, when imposing the increased sentences on these appellants on 15 August 2017, the Court of Appeal would have had in mind the guidelines that it was very shortly going to hand down in its written judgment in Wong Chi Fung (CA). The relevant dates are as follows: (1) The substantive hearing of the review of sentence in this case took place on 14 and 15 August 2017. (2) That was after the hearing of the review of sentence in Wong Chi Fung, which took place on 9 August 2017, at the conclusion of which judgment was reserved. The Court of Appeal’s reserved judgment in Wong Chi Fung (CA) was handed down on 17 August 2017. (3) However, two days before that, on 15 August 2017, the Court of Appeal gave its decision in these cases and increased the sentences imposed by the magistrate. It then subsequently handed down the CA Reasons on 11 September 2017. 49. That being the case, and applying the reasoning in Section D.3 and at [126] of Wong Chi Fung (CFA), the sentences imposed by the Court of Appeal in this case were wrong in principle and the appellants’ appeals against them must be allowed. This is not on the basis that the Court of Appeal should not have interfered with the magistrate’s sentences of community service orders at all (for the reasons set out in Section C.1 above) but, rather, on the basis that, although it was justifiable for the Court of Appeal to substitute sentences of imprisonment, they should not have applied the new guidelines in Wong Chi Fung (CA) in fixing the length of the terms of imprisonment. 50. We shall address at Section D below the appropriate disposition of these appeals. C.3 Issue (3): Did the Court of Appeal fail properly to consider section 109A? 51. In Section D.4 of the judgment in Wong Chi Fung (CFA), this Court addressed the relevance of youth in sentencing and section 109A of the Criminal Procedure Ordinance. We held that the age of an offender, whether youth or advanced age, is always a relevant mitigating factor in sentencing and that the purpose of section 109A was to ensure that, save for excepted offences, the imprisonment of young persons between the ages of 16 and 21 is a sentencing measure of last resort.[48] 52. We concluded that, on its plain wording, section 109A placed a duty on a sentencing court when considering the appropriate sentence for an offender aged between 16 and 21, to obtain and consider information about the circumstances of the offender, the offence, his suitability for particular types of punishment, his character and his physical condition, to determine whether a non-custodial sentence was appropriate. Nevertheless, the requirement to obtain information was not absolute and the sentencing court could determine, without resort to obtaining information pursuant to section 109A, that the only appropriate sentence was imprisonment.[49] 53. Section 109A, it will be recalled, provides as follows: “No court shall sentence a person of or over 16 and under 21 years of age to imprisonment unless the court is of opinion that no other method of dealing with such person is appropriate; and for the purpose of determining whether any other method of dealing with any such person is appropriate the court shall obtain and consider information about the circumstances, and shall take into account any information before the court which is relevant to the character of such person and his physical and mental condition.” (Emphasis added.) 54. The two appellants in this case in respect of whom section 109A might be relevant are the 5th and 6th appellants. As noted above, the 5th appellant was born on 18 July 1994 and the 6th appellant on 30 October 1995. Therefore: (1) At the date of the offence, on 13 June 2014, the 5th appellant was aged 20 and the 6th appellant was aged 18. (2) At the date of conviction, on 30 December 2015, the 5th appellant was aged 21 and the 6th appellant was aged 20. (3) At the date of sentence by the magistrate, on 19 February 2016, the 5th appellant was aged 21 and the 6th appellant was aged 20. (4) At the date of the review of sentence by the Court of Appeal, on 15 August 2017, the 5th appellant was aged 23 and the 6th appellant was aged 21. 55. In the CA Reasons, there is no reference to section 109A at all and therefore no indication that the Court of Appeal took that section into account in respect of either the 5th appellant or the 6th appellant before increasing their respective sentences from community service orders to terms of imprisonment. Was there, therefore, a departure from an established norm giving rise to substantial and grave injustice to them? 56. The critical issue here is the date by reference to which the words “No court shall sentence a person of or over 16 and under 21 years of age to imprisonment” in section 109A is to be measured. Is this the date of offending, the date of conviction or the date of sentence? This is a question of construction of the relevant statutory language. 57. For the 5th appellant, Mr Martin Lee SC submitted that the operative date for determining whether a person is under the age of 21 for the purpose of section 109A is the date of commission of the offence. As a fallback, Mr Lee contended that, if the operative date is some later date, such as conviction or sentence, the likely sentence that the defendant would have received at the date of the offence should still be “a powerful factor” to be taken into account by the sentencing court.[50] For the 6th appellant, Mr Hectar Pun SC submitted that the relevant date for the purposes of section 109A is the date of offending, alternatively the date of conviction.[51] 58. The Director of Public Prosecutions submitted on behalf of the Secretary for Justice that “the relevant date for determining age is clearly the date of sentencing by the trial magistrate in the first instance; by the [Court of Appeal] on a sentence review; and indeed by [this Court] if it decides to sentence a person afresh”.[52] 59. For the following reasons, we conclude that the relevant date for the purposes of section 109A is the date on which a sentence of imprisonment is passed. 60. The construction of section 109A requires the Court to have regard to the language used having regard to its context and purpose. The purpose of section 109A is clearly rehabilitative in that it makes the imposition of a custodial sentence of imprisonment a last resort for a person aged between 16 and 21. This purpose is borne out by the speech of the Director of Social Welfare in moving the first reading of the bill by which section 109A was introduced into the Criminal Procedure Ordinance.[53] In that speech, he said: “The new provision follows generally a provision made in the United Kingdom Criminal Justice Act, and its simple purpose is to secure, without unduly fettering the discretion of the court, that imprisonment is used in relation to such young persons only where it is absolutely necessary to do so. We are … proposing this amendment … because we believe – and our belief is backed by experience – that it is true for Hong Kong that young offenders, involved even in serious crime, may be more effectively rescued from embarking upon a lifetime of crime if contact with hardened criminals through imprisonment is avoided, and if, in association with such curtailment of their liberty as is necessary, constructive measures are taken to help them to adjust to the requirements of society. Whether the young person is sent to a training centre or to a reformatory school, or is placed under the supervision of a probation officer his liberty is in a greater or lesser degree curtailed and it is on this basis of discipline that the constructive element of rehabilitation through training, counselling and education is founded.”[54] 61. This purpose is reflected in a passage from the judgment of Dyson LJ (as he then was) for the English Court of Appeal in R v Imran Hussain Ghafoor[55] at [31]: “… the philosophy of restricting sentencing powers in relation to young persons reflects both (a) society’s acceptance that young offenders are less responsible for their actions and therefore less culpable than adults, and (b) the recognition that, in consequence, sentencing them should place greater emphasis on rehabilitation, and less on retribution and deterrence than in the case of adults.” 62. The UK provision on which section 109A was modelled was, as noted in Wong Chi Fung (CFA) at [86], section 17(2) of the Criminal Justice Act 1948, which provided that: “No court shall impose imprisonment on a person under twenty-one years of age unless the court is of opinion that no other method of dealing with him is appropriate; and for the purpose of determining whether any other method of dealing with any such person is appropriate the court shall obtain and consider information about the circumstances, and shall take into account any information before the court which is relevant to his character and his physical and mental condition.” (Emphasis added.) 63. That provision in the UK has been superseded by subsequent legislation. Section 17(2) of the Criminal Justice Act 1948 became section 19(2) of the Powers of Criminal Courts Act 1973, which was then repealed and replaced by section 1 of the Criminal Justice Act 1982. The material part of section 1 of the Criminal Justice Act 1982[56] was replaced by section 1(3A) of the Criminal Justice Act 1982 (enacted by the Criminal Justice Act 1988)[57] and is now found in section 89(1) of the Powers of Criminal Courts (Sentencing) Act 2000.[58] Thus, it is clear that in the UK, the statutory provisions now benchmark the relevant age to the date of conviction. For that reason, reference to cases from England and Wales in respect of current legislation is of limited assistance to the construction of section 109A. 64. As a matter of language, the wording of section 109A is clear. It places a restriction on a court sentencing a person of or over 16 and under 21 years of age to imprisonment unless the court is of opinion that no other method of dealing with such person is appropriate. This refers, in our view, to a restriction by reference to the age of a defendant at the time when he is sentenced by a court. It is his remand into prison on the passing of a sentence of imprisonment that would frustrate the statutory purpose of the section of dealing with him by some other means so as to facilitate his rehabilitation and so it is the date of the imposition of that sentence that is material under section 109A. 65. This conclusion is also reinforced by reference to another relevant statutory provision of like character. Section 4 of the Training Centres Ordinance[59] provides expressly that a sentence of detention in a training centre may be possible if an offender is, in the opinion of the court, not less than 14 but under 21 years of age “on the day of his conviction”. That express reference to the date of conviction may be contrasted with the restriction, in section 109A, on sentencing a person over 16 and under 21 years of age to imprisonment. 66. Although the editors of Archbold Hong Kong 2018 state, at [5-143], that the date for determining a person’s age for the purpose of section 109A is the date of conviction, that statement is supported by reference to R v Danga,[60] a case decided by the Court of Appeal of England and Wales. That decision is, however, based on a statutory provision different to section 109A. In Danga, the relevant provision was section 1(3A) of the Criminal Justice Act 1982, as amended by the Criminal Justice Act 1988. That section was expressed in terms of a restriction on custodial orders that could be made “where a person under 21 years of age is convicted or found guilty of an offence” (emphasis added). Those italicised words plainly point to the date of conviction as the relevant date for consideration. Given the difference in the statutory language between section 1(3A) of the 1982 Act and section 109A, it is doubtful that the statement in Archbold can be supported by reference to Danga. We shall, however, return to Danga later in this judgment as it provides useful guidance as a matter of principle to the approach where an offender reaches a particular threshold age between the dates of offending, conviction and sentence. 67. Mr Pun referred to the decision of the Court of Appeal of R v Hor Wai Ming & Anor[61] as supporting his submission that the date of conviction is the relevant date for section 109A. However, the question of construction of section 109A before this Court was not before the Court of Appeal in that case. Instead, the appellants there were 15 and 16 at the date of conviction (29 September 1984) so that, when the case was before the Court of Appeal (16 January 1985), they were still clearly under the age of 21 and so the issue of the relevant date for section 109A did not arise. There is no discussion in the judgment of Kempster JA of the proper construction of section 109A and so the decision does not, in our view, assist on the issue before us. 68. Mr Lee also referred to and relied on the dissenting opinion of Lord Salmon in Baker v The Queen,[62] a Privy Council case on appeal from Jamaica concerning the construction of section 29(1) of the Juveniles Law.[63] There, the appellants had committed murder when aged 17½ but were convicted when aged 18. The majority, in an opinion delivered by Lord Diplock, concluded that the wording of sub-section (1) made it plain that the time for ascertaining whether the appellants were to be treated as juveniles was the date on which the sentence was passed and not the date of the offence. However, in a powerful dissent, Lord Salmon considered that the language of the sub-section was capable of two meanings and preferred the construction which referred to the age of the offender at the date of the offence. He considered that adopting a meaning which made a death sentence mandatory for a person who committed murder between the ages of 8 and 18 so long as he was sentenced after he reached the age of 18 would lead to “shocking and indeed barbarous results”,[64] such as where two boys of the same age committed murder but were tried and convicted on different dates so that one was sentenced before 18 but the other after. 69. Disregarding the fact that Lord Salmon’s was a lone dissenting opinion in Baker, we do not consider that case provides assistance in relation to section 109A. It concerns a case of capital punishment and that context therefore provides the basis for Lord Salmon’s dissent. It was thus a case not so much about promoting the offender’s rehabilitation as about sparing young offenders from being executed. That is simply not a concern with which we are faced in construing section 109A. We shall, however, address below the approach that courts should adopt when a defendant crosses a relevant age threshold between the dates of offending, conviction and sentence. 70. Mr Lee and Mr Pun both relied on the decision of the New Zealand Supreme Court in R v Mist,[65] in which Lord Salmon’s dissenting judgment in Baker was endorsed. That case concerned the proper construction of section 75 of the Criminal Justice Act 1985.[66] In their joint judgment, Elias CJ and Keith J wrote (at [39]): “[39] We prefer the position taken by Lord Salmon. It is supported by the considerations of fairness, predictability and due process discussed earlier. Further, as indicated, the reasons given by the majority for rejecting the argument that their interpretation was irrational and unjust, relating as they do to the Judicial Committee’s lack of familiarity with the Jamaican situation, provide a basis for distinguishing the decision. And judicial attitudes to the protection of human rights have undergone a change over the last 30 years in response to national legislative and constitutional changes and the development of international human rights law among other matters.” 71. Mr Lee and Mr Pun also relied on Article 12 of the Hong Kong Bill of Rights, which materially provides that “Nor shall a heavier penalty be imposed than the one that was applicable at the time when the criminal offence was committed.” This is in the same terms as Article 15 of the International Covenant on Civil and Political Rights and was part of the body of human rights law which led the New Zealand Supreme Court to construe section 75 of the Criminal Justice Act 1985 as requiring to be read with section 4(2) of the same act[67] and therefore as referring to the offender’s age on the date of the offence.[68] 72. We do not think that the decision in Mist provides a basis for concluding that section 109A means otherwise than what its clear wording indicates, namely that no court may sentence a person over the age of 16 but under 21 to imprisonment unless of the opinion that no other method of dealing with him is appropriate. The statutory provisions under consideration in Mist were in different terms to section 109A and clearly related the relevant age to the date of conviction. In contrast, for the purposes of section 109A, a court in Hong Kong takes the offender at his age when he appears before the court for sentence and at the time when that court might be minded to impose a sentence of imprisonment on him. 73. Similarly, we do not consider that Article 12 of the Hong Kong Bill of Rights supports the appellants’ submissions as to the construction of section 109A. The prohibition on a heavier penalty than one applicable at the time when the offence is committed is not infringed by construing the age in section 109A by reference to the date of sentence. The maximum sentence that can be imposed is that existing at the date of the offence. In the case of taking part in an unlawful assembly that maximum is 5 years’ imprisonment (if convicted on indictment) or a fine at level 2 and 3 years’ imprisonment (if summarily convicted).[69] Construing section 109A by reference to the age of the offender at the date of sentence does not increase the potential penalty for the offence. 74. We turn now to the question of the approach that courts should adopt when a defendant crosses a relevant age threshold between the dates of offending, conviction and sentence. As the Court stated in Wong Chi Fung (CFA) at [84], the age of an offender is always a relevant mitigating factor in sentencing. Where, therefore, a defendant is just under the age of 21 when he commits the offence, the fact that he has turned 21 shortly thereafter and before conviction or sentence should be taken into account by the sentencing court. As the court held in Danga: “It is, however, important to say that the broad conceptual approach of a sentencing court does not undergo a fundamental change simply because the offender passes his twenty-first birthday. If all factors were identical an offender aged 21 years and a few days is likely to receive in substance much the same punishment as one who is 20 years and 11 months, and the court will in substance take account, for instance, of the criteria of section 1(4) and (5) of the Act of 1982 for the slightly older person although not in terms strictly required by statute to do so.”[70] 75. This approach has consistently been adopted in England and Wales, in particular in relation to sentencing an offender for an historic offence prosecuted long after its commission: see, for example, R v Cuddington[71] where the fact that but for the passage of time between offence and conviction a lesser punishment would have been imposed is described as “a powerful factor” to be taken into account in sentencing. Other examples illustrating the same approach include: R v Dashwood[72] and R v Imran Hussain Ghafoor.[73] 76. For the above reasons, we conclude that, for the purposes of section 109A, it is the defendant’s age at the date of sentence that is relevant. However, if a young person has turned 21 years of age between the date of offending or conviction and the date of sentence, the fact of his youth will be a powerful factor in determining the appropriate sentence for him. All the more so should this be the case where an offender aged under 21 years of age at the date when an original sentence is imposed turns 21 before a later review of that sentence by the Court of Appeal. Although the provisions of section 109A do not strictly apply to such a person (so that the court is not strictly obliged to obtain the prescribed information), the sentence he should receive will, in most cases, be the same as if section 109A had applied to him. There will, of course, be exceptions (and this Court has already noted that section 109A may, in an appropriate case, be dispensed with)[74] but, in practical terms, this will mean that a young offender who has turned 21 by the time of sentencing should only be sent to prison as a matter of last resort and, for that purpose, the court will have to be alive to the possibility it may need to obtain reports on the young person in question. This approach reflects a wider principle that a court should have regard to common sense when sentencing a young person: see, in this context, Wong Chun Cheong v HKSAR.[75] 77. Returning to the present case, the provisions of section 109A did not, in our view, apply to the 5th appellant who was already 21 at the date of sentence by the magistrate. Nor, strictly, did they apply to the 6th appellant at the time of the passing of sentence by the Court of Appeal on the review of his sentence, since by then had reached the age of 21. However, applying the approach set out in Danga (see above), we consider that, conceptually, the Court of Appeal should have imposed sentences on the 5th and 6th appellants that were in substance much the same as those which would have been imposed on an offender who was just under 21 years of age. In practice, this means that the Court of Appeal should only have imposed sentences of imprisonment if of the opinion that there was no other appropriate means of dealing with them. Since there was no reference in the Court of Appeal’s judgment in this case to section 109A, or indeed to the fact that the 5th and 6th appellants had passed the threshold age of 21 years between the date of the offence and the review of sentence, we are satisfied that there was a departure from an established norm. 78. In view of our conclusion (in Section C.2 above) that the Court of Appeal erred in retrospectively applying the Wong Chi Fung (CA) guidelines to the appellants, the appeals must be allowed and the sentences of imprisonment imposed by the Court of Appeal set aside. For this reason, it is unnecessary to determine whether the Court of Appeal’s failure to have regard to the conceptual approach laid down in section 109A as a relevant factor in sentencing the 5th and 6th appellants is a sufficient reason on its own for allowing their appeals on the basis of substantial and grave injustice. D. The appropriate disposition of these appeals 79. In the light of our conclusions on Issues (1) and (2) above (see Sections C.1 and C.2 of this judgment), the appeals must be allowed and the sentences of imprisonment imposed by the Court of Appeal set aside. This is not, however, on the basis that the Court of Appeal should not have interfered with the magistrate’s sentences of community service orders but, rather, on the basis that, although it was justifiable for the Court of Appeal to substitute sentences of imprisonment, they should not have applied the new Wong Chi Fung (CA) guidelines in fixing the length of the terms of imprisonment. 80. Instead, having concluded that the magistrate had erred in principle and imposed manifestly inadequate sentences, it would be appropriate for the appellants to be re-sentenced on the basis of the sentencing regime for the offence of taking part in an unlawful assembly prior to the new guidelines in Wong Chi Fung (CA). 81. In Wong Chi Fung (CFA), we made the observation at [115] that the Court of Final Appeal is not a sentencing court and that the function of sentencing is primarily that of the convicting court of trial, subject to review by the Court of Appeal. That would militate in favour of a remitter to the Court of Appeal to pass the appropriate sentences. However, it is clearly within the Court’s jurisdiction to make such orders as the Court of Appeal could on the review of sentence[76] and, given the history of this case and the fact that the relevant events took place over 4 years ago, rather than subject all concerned to yet another hearing (which may even give rise to a further appeal), we took the view that the better course was for the Court to resolve the question of the appropriate sentence rather than remit the matter to the Court of Appeal. 82. For the following reasons, we concluded that we should substitute, in place of the Court of Appeal’s sentences of imprisonment, sentences of imprisonment corresponding to the period of time already served in prison by each prior to the grant of bail. 83. In arriving at this result, we took into account that sentencing is an art and not a science and that the determination of a suitable sentence for taking part in an unlawful assembly is not something that can be arrived at by the application of any formula. Previous sentences in other cases have inevitably varied because of the fact sensitive nature of the sentencing process. We refer again to the illustrations of the range of sentences for this offence set out in Wong Chi Fung (CFA) at [95]. 84. As we have already indicated (in Section C.1 above), we consider that the degree of violence involved in the present case, the number of persons involved, the duration of the unlawful assembly and the injuries and damage inflicted merited immediate custodial sentences. Having regard to the previous cases, we consider the closest factual parallel to be the case of HKSAR v Tai Chi Shing & Ors.[77] This would suggest an upper end of appropriate sentence for this offence, prior to the guidelines laid down in Wong Chi Fung (CA) of 6 months. On that basis, allowing for time off for good behaviour (approximately one-third), the maximum period of incarceration would be around 4 months for each of the appellants. 85. Since five of the appellants have served more than 4 months,[78] there is no realistic possibility they would be sentenced to a term of imprisonment that would require them to be remanded into custody again. The remaining eight appellants who have served 3 months and 9 days[79] include the 12th appellant who pleaded guilty and who should therefore only have received a sentence of no more than 4 months in any event, so he would not receive a sentence that would require him to go back to prison. The other appellants have therefore served terms of imprisonment which are less than 3 weeks’ shy of the period which would entitle them to be released (assuming an original sentence of 6 months). Since some discount should have been afforded for the fact that this was a sentence review, they should also not be sentenced to terms that would require them to return to prison. In this regard, it is relevant to note that the Secretary for Justice, in his written submissions before the Court of Appeal on the review of sentence, initially asked that court to substitute “a short custodial sentence” in place of the community service orders.[80] This request is relevant to the question of any discount that would have been afforded for the fact that the sentences were being increased on review. 86. Ordinarily, of course, the appellants having taken part in the same unlawful assembly and having been regarded by both the magistrate and Court of Appeal to be equally culpable, they could have expected to receive the same sentence. The fact that they have ultimately served different lengths of sentence simply reflects the fact that their release from prison pending this appeal occurred on different dates because of the timing of their applications for bail. E. Conclusion 87. For these reasons, the Court allowed each of these appeals and made the orders set out in paragraph [4] above. 88. We would finally just emphasise that, as Wong Chi Fung (CFA) made clear, guidance for the future was provided by the Court of Appeal in that case in respect of offences involving unlawful assembly. We reiterate the much stricter view to be taken when sentencing in this context where disorder or violence is involved. Mr Martin Lee SC and Mr Jeffrey Tam, instructed by Ho Tse Wai & Partners, assigned by the Director of Legal Aid, for the 3rd, 5th, 10th, 11th & 12th Appellants (D3, D5, D11, D12 & D14) in FACC 9, 10, 11, 12 & 13/2018 Mr Philip Dykes SC and Mr Douglas Kwok, instructed by Bond Ng Solicitors, assigned by the Director of Legal Aid, for the 1st, 4th, 9th & 13th Appellants (D1, D4, D10 & D15) in FACC 3, 5, 7 & 8/2018 Mr Hectar Pun SC and Mr Anson Wong Yu Yat, instructed by Kenneth Lam Solicitors, for the 2nd & 6th Appellants (D2 & D6) in FACC 4 & 6/2018 Mr Osmond Lam and Ms Jacquelyn Ng, instructed by Sanny Kwong & Co., for the 7th & 8th Appellants (D7 & D8) in FACC 14 & 15/2018 Mr David Leung SC, DPP, Mr Jonathan Man, SADPP, Mr Derek Lau, SPP and Ms Annie Li, PP, of the Department of Justice, for the Respondent in FACC 3-15/2018 [1] (Cap.221). [2] [2018] HKCFA 4; (2018) 21 HKCFAR 35; Judgment dated 6 February 2018 (“Wong Chi Fung (CFA)”). [3] Namely, whether a police officer carrying out duties within the precincts of LegCo is an “officer of the Council” for the purposes of the Legislative Council (Powers and Privileges) Ordinance (Cap.382): see HKSAR v Leung Hiu Yeung [2018] HKCFA 2; (2018) 21 HKCFAR 20. [4] CAAR 3/2016, Reasons for Judgment (11 September 2017) at [129(1)]. [5] (Cap.245). [6] (Cap.200). [7] (Cap.382). [8] Charge 3, of which the 1st appellant was convicted and the 2nd appellant acquitted, was the subject of the appeal in FACC 5/2017 (see FN 3 above) and it is not necessary to consider Charges 3 and 4 further. [9] In ESCC 3658/2014, before Mr Jason Wan Siu-ming. [10] Statement of Findings (“SoF”) at [36]; the magistrate concluded that, since Charge 2 was based on the same facts as Charge 1, a conviction on Charge 2 would be repetitive and unfair to the appellants. [11] The 1st appellant was also sentenced to 120 hours of community service on Charge 3, which sentence was ordered to run concurrently with the sentence on Charge 1. [12] The 12th appellant received the same sentence in respect of Charge 2, to run concurrently with his sentence on Charge 1. [13] The 5th appellant was born on 18 July 1994 and the 6th appellant was born on 30 October 1995. [14] By reason of section 81C(1)(a) of the Criminal Procedure Ordinance, the review could not proceed until the conclusion of the appeals against conviction. [15] In CAAR 3/2016, before Yeung VP, Poon and Pang JJA. [16] Again, by reason of section 81C(1)(a) of the Criminal Procedure Ordinance. [17] This was the appeal in FACC 5/2017 (see FN3 and FN7 above). [18] The review of sentence in respect of the 1st appellant’s conviction on Charge 3 was adjourned pending the judgment of this Court in FACC 5/2017. [19] In CAAR 4/2016, in which the Secretary for Justice was seeking to review sentences of community service orders imposed on the three defendants in that case. [20] In FAMC 43-55/2017 (Ma CJ, Ribeiro & Fok PJJ). [21] See Wong Chi Fung (CFA) at [43]. [22] Being the guidelines laid down by the Court of Appeal and approved by in Wong Chi Fung (CFA). [23] CA Reasons at [76]. [24] Although they were respondents in the review, we shall for consistency refer to them as the appellants in this judgment. [25] CA Reasons at [138]; in this regard, as to the facts, see also CA Reasons at [25] to [27]. [26] CA Reasons at [139]. [27] CA Reasons at [140]. [28] CA Reasons at [142]. [29] CA Reasons at [143]. [30] CA Reasons at [144]. [31] ESCC 3658/2014, Reasons for Sentence, 19 February 2016 (“RS”) at pp.3S-4R and 5O-5T. [32] RS at pp.4T-5N. [33] [1995] 1 HKCLR 251. [34] Case for the 2nd and 6th Appellants at [47(5)], referring to a newspaper report of the sentences. [35] CA Reasons at [76] to [80] recording the Secretary for Justice’s grounds of application. [36] Represented by Mr Martin Lee SC and Mr Jeffrey Tam. [37] Case for the 3rd, 5th, 10th, 11th and 12th Appellants at [32]. [38] Represented by Mr Philip Dykes SC and Mr Douglas Kwok. [39] (Cap.378). [40] Represented by Mr Hectar Pun SC and Mr Anson Wong Yu Yat. [41] An unreported decision of the European Court of Human Rights (Applications Nos. 4966/13 & 5550/15), decided on 30 January 2018 and therefore after Wong Chi Fung (CFA). [42] Represented by Mr Osmond Lam and Ms Jacquelyn Ng. [43] Case for the 7th and 8th Appellants at [26]. [44] [2016] 2 HKC 436. [45] [2014] 2 HKLRD 777. [46] Wong Chi Fung (CA) at [18]. [47] Appearing with Mr Jonathan Man, SADPP, Mr Derek Lau, SPP, and Ms Annie Li, PP. [48] Wong Chi Fung (CFA) at [84] and [86]. [49] Wong Chi Fung (CFA) at [87] to [90]. [50] 5th Appellant’s printed case at [83] and [84]. [51] 6th Appellant’s printed case at [35] to [36] and [34] respectively. [52] Printed Case for the Respondent at [63]. [53] Young Offenders (Miscellaneous Provisions) Bill 1967. [54] Hansard (1 November 1967) at p.448. [55] [2003] 1 Cr. App. R. (S.) 84, a case concerning the Powers of Criminal Courts (Sentencing) Act 2000. [56] Which referred to “Where a person under 21 years of age is convicted or found guilty of an offence …”. [57] Similarly referring to a person under 21 years of age being “convicted or found guilty of an offence”. [58] Also referring to a person “aged under 21 when convicted of the offence …”. [59] (Cap.280). Section 4(1) materially reads: “Where a person is convicted of an offence punishable with imprisonment, then if on the day of his conviction he is in the opinion of the court not less than 14 but under 21 years of age, …, the court may, in lieu of any other sentence, pass a sentence of detention in a training centre.” [60] [1992] 1 QB 476. [61] [1985] 1 HKC 30. [62] [1975] AC 774. [63] Relevantly providing: “Sentence of death shall not be pronounced on or recorded against a person under the age of 18 years, but in place thereof the court shall sentence him to be detained during Her Majesty’s pleasure, …”. [64] [1975] AC 774 at 790H. [65] [2006] 3 NZLR 145. [66] Section 75 provided that it would apply to a person who was not less than 21 years of age and who was “convicted of an offence”. [67] Section 4(2) materially provided that: “no court shall have power, on the conviction of an offender of any offence, to impose any sentence or make any order in the nature of a penalty that it could not have imposed on or made against the offender at the time of the commission of the offence, except with the offender’s consent”. [68] R v Mist [2006] 3 NZLR 145 at [5], [62], [88] and [107]. [69] See Wong Chi Fung (CFA) at [93]. [70] R v Danga [1992] 1 QB 476 at 481D-E. The restrictions in section 1(4) and (5) of the Criminal Justice Act 1982 apply to a person under 21 but not to a person over 21. [71] (1995) 16 Cr. App. R. (S.) 246 at 250. [72] (1995) 16 Cr. App. R. (S.) 733 at 736-737. [73] [2003] 1 Cr. App. R. (S.) 84 at [31]. [74] Wong Chi Fung (CFA) at [90]. [75] (2001) 4 HKCFAR 12, a case concerning a “plainly trivial” offence (participating in a lion dance in a public place without a permit) in which, by reason of the training centre order imposed by the magistrate, the appellant was exposed to the risk of detention for up to five times the statutory maximum prescribed for the offence. [76] Court of Final Appeal Ordinance (Cap.484), section 17(2). [77] [2016] 2 HKC 436. [78] The 1st, 4th, 6th, 9th and 10th appellants. [79] The 2nd, 3rd, 5th, 7th, 8th, 11th, 12th and 13th appellants. [80] CA Reasons at [80]. |
The Court: 1. The appellants were convicted of a conspiracy the alleged object of which was for the 1st appellant to engage in misconduct in public office.[1] Immediately before, and in anticipation of, his appointment to a senior public office, the 1st appellant received, from the other appellants, large payments of money. The prosecution case was that these were bribes, not in contemplation of any specific act or omission, but in order to secure an improper inclination and that, in return for the payments, the 1st appellant agreed to be or remain favourably disposed, in office, to commercial interests associated with the other appellants. The certified question[2] involves the resolution of the issue whether such an agreement is capable of answering the description of an agreement on the part of the 1st appellant to misconduct himself in the course of or in relation to his public office. The appellants contend that no relevant act of misconduct is involved. For the reasons that follow that contention fails. A. Background 2. The factual background to these appeals, helpfully set out at length in the judgment of Lunn VP in the Court of Appeal,[3] lies in the relationship between a senior public servant employed by the Government of the Hong Kong Special Administrative Region (“HKSAR”) and senior executives of a large Hong Kong property developer. For the purposes of this judgment, a summary of that background will suffice. A.1 The individuals concerned 3. Hui Si-yan Rafael (“Rafael Hui”) joined the Civil Service in 1970 and rose to become, in 1995, the Secretary for Financial Services of the HKSAR Government. He resigned from that position in 2000 and, on 7 June 2000, was appointed Managing Director of the Mandatory Provident Fund Scheme (“MPFS”) Authority for a period of four years. Although he resigned with effect from 1 January 2003, his service was extended until 14 August 2003. Having worked as a consultant in the private sector for a brief period (described below), Rafael Hui re-entered public service on 30 June 2005 and was appointed Chief Secretary of the HKSAR Government. He served as Chief Secretary from 1 July 2005 until 30 June 2007 and, as such, was an Official Member of the Executive Council (“ExCo”). Following the period of his appointment as Chief Secretary, Rafael Hui became a Non-Official Member of ExCo from 1 July 2007 to 20 January 2009. Rafael Hui was 1st defendant at trial and 1st appellant below and in this Court. 4. Sun Hung Kai Properties Limited (“SHKP”) is a major property developer and publicly listed company in Hong Kong under the control and management of members of the same family. At the time of the events in question, Kwok Ping-kwong Thomas (“Thomas Kwok”) and his brother Kwok Ping-luen Raymond (“Raymond Kwok”), were its Co-Chairmen and Managing Directors. Thomas Kwok was 2nd defendant at trial and 2nd appellant below and in this Court; Raymond Kwok was 3rd defendant at trial. 5. Chan Kui-Yuen (“Thomas Chan”) was an executive director of SHKP and was 4th defendant at trial and 3rd appellant below and in this Court. 6. Kwan Francis Hung-sang (“Francis Kwan”) was a close friend of Rafael Hui and was 5th defendant at trial and 4th appellant below and in this Court. A.2 Rafael Hui’s relationship and dealings with SHKP 7. In 2003, Rafael Hui began to work in the private sector as a consultant to SHKP and Thomas Kwok and Raymond Kwok, as well as their elder brother Walter Kwok. Subsequently, a written service agreement was entered into between a company controlled by Rafael Hui, Top Faith Enterprises Limited (“Top Faith”), and Sun Hung Kai Real Estate Agency Limited (“SHKR”) under which Top Faith would provide consultancy services and professional advice to SHKR from 1 March 2004 for two years. The agreement provided that SHKR would pay Top Faith an annual consultancy fee of HK$4.5 million and provide it with an office. Although the agreement was terminated in March 2005, the full HK$9 million for two years’ service was paid on the authorisation of Raymond Kwok. An office was provided to Top Faith in One IFC, a prime commercial building in Central owned by a company in which SHKP was a principal shareholder. Rafael Hui used this as his office and the expenses for it were paid by SHKR and Raymond Kwok and/or Thomas Kwok. 8. From 2000, a number of loans were advanced to Rafael Hui and Top Faith by Honor Finance Company Limited (“Honor Finance”), a SHKP subsidiary whose business was principally to provide mortgage loans to purchasers of properties developed by SHKP. A first loan was granted to Rafael Hui on 31 March 2000 for HK$900,000 for 38 months at prime lending rate and this was repaid in full with interest on the due date. A second loan was granted to Rafael Hui on 18 December 2001 for HK$1.5 million and this was also repaid in full with interest. A third loan was granted to Top Faith in May 2004 for HK$3 million for 12 months. Although interest was specified at 3% per month on overdue sums, this was never paid and the loan was extended annually until 2010. 9. On 14 February 2003, having previously lived in government quarters, Rafael Hui and his wife moved into two conjoined flats in SHKP’s Leighton Hill development.[4] The two flats were respectively owned by a Kwok family private company and a SHKP subsidiary. Subsequently, on 26 November 2003, two tenancy agreements in respect of the flats were executed, backdated to 1 April 2003, for a period of one year and at a monthly rental of HK$55,000. A.3 Dealings between SHKP and the MPFS Authority/the Government 10. The MPFS Authority rented substantial parts of One IFC, pursuant to three leases which all expired on 31 March 2004. One of those leases was signed by Rafael Hui as Managing Director of the MPFS Authority. At the end of 2002, FPD Savills recommended to the MPFS Authority that it should renew its existing leases at One IFC for six years after their expiration. This recommendation was endorsed by a Joint Committee of the MPFS Authority, of which Rafael Hui was a member. He did not attend the meeting at which the renewal decision was made but was circulated with the papers and a voting slip and approved the lease renewals. In contrast, the Chief Executive of the Hong Kong Monetary Authority (“HKMA”) abstained from voting due to his potential conflict by reason of the HKMA’s leasing options at Two IFC. On 10 June 2003, Rafael Hui signed the letter of acceptance on behalf of the MPFS Authority in respect of the lease renewals. 11. During the time when Rafael Hui was Chief Secretary, there were substantial commercial negotiations between SHKP and the HKSAR Government. These included negotiations relating to two major property development projects, namely the Ma Wan Park Project and the West Kowloon Cultural District (“WKCD”) Project, in which SHKP had a significant interest. In particular, as Chief Secretary, Rafael Hui was the Chairman of the Steering Committee of the WKCD Project. A.4 The HK$8.5m and HK$11.182m payments made to Rafael Hui 12. In the period between 27 and 30 June 2005, immediately before Rafael Hui took the oath of office as Chief Secretary, eight payments totalling HK$8.5 million were made into his account with the Standard Chartered Bank. These were made either directly or on the direction of Francis Kwan and came from a sum of HK$10.8 million which Francis Kwan had received, in the form of a cashier’s order, from an account in the name of Villalta, a company controlled by Thomas Chan and his family. 13. The payments of HK$8.5 million to Rafael Hui came from and were made on the ultimate directions of Thomas Kwok, who paid HK$4 million and HK$4.8 million to Thomas Chan by cheques dated 20 and 28 June 2005 respectively. 14. In the period between 21 November and 12 December 2007, payments totalling HK$10.182 million were made by Francis Kwan from his account with the Hang Seng Bank to the account of Rafael Hui with the Standard Chartered Bank. Further, on 21 November 2007, a payment of HK$1 million was made by Francis Kwan from his account with the Hang Seng Bank to the account of Top Faith. 15. The prosecution alleged that the source of the HK$10.182 million was ultimately also Thomas Kwok. On 9 November 2007, HK$12 million was remitted from an account in the name of Villalta, operated by Thomas Chan and his family, to an account with DBS Bank in Singapore in the name of Wedingley Limited (“Wedingley”), a BVI company. On 20 November 2007, US$1.543 million was remitted from Wedingley’s DBS account to an account of Francis Kwan with DBS Bank in Hong Kong, where it was split into two time deposits. Loans raised on the security of those deposits were the source of the HK$10.182 million paid to Rafael Hui. Subsequently, on 22 and 30 April 2008, Thomas Kwok paid two cheques to Thomas Chan for HK$5 million and HK$7 million respectively and, on 30 April 2008, Thomas Chan transferred HK$13 million to the account of Villalta. On 7 November 2008, Thomas Kwok paid Thomas Chan a further HK$6 million. A.5 The non-disclosures 16. In his capacity as Managing Director of the MPFS Authority and as a member of ExCo, both during his tenure as Chief Secretary and thereafter as a Non-Official Member, Rafael Hui was subject to duties[5] to make disclosures of any interests that might give rise to conflicts between his personal interests and his public duties. In addition, any member of ExCo with interests in a specific topic to be discussed in an ExCo meeting was required to give notification and whether he should participate in the meeting would be determined by the Chief Executive. 17. At no time did Rafael Hui disclose to the MPFS Authority his relationship with SHKP, including in particular the first and second loans from Honor Finance to him or the fact that he had been occupying the two Leighton Hill flats without payment of rent since February 2003. 18. When he was Chief Secretary and during his time as a member of ExCo, Rafael Hui made no express declaration or disclosure of interest arising from his relationship with SHKP. His only declarations of interests were limited to the ownership of a flat in Wanchai, his connection with the Hong Kong Jockey Club and his status as a prospective or existing civil service pensioner. B. The proceedings below 19. The appellants, together with Raymond Kwok, were tried together on an indictment containing eight counts before Macrae JA and a jury.[6] 20. Rafael Hui was charged with: three offences of misconduct in public office (Counts 1, 6 and 8); three offences of conspiracy to commit misconduct in public office (Counts 2, 3 and 5); one offence of furnishing false information (Count 4); and one offence of conspiracy to offer an advantage to a public servant (Count 7). 21. Thomas Kwok was charged with: two offences of conspiracy to commit misconduct in public office (Counts 2 and 5); and one offence of conspiracy to offer an advantage to a public servant (Count 7). 22. Thomas Chan and Francis Kwan were each charged with: one offence of conspiracy to commit misconduct in public office (Count 5); and one offence of conspiracy to offer an advantage to a public servant (Count 7). B.1 The indictment 23. Count 1 alleged that, between 7 June 2000 and 13 August 2003, Rafael Hui, as the Managing Director of the MPFS Authority, without reasonable excuse or justification, wilfully misconducted himself in relation to his public office, by failing to declare or disclose to the MPFS Authority, that he had accepted the rent-free use of the Leighton Hill flats, the unsecured first and second loans from Honor Finance, and his negotiations for a consultancy agreement with SHKP.[7] 24. Count 2 alleged that Rafael Hui and Thomas Kwok conspired together, between 1 March 2005 and 30 June 2007, that Rafael Hui, whilst Chief Secretary of the HKSAR Government, without reasonable excuse or justification, would wilfully misconduct himself in the course of or in relation to his public office, by being or remaining favourably disposed to SHKP[8] in return for the payment of HK$5 million from Thomas Kwok.[9] 25. Count 3 alleged that Rafael Hui and Raymond Kwok conspired together, between 1 March 2005 and 30 June 2007, that Rafael Hui, whilst Chief Secretary of the HKSAR Government, without reasonable excuse or justification, would wilfully misconduct himself in the course of or in relation to his public office, by being or remaining favourably disposed to SHKP in return for the payment of HK$4.125 million from SHKP.[10] 26. Count 4 alleged that Rafael Hui and Raymond Kwok furnished a false invoice, with a view to gain for themselves or another or with intent to cause loss to another, which purported to show that the payment of HK$4.125 million was in respect of Rafael Hui’s services for the period from April 2005 to February 2006.[11] 27. Count 5 alleged that Rafael Hui, Thomas Kwok, Raymond Kwok, Thomas Chan and Francis Kwan conspired together, between 1 March 2005 and 30 June 2007, that Rafael Hui, whilst Chief Secretary of the HKSAR Government, without reasonable excuse or justification, would wilfully misconduct himself in the course of or in relation to his public office, by being or remaining favourably disposed to SHKP in return for the sum of HK$8.5 million through a series of payments from Thomas Kwok, Raymond Kwok, Thomas Chan and Francis Kwan.[12] 28. Count 6 alleged that Rafael Hui, whilst Chief Secretary of the HKSAR Government, between 30 June 2005 and 30 June 2007, without reasonable excuse or justification, wilfully misconducted himself in public office, by failing to declare or disclose to the Government of the HKSAR the provision to him of the annual extensions of the unsecured third loan from Honor Finance.[13] 29. Count 7 alleged that Rafael Hui, Thomas Kwok, Raymond Kwok, Thomas Chan and Francis Kwan conspired together, between 30 June 2005 and 20 January 2009, without lawful authority or reasonable excuse, to offer an advantage, namely HK$11.182 million, to Rafael Hui as Chief Secretary of the HKSAR Government and then a Non-Official Member of ExCo, as an inducement or reward for or otherwise on account of Rafael Hui performing or abstaining from performing or having performed or abstained from performing an act in his capacity as a public servant, namely being or remaining favourably disposed to SHKP.[14] 30. Count 8 alleged that, between 1 July 2007 and 20 January 2009, Rafael Hui, without reasonable excuse or justification, wilfully misconducted himself in public office as a Non-Official Member of ExCo, by failing to declare or disclose to the Government of the HKSAR his receipt of HK$11.182 million through a series of payments from Thomas Kwok, Raymond Kwok, Thomas Chan and Francis Kwan.[15] 31. Although the other charges on the indictment are relevant by way of background to this judgment, the issue of law raised in these appeals arises only in relation to Count 5 on the indictment. B.2 The prosecution case on Count 5 32. The prosecution case on Count 5 alleged that the payments totalling HK$8.5 million to Rafael Hui in June 2005, shortly before he became Chief Secretary of the HKSAR Government, were made pursuant to a conspiratorial agreement for Rafael Hui to misconduct himself in public office. It was known by the time the payments were made that Rafael Hui would be appointed Chief Secretary. The payments were secret and unexplained and elaborate lengths were taken to ensure that they were concealed and not recorded in any documents. The prosecution alleged that the payments to Rafael Hui were made as a “general sweetener” made to secure his “favourable disposition”, as Chief Secretary, to SHKP and that they were, in effect, “bribes”. It was further contended that Thomas Chan contributed his own monies to the payments and that Francis Kwan was rewarded for his part in the transactions. B.3 The no case submission and ruling 33. At the close of the prosecution case at trial, the appellants’ counsel made submissions that there was no case for the appellants to face on Count 5. These submissions were made on the basis that the prosecution case had shifted in the course of its presentation from one alleging that Rafael Hui was paid the sum of HK$8.5 million to be the “eyes and ears” of SHKP and that he had showed favour in some way to the company to one alleging that he was paid “general sweetners” for doing nothing more than his normal duty. It was submitted that, as a matter of law, this could not constitute misconduct in public office.[16] 34. The trial judge rejected the submissions that there had been any shift in the prosecution’s position and, on its validity as a matter of law, concluded: “Their position, as it was explained to the jury, and as I have just referred, is that it is not necessary for the prosecution to prove that D1 was in fact favourable to SHKP Ltd. Their case is that D1 was paid sweeteners so that he would be or remain favourably disposed to SHKP Ltd. He thereby became their man in government, regardless of whether he did in fact use his eyes and ears, or do anything favourable to SHKP Ltd. That, as I understand it, has always been their position, and I see no shift in position that would warrant my intervention at this stage upon a submission of ‘no case to answer’. It is a legitimate way of putting the prosecution case in law, and I find a case to answer on the evidence in relation to those counts. That is my ruling.”[17] B.4 The defence case 35. Although each of the appellants advanced his own case to the various charges, there were common elements of their defences. In summary, when Rafael Hui was intending to leave the MPFS Authority and moving to the private sector, he was concerned with remuneration and accommodation. He eventually agreed to work as a consultant for SHKP because Thomas Kwok offered to pay him HK$15 million per year and to provide living quarters as well as reimbursing his office expenses. Although the remuneration stated in the written service agreement was understated at HK$4.5 million per year, Rafael Hui signed the agreement on the understanding that Thomas Kwok would make up the difference and pay for his accommodation. 36. Upon accepting the invitation of the Chief Executive-elect[18] to become Chief Secretary, Rafael Hui terminated the service agreement and sought payment of the outstanding sums due to him from SHKP. Taking into account the payments made up to April 2005, there was a sum of HK$10.8 million due. The HK$8.5 million which featured in Count 5 was the payment to Rafael Hui of that outstanding amount, with the balance of HK$2.3 million being retained by Francis Kwan in order for the latter to carry out foreign exchange transactions for Rafael Hui. The payment of the HK$8.5 million was made in a convoluted manner due to a family dispute within the Kwok family concerning Walter Kwok. In short, the defence in relation to the payment which formed the subject of Count 5 was that this was the balance of monies legitimately owing to Rafael Hui from SHKP and the Kwoks. It was therefore denied that the payment was a bribe. 37. So far as the payment of HK$11.182 million in 2007 was concerned, different cases were advanced but with the common thread that this was not a payment from SHKP or the Kwoks to Rafael Hui at all. It was the case of Francis Kwan and Rafael Hui that this sum was paid by Francis Kwan to Rafael Hui on behalf of a Mainland third party and its purpose was to alleviate Rafael Hui’s financial difficulties caused by his expensive lifestyle and with a view to his remaining Chief Secretary. Thomas Kwok’s case was that the monies paid by him to Thomas Chan were bonuses to the latter. Thomas Chan’s case was that Villalta paid the sum of HK$12 million to Wedingley as part of an arrangement for Francis Kwan to manage this money on behalf of Thomas Chan. 38. It was also the defence case that Rafael Hui did not show any favour to SHKP whilst he was in office as Chief Secretary or as a Non-Official Member of ExCo, in particular in relation to either the Ma Wan or WKCD Projects. B.5 The trial judge’s summing up on Count 5 39. The trial judge instructed the jury that in order to find a conspiracy it was necessary for them to find that there had been an agreement as alleged by the prosecution. His summing up on the charge of conspiracy to commit misconduct in public office in Count 5 reflected the prosecution case as to the law of misconduct in public office. The material part of that summing up where the judge dealt with the third element of the offence as identified by Sir Anthony Mason NPJ in Sin Kam Wah & Another v HKSAR,[19] namely “wilfully misconducts himself; by act or omission, for example, by wilfully neglecting or failing to perform his duty” was in the following terms: “The act of wilful misconduct alleged by the prosecution in these three counts, Counts 2, 3 and 5, and this is the third requirement the prosecution must prove, is that D1, as Chief Secretary, would be or remain favourably disposed to SHKP’s interests in return for certain specified payments. Although the particulars of each count do not mention the word, the prosecution say that these payments were, in effect, bribes. The payments are, of course, different in each count. In Count 2, it is $5 million; in Count 3, $4.125 million; and in Count 5, $8.5 million. But the objective of the conspiracy alleged, namely, that D1 should misconduct himself as Chief Secretary by being favourably disposed to SHKP’s interests in return for money is the same. So, members of the jury, what does ‘being or remaining favourably disposed to SHKP Limited and/or its subsidiaries or associated companies and/or named conspirators’ mean? What does it mean? The words ‘being or remaining favourably disposed to’ reflect the prosecution allegation that the payments made to D1 were general goodwill payments. In other words, they were sweeteners, payments made to sweeten a public official. The counts do not allege that the payments were made in return for any specific identifiable favour which D1 was to perform or had performed. And the law does not require that any particular favour be specifically identified. Indeed, in the context of paying any public official a sweetener, which you might think would necessarily involve subtlety and secrecy, it may be very difficult to show that any favour was in fact performed. A public official may have acted in exactly the same way, or objectively made the correct decision, or done the right thing, whether he was sweetened or not. The reason the law does not require a particular favour to be identified is, you may think, obvious. The acceptance of money by a public official in return for him in a general way, rather than in a specific way, being favourably disposed to the person or persons giving him the money, is itself capable of amounting to misconduct by virtue of the breach of the duties and obligations he owes to the public as a public official. The evil or the vice of these kinds of payments is that no one could have confidence in the acts of a public official who, through the offer and acceptance of money, has been kept sweet by private interests. And the confidence which the public are entitled to have in the fair and impartial performance of a public official’s duties and obligations is thereby eroded or destroyed.”[20] B.6 Verdicts and sentences 40. In respect of the appellants, the jury returned verdicts of guilty on some of the charges against them and not guilty on the others: thus, Rafael Hui was found guilty of Counts 1, 5, 6, 7 and 8 and acquitted of Counts 2, 3 and 4; Thomas Kwok was found guilty of Count 5 and acquitted of Counts 2 and 7; and Thomas Chan and Francis Kwan were both found guilty of Counts 5 and 7. The jury acquitted Raymond Kwok of the four charges on which he stood trial, namely Counts 3, 4, 5 and 7. 41. The judge imposed sentences on the appellants as follows: Rafael Hui was sentenced to a total term of imprisonment of 7 years and 6 months and ordered to pay the HKSAR Government the sum of HK$11.182 million;[21] Thomas Kwok was sentenced to 5 years’ imprisonment and fined HK$500,000 and disqualified from acting as a director of any company for a period of 5 years; Thomas Chan was sentenced to a total term of imprisonment of 6 years and fined HK$500,000 and disqualified from acting as a director of any company for a period of 6 years; and Francis Kwan was sentenced to a total term of imprisonment of 5 years.[22] B.7 The Court of Appeal decision 42. The appellants each appealed their convictions to the Court of Appeal and, in addition, Thomas Chan appealed against his sentence. The appeals against conviction were each dismissed for the reasons set out in a lengthy judgment.[23] Although the Court of Appeal allowed Thomas Chan’s appeal against sentence, the totality of sentence imposed in respect of his convictions remained the same, namely 6 years’ imprisonment. 43. In respect of the appeal against conviction on Count 5, Yeung VP noted that the jury had clearly rejected the defence case and must have concluded that the HK$8.5 million was paid to Rafael Hui because of his appointment as Chief Secretary and that in return for the payment Rafael Hui had agreed to be or to remain favourably disposed towards SHKP.[24] Lunn VP observed that, in convicting, the jury rejected the evidence of Rafael Hui and Thomas Kwok that the payments of HK$8.5 million to Rafael Hui were legitimate payments arising out of their undocumented oral agreement, by which he was to be compensated in addition to the payments made pursuant to the written service agreement by which, through Top Faith, he provided consultancy services and advice to SHKP.[25] 44. Both Yeung VP and Lunn VP, for the reasons set out in their respective judgments (with both of which Pang JA agreed), considered the validity of the prosecution case on Count 5 and concluded that, on the facts alleged and accepted by the jury to be proved, the offence of conspiracy to engage in misconduct in public office was established.[26] C. Misconduct in public office and bribery in Hong Kong C.1 Misconduct in public office 45. For the purposes of the law of Hong Kong, the elements of the common law offence of misconduct in public office were stated by Sir Anthony Mason NPJ in Sin Kam Wah & Another v HKSAR[27] as follows: “The offence is committed where: (1) a public official; (2) in the course of or in relation to his public office; (3) wilfully misconducts himself; by act or omission, for example, by wilfully neglecting or failing to perform his duty; (4) without reasonable excuse or justification; and (5) where such misconduct is serious, not trivial, having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those responsibilities.”[28] That was a re-formulation, in a presently immaterial respect, of what Sir Anthony Mason NPJ had earlier said in Shum Kwok Sher v HKSAR.[29] The re-formulation was to take account of developments in the law in respect of the concepts of wilfulness and recklessness.[30] The statement has since been applied in a number of cases, including HKSAR v Wong Lin Kay,[31] and was accepted in argument in the present appeals.[32] 46. In R v Boulanger[33] the Supreme Court of Canada, having pointed out[34] that the Canadian statutory offence of breach of trust by a public officer can be traced to the common law offence of misconduct in public office, said[35] that the actus reus of the offence “defies precise definition because of the range of conduct that it is designed to cover”. That it may include solicitation or acceptance of a bribe is clear. Professor Finn, in his article on “Official Misconduct”[36] gives “entering into secret commission agreements while acting in an official agency capacity” as an example of the “fraud in office” type of misconduct, and notes that it may also constitute an offence under secret commissions legislation. It can be said that the receipt of bribes is a quintessential example of misconduct in public office. 47. For behaviour to qualify as relevant misconduct it may, but need not, involve a contravention of a statute. It must, however, have the necessary link to official powers, duties or responsibilities. Yet, not every breach of the law by a person when he or she is a public official is in the course of or in relation to the office held. In Sin Kam Wah and Anor v HKSAR[37] the relevant conduct was not in the performance of the police officer’s duties, but was found to have such a relation with his public office as to bring that office into disrepute. In R v Quach[38] Redlich JA, with whom the other members of the Victorian Court of Appeal concurred, approved[39] Professor Finn’s statement that “the kernel of the offence is that an officer, having been entrusted with powers and duties for the public benefit, has in some way abused them, or has abused his official position”, and said:[40] “In my opinion the relevant misconduct need not occur while the officer is in the course of performing a duty or function of the office. Certain responsibilities of the office will attach to the officer whether or not the officer is acting in the course of that office. Where the misconduct does not occur during the performance of a function or duty of the office, the offence may be made out where the misconduct is inconsistent with those responsibilities. It may be connected to a duty already performed or to one yet to be performed or it may relate to the responsibilities of the office in some other way. The misconduct must be incompatible with the proper discharge of the responsibilities of the office so as to amount to a breach of the confidence which the public has placed in the office, thus giving it its public and criminal character.” 48. The characterisation of the misconduct alleged may involve both a descriptive element (of the facts of the transaction) and a value judgment (of its effect). For example, the Australian case of R v Boston[41] concerned a conspiracy to make a corrupt payment to a member of the New South Wales Parliament to induce him to use his official power in an improper way. The criminality of the alleged agreement lay in its tendency to produce a public mischief.[42] Members of the High Court characterised the public mischief. Knox CJ said:[43] “Payment of money to a member of Parliament to induce him to persuade or influence or put pressure on a Minister to carry out a particular transaction tends to the public mischief in many ways, irrespective of whether the pressure is to be exercised by conduct inside or outside Parliament. It operates as an incentive to the recipient to serve the interest of his paymaster regardless of the public interest, and to use his right to sit and vote in Parliament as a means to bring about the result which he is paid to achieve. It impairs his capacity to exercise a disinterested judgment on the merits of the transaction from the point of view of the public interest, and makes him a servant of the person who pays him, instead of a representative of the people.” This, of course, is a reference to a specific transaction. But Isaacs and Rich JJ put the public mischief in wider terms in the following passage:[44] “[The member] has … placed himself in a situation embarrassing and inconsistent with that independence to criticize or censure which he is bound to preserve; he has fastened upon himself golden fetters which preclude his freedom of action. The natural fear of exposure or reproach, or the sense of personal obligation, must inevitably operate to dissuade him from fearlessly pursuing the path of true service …”. 49. The public mischief that was the object of the conspiracy in Boston did not lie either in the bare financial transaction involved in the payment or in the making by a parliamentarian of representations about government action. It lay in the connection between the two: the representations were to be made in return for the payment. The payment took its character from the purpose for which it was made, and by accepting it the recipient placed himself in a situation incompatible with the responsibilities of his office. 50. The present appeals, like Boston, involve a charge of conspiracy. Section 159A of the Crimes Ordinance (Cap.200) provides: “159A. The offence of conspiracy (1) Subject to the following provisions of this Part, if a person agrees with any other person or persons that a course of conduct shall be pursued which, if the agreement is carried out in accordance with their intentions, either— (a) will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement; or (b) would do so but for the existence of facts which render the commission of the offence or any of the offences impossible, he is guilty of conspiracy to commit the offence or offences in question.” C.2 Bribery at common law 51. The common law offence of bribery is described in Russell on Crime[45] as “receiving or offering any undue reward by or to any person whatsoever, in a public office, in order to influence his behaviour in office, and incline him to act contrary to the known rules of honesty and integrity.” The purposive element of that formula is stated from the point of view of the offeror rather than the recipient. The motive of the recipient may be simple greed, but it is the offeror’s purpose which characterises the payment. C.3 Statutory formulations of bribery 52. As the statement in Russell on Crime indicates, the common law was concerned with bribery of persons in public office (originally, it appears, judicial officers[46]), but concern with the practice of payment of secret commissions to “agents” in the private sector resulted in legislation which extended the reach of anti-corruption law. The history of United Kingdom legislation on the topic, culminating in the Bribery Act 2010 (UK), was examined by the Court of Appeal in 2013 in R v J (P) and others[47] and in 2016 in R v AIL (a company) and others.[48] Originally, three Acts were of particular significance: the Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Act 1906 and the Prevention of Corruption Act 1916. The 1889 Act provided: “(1) Every person who shall by himself or by or in conjunction with any other person, corruptly solicit or receive, or agree to receive, for himself, or for any other person, any gift, loan, fee, reward, or advantage whatever as an inducement to, or reward for, or otherwise on account of any member, officer, or servant of a public body as in this Act defined, doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed, in which the said public body is concerned, shall be guilty of a misdemeanor. (2) Every person who shall by himself or by or in conjunction with any other person corruptly give, promise, or offer any gift, loan, fee, reward, or advantage whatsoever to any person, whether for the benefit of that person or of another person, as an inducement to or reward for or otherwise on account of any member, officer, or servant of any public body as in this Act defined, doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed, in which such public body as aforesaid is concerned, shall be guilty of a misdemeanor.” 53. The 1906 Act dealt with what are often referred to as secret commissions, and extended to private enterprise. The 1916 Act addressed payments to public employees responsible for awarding contracts. 54. The first Hong Kong legislation on the subject was the Misdemeanors Punishment Ordinance 1898 (No.1 of 1898) which used language closer to that of Russell on Crime (although, it should be added, the word “corruptly” in the United Kingdom legislation served a similar purpose). The long title was “An Ordinance for the more effectual punishment of bribery and certain other misdemeanors”. Sections 3 and 4 were as follows: “(3) Every public servant who accepts, or obtains, or agrees to accept, or attempts to obtain, or causes or procures to be obtained, from any person … any bribe, with a view to influence his conduct as such public servant or to incline him, contrary to his duty as such public servant or contrary to the rules of honesty and integrity, to do or to omit to do any act, shall be guilty of a misdemeanor … (4) Every person who gives or offers, or causes or procures to be given or offered, to any public servant any bribe, for himself or for any other person, with a view to influence his conduct as such public servant or to incline him, contrary to his duty as such public servant or contrary to the rules of honesty and integrity, to do or to omit to do any act, shall be guilty of a misdemeanor …”. 55. “Bribe” was defined in section 2 to include “any fee, perquisite, reward, or gratification, whether pecuniary or otherwise, not payable or receivable by law”. Again, the expression of the purposive element was somewhat more natural in (4) than in (3), but obtaining improper influence or securing a disloyal inclination was the essence of the purposive element of the offence. It is the tendency of a payment or other advantage which stamps it as corrupt and a bribe. 56. Neither the United Kingdom legislation nor the Hong Kong Ordinance addressed an issue identified, but neither pursued nor resolved, in a 1901 Scottish case of HM Advocate v Dick,[49] that is, the case of a payment, otherwise having the characteristics of a bribe, to a person before and in anticipation of that person’s assuming public office. Anti-bribery legislation, whether directed towards the conduct of or in relation to people in public office or extended to cover people in other positions, typically relates to the current position of the office-holder, (see for example, the definition of “public servant” in the 1898 Ordinance), at the time of the payment or other advantage. If a legislature were to take up the matter of corrupt investment in potential future benefits by pre-office payments or other advantages, it would no doubt be confronted by some policy choices. 57. The next Hong Kong legislation was the Prevention of Corruption Ordinance 1948.[50] The Acting Attorney General said the purpose of the law was both to cover corruption by “agents” and to make the offence of corruption in office more comprehensive. The legislation followed the language of the earlier United Kingdom legislation. Section 3 dealt with corruption by or in relation to public servants. Section 4 dealt with corruption by or in relation to agents. Sub-sections (1) and (2) of section 3 substantially followed sub-sections (1) and (2) of the 1889 United Kingdom Act, making the offences corruptly soliciting or receiving an advantage or corruptly giving, promising or offering an advantage. As in the United Kingdom legislation, the proscribed advantage was as an inducement to, or reward for, or otherwise on account of doing or forbearing to do something. 58. The current Hong Kong legislation, the Prevention of Bribery Ordinance 1970 (Cap.201) widened the kinds of advantage that were proscribed,[51] and, so far as presently relevant, expressed the offence of bribery in relation to a public servant as follows: “4.(1) Any person who, without lawful authority or reasonable excuse, offers any advantage to a public servant as an inducement to or reward for or otherwise on account of that public servant’s — (a) performing or abstaining from performing, or having performed or abstained from performing, any act in his capacity as a public servant; (b) expediting, delaying, hindering or preventing, or having expedited, delayed, hindered or prevented, the performance of an act, whether by that public servant or by any other public servant in his or that other public servant’s capacity as a public servant; or (c) assisting, favouring, hindering or delaying, or having assisted, favoured, hindered or delayed, any person in the transaction of any business with a public body, shall be guilty of an offence. (2) Any public servant who, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for or otherwise on account of his — (a) performing or abstaining from performing, or having performed or abstained from performing, any act in his capacity as a public servant; (b) expediting, delaying, hindering or preventing, or having expedited, delayed, hindered or prevented, the performance of an act, whether by himself or by any other public servant in his or that other public servant’s capacity as a public servant; or (c) assisting, favouring, hindering or delaying, or having assisted, favoured, hindered or delayed, any person in the transaction of any business with a public body, shall be guilty of an offence.” 59. In its current form, section 4 has been given an extra-territorial reach, which is presently immaterial, but otherwise it is substantially the same. The Ordinance goes on to deal with more specific kinds of corruption, some of which involve public servants and others of which may not. It also establishes a special investigative regime. By comparison with the 1948 Ordinance it replaces “corruptly” with “without lawful authority or reasonable excuse”. This was unlikely to have been intended to have a narrowing effect.[52] The pattern of legislative development in Hong Kong, as in the United Kingdom and elsewhere, has been to widen the anti-corruption net, and to deal with specific forms of conduct thought to require particular attention, but there is no indication of an intention to abandon the original concept of purchasing improper influence or an inclination to act contrary to duty. It is to be noted that the concept of inclination had been in Hong Kong’s statute book since 1898 (see [54] above). C.4 Is a specific act or omission required? 60. In 1978 there arose an issue as to the effect of the 1970 Ordinance in a case where the facts were relatively minor (an oblique solicitation of a small gift by a postman) but which was thought to involve an important principle. The question was whether, in order to establish a contravention of section 4(2)(a), it is sufficient to show that a public servant, in the course of or in relation to his duty, solicited an advantage or whether it was also necessary to prove that either the payer or the payee had in contemplation some specific act or omission on the part of the payee. The case was Attorney General v Chung Fat Ming.[53] McMullin J said:[54] “[T]he distinction which has been argued before us is between the advantage which is seen to be solicited or accepted as a ‘quid pro quo’ for some particular act or abstention identifiable as to place and time on the one hand and, on the other, an advantage solicited or accepted as a general earnest of good relations-the ‘keeping sweet’ situation.” The argument which the Court of Appeal accepted was “that section 4 does not require the Crown to prove any specific act in contemplation of either party as being related to the particular advantage sought [or offered]”.[55] That is the proposition for which the case is authority. It is a negative proposition and invites the further question: what, then, is it necessary or sufficient for the prosecution to prove? A person who pays a bribe may be taken to expect, or at least hope, for some kind of value for money, but there can be an almost limitless variety of circumstances bearing upon the extent to which such hope or expectation takes any concrete form. In a case of extortion, the payer may have nothing to hope for, but in the case of a bribe the benefit in prospect may (perhaps deliberately) be left completely undefined. McMullin J’s reference to “an advantage solicited or accepted as a general earnest of good relations” was to an advantage solicited or accepted by a public servant in the course of or in relation to his duty. That context gives colour to the concept of “good relations”. 61. In Attorney General v Chung Fat Ming,[56] and in an earlier case of Chan Wing Yuen v The Queen,[57] McMullin J said that the phrase “otherwise on account of” (which was in the original United Kingdom legislation) goes beyond “inducement” and “reward”, which relate to specific acts, and covers “an act” which may denote the entire range of a public servant’s duties. In a passage from Chan Wing Yuen v The Queen which Leonard J quoted and adopted in Chung Fat Ming,[58] McMullin J said: “The substance of the offence created by section 4(2) is in the soliciting or accepting of an advantage by one acting in the capacity of a government servant under circumstances which make it clear that the advantage is solicited or offered in reference to his having such capacity. It is a feature of the particular evil at which those provisions are aimed that the purpose may be generally apparent without being entirely explicit. In a given case it may be that the evidence available to the prosecution is not sufficiently specific to indicate whether the advantage has been solicited or offered as an ‘inducement’ to do a particular act or as a ‘reward’ for having done it. In such a case the charge should no doubt properly speaking be one of offering or accepting the advantage ‘on account of’ some prospect of favour not particularized but discernible among a variety of possible acts within the public capacity of the accused.” Following an expression of his agreement with that passage, Leonard J went on to say[59] that, in a case of solicitation contrary to section 4(2)(a), the solicitation must be on account of performance of an “act” in the person’s capacity as a public servant, and that he would regard being or remaining favourably disposed to the person solicited as sufficient to amount to an “act”. In the context, he was evidently referring to “some prospect of favour not particularized but discernible among a variety of possible acts within the public capacity of the accused” on account of which the advantage was solicited. 62. The same question arose in the New South Wales Court of Criminal Appeal in 1992 in R v Allen,[60] a case concerning the common law misdemeanour of bribery. The appellant, an Assistant Commissioner of Police, had formed an association with an operator of licensed nightclubs in Sydney’s Kings Cross area. Evidently placed in funds by his associate, the appellant set out to corrupt a junior police officer, whose responsibilities covered that area, by making a number of unsolicited cash gifts. Ultimately, the officer reported the matter. The case was tried before a judge sitting without a jury and the appellant was convicted of bribery. On appeal it was argued that there was an absence of a necessary quid pro quo because the recipient of the payments was never asked to do anything, and never agreed or intended to do anything, in consideration for them. The Court of Criminal Appeal said that a corrupt intent on the part of the appellant had been shown and that was sufficient. The size and regularity of the payments suggested an intention to place the junior officer under a sense of obligation to the appellant, and the systematic nature of the dealings suggested that the junior officer was being placed on some kind of payroll. The Court said:[61] “In its application to circumstances such as the present, the gravamen of the offence of bribery is the making or offering of a payment with an intent to incline a person in public office to disregard his duty. The occasion for the disregard of duty need not have arisen at the time of the offence, and it need never arise. Nor is it necessary that the particular kind of contemplated breach of duty be specified at the time of the payment or inducement.” 63. The risk associated with euphemisms such as “sweetener”, and “being … favourably disposed”, while they are understandable because the argot of corruption commonly employs understatement and evasion, is that they may be taken as signifying a purely emotional state, of a kind that could be benign or even involuntary. Protection ordinarily denotes care and concern, but in the context of extortion it means something different. Similarly, goodwill is a sentiment that a public servant may feel towards honest citizens generally, but in the context of what may be purchased by a bribe it means something different. It was pointed out in argument that, in one sense, a person may be favourably disposed to another for all manner of reasons that are innocent, or at least legally neutral. Furthermore, the trial was conducted on the basis that if the defence explanation of the reason for the payment of HK$8.5m were accepted (at least to the level of raising a reasonable doubt), then the prosecution must fail; yet, even on that explanation, the new Chief Secretary might be expected to have felt general goodwill towards a former employer or client by whom he had been well remunerated, and with whom he was and would be likely to remain on cordial terms. In relation to the payment of HK$8.5 million there was no charge of a contravention of section 4 of the Prevention of Bribery Ordinance because of a matter of timing. On the facts alleged by the prosecution, however, if the payment had been made a week later there would have been an offence against the Ordinance. In that event, what would have given the payment the character of a bribe would have been its tendency to incline the recipient to disregard his public duty; not his emotional state. 64. To return to the offence of misconduct in public office, which may overlap with bribery, in Sin Kam Wah & Another v HKSAR, Sir Anthony Mason NPJ, with whom the other members of the Court agreed, after explaining that the trial in that case had been conducted on the basis that the relevant misconduct lay in the first appellant’s part in accepting sexual services from women over whom he knew the second appellant was exercising control, direction or influence, added:[62] “I should make it clear, however, that acceptance of a ‘general sweetener’ by a public officer can, in appropriate circumstances, amount to misconduct in public office.” D. The arguments on appeal D.1 Background 65. To understand the competing arguments presented to this Court, and therefore the issue at hand, it is convenient to record first what was not asserted by the respondent to be the allegation advanced by the particulars of offence in Count 5. 66. It was not alleged by the prosecution at trial and it is not contended before this Court: (1) that Rafael Hui’s act of misconduct in public office was his receipt and acceptance in June 2005 of the sums amounting to HK$8.5 million. That is because, in June 2005, he did not occupy public office; (2) that of itself, the fact of favourable disposition on Rafael Hui’s part towards SHKP, after he assumed office as Chief Secretary, was an act of misconduct. That is because disposition, whether favourable or unfavourable, is a common and largely unavoidable incident of every day experience which may or may not bear an impermissible consequence. Whereas the failure by a public officer to disclose a bias might, in certain circumstances, constitute misconduct, it seems obvious that the mere existence of a disposition, in a vacuum as it were, does not; or (3) that the agreement was that upon and after the assumption of office, Rafael Hui would, in return for the sum of HK$8.5 million, show favour to SHKP if and when that should become necessary or desirable. 67. The last of these three points, in particular the phrase “if and when that should become necessary or desirable” requires some explanation. The case for the appellants at trial was that if, contrary to the defence case, the payments to Rafael Hui in June 2005 were not monies due for his work as a consultant, it was incumbent upon the prosecution to prove that there was agreed an act or acts to be performed by Rafael Hui, once in office, as the quid pro quo for these payments and that mere favourable disposition was not an act. It was however conceded by the appellants that if an agreement were proved that in return for the payments, Rafael Hui would show favour should that become necessary or, put another way, as and when opportunity presented itself, the agreement necessarily envisaged an act or acts, and that it could not then validly be argued that that anticipated conduct did not amount to misconduct. 68. The point was raised specifically by Mr Ian Winter QC, for Thomas Chan, in submissions made to the trial judge about proposed directions to the jury. What was at issue, said Mr Winter, was whether it was alleged that the agreement was one which contemplated Rafael Hui acting “should it become necessary to do so” or was it “just an agreement that [Rafael Hui] would remain favourably disposed”?[63] The prosecution’s response at trial was that the agreement alleged was no more than an agreement to be or to remain favourably disposed. Whilst it was open to the jury to conclude that acts of specific favour had been carried out by Rafael Hui, and that such acts, if proved, would support the allegation of favourable disposition, the long and the short of the prosecution case was favourable disposition in return for money and that that sufficed. 69. Mr David Perry QC explained to this Court why the prosecution chose not to tie its colours to the mast of a conditional conspiracy, meaning a conspiracy to show favour if and when the occasion presented itself. Amongst the several considerations advanced was that such a charge would raise the question whether the course of conduct contemplated would necessarily result in the commission of a criminal offence; would generate arguments about what was meant by “necessary” or “appropriate”; and would give rise to a danger that focus would shift from the character of the payments to the merits of decisions taken, thereby creating unnecessary complexity. 70. The point was urged upon us that, by framing its case as it did, the prosecution was seeking to widen the reach of the offence of misconduct in public office because it perceived a gap in the law’s armoury against corruption in the realm of payments made in anticipation of office.[64] This as a matter of principle was impermissible but there was, in any event, no such gap, so the argument ran, because it would have been open to the prosecution to allege as the act of misconduct the non-disclosure by Rafael Hui, to whomsoever potential conflicts of interest fell to be disclosed, the fact of the June payments. Mr Perry explained that whilst such a charge could properly have been laid, it would have failed adequately to reflect the criminality of the case, for the criminality did not merely lie in the failure to disclose but in the corrupt payments and receipt of monies and in the impermissible use of office for private gain. D.2 The appellants’ argument 71. The essence of the appellants’ argument is at a fundamental level. It is to say that no criminal offence is committed without an actus reus, an external conduct element, and that the actus reus of the offence of misconduct in public office is either misfeasance, in other words, an act of misconduct, or non-feasance, an act of omission amounting to misconduct. For the purpose of the present case, we are concerned only with misfeasance, yet one looks in vain, according to this argument, for the actus reus, the act of misconduct, since being or remaining favourably disposed is not an act. It is said that the case was not left to the jury on the footing that the favourable disposition was intended to lead to action or that the payments in June were to secure a disposition which would necessarily and materially impair Rafael Hui in the performance of his public duties but was instead left on the basis that what was intended was no more than the creation in Rafael Hui of goodwill towards SHKP. 72. Viewed in that way, what was alleged to constitute the intended misconduct was nothing other than a state of mind, a mental disposition, whereas the criminal law does not recognise mere motive, intention, disposition or inclination as sufficient for the commission of a criminal offence. It is the principle which was articulated by Lord Mansfield that “so long as an act rests in bare intention, it is not punishable by our laws”,[65] and Professor Glanville Williams has suggested that the reasons for the rule are, first, “the difficulty of distinguishing between day-dream and fixed intention in the absence of behaviour tending towards the crime intended” and, second, “the undesirability of spreading the criminal law so wide as to cover a mental state that the accused might be too irresolute even to begin to translate into action. There can hardly be anyone,” he added, “who has never thought evil. When a desire is inhibited it may find expression in fantasy; but it would be absurd to condemn this natural psychological mechanism as illegal.”[66] So at the root of the appellants’ argument is that favourable disposition is itself a natural psychological mechanism which only results in criminality if the disposition is translated into action proscribed by criminal law, whereas the result of the judge’s ruling and that of the Court of Appeal, if left undisturbed, is the creation of an Orwellian thought crime. 73. The strength of the appellants’ argument is said to be rendered all the more apparent in the light of section 159A of the Crimes Ordinance which provides that conspiracy to commit an offence is established only if there was an agreement to pursue a course of conduct which, if the agreement be carried out in accordance with the intentions of the parties to the agreement, will necessarily amount to the commission of an offence by one or more parties to the agreement.[67] The argument is that, as framed, the prosecution case was unable to identify any course of conduct that would necessarily amount to the offence of misconduct in public office. The adoption of a state of mind is not sensibly categorised as the carrying out of a course of conduct; and the alternative assertion in the particulars of offence that it was agreed that Rafael Hui would “remain” favourably disposed sits ill with the tenor of section 159A which envisages an agreement that a future crime be committed. 74. The appellants contend that what is proposed is an unprecedented and unprincipled expansion of the boundaries of the offence of misconduct in public office. This common law offence has a long history[68] and the appellants say that it is no accident that no example has been discovered of any prosecution mounted on the basis now advanced. 75. The ramifications are said to be chilling, for an expansion of the offence’s parameters to embrace favourable disposition would render susceptible to prosecution those in the private sector who enter public life and carry with them natural feelings of goodwill. Rules for disclosure of potential conflicts of interest and the present law which proscribes external acts of misconduct suffice and just as “it [is] not for this Court to create a new offence as an answer to a perceived problem of imprecise definition or accessibility,”[69] it is not for this Court to relax the limits of the offence so as to cater for a perceived lacuna in the law relating to pre-office payments. 76. The appellants next contend that the suggestion by Leonard J in Chung Fat Ming that he “would regard being or remaining favourably disposed to the person solicited as sufficient to amount to an ‘act’” within the meaning of section 4(2)(a) of the Prevention of Bribery Ordinance, which is the genesis of the phrase used in Count 5 (as well as in Count 7), is of no avail to the prosecution. The point is made that the base criminality or actus reus of the section 4(2)(a) offence is not the suggested favourable disposition to which Leonard J referred but the solicitation or acceptance of an advantage. Under section 4(2)(a), an offence may be committed absent any breach of duty by the public servant: it is enough that he accepts or solicits the advantage merely on account of his doing his job and what Leonard J was saying, so the argument goes, was that if he solicited or accepted an advantage – the actus reus – for being favourably disposed, he could properly be said to have committed the proscribed conduct on account of performing an act in his capacity as a public servant. What has happened, therefore, is that the prosecution in the present case has lifted an analysis not directed at the actus reus of section 4(2)(a) of the Ordinance and turned it into the actus reus of the common law offence with which these appellants were charged. 77. Finally, the appellants say that the remark by Sir Anthony Mason NPJ in Sin Kam Wah & Another v HKSAR (at [64] above) that the “acceptance of a ‘general sweetener’ by a public officer can, in appropriate circumstances, amount to misconduct in public office”[70] is also not to the point since the comment relates to the act of acceptance, which is not the act of misconduct in the present case. D.3 The respondent’s argument 78. The respondent’s position was explained by Mr Perry as follows. As is obvious from the verdicts returned by the jury, the defence offered by the appellants at trial was rejected and the jury concluded that the June 2005 payments were bribes paid to Rafael Hui in relation to the performance by him of his public office and were paid in return for him being or remaining favourably disposed to the interests of SHKP. That was a finding that he was paid to be favourably disposed to a private interest group. It was a finding that he was to be, and was in fact, on the payroll of that private interest group. What therefore was envisaged by the conspirators was a continuing act of partiality in breach of Rafael Hui’s duty to serve the public interest and not to serve his private interests and those of a secret paymaster. The misconduct in this case was a continuing act of disloyalty, since the performance of a public office in golden fetters is to act disloyally and without integrity. It is a continuing breach of the public officer’s obligation to act with integrity in the public interest and is at the heart of what the offence of misconduct in public office is designed to deter. 79. There is no need, he suggested, to identify a particular act or acts contemplated by the conspirators. That is not only because favourable disposition to private interests in return for a bribe is itself misconduct but because the law recognises the practical realities of proof, in that conspirators are unlikely in such cases to spell out a specific act; indeed no specific act may be in contemplation and showing favour may be understood to mean no more than avoiding fault picking or obstruction.[71] 80. Nor are the merits of decisions taken by the public officer thus corrupted of any relevance for he has consciously and deliberately put himself into a position in which his duty to act in the public interest is compromised. That being so, the question whether a particular policy decision or transaction is beneficial to the public is immaterial. 81. It is, says Mr Perry, fallacious in the context of this case to categorise favourable disposition as a mere thought. The error underlying that contention is to be found in placing favourable disposition in isolation, divorced from the payments made to secure it. The favourable disposition thus secured is the description of the misconduct itself, and the mens rea is the wilfulness of that conduct. E. Addressing the issue raised in the appeals E.1 The many forms of misconduct in public office 82. The decided cases show that a broad range of different acts and omissions can constitute the relevant conduct element of the offence. In Shum Kwok Sher v HKSAR, Sir Anthony Mason NPJ observed (at [69]): “The difficulty which has been experienced in defining with precision the elements of the offence stem not so much from the various ways in which they have been expressed as from the range of misconduct by officials which may fall within the reach of the offence. This is because, to quote the words of PD Finn, ‘Public Officers: Some Personal Liabilities’ (1977) 51 ALJ 313 at p.315: The kernel of the offence is that an officer, having been entrusted with powers and duties for the public benefit, has in some way abused them, or has abused his official position. It follows that what constitutes misconduct in a particular case will depend upon the nature of the relevant power or duty of the officer or of the office which is held and the nature of the conduct said to constitute the commission of the offence.” 83. This dictum was adopted by the Supreme Court of Victoria in R v Quach[72] and is reflected in the passage in the judgment of the Supreme Court of Canada in R v Boulanger quoted in [46] above. 84. Thus, the following acts and omissions have been held to constitute the offence: failing to disclose a relationship with a company and showing preferential treatment to that company by permitting it to tender for Government contracts despite lacking the requisite experience;[73] accepting free sexual favours provided by prostitutes controlled by the owner of a nightclub;[74] obtaining and using the personal particulars of patients of a public hospital to advertise the commencement of a private medical practice.[75] But these are merely specific instances of the offence and they are illustrative rather than definitive of the ways in which it can be committed. As Sir Anthony Mason NPJ said in Shum Kwok Sher v HKSAR, the offence “is necessarily cast in general terms because it is designed to cover many forms of misconduct on the part of public officers.”[76] 85. That there must be a relevant relationship between the act or omission constituting the misconduct and the public office was confirmed by this Court’s decisions in Sin Kam Wah & Another v HKSAR[77] and HKSAR v Wong Lin Kay.[78] Nevertheless, as Sir Anthony Mason NPJ noted in Shum Kwok Sher v HKSAR: “… the essence of the offence is that an officer who has been entrusted with powers and duties for the public benefit has abused them or his official position. Abuse of such powers and duties may take various forms, ranging from fraudulent conduct, through nonfeasance of a duty, misfeasance in the performance of a duty or exercise of a power with a dishonest, corrupt or malicious motive, acting in excess of power or authority with a similar motive, to oppression. In all these instances the conduct complained of by the public officer takes place in or in relation to, or under colour of exercising, the office.”[79] E.2 The responsibility of the office and the office-holder 86. That, as noted at [47] above, the essence of the offence is the abuse of public trust by the officer is also amply supported by the authorities cited by Ribeiro PJ in his judgment in HKSAR v Wong Lin Kay[80] at [26] to [33]. And as Chan ACJ put it, in HKSAR v Ho Hung Kwan Michael, “this offence is aimed at punishing an abuse by a public officer of the power and duty entrusted to him for the public benefit or of his official position”.[81] 87. In this area of the law, as elsewhere, context is all important. Because the essence of the offence is the abuse of office it is necessary that the misconduct be “serious, not trivial” and, therefore, when asking whether a public officer has misconducted himself in office, it is essential to put that inquiry into its proper context by identifying “the responsibilities of the office and the officeholder”.[82] 88. In the present case, we are concerned with the office of the Chief Secretary for Administration of the HKSAR Government. The Chief Secretary is a Principal Official under the Basic Law of the Hong Kong Special Administrative Region (“the Basic Law”)[83] and the second most senior officer in the HKSAR Government. In the event the Chief Executive is not able to discharge his or her duties for a short period, such duties shall be temporarily assumed by the Chief Secretary, the Financial Secretary or the Secretary for Justice, in that order of precedence.[84] 89. The Chief Secretary is also an Official Member of ExCo, which assists the Chief Executive in policy-making.[85] As the prosecution pointed out in its Case Summary at trial, ExCo is consulted by the Chief Executive before he or she makes important policy decisions, introduces bills to the Legislative Council, makes subordinate legislation or dissolves the Legislative Council. ExCo normally meets once a week and its proceedings are confidential. It is also the fact (and this can be assumed without evidence) that the Chief Secretary exercises statutory functions vested in him by law, such as those concerning the handling of appeals and certain public bodies. 90. Specifically, in the present case, whilst he was Chief Secretary and later as a Non-Official Member of ExCo, Rafael Hui was involved in important matters of policy concerning the WKCD Project and the Ma Wan Project, two large property developments which concerned also the interests of SHKP. During his time as Chief Secretary, in particular, Rafael Hui was the Chairman of the Steering Committee of the WKCD Project. 91. As a Principal Official, in addition to his oath of office, Rafael Hui was subject to Government Regulations relating to conduct and conflicts of interests. He was also subject, in particular, to the Code for Principal Officials. This Code contains the basic principles governing the performance by Principal Officials of their duties, which include the following: to be dedicated to their duties and be responsible to the Government of the HKSAR; to uphold the law, abide by the law, and protect the integrity of the public office; to observe the highest standards of personal conduct and integrity at all times; to ensure that no actual or potential conflict of interest arises between their public duties and their private interests; to promote and support these principles by leadership and example. In relation to the prevention of conflicts of interests, the Code specifically lays down the principles that Principal Officials should: avoid putting themselves in a position where they might arouse any suspicion of dishonesty, unfairness or conflict of interest; refrain from handling cases with actual or potential conflict of interest; and report to the Chief Executive any private interests that might influence, or appear to influence, their judgment in the performance of their duties. 92. In short, as the prosecution asserted in its case at trial, as Chief Secretary, Rafael Hui would have had an important role in the development of Government policy, and be privy to highly confidential information, in relation to matters in which SHKP had substantial interests. And it is plain that, as Chief Secretary, Rafael Hui was “appointed to be a sentinel of the public welfare”.[86] E.3 The offence alleged in Count 5 93. As already noted, Count 5 charged a conspiracy to commit misconduct in public office. As in any charge of conspiracy, it is necessary to focus on the character of the conspiratorial agreement alleged by the prosecution. It is also necessary, for the statutory offence of conspiracy to be established, that the conspirators’ agreement must be “that a course of conduct shall be pursued which, if the agreement is carried out in accordance with their intentions, either … will necessarily amount to or involve the commission of any offence … by one or more of the parties to the agreement”.[87] 94. The agreement here was made shortly before Rafael Hui assumed his position as a public officer. It was an agreement under which Rafael Hui was to be paid HK$8.5 million in return for his favourable disposition while in office and was clearly therefore a corrupt bargain. Had that payment been made after he assumed the office of Chief Secretary, the prosecution case could have been put simply on the basis of an agreement to offer an advantage to a public officer since the acceptance of the payment would have constituted the substantive offence of misconduct in public office.[88] Similarly, had the conspiratorial agreement been made when Rafael Hui was already Chief Secretary, the prosecution might alternatively have been put simply on the basis that the making of the corrupt agreement itself was a relevant act of serious misconduct sufficient to constitute the offence. However, the timing in this case was such that this could not be alleged. 95. Nevertheless, from Rafael Hui’s perspective, the agreement alleged in Count 5 was concerned with his position in public office and, from the other conspirators’ perspective, their payment of HK$8.5 million to Rafael Hui was referable to his position as Chief Secretary and was made in anticipation of his assuming that office. The purpose of the payment, from their perspective, was to put the incoming Chief Secretary on their payroll and thus inclined to show them favour or prefer their interests. One might ask, rhetorically, if Rafael Hui had not taken the oath of office and become Chief Secretary, would not the other conspirators have sought the repayment of the HK$8.5 million from Rafael Hui? As Mr Perry put it in his closing speech to the jury, those who were paying Rafael Hui that sum were not “running a charity”.[89] 96. As such, the agreement alleged in the indictment, although entered into before Rafael Hui assumed public office, was made in anticipation of his entering into public office as Chief Secretary, and was wholly concerned with his anticipated holding of that public office. It was an agreement that, in the language of section 159A of the Crimes Ordinance, involved the commission by him of misconduct in public office because, by making the agreement, Rafael Hui would (to use the language of Knox CJ in R v Boston, see [48] above) “[impair] his capacity to exercise a disinterested judgment” or (to use the language of Isaacs and Rich JJ in the same case) “[place] himself in a situation embarrassing and inconsistent with that independence to criticize or censure which he [was] bound to preserve” (or, more colourfully, would “[fasten] upon himself golden fetters which preclude[d] his freedom of action”). Once he had accepted the sum of HK$8.5 million in relation to his holding of public office, Rafael Hui’s independence when he assumed office would be hopelessly compromised and he could not properly discharge the duties of Chief Secretary nor be trusted to do so. This involved a continuing offence that commenced from the time he entered into his public office as Chief Secretary and infected the entire period he held that office under the influence of the payment made to him. 97. It is correct, of course, that Rafael Hui might have been charged with the substantive offence of misconduct in public office for failing to disclose his receipt of the payment when acting as Chief Secretary, but, as Mr Perry rightly observed, such a charge would not properly reflect the criminality involved in this conspiracy. E.4 Sufficient allegation of misconduct in public office in Count 5 98. So analysed, it will be apparent that the conspiracy alleged was an agreement under which, in return for a substantial payment of money, Rafael Hui would incline himself in a manner inconsistent with his duty as a public officer. That inclination was improper since it was wholly inimical to his duties as Chief Secretary, described above, and involved a serious abuse of office and abuse of public trust. Having accepted the payment of HK$8.5 million in return for his improper inclination, Rafael Hui could not properly discharge the duties of Chief Secretary. 99. The abuse of public trust contemplated by the conspirators in the present case is therefore clear and, by agreeing to place himself in such a compromised state, Rafael Hui made an agreement which contemplated a continuing act of misconduct whilst he was Chief Secretary. The fact that the payment made to induce that compromised state was made before he assumed his public office does not mean that the abuse of trust occurred at the time of the making of the payment. That payment was made to secure an ongoing inclination on the part of Rafael Hui towards SHKP once he assumed the office of Chief Secretary and it is by so agreeing to act as Chief Secretary whilst he was in the “golden fetters” constituted by that payment that he conspired to commit an act of misconduct sufficient to satisfy the conduct element of the offence of misconduct in public office. 100. The above conclusion on the issue raised in these appeals is, as the prosecution contended, consistent with the core of the common law offence of misconduct in public office and the mischief it is designed to address. If the expression “being … favourably disposed”, the risks of which are alluded to in paragraph [63] above, is used in the context of a case of bribery (see Section C above) it is an adequate description of an act of misconduct. F. Suggested misdirections and non-directions 101. Given our conclusion upon the central issue of law, that the agreement alleged by the particulars of offence in Count 5 was an agreement to commit misconduct in public office, the argument advanced to this Court that the judge erred in not directing the jury that it was necessary to prove that specific acts of favour were contemplated by the appellants or that at least it was agreed that favour would be shown if and when that should become necessary, is an argument which necessarily fails. 102. A number of other complaints were advanced. These included, first, the contention that the manner in which the respondent has sought before this Court to categorise the misconduct alleged by the particulars is neither the way it was put to the jury by the prosecution at trial nor the sense in which it was explained to the jury by the judge. Secondly, it was said that the directions created a danger of conviction on Count 5 from the mere fact of such favourable disposition towards the Kwoks and SHKP as naturally resulted from their long relationship. Thirdly, that the judge erroneously left the jury with the impression that it was the acceptance of the payments that was the relevant alleged misconduct. Fourthly, it was suggested that it was wrong at trial to refer to the June 2005 payments as alleged bribes since Count 5 did not charge either common law or statutory bribery; and, further, that the judge erred in failing to direct the jury that evidence of conduct by Rafael Hui which enured to the disadvantage of SHKP was relevant in deciding whether the appellants had entered into the impugned agreement. 103. Some of the complaints strayed somewhat from the ground on which leave was given but, nonetheless, we are satisfied that none of the complaints is made out. We have already set out the material part of the judge’s directions at [39] above. As to the criticism of the description of the payments as bribes, that description was used by counsel on all sides as a convenient way by which to highlight the core issue, namely whether the payments were for a corrupt or for an innocent purpose. G. Conclusion and disposition of appeals 104. For the above reasons, the appeals are dismissed. The appellants were each properly convicted of the offence of conspiracy to commit misconduct in public office charged in Count 5 of the indictment. Mr Edwin Choy and Mr Joe Chan, instructed by Tang, Lai & Leung, for the 1st Defendant/Appellant in FACC 12/2016 (1st Appellant) Ms Clare Montgomery QC, Mr Gary Plowman SC and Mr Benson Tsoi, instructed by Davis Polk & Wardwell, for the 2nd Defendant/Appellant in FACC 14/2016 (2nd Appellant) Mr Ian Winter QC, Mr Selwyn Yu SC and Mr Isaac Chan, instructed by Morley Chow Seto, for the 4th Defendant/Appellant in FACC 15/2016 (3rd Appellant) Mr Hugo Keith QC, Mr Charles J. Chan and Mr Billy Kwan, instructed by Simon Ho & Co., for the 5th Defendant/Appellant in FACC 13/2016 (4th Appellant) Mr David Perry QC, Mr Joseph Tse SC and Ms Maggie Wong, on fiat, for the Department of Justice, for the Respondent [1] Misconduct in public office is a common law offence. [2] FAMC 8, 9, 10 & 11/2016, Determination dated 12 July 2016, at [2]. [3] CACC 444/2014, Judgment dated 16 February 2016, at [59] to [83]. [4] Flats 20A and 20B, Tower 6, Leighton Hill. [5] Addressed in more detail at [91] below. [6] In HCCC 98/2013; Macrae JA tried the case sitting as an additional judge of the Court of First Instance. [7] Contrary to common law and s.101I(1) of the Criminal Procedure Ordinance (Cap.221). [8] The particulars of offence for Counts 2, 3, 5 and 7 alleged favourable disposition to SHKP and/or its subsidiaries or associated companies and various named defendants. In this judgment, we shall simply refer to the allegation of favourable disposition to SHKP in relation to those various counts. [9] Contrary to common law and ss.159A and 159C of the Crimes Ordinance (Cap.200) and s.101I(1) of the Criminal Procedure Ordinance (Cap.221). [10] Contrary to common law and ss.159A and 159C of the Crimes Ordinance (Cap.200) and s.101I(1) of the Criminal Procedure Ordinance (Cap.221). [11] Contrary to s.19(1)(b) of the Theft Ordinance (Cap.210). [12] Contrary to common law and ss.159A and 159C of the Crimes Ordinance (Cap.200) and s.101I(1) of the Criminal Procedure Ordinance (Cap.221). [13] Contrary to common law and s.101I(1) of the Criminal Procedure Ordinance (Cap.221). [14] Contrary to ss.4(1)(a) and 12 of the Prevention of Bribery Ordinance (Cap.201) and ss.159A and 159C of the Crimes Ordinance (Cap.200). [15] Contrary to common law and s.101I(1) of the Criminal Procedure Ordinance (Cap.221). [16] HCCC 98/2013, transcript of Ruling of Macrae JA on Friday, 12 September 2014, at pp.7-8. [17] Ibid. at pp.10-11. [18] Mr Donald Tsang Yam-kuen. [19] (2005) 8 HKCFAR 192 at [45]. [20] HCCC 98/2013, Summing-up on 8 December 2014, at pp.46-47. [21] Pursuant to s.12(1) of the Prevention of Bribery Ordinance (Cap.201). [22] The disqualification orders against Thomas Kwok and Thomas Chan were made pursuant to s.168D of the Companies Ordinance (Cap.32). [23] CACC 444/2014 (Yeung VP, Lunn VP and Pang JA), Judgment dated 16 February 2016. [24] Ibid. at [10]. [25] Ibid. at [157]. [26] Ibid. at [12]-[44] per Yeung VP and [173]-[226] per Lunn VP. [27] (2005) 8 HKCFAR 192. [28] Ibid. at [45]. [29] (2002) 5 HKCFAR 381. [30] Re A-G’s Reference (No 3 of 2003) [2004] 2 Cr App R 23, 366. [31] (2012) 15 HKCFAR 185. [32] For present purposes it is not materially different from the law as recently stated in cases in England and Wales (R v Chapman & Ors [2015] 2 Cr App R 10, 161) and in Australia (R v Quach [2010] VSCA 106; (2010) 201 A Crim R 522; Obeid v R [2015] NSWCCA 309). [33] [2006] 2 SCR 49. [34] [2006] 2 SCR 49 at 55. [35] [2006] 2 SCR 49 at 69. [36] (1978) 2 Crim LJ 307 at 314 fn 71. [37] (2005) 8 HKCFAR 192. [38] [2010] VSCA 106. [39] [2010] VSCA 106 at [37]. [40] [2010] VSCA 106 at [40]. [41] (1923) 33 CLR 386. [42] (1923) 33 CLR 386 at 392. [43] (1923) 33 CLR 386 at 393. [44] (1923) 33 CLR 386 at 404. [45] 12th Ed. p.381. [46] Russell on Crime, 12th Ed., p.381 fn 1. [47] [2014] 1 WLR 1857. [48] [2016] QB 763. [49] (1901) 3 F (Ct of Session) 59. [50] (Cap.215). [51] Hong Kong Hansard, Prevention of Bribery Bill 1970 (First Reading, 21 October 1970). [52] See, in a related context, Secretary for Justice v Chan Chi Wan Stephen & Another, FACC 11 & 18/2016, unrep., 14 March 2017 at [56] to [58] and [140] to [146]. [53] [1978] HKLR 480. [54] Ibid. at 482. [55] Ibid. at 482. [56] Ibid. at 486. [57] [1977] HKLR 186. [58] [1978] HKLR 480 at 495. [59] Ibid. at 497. [60] (1992) 27 NSWLR 398. [61] Ibid. at 402. [62] (2005) 8 HKCFAR 192 at [54]. [63] Trial transcript, Day 105, p.9, lines 12-19. [64] In India, the Prevention of Corruption Act 1988, section 7 renders it an offence for “whoever, being, or expecting to be a public servant” accepts pecuniary gratification, other than legal remuneration, for doing or forbearing to do any official act. In the United States of America, it is an offence corruptly to give anything of value to any public official or “person who has been selected to be a public official” and for such a person corruptly to demand or receive anything of value, where the intent is to influence the performance of an official act: 18 U.S. Code, section 201. [65] Scofield (1784) Cald 397 at 402. [66] Criminal Law – The General Part (2nd Ed.), p.2. [67] The terms of s.159A are set out at [50] above. [68] Sir Anthony Mason NPJ in Shum Kwok Sher stated at [66] that it went back at least to 1704; whereas in a recent article, “Revival of the common law offence of misconduct in public office”, David Lusty (2014) 38 Crim LJ 337, the suggestion is made that it can be traced back to the 13th century. [69] Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381 at [98]. [70] (2005) 8 HKCFAR 192 at [54]. [71] HKSAR v Cheung Koon Chee, CACC 356/2010, unrep. at [40], a decision of the Court of Appeal in relation to s.9 of the Prevention of Bribery Ordinance. [72] [2010] VSCA 106; (2010) 201 A Crim R 522; per Redlich JA at [15]. [73] Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381. [74] Sin Kam Wah & Another v HKSAR (2005) 8 HKCFAR 192. [75] Chan Tak Ming v HKSAR (2010) 13 HKCFAR 745. [76] (2002) 5 HKCFAR 381 at [91]. [77] (2005) 8 HKCFAR 192 at [47]. [78] (2012) 15 HKCFAR 185 at [17]. [79] (2002) 5 HKCFAR 381 at [81]. [80] (2012) 15 HKCFAR 185: viz. R v Bremridge (1783) 3 Doug KB 327, 99 ER 679; R v Dytham [1979] QB 722; R v Whitaker [1914] 3 KB 1283; Re A-G’s Reference (No 3 of 2003) [2005] QB 73; Russell on Crime (12th ed., 1964) p.361 para.32; Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1, 235; Henly v Mayor and Burgesses of Lyme (1828) 5 Bing NC 91 at 107, 130 ER 995 at 1001; Northern Territory of Australia v Mengel (1995) 185 CLR 307. [81] (2013) 16 HKCFAR 525 at [26]. [82] Element (5) of Sir Anthony Mason NPJ’s re-formulation of the offence set out at [45] above. [83] As such he would be required to take the Oath of the Principal Officials under the Oaths and Declarations Ordinance (Cap.11), s.16B and Sched.2, Part II. [84] Basic Law, Article 53(1). [85] Basic Law, Article 54. As a member of ExCo, he would be required to take the Oath of Fidelity and the Executive Council Oath: Oaths and Declarations Ordinance (Cap.11), s.18 and Sched.2, Parts III and VI. [86] R v Boston (1923) 33 CLR 386 per Isaacs and Rich JJ at p.403. [87] Crimes Ordinance (Cap.200) s.159A. [88] The prosecution could also have charged the offence under s.4 of the Prevention of Bribery Ordinance: see [63] above. [89] Trial transcript, Day 113, p.107, lines 11-12. |
Mr Justice Ribeiro PJ: 1. These appeals, which arise out of the same transaction and which have been heard together, raise questions concerning the elements of the offence created by section 9 of the Prevention of Bribery Ordinance[1] (“POBO”). A. The relevant events 2. The appellant Stephen Chan Chi Wan (“Chan”) was at the material time employed as General Manager (Broadcasting) by Television Broadcasts Ltd (“TVB”) under a contract designed for administrative personnel. He was not required to appear in front of the cameras but had voluntarily hosted a talk show screened on a TVB pay channel where he interviewed various celebrities, receiving no additional remuneration for so doing. 3. The show has been referred to as the “Be My Guest” show but its Chinese name “志雲飯局” translates literally as “Chi Wan’s Dinner Party”, “Chi Wan” being Chan’s given name. It gained considerable popularity, more than 150 episodes having been aired, so that Chan himself acquired a certain celebrity status. This led to his being engaged by third parties to appear at various external events, the evidence being that between June 2008 and January 2010, this occurred 20 odd times, Chan receiving remuneration on 18 of those occasions. 4. The appellant Tseng Pei Kun (“Tseng”) was the sole director and shareholder of Idea Empire Advertising & Production Company Limited (“IEAP”). He and IEAP acted as Chan’s agent in respect of his outside commercial engagements. 5. Olympian City is a shopping mall operated by Olympian City 2 Management Co Ltd (“OC”). For several years, OC had collaborated with TVB, sponsoring a New Year’s Eve Countdown show produced by TVB and broadcast from Olympian City as a means of promoting the shopping complex. In November 2009, OC and TVB reached agreement for the Countdown show to be presented on 31 December 2009. OC agreed to pay $1.3 million as the sponsorship fee without having discussed any of the programme’s contents. 6. Coincidentally, the parties came up with the idea of adding, as a segment ancillary to the main Countdown presentation, a live, staged edition of the “Be My Guest” show. It was accepted that the $1.3 million fee would not cover the cost of this additional segment and there was no suggestion that TVB would be responsible for arranging for Chan’s participation. The evidence was that OC knew from previous experience that TVB would not provide what were referred to as their “top-tier artistes” for the Countdown event, so OC would independently invite any personalities they wished to have appearing on the show. 7. OC accordingly contacted Tseng, knowing that IEAP acted as Chan’s agent, and entered into an agreement with IEAP for Chan to appear on a live “Be My Guest” segment in the Countdown show, interviewing as his guest Lai Yiu Cheung (“Lai”). It was agreed that they would wear stickers promoting Olympian City, a requirement that did not apply to the artistes supplied by TVB. 8. OC agreed to pay IEAP $160,000 and in turn, IEAP agreed to pay $112,000 to Chan and $20,000 to Lai, keeping $28,000 for itself. Chan did not seek or obtain permission from TVB to appear on or to be paid for hosting the show although he had a contractual obligation to seek approval for outside work. However, since TVB produced the show, it was generally known by persons at TVB that Chan had been engaged to take part in the Countdown event. It was, as its Chinese name indicates, Chan’s show obviously to be aired with his participation. The special edition of “Be My Guest” was duly broadcast and IEAP, Chan and Lai duly received the agreed remuneration. B. The charges and the course of the proceedings 9. The appellants were charged with conspiring for an agent to accept an advantage contrary to section 9(1)(a) (Charge 1) and, alternatively, with the substantive offences of an agent accepting an advantage (Charge 2, in Chan’s case) and offering an advantage to an agent (Charge 3, in Tseng’s case). 10. The charge against Chan as particularised was that he, being an employee and thus an agent of TVB, without lawful authority or reasonable excuse, accepted from Tseng acting on behalf of IEAP, an advantage consisting of the $112,000 fee as an inducement or reward for or otherwise on account of Chan’s doing or having done an act in relation to his principal’s affairs or business “namely participating and performing in a side-show entitled ‘Be My Guest’ in the ‘New Year Eve Countdown Programme at Olympian City for 2010’ which was produced and broadcast by TVB” on 31 December 2009. 11. Tseng was charged with offering that amount to Chan as an inducement, etc, for Chan so to act in relation to the affairs or business of his principal TVB. The alternative charge that they both faced was that they had conspired for Chan to accept that advantage as such an inducement, etc, in relation to his principal’s affairs or business. 12. On 2 September 2011, His Honour Judge S T Poon, AgCDJ (as he then was) acquitted the appellants.[2] The prosecution appealed by way of case stated[3] and the Court of Appeal[4] allowed the appeal, set aside the not guilty verdicts and remitted the case to the trial judge to consider whether the appellants could rely on the defence of reasonable excuse for Chan’s conduct. 13. On 7 March 2013,[5] S T Poon CDJ ruled that the reasonable excuse defence availed both appellants and dismissed the charges afresh. However, the prosecution once again appealed by way of case stated[6] and, once again, the Court of Appeal[7] allowed the appeal and directed the Judge to convict Chan and Tseng on the conspiracy charge and to sentence them accordingly. Chan was fined $84,000 and Tseng fined $28,000. 14. The Court of Appeal[8] refused a certificate sought by the appellants for the purposes of appeal, but the Appeal Committee granted each appellant leave to appeal,[9] certifying the following questions as being of sufficiently great and general importance, namely: (1) In the context of a section 9 offence under the Prevention of Bribery Ordinance (Cap 201) (“POBO”): (i) what is the mens rea required of an agent to constitute him guilty of an offence under that section; and (ii) how should the element “in relation to the principal’s affairs or business” be interpreted having regard to the determination of the Privy Council in Commissioner of the ICAC v Ch’ng Poh [1997] HKLRD 652? (“Questions 1(i) and 1(ii)”) (2) In the context of a section 9 offence under POBO, what is the proper approach the Court should adopt in considering the defence of reasonable excuse? (“Question 2”) 15. Leave was also granted on the ground that it was reasonably arguable that a substantial and grave injustice had been done to the appellants in the present case. C. Question 1(i): Elements of section 9 and mens rea 16. POBO section 9 is concerned with transactions between third persons and agents in relation to the affairs or business of their principals. Its offence-creating provisions materially state as follows: Corrupt transactions with agents (1) Any agent who, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for or otherwise on account of his – (a) doing or forbearing to do, or having done or forborne to do, any act in relation to his principal's affairs or business; or (b) showing or forbearing to show, or having shown or forborne to show, favour or disfavour to any person in relation to his principal’s affairs or business, shall be guilty of an offence. (2) Any person who, without lawful authority or reasonable excuse, offers any advantage to any agent as an inducement to or reward for or otherwise on account of the agent's – (a) doing or forbearing to do, or having done or forborne to do, any act in relation to his principal's affairs or business; or (b) showing or forbearing to show, or having shown or forborne to show, favour or disfavour to any person in relation to his principal’s affairs or business, shall be guilty of an offence. 17. Section 9(4) excludes from liability an agent who obtains the informed permission of his principal before or as soon as reasonably possible after the conduct which would otherwise constitute a section 9 offence. As permission was neither sought nor given in the present case, section 9(4) is of no application. 18. Addressing Question 1(i), there is no doubt that section 9 is an offence which requires proof of mens rea in respect of all its essential actus reus ingredients. It should be borne in mind that there are several variants of the offence. Thus, section 9(1) covers agents who solicit or accept an advantage while section 9(2) deals with persons who offer an advantage to the agent. The advantage may be an inducement to do or forbear from doing some act in the future. Or it may be a reward for having already done or forborne to do something. The act or forbearance must in each case be in relation to the affairs or business of the agent’s principal, a phrase which is examined in detail below.[10] The mens rea requirement of any particular variant is necessarily adapted to the elements of that variant and may differ from the mens rea requirement of some other variant of the offence. 19. The importance of the mens rea or mental dimension of the offence looms larger in cases involving the offering, soliciting or accepting of an advantage as an inducement for a future act or forbearance. This is because the offence is committed upon the making of the offer, solicitation or acceptance, it being no defence that the contemplated act or forbearance was not or could not be performed by the agent.[11] In such cases, it is the state of mind of the person making the offer to the agent or of the agent soliciting the advantage, or where the agent accepts the advantage, the mental state of the agent in accepting the advantage, that is the major component of the offence. Where the induced or offered act or forbearance has taken place or where the case involves a reward for past conduct, that conduct is available to be examined as part of the actus reus with the accused’s accompanying mental state. 20. It has been stressed that the liability of each person involved in the transaction must be independently assessed according to his own mens rea. Thus it has been held that an agent accepting an advantage with the requisite corrupt intent may be convicted even though the person furnishing the advantage acted innocently. Stuart-Moore VP put it thus in HKSAR v Wong Yuk Sim:[12] “...where a provider of a reward thinks he is providing something innocently but the receiver believes that the provider is providing it as a corrupt reward and he accepts it as a corrupt reward, believing it to have been provided as a corrupt reward, then the receiver behaves corruptly even if the provider behaves innocently.” 21. It follows that in cases involving the offering or solicitation of an advantage, the prosecution must prove that the accused intended that, if provided, the advantage should be accepted as an inducement or reward for or otherwise on account of the agent’s act or forbearance in relation to his principal's affairs or business (in the sense discussed below[13]). 22. And in cases involving the accused agent’s acceptance of an advantage, the prosecution must prove that he knew or believed it to have been provided as an inducement or reward for or otherwise on account of his act or forbearance in relation to his principal's affairs or business (in the aforesaid sense). D. The Judge’s reasoning 23. The Judge referred to Commissioner of ICAC v Ch’ng Poh,[14] (to which I shall return[15]) and recognized that the prosecution did not have to establish that Chan was acting in his capacity as TVB’s agent either when accepting the money or when appearing on the show. His Honour noted, relying on Ch’ng Poh, that: “What the prosecution needs to prove is only that the relevant act is an act done in relation to his principal’s affairs or business. However, this phrase should not be given a limitlessly wide meaning. Its meaning should be kept within a specific parameter, which is: when the defendant did the act in question, he must have intended the act to ‘influence or affect’ his principal’s affairs or business. In other words, his act was ‘aimed at’ his principal.”[16] 24. He concluded that Chan’s appearance in the “Be My Guest” segment “was purely an act of moonlighting in his capacity as a ‘celebrity’ or an ‘artiste’, and such an act was not intended to influence or affect the affairs or business of TVB, nor was it aimed at TVB”[17] so that it fell outside the ambit of section 9. 25. In his 2nd Case Stated,[18] the Judge elaborated on his views, pointing out that Chan had not used any powers of his office to benefit himself and had acted openly, his participation having been discussed at TVB production meetings, so that there was no question of him making a secret profit. He held that Chan’s participation in the show “would do no harm but good to TVB” and that “[his] performance and acceptance of the reward did not conflict with any interest of TVB.” He commented that Chan’s mistake merely involved his failure to “follow the procedures prescribed in the employment contract” regarding approvals of outside work and remuneration. 26. The Judge therefore concluded that Chan’s act of accepting $112,000 as an inducement or reward for appearing on the show was not an act done “in relation to his principal's affairs or business” within the meaning of section 9 or (in his 2nd Case Stated) was amenable to the defence of reasonable excuse. He therefore acquitted the appellants. E. The Court of Appeal’s reasoning 27. The Court of Appeal reversed the Judge’s verdict of acquittal holding that he had been wrong to find that Chan’s act fell outside section 9. In the joint judgment of Yeung VP and Yuen JA, it was held that Chan’s appearance in the show “related to TVB’s affairs or business”; would “influence or affect TVB”; was “aimed at TVB” and would “involve TVB”.[19] The reasoning behind those conclusions is contained in the following paragraphs of that judgment (translated from the original Chinese): “107. Although Chan’s chief position at TVB was General Manager (Broadcasting) and he was not contractually obliged to perform in front of the camera, the undisputed evidence shows that he had performed in more than 150 episodes of ‘Be My Guest’, which was a well-known and very favourably received talk show on TVB’s pay channel. 108. It must have been because of the popularity of ‘Be My Guest’ that Olympian City would like to have the additional ‘Be My Guest’ show added within the main show. 109. This request made by Olympian City met with approval from TVB. TVB allowed Chan and another artiste Lai Yiu-cheung to perform together in the additional ‘Be My Guest’ show, which was to be produced and broadcast live by TVB. 110. Had Chan refused to perform in the additional ‘Be My Guest’ show, it might have been necessary for TVB to arrange another programme as a substitute. This might affect the contractual relationship between TVB and Olympian City and would significantly influence the audience ratings of the live broadcast of the main show. 111. Judging from the undisputed and/or indisputable background facts of the present case, the propositions that Chan performed in the additional ‘Be My Guest’ show merely in the capacity of a celebrity, that his performing in that show was not related to TVB’s affairs or business, and that it would not influence or affect TVB, would not involve TVB and was not aimed at TVB, are all artificial and contrived. These propositions not only deviate from the crux of the issues in the present case and defy common sense, but also represent an approach which is neither realistic nor reasonable.” 28. These are, with respect, decidedly odd reasons for labelling Chan’s conduct as criminal. What is asserted in those paragraphs is that TVB wanted Chan’s show to be part of its Countdown event because its popularity would boost audience ratings. Chan in fact obliged without being asked to do so by TVB and at no cost to the television station, having been engaged and paid to appear on the show by OC via IEAP. Thus, on the Court of Appeal’s reasoning, Chan’s conduct was wholly in line with and beneficial to TVB’s interests. 29. However, the joint judgment holds that Chan’s conduct constituted the section 9 offence by saying that it “related to”, would “influence or affect”, was “aimed at” or would “involve” TVB’s business or affairs in that TVB’s business would have been prejudicially affected if Chan had refused to perform (as he was entitled to under his contract) because audience ratings would have been adversely affected, alternative programming arrangements might have been necessary and TVB’s contractual relationship with OC might have been affected. This is to assert that Chan committed the offence because TVB would have been prejudiced if Chan did not act in the beneficial way in which he was induced to act by remuneration from OC. Such reasoning appears to turn the policy of section 9 on its head. 30. The joint judgment did not regard this as a difficulty, taking the view that lack of prejudice to the principal’s affairs or business was irrelevant: “What section 9(1)(a) requires is that the act of the agent is done in relation to his principal’s affairs or business. There is no requirement that the agent’s act has to cause prejudice to his principal’s affairs or business. Ch’ng Poh further explained that the phrase ‘in relation to his principal’s affairs or business’ meant that the agent’s act would influence or affect his principal’s affairs, would involve his principal, and was aimed at his principal. Ch’ng Poh did not say that the ‘influence’ or ‘effect’ must be adverse, and the parties agreed that the term ‘aimed at’ does not carry a negative meaning.[20] In support of this view, reliance was placed on the Court of Appeal’s earlier decision in HKSAR v Fung Hok Cheung,[21] to which I shall return.[22] 31. Cheung JA, in a concurring judgment, gave different reasons for holding that Chan’s performance was an act in relation to his principal's affairs within the meaning of section 9. His Lordship stated: “... Judge Poon overlooked the fact that besides being a celebrity or an artiste, the 1st respondent was also General Manager (Broadcasting) of TVB, and therefore his acts were certainly related to TVB’s business. This is because, on the facts, when TVB and Olympian City Management Ltd were planning the countdown event, they happened to put forward the same idea, to which they then agreed, of adding in a shopping mall version of ‘Be My Guest’ as part of the event. It follows that, if the 1st respondent participated in that show and accepted money therefor, he would be doing an act in relation to TVB’s business.”[23] 32. With respect, the proposition that Chan was General Manager (Broadcasting) and “therefore” his acts “were certainly related to TVB’s business” is hard to follow. Chan’s appearance on the talk show had nothing to do with his being General Manager (Broadcasting). Whether his hosting of the show did or did not qualify as an act “in relation to his principal's affairs or business” required examination of the relationship between that act and the principal’s affairs or business. It was not determined simply by pointing to his managerial position in TVB. 33. Cheung JA added (in the context of his discussion of mens rea): “Judge Poon considered that when the 1st respondent agreed to perform in the ‘Be My Guest’ show, he had no intention to influence or affect TVB’s business and his act was not intended to be aimed at TVB, because the idea of adding in the show was not conceived by either of the two respondents, who merely played a passive role. However, as stated above, the most important consideration is that the 1st respondent’s act was related to the TVB programmes, and this precisely indicates a causal relationship between his act and his principal’s business, on which basis the court is entitled to find that the 1st respondent had the mens rea for the section 9(1)(a) offence.”[24] (Italics supplied) 34. To regard the required relationship between the agent’s act and the principal’s affairs or business as established simply because Chan’s show “related to TVB programmes”, gives the section an extremely broad interpretation. It was an approach supported by Mr Jonathan Caplan QC[25] who submitted that it was enough that Chan’s show was part of a programme broadcast by TVB. 35. For the reasons developed below, I am respectfully of the view that the Court of Appeal’s judgments are erroneous and based on a misconstruction of section 9. F. Ch’ng Poh 36. The leading authority in this context is Commissioner of the ICAC v Ch’ng Poh[26] in which the Privy Council considered the nature and limits of the offence created by section 9. Mr A, a partner in a solicitors’ firm referred to as X & Co, was acting for Ch’ng Poh who had been convicted of fraud. To bolster his prospects of appeal, Ch’ng Poh caused A to offer a bribe to a corrupt former prosecutor, Warwick Reid, who was asked to swear an affidavit discrediting an accomplice and key prosecution witness, one C H Low, and to try to persuade Low not to cooperate with the prosecuting authorities. A warrant authorizing a search of X & Co’s premises which was purportedly issued by the magistrate under POBO section 9(1)(a) was quashed for want of jurisdiction. The Privy Council held that on the facts, A’s acts had nothing to do with the affairs or business of his principal X & Co, so that section 9 was not engaged. 37. In reaching that conclusion, Lord Lloyd of Berwick held that the words “in relation to his principal's affairs or business” had a restricting purpose and that it was not enough that the recipient of a bribe should merely be shown to be someone’s agent: “Section 9 is the only section in the Ordinance dealing with persons other than public servants. It is confined to agents. It does not say, like section 4, that the agent must have been acting in his capacity as an agent. Instead the act done (or not done) by the agent must be an act done or not done ‘in relation to his principal's affairs’. But as Keith J pointed out in R v Ng Man Ho [1993] 1 HKC 632 at p.638 the alternative words serve much the same purpose. They are clearly intended to be restrictive. It is not enough that the recipient of the bribe should be an agent in fact. Otherwise any partner in a firm of solicitors, accepting an advantage without authority or reasonable excuse, would be caught by the section. This would be much too wide.”[27] 38. Turning to the meaning of the restricting phrase, his Lordship stated: “So what do the limiting words mean? They mean that, for the section to apply, the person offering the bribe, must have intended the act or forbearance of the agent to influence or affect the principal's affairs. Accordingly s.9 would apply if Ch’ng Poh had bribed Mr A to secure him a benefit at X & Co's expense, for example, to arrange a reduction in X & Co's ordinary professional fees; or if X & Co were induced to act in a way in which they would not otherwise have acted. Thus it is an essential ingredient of the offence under s.9 that the action or forbearance of the agent should be aimed at the principal. If it is sufficient for the purposes of the person offering the bribe that the agent should act on his own without involving his principal, then, whatever other offence may have been committed, it is not a corrupt transaction with an agent for the purposes of s.9.”[28] 39. In giving this meaning to the restrictive words, Lord Lloyd was elaborating upon both the actus reus and mens rea elements of the offence. In variants of the offence where the agent has already done the act or forborne to act, his Lordship’s dictum explains the quality of the relationship between the performed act or forbearance on the one hand and the principal’s affairs or business on the other which must be proved: the act or forbearance must have been aimed at and intended to influence or affect the latter’s affairs or business. In cases where the act or forbearance have yet to occur, Lord Lloyd identifies the mental element required: the advantage offered or solicited must be intended as an inducement or reward for an act or forbearance aimed at the principal’s business, with a view to influencing or affecting the same. 40. Reliance on section 9(1)(a) by the Commissioner in the Ch’ng Poh case was plainly misconceived. There was no advantage offered to or solicited or accepted by the only relevant agent, Mr A. And although he was a partner in X & Co and was in general an agent of the firm, his act of conveying a bribe to Reid was not related to X & Co’s affairs or business. The importance of Lord Lloyd’s judgment is in its explication of the required nexus between act and business which was plainly missing in Ch’ng Poh. He construed the requirement that the agent’s act or forbearance should be “in relation to his principal's affairs or business” as a requirement that the act or forbearance be “aimed at” and intended to “influence or affect” the principal's affairs. G. Question 1(ii): The Court of Appeal and Ch’ng Poh 41. Although the Court of Appeal referred extensively to Ch’ng Poh, I do not, with respect, think that that authority was correctly analysed and applied. To take Cheung JA’s judgment first, his Lordship, as we have seen, adopted an extremely wide interpretation of the relevant phrase, holding that it was enough simply to prove that Chan’s show “related to TVB programmes” in some undefined way. This is inconsistent with Ch’ng Poh in that it fails to assign to that phrase the restrictive function referred to above. 42. It appears that Cheung JA may have adopted his wide interpretation because he was not persuaded that Lord Lloyd had meant the words to operate restrictively. Cheung JA stated: “The words ‘influence’, ‘affect’ and ‘aimed at’ do not appear in section 9. The Privy Council used these words merely because this would facilitate explanation of the causal relationship between the act of the offending agent and his principal’s business. The Court used these words for the purpose of emphasizing the need for the prosecution to prove such a causal relationship in a given case, but this does not mean that, apart from being related to the principal’s business, the agent’s act must also have been deliberately intended to influence, affect or be aimed at the principal’s business. Put another way, these words do not connote a positive or negative impact of the agent’s act on the principal’s business or any good or bad consequences of such act upon the principal’s business. I think that this is the principle which the courts should apply when considering the agent’s intention.”[29] 43. Two main points are made in that paragraph, the important proposition being that the words “influence”, “affect” and “aimed at” do not appear in section 9. That is certainly true and it is correct that in the relevant phrase, words with a general, non-specific meaning – “in relation to his principal's affairs or business” – are used. However, I am unable to agree with Cheung JA’s statement that “this does not mean that, apart from being related to the principal’s business, the agent’s act must also have been deliberately intended to influence, affect or be aimed at the principal’s business” in so far as his Lordship may have intended to question the correctness of Lord Lloyd’s construction. 44. Lord Lloyd elaborated upon the meaning of those words by reference to the mischief of the legislation (which is further discussed below[30]) as indicated by the examples he gave. In so doing, he was reflecting the Court’s duty to give effect to the legislative intention when construing general words, as explained by Lord Millett NPJ in Ho Choi Wan v Hong Kong Housing Authority:[31] “In construing the language of a statute, it is the task of the court to ascertain and give effect to the intention of the legislature. But that does not mean that the Court must give a literal construction to every word or phrase in the statute. As Lord Bingham of Cornhill said in R (Quintavalle) v. Secretary of State for Health[2003] 2 AC 687 at p.695: ‘The court’s task, within the permissible bounds of interpretation, is to give effect to Parliament’s purpose.’ Whenever the legislature enacts or amends an Ordinance, its purpose is to remedy a perceived mischief or defect in the pre-existing legislation. It is to be presumed that it did not intend the statute to go wider in its operation than is necessary to remedy the mischief or defect in question. If it has inadvertently employed general words which, if given their fullest effect, are wider than necessary, the court not only may but must restrict them by construing them in a narrower sense which, while still falling within the ordinary meaning of the words, gives effect to the legislative intent but does not go beyond it, still less frustrate it.” 45. I am less clear about the meaning of Cheung JA’s second point regarding a “causal relationship.” The suggestion that Lord Lloyd was “emphasizing the need for the prosecution to prove [some] causal relationship” is puzzling especially since it is juxtaposed with the statement that the words in question “do not connote a positive or negative impact of the agent’s act on the principal’s business”. If this is a reference to the rule laid down by POBO section 11 that inability or failure to carry out the corrupt purpose is not a defence, then it is uncontroversial. Otherwise, its relevance is not evident. 46. Turning to the joint judgment, it held, as we have seen, that the appellants’ conduct was caught by the relevant phrase because TVB’s enthusiasm for having Chan’s segment as part of the Countdown show to achieve higher audience ratings meant that his participation was an act “in relation to his principal's affairs or business”. That is not an approach consistent with Ch’ng Poh. It appears that in arriving at its decision, the joint judgment sought to distinguish the Privy Council’s decision. First, it treats Ch’ng Poh as authority merely for the proposition that where an “agent’s act has nothing to do with his principal’s affairs or goes beyond the agent’s official powers and duties and is not authorized by his principal” no section 9 offence is committed.[32] This was certainly the position on the facts of Ch’ng Poh[33] and may be said to be its ratio decidendi. However,as noted above,[34] the importance of Lord Lloyd’s judgment lies in its elaboration of the phrase currently under discussion. 47. The joint judgment seeks next to distinguish Lord Lloyd’s explication by asserting that: “The intention with which Ch’ng Poh was concerned is the intention in relation to the offering of the bribe, not the intention of the agent who accepts the advantage. This point is not difficult to understand. The person offering the bribe will not give an advantage to the agent for no reason. He certainly wants the agent who has accepted the advantage to do certain acts which will influence or affect his principal and which will benefit him. It is possible that an agent accepts an advantage solely out of greed, with no intention to actually influence or affect his principal’s affairs by doing his act, but it does not follow that he has not committed the offence under section 9(1)(a) of the Prevention of Bribery Ordinance.”[35] 48. In Ch’ng Poh, Lord Lloyd was analysing the position from the point of view of the offeror, giving hypothetical examples involving Ch’ng Poh offering a bribe to Mr A. But his Lordship was not suggesting that the need to establish the relationship in question only arises in the variant of the offence involving the offering of a bribe. Lord Lloyd stated generally that “the act done (or not done) by the agent must be an act done or not done ‘in relation to his principal's affairs’” and that it was “an essential ingredient of the offence under s.9 that the action or forbearance of the agent should be aimed at the principal”.[36] The section itself employs the same restrictive phrase in both subsections, dealing first with the variant involving an agent who solicits or accepts the advantage and secondly with the variant involving a person who offers the advantage. 49. But even on the narrow view of Ch’ng Poh taken by the joint judgment, the question which had to be – but was not – posed was whether Tseng, acting on behalf of IEAP and OC, in offering remuneration of $112,000 to Chan as an appearance fee, intended his performance in the “Be My Guest” segment to be an act aimed at and intended to influence or affect TVB’s business. I find it impossible to see how the answer could be in the affirmative. Tseng’s position was in principle no different from that of OC which had provided the fee to secure Chan’s performance as OC’s guest in a show promoting its shopping mall. It cannot plausibly be suggested that OC committed a section 9 offence involving TVB’s affairs or business. 50. Properly applying Ch’ng Poh,the joint judgment should also have asked whether, in accepting the fee and doing the show, Chan knew or believed that his fee had been provided by Tseng as an inducement or reward for appearing on the show as an act aimed at TVB’s affairs or business and intended to influence or affect the same. As discussed above[37], this represents the agent’s mens rea requirement in a section 9 offence involving solicitation or acceptance. Again, I can see no basis for an affirmative answer. 51. It follows, in my view, that the Court of Appeal misconstrued section 9 and applied the wrong test for determining whether the necessary relationship between the agent’s act or forbearance and the principal’s affairs or business was proved. On this basis alone, the Court of Appeal’s decision to reverse the trial Judge’s acquittals cannot stand. However, one other aspect of the Court of Appeal’s decision, also bearing on that relationship, is of general importance and ought to be addressed. This involves the question whether, on the true construction of the section, the contemplated act or forbearance by the agent has to be adverse to the principal’s interests. H. The need for conduct adverse to the principal’s interests 52. As noted above,[38] the joint judgment was not troubled by the fact that Chan’s appearance on the show would only have beneficial consequences for TVB and involved no conflict of interest or other detriment to the principal’s interests. It took the view that “[There] is no requirement that the agent’s act has to cause prejudice to his principal’s affairs or business” and that “Ch’ng Poh did not say that the ‘influence’ or ‘effect’ must be adverse”, the term ‘aimed at’ not carrying a negative meaning.[39] 53. I respectfully disagree. In my view, on a proper construction of section 9 in the light of its mischief, the induced or rewarded conduct “aimed at the principal’s business” has to be conduct which subverts the integrity of the agency relationship to the detriment of the principal’s interests. It is not the legislative intent to stigmatize as criminal, conduct of an agent which is beneficial to and congruent with the interests of the principal (as in the present case). 54. I hasten to add that the prejudice to the principal’s interests to which I refer does not need to involve immediate or tangible economic loss to the principal or benefit to the agent at the principal’s expense. Of course, it will frequently (or indeed, usually) do so, but that is not essential on the true construction of the section. The agent may, for instance, be induced to act prejudicially to the reputation of the principal’s business or to divulge confidential information without any immediately palpable loss to the principal. Where the offering, solicitation or acceptance of an advantage is of such a nature as to undermine the integrity of the agency relationship, that is, of such a nature as to injure the relationship of trust and loyalty that a principal is entitled to expect from his agent, this in itself is capable of constituting the necessary detriment. This reflects increasing recognition in the field of employment law, of the importance of the reciprocal duties of trust and confidence in the relationship of employer and employee – perhaps the most common agency relationship – with the evolution of remedies for damage to that relationship.[40] 55. Corrupt transactions with agents which undermine that relationship of trust and loyalty may well give rise to serious reputational damage to the principal even if no direct economic detriment is suffered. This may be illustrated by some hypothetical examples: (a) An employee, A, is a manager with authority to select subordinate employees in his department for promotion. He accepts gifts from a subordinate’s parents who make it plain that they expect their daughter to get promotion, as she does. The employer suffers no detriment (if she is up to the job) but the corrupt transaction, if revealed, will damage its reputation with its other employees. (b) An employee, B, is in charge of a confidential tendering process. Shortly before the closing date B accepts a bribe from X to reveal the lowest tender price so far submitted (say $900,000), thus enabling X to submit a successful tender of $850,000. B has apparently saved his employer $50,000 (if X does the job properly) but the breach of confidence has impaired the relationship of trust and loyalty and the corrupt transaction, if revealed, will damage the employer’s reputation with its regular suppliers. (c) An employee, C, runs the department selling electronic toys in a large store. At Christmas there is intense demand, exceeding supply for a particular toy. C takes a bribe of $500 from a customer to jump the queue on the waiting list. The store suffers no financial loss but the corrupt transaction, if revealed, would damage the store’s reputation with its regular customers. H.1 The mischief of the Ordinance and of section 9 56. At the risk of stating the obvious, the object of the POBO is the suppression of bribery and corruption. The long title makes this clear[41] and the purpose of the legislation has been acknowledged in many reported cases.[42] In Ch’ng Poh, Lord Lloyd noted that “section 9(1)(a) criminalises corrupt transactions with agents ...”[43] In the example he gave of a case which would fall within the section, he spoke of Ch’ng Poh hypothetically bribing Mr A “to secure him a benefit at X & Co’s expense”.[44] 57. The respondent sought to make something of the fact that the word “corruptly”, used in the equivalent provision previously in force,[45] has been removed from the current Ordinance. However, its removal obviously does not change the mischief at which the Ordinance is aimed. In a debate on the Bribery Bill 1970, Mr Oswald Cheung, a Legislative Councillor, expressed doubts as to removal of the word and suggested an amendment to restore it.[46] The Attorney-General responded that it was removed lest inclusion of a reference to corruption “would oblige the Crown, before an accused had a case to answer, to establish that the soliciting or acceptance of a bribe was attributable to a corrupt motive”, experience showing that this had caused difficulties.[47] He went on to explain that, as drafted, “the Crown will need to prove only a payment to the public servant, or agent, or other person. It will then be for the accused to show that he received it for reasons which are unconnected with bribery...” 58. With respect, it was an over-simplification for the Attorney-General to suggest that the Crown would need “to prove only a payment”. As is evident from the structure and elements of the section 9 offence discussed in Section H.2 below, while the need to prove a corrupt motive was avoided by removing a reference to corruption in the wording, the approach adopted involves creating offences requiring proof of actual or proposed transactions involving particular classes of defendants (including agents in the private sector) which are of such a nature as to savour implicitly of corruption. Thus proof of a payment (or an offer or solicitation) meeting the conditions defined by section 9 implicitly establishes a corrupt transaction, subject to the defences of lawful authority and reasonable excuse. H.2 The structure of section 9 59. As Li CJ stated in HKSAR v Cheung Kwun Yin,[48]the purpose of a statutory provision may be evident from the provision itself. The structure and elements of the section 9 offence give a strong indication of the legislative intent. Thus, the section concerns transactions between third persons and agents who have been entrusted with power to act on their principals’ behalf. It focuses on an advantage solicited or accepted by, or offered to, the agent as an inducement for him to act or forbear to act in some way in relation to his principal’s affairs or business. If the agent were duly acting in the ordinary course of his principal’s business, one would expect no such inducement to enter the picture. The situation targeted by section 9 is thus evidently one where the agent is being offered or solicits without permission, lawful authority or reasonable excuse, an inducement to do (or forbear from doing) something “in relation to his principal's affairs or business”. It is a situation which is implicitly likely to involve some deviation from his normal duties and is likely to undermine the integrity of the agency relationship. This is reflected in paragraph (b) of each of sections 9(1) and 9(2)[49] which, by focussing on an agent’s “showing or forbearing to show ... favour or disfavour to any person in relation to his principal’s affairs or business” as the basis of guilt, indicate that section 9 targets transactions tending to undermine the integrity of the agency relationship. 60. As Blair-Kerr J, in R v R E Low,[50] put it in relation to an earlier version of section 9:[51] “It is the inducing influence of the gift in relation to the recipient's performance or non-performance of his duty which is the essence of the offence.” H.3 Fung Hok Cheung 61. In rejecting the argument that the “influence” or “effect” must be adverse, the Court of Appeal relied on HKSAR v Fung Hok Cheung.[52] The facts were described as follows: “... the applicant had access to a corrupt jockey, one Munce, who was prepared to provide tips as to the prospects of success of horses in respect of which he had peculiar information as a result of having ridden them at the request of various trainers; the applicant would pass this information on to PW1 [an ICAC undercover agent] who would place bets in his own name but on Munce's behalf; if a bet was successful a proportion of the winnings would be paid over to Munce, via the applicant who would retain a share, whereas if it was unsuccessful the loss would be borne by, ostensibly, PW1.”[53] 62. The jockey was held to be the agent of the trainers for whom he was riding and Wright J, giving judgment for the Court of Appeal, described the case as one in which the agent “surreptitiously provides confidential information concerning his employer's business to a third party in return for payment”.[54] The applicant was convicted of conspiracy to offer an advantage to an agent, contrary to POBO section 9(2)(a), read together with sections 159A and 159C of the Crimes Ordinance (“CO”).[55] In the passage relied on below, Wright J stated: “The section does not require, nor should the phrase ‘aimed at’ in Commissioner of the Independent Commission Against Corruption v Ch’ng Poh be read as importing, any direct adverse proprietary consequence to the principal's affairs or business. What it requires is that the person offering the inducement intended that the act to be carried out by the agent itself in some way would influence or affect the affairs or business of the principal.”[56] 63. His Lordship added: “The Deputy Judge was fully justified in finding on the evidence before her that the use by the applicant, for financial gain, of the confidential information obtained by Munce as jockey for and agent of the trainer, potentially would affect the trainer's reputation. It requires nothing more than commonsense to appreciate that such a situation would affect the trainer's affairs or business, from which it is self-evident that Munce's conduct was an act in relation to his principal's affairs or business and that the applicant intended that consequence.”[57] 64. It is clear from these two paragraphs that Fung Hok Cheung is not authority for the proposition that a person can be guilty of a section 9 offence even where the contemplated act or forbearance has no potentially adverse impact on the principal’s interests. Wright J was stating that there was no need to show any “any direct adverse proprietary consequence to the principal's affairs or business”. In the next paragraph he endorsed the trial judge’s finding that Munce’s acts potentially damaged the trainer’s reputation and thus would affect his affairs or business. Such reputational damage is not a direct “proprietary” or “economic” consequence, but it is plainly a consequence inimical to the integrity of the agency relationship between Munce and the trainer. It might moreover lead to indirect economic harm to the trainer’s business. 65. I pause to note that in the leading textbook in this jurisdiction on the subject,[58] the learned author asserts the need for prejudice to the principal’s interests: “Section 9 is the only offence in the POBO dedicated solely to corruption in the private sector but it is limited in its scope by the requirement that there exists a principal/agent relationship and that the principal’s interests are prejudiced or at risk of being prejudiced by the secret actions either of his corrupt agent or by a person with whom he is having dealings who seeks to corrupt his agent. This is the traditional narrow view of corruption which is typically found in anti-corruption legislation and is even reflected in Article 21 of the United Nations Convention Against Corruption (UNCAC) which proscribes the offering solicitation or acceptance of undue advantages to or by the employees of private sector entitles “in order that he or she, in breach of his or her duties, act or refrain from acting”. Thus the focus of the UNCAC and other similar offences is on conduct which undermines the integrity of the agent in his relationship with his principal ...” I. Conclusions on section 9 summarised 66. There are variants of section 9 offences differing according to whether they are committed by the agent soliciting or accepting the advantage or by the person offering the same; and whether the act or forbearance is contemplated or already performed. 67. The mens rea requirements of knowledge, belief and intention adhere in their appropriately adapted forms to the essential actus reus ingredients of each of these variants, applied independently to each person allegedly involved in the transaction. 68. The reference in section 9 to the agent’s act or forbearance being “in relation to his principal's affairs or business” is properly construed to mean that the agent’s act or forbearance must be aimed at and intended to influence or affect the principal’s affairs or business in a manner that undermines the integrity of the agency relationship by injuring the bond of trust and loyalty between principal and agent. 69. In offering cases, the prosecution must prove that the offeror intended that the advantage would be accepted as an inducement or reward for or otherwise on account of the agent’s act or forbearance which is aimed at and intended to influence or affect the principal’s affairs or business. 70. In soliciting or accepting cases, the prosecution must prove that the accused agent knew or believed that the advantage was provided as an inducement or reward or otherwise on account of his actual or contemplated act or forbearance as conduct aimed at or intended to influence or affect the principal’s affairs or business. J. Question 2: reasonable excuse 71. Section 9 creates an offence based on conduct performed without lawful authority or reasonable excuse and section 24 lays it down that these are matters of defence which the accused bears the onus of proving: “In any proceedings against a person for an offence under this Ordinance, the burden of proving a defence of lawful authority or reasonable excuse shall lie upon the accused.” 72. In HKSAR v Ho Loy,[59] Fok PJ pointed out that a defence of reasonable excuse involves (i) identifying the matters relied on as constituting the excuse; (ii) determining the genuineness of the excuse; and (iii) assessing “... whether that excuse is reasonable, which the court will do on an objective standard depending on the particular facts of the case”. 73. An issue as to reasonable excuse only arises if there is proof of conduct which prima facie constitutes the section 9 offence so that an assessment of the facts relied on as an excuse is required. Since I have concluded that the appellants do not fall within section 9, there is no realistic basis for assessing the defence in the present case. The prosecution has not proved that they respectively offered and accepted an advantage to induce or reward conduct by Chan aimed at TVB which prima facie undermined the integrity of the agency relationship to TVB’s detriment. It is thus not a meaningful exercise to search for and assess the reasonableness of matters relied on to excuse a state of affairs that never came into existence. This applies, for instance, to Chan’s reliance on his belief that he effectively had TVB’s permission to perform versus the prosecution’s assertion that permission would have been refused. What divided the parties on that issue was whether Chan’s act could be regarded as aimed at and intended to influence or affect TVB’s business – questions bearing on prima facie guilt rather than on reasonable excuse. I shall accordingly confine myself to a discussion of one question of principle relating to reasonable excuse that was canvassed at the hearing. K. Conspiracy, section 24 and the burden of proof 74. As noted above, section 24 provides that the “burden of proving a defence of lawful authority or reasonable excuse shall lie upon the accused”. If that section is engaged and a constitutional challenge mounted on the basis that it infringes the presumption of innocence, a proportionality analysis may be required. I do not, however, intend to enter into that discussion. 75. The point of principle which I wish to address arises out of the Court of Appeal’s direction requiring the Judge to find the appellants guilty solely on the charge of conspiracy for an agent to accept an advantage.[60] The question is whether, in cases of conspiracy, section 24 is engaged so that a reverse onus to prove lawful authority or reasonable excuse is placed on the accused. 76. In HKSAR v Ng Po On,[61] the effect of section 24 was considered in relation to POBO section 14 which made it an offence to fail “without reasonable excuse” to comply with a notice requiring the person served to furnish information relevant to an ICAC investigation. The prosecution argued that section 24 made it clear that reasonable excuse was a matter of defence to be proved by the respondent on the balance of probabilities. This Court held that on a proportionality analysis, the validity of the section 14 offence could be upheld as consistent with the presumption of innocence provided that section 24 was read down to impose merely an evidential burden on the person failing to comply with the notice to raise the issue of reasonable excuse while the prosecution bore throughout the persuasive burden of proving non-compliance and of negating reasonable excuse. 77. In connection with inchoate offences including the offence of conspiracy, I stated:[62] “The precise offence charged has to be borne in mind. Thus, if a defendant is charged with an inchoate offence of conspiracy, attempt or incitement relating to a statutory offence, it does not matter that the substantive statutory offence may, on construction, be found to contain a reverse onus provision. The inchoate offence exists at common law and, in accordance with the general common law rule, does not involve any reverse onus. This is unaffected by s.94A.[63] Thus, in HKSAR v Lam Yuk Fai (2006) 9 HKCFAR 281, §33, a count alleging a conspiracy to commit the statutory offence of transferring a passport to another person without reasonable excuse was held not to involve the imposition of any persuasive burden on the accused and the presumption of innocence was not engaged. Lord Woolf NPJ stated: As Count 3 alleges a conspiracy, the task of the prosecution was to prove in the normal way the nature of the conspiracy; namely that (a) there was an agreement alleged between the appellant and Philip Chu and; (b) the purpose of the agreement, which on the case for the prosecution, was that the passport should be used for an unlawful purpose and so without reasonable excuse (see for example Yip Chiu Cheung v R [1995] 1 AC 111). This conspiracy could not either under S.94A or at common law give rise to any reverse burden. In view of the ingredients of the offence of conspiracy it is unlikely that any charge of conspiracy should give rise to any burden being placed on a defendant.” 78. It may also be noted that CO section 159A(2),[64] which places the offence of conspiracy on a statutory footing, retains the common law approach by providing that even where the substantive offence is one of strict liability in relation to any factual ingredient, a conspiracy to commit that offence nevertheless requires proof of intention or knowledge in relation to that fact or circumstance. 79. It was however made clear in Ng Po On,[65] that the Court was concerned with section 24 exclusively as read in conjunction with, and affecting the meaning of, section 14(4). It was observed that section 24 is also relevant to other provisions of the POBO which involve “reasonable excuse”, including section 9, and noted that “[its] interaction with such other provisions raises separate considerations which fall outside the scope of this judgment”. 80. Mr Caplan QC submitted that, by virtue of POBO section 12A(1), the present case is indeed one where section 24 operates differently. Section 12A(1) provides: “Any person convicted of conspiracy to commit an offence under this Part shall be dealt with and punished in like manner as if convicted of such offence and any rules of evidence which apply with respect to the proof of any such offence shall apply in like manner to the proof of conspiracy to commit such offence.” 81. The argument is that section 24 is a rule of evidence which applies with respect to the proof of a section 9 offence so that section 12A(1) causes it to operate in conspiracy cases just as it does to proof of substantive section 9 offences. 82. In response, Mr David Perry QC[66] relies on CO section 159A(1) which materially provides: “Subject to the following provisions of this Part, if a person agrees with any other person or persons that a course of conduct shall be pursued which, if the agreement is carried out in accordance with their intentions, ... (a) will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement ... he is guilty of conspiracy to commit the offence or offences in question.” 83. Mr Perry QC’s argument runs as follows: (a) The words “without ... reasonable excuse” appear in the body of the offence-creating provisions of section 9 and form an element of the offence which the prosecution has the burden of proving in the usual way, negating reasonable excuse. (b) To prove a conspiracy to commit a section 9 offence, section 159A(1)(a) makes it necessary as a matter of substantive criminal law for the prosecution to prove that pursuit of the course of conduct agreed to by the alleged conspirators would necessarily amount to or involve the commission of a section 9 offence by at least one of them. (c) If, contrary to Tseng’s submission, POBO section 24, read with POBO section 12A(1), has the effect of reversing the onus for the purposes of conspiracy, it would mean, inconsistently with CO section 159A(1)(a), that the prosecution would not have to prove that pursuit of the alleged conspiratorial agreement would necessarily result in commission of the section 9 offence since it would be relieved from having to prove that pursuit of the agreement would not involve conduct exonerated by a reasonable excuse. (d) Mr Perry QC argued that this could not be the intended effect of section 24 since that section is concerned with rules of evidence and is not intended to modify the substantive law defining the elements of criminal conspiracy as laid down by CO section 159A(1)(a). Accordingly, he submitted that section 24 does not apply to the conspiracy charge and the prosecution’s failure to negate reasonable excuse presents another reason for allowing the appeal. 84. I have difficulty accepting Mr Perry QC’s argument. Its premise is that the words “without reasonable excuse” constitute an element of the offence to be proved by the prosecution. But if section 24 is engaged, it clearly stipulates that “reasonable excuse” is a matter of defence and expressly reverses the onus. Thus an argument founded on the premise that reasonable excuse is not a matter of defence but an ingredient of the offence as the basis for contending that section 24 is not engaged appears to beg the question. 85. However, I arrive at the same conclusion, but by a different route. Section 24 on its face only relates to “any proceedings against a person for an offence under this Ordinance”. A conspiracy to commit a section 9 offence is not an offence under the POBO. It is either a common law offence or, having been put on a statutory footing, an offence contrary to CO section 159A, so that on its face, section 24 does not apply to such conspiracies. 86. To make section 24 apply, the prosecution has to rely on section 12A(1), arguing that it makes section 24’s reverse onus, treated as a “rule of evidence” applicable to the proof of conspiracies to commit section 9 offences in like manner as it applies to proving the substantive offence. 87. But in my view, on its true construction, section 12A(1) is inapplicable to section 24. Section 12A(1) extends “rules of evidence which apply with respect to the proof of any ... offence” [67] under Part II of POBO (including section 9) to conspiracies to commit such offences. It does not cover rules of evidence (assuming a reverse onus provision to be such a rule) regarding available defences. Section 24 stipulates how the defences of lawful authority and reasonable excuse are to be established. It is not concerned with the proof of any offence. 88. The position is therefore as stated in Ng Po On set out above. To prove conspiracy, the prosecution cannot rely on section 12A or section 24 but must, in accordance with the usual common law rule and section 159A(2), discharge the burden of proving that pursuit by the alleged conspirators of their agreement would necessarily result in the commission of a section 9 offence without any (lawful authority or) reasonable excuse availing the accused. 89. Mr Caplan QC acknowledged that if the reverse onus provision did not avail the prosecution, the conspiracy conviction directed to be entered by the Court of Appeal could not stand since reasonable excuse had not been negated by the prosecution. However, he invited the Court in such event to exercise its discretion[68] to order that there be substituted in respect of each appellant, a conviction on the respective alternative charges of offering and accepting an advantage which, he submitted, are clearly within the ambit of section 24. 90. Since I have in any event held that liability cannot be established on the substantive charges because the appellants’ conduct was not caught by section 9, there is no question of any such substitution. L. Disposal of the appeals 91. For the foregoing reasons, I would allow both appeals and quash the appellants’ convictions. I would direct that any submissions as to costs should be lodged within 21 days of the date of the handing down of this judgment with any submissions in reply to be lodged within 14 days thereafter. Mr Justice Tang PJ: Introduction 92. I have had the advantage of reading Ribeiro PJ’s judgment in draft and agree that the appeals should be allowed. The background and facts have been stated by Ribeiro PJ and I gratefully adopt them. However, I am of the view that Chan’s participation in the 2010 countdown edition of “Be My Guest” was an act “in relation to his principal’s affairs or business” but that he had a reasonable excuse to accept OC’s payment within the meaning of s 9(1)(a) of the Prevention of Bribery Ordinance Cap 201 (“Cap 201”). 93. I will state the essential facts which, in my view, support my view that he had a reasonable excuse. 94. It is not disputed that OC and TVB agreed that, a live, staged edition of “Be My Guest” should form part of the countdown programme. Mr Caplan QC accepted that TVB knew that Chan would appear as a guest of OC. The learned trial judge said it would be naive to think that Chan would have done so gratuitously. With respect, I agree. Not only is this plain common sense, the evidence was that OC had to procure Chan’s attendance through Tseng because as the learned trial judge said “everybody knew that to invite (Chan) to take up a job had to proceed through (Tseng)”. Tseng, and his company, IEAP “acted as Chan’s agent in respect of his outside commercial engagements”.[69] The Court of Appeal said: “14. … For this reason they approached Tseng, and later Olympian City concluded a contract with him (on behalf of IEAP), under which he was to procure Chan and Lai Yiu-cheung [Lai][70] to perform in the additional ‘Be My Guest’ show, and Olympian City was to pay IEAP $160,000 as consideration.”[71] “It was agreed that they would wear stickers promoting Olympian City, a requirement that did not apply to the artistes supplied by TVB.”[72] 95. On these facts, I am satisfied that whether Chan had the evidential burden or persuasive burden to prove reasonable excuse,[73] the burden has been discharged.[74] 96. What is a reasonable excuse “depends not only on the circumstances of the individual case but also on the purpose of the provision to which the defence of ‘reasonable excuse’ is an exception.”[75] In order to determine the ambit of the defence of reasonable excuse one needs to take a view on the offence created by s 9.[76] Section 9(1) provides: “Any agent who, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for or otherwise on account of his - (a) doing or forbearing to do, or having done or forborne to do, any act in relation to his principal’s affairs or business; or (b) showing or forbearing to show, or having shown or forborne to show, favour or disfavour to any person in relation to his principal’s affairs or business. Shall be guilty of an offence.”[77] 97. I would just note[78] that s 9(4) and (5) provide that if the advantage was solicited or accepted with the permission of the principal which complied with s 9(5), neither the agent nor the person who offered the advantage would be guilty of an offence under s 9(1) or (2). 98. To constitute an offence under s 9, there must be a payment (without lawful authority or reasonable excuse) as an inducement to or reward for or otherwise on account of the agent doing or forbearing to do any act in relation to his principal’s affairs or business (the forbidden purpose). In the present case it was not disputed that the payment to Chan was made as an inducement to or reward for him to take part in the countdown edition of “Be My Guest” (Chan’s performance). What was disputed was whether the performance was in relation to TVB’s affairs or business and if so, whether he had a reasonable excuse. 99. Agent is defined to include “a public servant and any person employed by or acting for another”. It was not disputed that Chan was TVB’s agent since he was employed by TVB. TVB was a public body and Chan as its General Manager (Broadcasting) was a public servant.[79] As the learned trial judge pointed out, Chan could have been prosecuted under s 4. However, the prosecution relied on s 9 which covered dealings with agents as well as public servants. Section 4(2) makes it an offence by a public servant to solicit or accept any advantage as an inducement to or reward for or otherwise on account of his “performing … or abstained from performing, any act in his capacity as a public servant”.[80] However, s 9(1)(a) does not require that the agent acted or forborne from acting in his capacity as agent. It is engaged if the act or forbearance was “in relation to his principal’s affairs or business”.[81] The prosecution case was that Chan’s performance was an act in relation to TVB’s affairs or business. Ch’ng Poh 100. Lord Lloyd of Berwick said in Commissioner of ICAC v Ch’ng Poh [1997] HKLRD 652 at 657, a decision of the Privy Council on appeal from Hong Kong: “… the alternative words serve much the same purpose. They are clearly intended to be restrictive. It is not enough that the recipient of the bribe should be an agent in fact.” 101. Ch’ng Poh arose out of an application to quash a search warrant under s 10B of the ICAC Ordinance Cap 204 which was issued based on the commission of an offence under s 9. Briefly, a witness, Reid, had been bribed by Mr A, a solicitor, to made a false affidavit favouring Ch’ng Poh who was appealing his conviction. Mr A was a partner in the firm which acted in Ch’ng Poh’s appeal. Ch’ng Poh provided the money for the bribe. 102. Lord Lloyd who delivered the advice of the Privy Council was of the view that since the case being made by ICAC was that Reid had been bribed by Mr A: “… s.9(1)(a) of the Bribery Ordinance was simply not engaged. As Litton V-P put it: Section 9(1)(a) criminalises corrupt transactions with agents: not dishonest acts by agents.”[82] 103. However, it was argued on behalf of the ICAC in the Privy Council that the argument had been misunderstood and that its case was that Mr A must have received a bribe to do an act in relation to X & Co’s business. Their lordships did not accept that was the case relied on in the courts below but in light of it Lord Lloyd said of the words “in relation to his principal’s affairs” at 657: “ … mean that, for the section to apply, the person offering the bribe, must have intended the act or forbearance of the agent to influence or affect the principal’s affairs. Accordingly s.9 would apply if Ch’ng Poh had bribed Mr A to secure him a benefit at X & Co’s expense, for example, to arrange a reduction in X & Co’s ordinary professional fees; or if X & Co were induced to act in a way in which they would not otherwise have acted. Thus it is an essential ingredient of the offence under s.9 that the action or forbearance of the agent should be aimed at the principal. If it is sufficient for the purposes of the person offering the bribe that the agent should act on his own without involving his principal, then, whatever other offence may have been committed, it is not a corrupt transaction with an agent for the purposes of s.9. If the facts put before the magistrate had been that Ch’ng Poh offered Mr A a bribe in order to secure the filing by X & Co of an affidavit which they both knew to be false, then a case might just have been made out. But as already mentioned, that is not a fair reading, or indeed a possible reading, of the information sworn by Mr Osborn.” Section 9(1)(a) 104. I will consider s 9(1)(a) first and return to Ch’ng Poh later. Section 9(1) and (2) was first enacted as s 4 of the Prevention of Corruption Ordinance Cap 215 (“Cap 215”) in 1948.[83] Section 4 of Cap 201 was s 3 in Cap 215. When enacted, those sections required that the advantage be offered or accepted corruptly. As Bribery and Corruption Law in Hong Kong 3rd edition by Ian McWalters SC (as McWalters JA then was), explained the word “corruptly” was understood to require “purposely doing an act which the law forbids as tending to corrupt”.[84] 105. When Cap 201 was enacted in 1970 and ss 3 and 4 of Cap 215 were replaced by s 9 and s 4 of Cap 201 the word “corruptly” was removed and substituted by “without lawful authority and reasonable excuse”. 106. The reason for the change was explained by the Attorney General[85] in response to the remarks by Hon Mr Oswald Cheung that he was “staggered” that “the word corruption” was not used in the proposed Cap 201. The Attorney said the word was not used: “… since it would oblige the Crown, before an accused had a case to answer, to establish that the soliciting or acceptance of a bribe was attributable to a corrupt motive. Unfortunately, past experience has been that this is difficult, and many accused persons have not been charged, and some have been charged but acquitted, because the prosecution was not able to establish that a payment of money in suspicious circumstances was corrupt but had to leave it to the court to draw an inference of corruption, which it was sometimes reluctant to do.”[86] 107. The mischief against which the amendments were made is clear, namely, that corrupt motive was not to be an essential element of the offences under s 4 or s 9 of Cap 201. The Attorney General went on to say: “As the bill is now drafted, the Crown will need to prove only a payment to the public servant, or agent, or other person.” 108. Section 9 is straightforward. It makes it an offence for an agent to solicit or accept any advantage as an inducement to or reward for or otherwise on account of his doing or forbearing to do “any act in relation to his principal’s affairs or business” in the absence of lawful authority or reasonable excuse.[87] In other words, if an advantage was solicited or accepted in respect of an act or forbearance which related to the principal’s affairs or business, absent lawful authority or reasonable excuse or permission under s 9(4) and (5), an offence is committed. The deliberate removal of the word “corruptly” is significant and I do not believe s 9 requires that any payment for a forbidden purpose must be made with a corrupt motive. With respect, the Attorney General was exactly right when he said: “As the bill is now drafted, the Crown will need to prove only a payment to the public servant, or agent, or other person.” Influence or Affect 109. Ch’ng Poh is authority that for an act or forbearance to relate to the principal’s affairs or business it must have been intended to “influence or affect the principal’s affairs.” And it would not so relate if the agent “should act on his own without involving his principal”. With respect, I agree. Thus, a moonlighting employee would not fall foul of s 9 even if moonlighting was strictly forbidden by his contract of employment.[88] But Lord Lloyd went on to say: “Thus it is an essential ingredient of the offence under s.9 that the action or forbearance of the agent should be aimed at the principal.”[89] Aimed At 110. It is not clear what if anything “aimed at the principal” additionally requires. The expression has been considered by the English Court of Appeal in R v Majeed and Another [2013] 1 WLR 1041 when they considered s 1 of the 1906 Act on which s 9 of Cap 201 was based. The only material difference between s 1 of the 1906 Act and s 9 is that section 1 had not replaced “corruptly” with “without lawful authority or reasonable excuse.” 111. Majeed was concerned with cricketers who were bribed to play in a certain way to facilitate betting on cricket matches where one could bet not only on the outcome but also, for example, “on individual events during the course of an over or passage of play”.[90] One of the arguments relied on was that the actions of the cricketers on the field were not aimed at their principals, the Pakistan Cricket Board or the Essex Cricket Club (“the boards”). Relying on the passage in Ch’ng Poh quoted above,[91] counsel submitted: “The boards did nothing, and nothing was expected of them. The bribes were not intended to and did not influence them in any way. … He suggested that, like the dishonest solicitor, ‘A’, in the Ch’ng Poh case, the way in which [the cricketers performed in their matches], was personal to them. Like the firm in which ‘A’ was a partner, the boards did not and were not expected to do anything at all by way of response or as a reaction to the giving and the acceptance of the bribes.” 112. Lord Judge CJ who delivered the judgment of the Court[92] said: “21. … The problem for [counsel] is that [the passage] was addressing the stark reality that ‘A’s’ firm was remote from the bribes paid by Ch’ng Poh, and wholly unaffected by them. They were not paid to ‘A’ for any purposes associated, directly or indirectly, with the business or affairs of his firm. In fact they were not paid to ‘A’ at all. He simply organised their onward transmission to the intended recipients. It is however clear from the judgment that the transaction would have fallen within the ambit of the legislation if the bribes had been accepted by ‘A’ with the intention or for the purpose of influencing or affecting the affairs of the firm. This is why Lord Lloyd went on to acknowledge that if the bribe had been offered to ‘A’ by Ch’ng Poh in a way which would have led the firm to file an affidavit which both ‘A’ and Ch’ng Poh knew to be false, the warrant, as issued, might have been appropriate. This would have been because, although Lord Lloyd did not need to spell it out, the bribe would then have involved the firm, albeit wholly innocently on the part of the firm, in the corrupt activity. 22. We cannot find anything in the judgment in the Ch’ng Poh case … which lends support to [counsel]’s argument, and if it did, the submission would be wholly inconsistent with the clear statutory language. 23. … looking at the realities of the situation, there could on the evidence have been nothing closer to the heart of the affairs or business of a cricket board than the performance of the players selected by them to represent their and his country, or their and his county.” 113. With respect, like the English Court of Appeal, I believe the language of s 9 does not require that the act or forbearance should, apart from influencing or affecting the principal’s affairs or business thus involving them be also intentionally directly or indirectly aimed at the principal though one would expect that in many cases they would do so. Nor do I understand Lord Lloyd to have said otherwise. 114. So the question here is whether Chan’s performance related to TVB’s affairs or business. With respect, I agree with Ribeiro PJ’s statement of the elements and mens rea at paras 20 and 21 of his judgment. However, it was TVB’s countdown which was televised by TVB and the “Be My Guest” portion was part of the programme. So TVB was very much involved. Suppose TVB had requested Chan to take part in this edition of “Be My Guest” and Chan had agreed. Undoubtedly his participation would have related to TVB’s affairs or business. I am not sure the fact that he had appeared as OC’s guest and paid by them to do so would necessarily result in his not being involved in the business or affairs of TVB. Morgan 115. DPP v Morgan [1970] 3 All ER 1053 was also concerned with the interpretation of s 1 of the 1906 Act, Lord Parker CJ in the Divisional Court[93] was quite satisfied that these words “fall to be widely construed”.[94] Morgan was an employee of Rover’s as well as the convenor of shop stewards. He solicited a bribe from H who worked as a subcontractor for Rover’s who had been blacked by the union, telling H that he could possibly make it easier for H at the management/union meeting by suggesting that there was no objection to H doing the work. Morgan is often cited for the proposition that an agent can have more than one principal. 116. But it decided more than that. It was submitted on behalf of Morgan that: “… if the £25 was obtained as an inducement for doing an act, ie for procuring that there would be no objection by the union to Mr Hurford doing the work, the act was not in relation to Rover’s affairs but in relation to those of the union; that, if the £25 was so obtained, it was not obtained by the appellant as agent of Rover’s but as agent of the union.”[95] 117. Of course, the fact that Morgan was the agent of Rover’s was not to the point unless the act “related to the affairs” of Rover’s as well. Hence, Lord Parker CJ said at page 1057: “The real point is whether, there being an obtaining of money as an inducement for the doing of some other act, that act was to be in relation to his principal’s affairs, namely Rover’s affairs.” (my emphasis) 118. Lord Parker went on to say at pages 1057 to 1058: “ … It is counsel for the appellant’s argument that the words “any act in relation to his principal’s affairs” in s 1(1) must mean in direct relation to his principal’s affairs or, put another way, in relation to matters concerning his principal where he owes a duty as an agent. Read in that way, it can be said that, while the appellant was an agent of Rover’s, nevertheless the act in question was in relation to union affairs albeit against the background of the business that Rover’s carried on. For my part, I am quite satisfied that those words “in relation to his principal’s affairs” fall to be widely construed, as indeed they were in the only case to which the court has been referred, R v Dickinson, R v De Rable,[96] where Pritchard J, in giving the judgment of the Court of Criminal Appeal, said: “In the judgment of the court the words of s 1 of the Act of 1906 are designedly very wide, and it would be undesirable in the extreme to narrow their meaning in the way which would be necessary if the argument on this first point were held to be valid.” It seems to me that the conditions precedent to an offence being proved are present here; the appellant was an agent, and what was done here, albeit it was in relation to the union affairs, was also in relation to his principal’s affairs, namely Rover’s affairs.” 119. So here, the fact that Chan performed as the guest of and was paid exclusively by OC is not a sufficient answer to a charge under s 9 unless Chan’s performance did not also relate to TVB’s affairs or business. I am also of the view that it would be undesirable in the extreme to narrow down the meaning of those words. It is of course a question of fact whether the agent’s act or forbearance relates to the affairs or business of his principal. On the facts of this case, I am of the view that Chan’s performance related to the affairs or business of TVB. Prejudice to the Principal 120. Ribeiro PJ is of the view that the agent’s act or forbearance must be adverse to the principal’s interest,[97] in the sense, I think, that it must “prima facie undermined the integrity of the agency relationship to [the principal’s] detriment.”[98] I regard any advantage solicited or accepted without the knowledge of the principal to have such effect. Naturally, in most cases under s 9, the act or forbearance would be adverse to the principal’s interest which was the reason for the advantage. But as Lawton LJ said in connection with s 1 of the 1906 Act: “The mischief aimed at by the modern statutes dealing with corruption is to prevent agents and public servants being put in positions of temptation.”[99] 121. I do not accept that s 9 requires any other detriment. The acceptance of a payment to favour one of two equal competitors is no less an offence under s 9. Nor would it have made any difference in Morgan, if Morgan’s promised effort would have stopped a crippling strike. 122. Ribeiro PJ said[100] that on the Court of Appeal’s reasoning, namely that Chan’s performance would boost audience rating at no cost to TVB, “Chan’s conduct was wholly in line with and beneficial to TVB’s interest”. In my view such benefits have no bearing on the offence. Fiduciary obligation of agents 123. Cap 201 was enacted to make “further and better provision for the prevention of bribery” and in construing s 9 one naturally has such purpose in mind. Lord Thomas of Cwmgiedd CJ, in R v J(P) and others [2014] 1 WLR 1857[101] said of the 1906 Act that: “14. … It is clear from the materials before us that the mischief at which the provision was principally aimed was criminalising the bribery of agents in commercial transactions, particularly commissions paid to the agent without the knowledge and informed consent of his principal. These were and are commonly referred to as secret commissions.”[102] 124. And that the aim and purpose of the 1906 Act: “17. … was entirely in accordance with the underlying law relating to the fiduciary obligations of agents established in the cases to which we have referred.” 125. One of those cases was Parker v McKenna (1874-75) LR 10 Ch App 96 where James LJ at 124-125 said: “ … I do not think it is necessary, but it appears to me very important, that we should concur in laying down again and again the general principle that in this Court no agent in the course of his agency, in the matter of his agency, can be allowed to make any profit without the knowledge and consent of his principal; that that rule is an inflexible rule, and must be applied inexorably by this Court, which is not entitled, in my judgment, to receive evidence, or suggestion, or argument as to whether the principal did or did not suffer any injury in fact by reason of the dealing of the agent; for the safety of mankind requires that no agent shall be able to put his principal to the danger of such an inquiry as that.” 126. In my opinion, once it is established that an advantage was offered or accepted by an agent for a forbidden purpose then absent a reasonable excuse[103] an offence under s 9 would have been committed. Furthermore, I would not regard absence of prejudice to the principal, or that the act was beneficial to the principal to be a reasonable excuse. I see no reason why criminal law should differ from civil law in this respect. Just as in civil law the principal should not be put to the danger of such an inquiry, to permit such inquiries in criminal prosecution would set back the fight against corruption. It is well to remember what the Attorney General said in moving the second reading of the Bill: “Sir, it is impossible to assess with any accuracy the extent to which society in Hong Kong is affected by corruption … But … corruption does exist here to an extent which not only justifies, but demands, that the utmost efforts be made to eradicate it from our public and business affairs.”[104] Since 1970, corruption has become less of a problem in Hong Kong but it has not been defeated. 127. Section 4 which covers public servants may provide a useful comparison. There, I do not believe it is suggested that prejudice to public service is required or that its absence might provide a defence. Under s 4(2) “any public servant who, whether in Hong Kong or elsewhere, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for or otherwise on account of his – (a) performing or abstaining from performing, or having performed or abstained from performing, any act in his capacity as a public servant; … shall be guilty of an offence.” 128. As I understand s 4(2)(a), a public servant, say a postman, who accepted any advantage from a householder would be guilty of an offence under s 4 even if the householder had offered it in appreciation of the fact that he had gone out of his way to deliver a letter or parcel. It is important, given the scourge of corruption under which Hong Kong had suffered for so long,[105] that it should be clearly understood that under no circumstances should any public servant accept any advantage for acting or forbearing to act in his capacity as a public servant. The corrupting tendency of any offer or acceptance of advantage is too obvious to require elaboration. Nor would I leave it to be determined on a case by case basis whether the tip was deserved and whether there was any prejudice. 129. If prejudice to public service is not required under s 4, I see no reason for requiring it for an offence under s 9. Reasonable excuse 130. I turn now to consider reasonable excuse. 131. R v J (P) was also concerned with s 1 of the 1906 Act and involved the allegation that the defendants had conspired corruptly to give agents of the tax authorities of a state in the Commonwealth a substantial sum of money as an inducement to show favours to a company in relation to the calculation of tax owed by that company to the tax authorities. The issue before the court was whether the word “corruptly” implied that the payment for the prohibited purpose had to have been paid or received secretly and without the knowledge and informed consent of the principal. 132. The defendant’s contention was: “8(ii) … that the term ‘corruptly’ connoted secrecy. As the 1906 Act had been formulated in terms of principal and agent, it must follow that a payment could not be secret if it was made with the knowledge and consent of the principal. Thus it must be for the prosecution to prove, as part of its case, the specific ingredient of lack of knowledge or informed consent by the principal; in essence the element of corruption was the doing of the act prohibited without having first made full disclosure to the principal and obtaining his informed consent.” 133. Given that the 1906 Act required that the giving be made corruptly, Lord Thomas said: “28. There might well be cases where the defendant who is a commercial agent avers that his principal knew of the payment as he had made full disclosure and gave his informed consent; or the defendant might aver that he honestly believed that the agent’s principal knew and gave his informed consent to the receipt of the payment by his agent. It would in such a case be necessary when deciding whether the payment was or was not made or received corruptly for the jury to consider that evidence. However, there is no requirement that the prosecution specifically prove the lack of knowledge and informed consent of the principal separately.” 134. Had the word corruptly been retained in Hong Kong, I would have concluded that on the facts of this case the payment did not fall within s 9. However, the word “corruptly” having been replaced, the payment being for a forbidden purpose, it fell within s 9, and it is necessary to consider whether there was any reasonable excuse. The Court of Appeal was of the view that there was no reasonable excuse. 135. In the second judgment of the Court of Appeal[106] it said at para 88: “We agree that permission[107] and reasonable excuse are two separate defences provided for by the Ordinance. We also agree that reasonable excuse is wider in scope than permission.” With respect, I agree. 136. The Court of Appeal went on to say: “88. … Under some circumstances, it is possible that an agent who does not have his principal’s permission but accepts an advantage which is related to his principal’s business can use reasonable excuse as his defence. Take for example, an agent who has from time to time applied to his principal for permission to accept an advantage on account of his doing an act in relation to his principal’s business, and to whom the principal has always granted permission, will reasonably believe that under the same circumstances he can obtain his principal’s permission. However, on one occasion, when the agent applied for permission from his principal pursuant to section 9(5)(b) of the Ordinance after he accepted an advantage, his principal, without informing him of any change, suddenly, for no reason, refuses to give him permission. The agent cannot legitimize his acceptance of the advantage by the permission provided in the Ordinance, but it is highly likely that he can successfully convince the court that he has a reasonable excuse and thereby legitimizing his acceptance of the advantage.” 137. With respect, on these facts I feel sure that the defence of reasonable excuse has been established because they showed that the agent honestly believed that his principal would not object to his accepting the advantage. In other words, he had the consent of his principal to accept the payment, the paradigm of a reasonable excuse. In my view, that is precisely Chan’s position. TVB accepted it knew that Chan would appear in the programme as a guest of OC. On the evidence the inescapable conclusion was that Chan would be paid by OC through IEAP.[108] It is true that there was no evidence that TVB knew how much Chan would be paid by OC. It was suggested that absent such knowledge there was no informed consent. What constitutes a fully informed consent is a question of fact and “there is no precise formula which will determine all cases”.[109] In this case I do not believe it mattered. On the facts TVB must be taken to have consented to Chan performing in the programme as OC’s guest and be paid for it. The exact amount was of no consequence to TVB. 138. For the above reasons, I am of the view that no offence was committed under s 9 because Chan had a reasonable excuse in appearing as OC’s guest and be paid for it. It follows that both he and Tseng should be acquitted of all the charges relating to this incident. I would allow their appeals. Mr Justice Fok PJ: 139. I have had the benefit of reading in draft the judgments of Ribeiro PJ and Tang PJ. I agree with them in their respective conclusions that these appeals should be allowed. As will be apparent, however, Ribeiro PJ arrives at his conclusion by a very different route to that of Tang PJ and, for that reason, I add this short judgment to indicate my agreement with the reasoning of Ribeiro PJ and to explain my preference for his reasoning in arriving at the conclusion that the two appellants were not guilty of an offence under section 9 of the POBO. 140. Ribeiro PJ’s analysis of the need, if guilt under section 9 is to be established, for there to be conduct adverse to the principal’s interests (Section H of his judgment) is, in my opinion, sound and consistent with the language of section 9 properly construed in accordance with its context and purpose. 141. I do not, with respect, share the view of Tang PJ that the omission of the word “corruptly” in section 9 (which had previously been found in section 4 of the Prevention of Bribery Ordinance (Cap.201)) means that, for an offence under section 9 to be made out, the prosecution need prove only a payment to an agent of which his principal does not know and to which he does not consent. 142. The section does not, in my view, criminalise any and all payments of money by a third party to an agent made without the principal’s knowledge and consent. If it had been intended to cast the offence in such wide terms (and they would be very wide indeed), section 9 would have been very differently and much more simply worded. 143. Instead, the Legislature required that the advantage solicited, accepted or offered must have been as “an inducement to or reward for” the agent’s doing (or forbearing to do) an act “in relation to his principal’s affairs or business” (in sub-sections 9(1)(a) and 9(2)(a)) or showing or forbearing to show “favour or disfavour” to someone “in relation to his principal’s affairs or business” (in sub-sections 9(1)(b) and 9(2)(b)). The words “inducement” and “reward” require the advantage solicited, accepted or offered be invested with some quality of purpose. This is reinforced by the use of the words “favour” and “disfavour” in sub-sections 9(1)(b) and 9(2)(b). 144. Likewise, the Legislature required that the advantage be “in relation to his principal’s affairs or business”. Section 9 is not the private sector mirror image of the section 4 offence. The offence in the latter section is established on proof of an advantage solicited or accepted by a public servant for an act “in his capacity as a public servant”. It is the nature of the act performed (or not) as a public servant in return for the advantage that invests the advantage with its criminality. In contrast, for section 9, it is not enough that the advantage is solicited or accepted by the agent in his capacity as such. It must additionally be “in relation to his principal’s affairs or business”. 145. Those words in section 9 are critical. They were construed by Lord Lloyd of Berwick in Commissioner of the ICAC v Ch’ng Poh [1997] HKLRD 652 at pp.656-657 as meaning that the action or forbearance of the agent must have been intended to “influence or affect the principal’s affairs” and be “aimed at the principal”. It would be surprising, to say the least, for Lord Lloyd to have expressed himself as he did if he thought that those words simply meant that the payment must be “related to” the principal’s affairs or business in the broad sense urged by the prosecution in these appeals. 146. I do not therefore agree that the Attorney General’s statement that “the Crown will need to prove only a payment to the … agent” is a correct or complete statement of the elements of the offence under section 9. It is unlikely that this was his intention given the language of section 9 as a whole. Rather that statement, seen in context, was commenting on the wording of the then proposed section 9 “[a]s … now drafted” and addressing the concern he expressed as to what the Crown would have to establish “before an accused had a case to answer”. Removing the word “corruptly” from section 9 did not mean that there was no need for a qualitative assessment of the payment and, on its wording, the section clearly requires an examination of the nature, purpose and context of the payment. This is referred to, in Tang PJ’s judgment, as “a forbidden purpose”. I respectfully agree with the need for there to be such a “forbidden purpose” and the real debate in these appeals has been directed to the search for a proper definition of that prohibited purpose. 147. In my view, that definition is to be found in Sections H and I of the judgment of Ribeiro PJ. I also agree in all other respects with that judgment. Mr Justice Stock NPJ: 148. I agree with the judgments of Mr Justice Ribeiro PJ and Mr Justice Fok PJ. Lord Walker NPJ: 149. I agree with the judgments of Mr Justice Ribeiro PJ and Mr Justice Fok PJ. Mr Justice Ribeiro PJ: 150. The appeals are unanimously allowed and the appellants’ convictions are quashed. Any submissions as to costs should be lodged within 21 days of the date of the handing down of this judgment with any submissions in reply to be lodged within 14 days thereafter. Mr Joseph Tse SC, Mr Charles J. Chan and Mr Byron C.Y. Tsang, instructed by Ivan Tang & Co., for the Appellant in FACC 11/2016 Mr David Perry QC, Ms Maggie Wong, Mr Derek C.L. Chan and Mr Samuel Sung, instructed by Angela Lau Law Office, for the Appellant in FACC 18/2016 Mr Jonathan Caplan QC and Mr Eric Kwok SC, on fiat, and Mr Felix Tam SPP, of the Department of Justice, for the Respondent in FACC 11/2016 and FACC 18/2016 [1] Cap 201. [2] DCCC 1214/2010. [3] The Case Stated by the Judge is dated 5 March 2012, CACC 103/2012 (“1st Case Stated”). [4] Yeung VP, Cheung and Yuen JJA, CACC 355/2011 and CACC 103/2012 (21 November 2012) (“1st CA Judgment”). [5] DCCC 1214/2010. [6] The second Case Stated by the Judge is dated 17 September 2014, CACC 183/2014 (“2nd Case Stated”). [7] Yeung VP, Yuen and Pang JJA, CACC 92/2013 and CACC 183/2014 (26 October 2015) (“2nd CA Judgment”). [8] Yeung VP, Yuen and Pang JJA, CACC 103/2012 and CACC 183/2014 (26 January 2016). [9] Tang and Fok PJJ and Stock NPJ, FAMC 4/2016 (29 June 2016) in Chan’s case; and Ribeiro, Tang and Fok PJJ, FAMC 40 of 2016 (4 October 2016) in Tseng’s case. [10] In Sections F, G and H of this judgment. [11] POBO section 11. See HKSAR v So Kam Tim [1997] HKLRD 1123 at 1126. [12] (CACC 497/2002, 24 August 2004, unreported) at §44. Citing R v Li Fook Siu Ronald [1991] 2 HKLR 288, see per Fuad VP at 298. [13] That is, an act “aimed at” and “intended to influence or affect” the principal’s affairs or business. See Section F of this judgment. [14] [1997] HKLRD 652. [15] In Section F of this judgment. [16] 1st Case Stated §11. [17] Ibid §12(6). [18] At §§32-35. [19] 1st CA Judgment §§105-106. [20] 1st CA Judgment, §128. [21] [2008] 5 HKLRD 846. [22] In Section H.3 of this judgment. [23] 1st CA Judgment, §153. [24] 1st CA Judgment §154. [25] Acting for the respondent with Mr Eric Kwok SC and Mr Felix Tam SPP. [26] [1997] HKLRD 652. [27] At 656-657. [28] At 657. [29] 1st CA Judgment, §150. [30] In Section H.1 of this judgment. [31] (2005) 8 HKCFAR 628 at §109. This duty was reiterated by Lord Woolf NPJ in HKSAR v Lam Yuk Fai (2006) 9 HKCFAR 281. [32] 1st CA Judgment, §101-104. [33] As noted in R v Majeed, R v Westfield [2013] 1 WLR 1041 at §§19 and 21. [34] Section F of this judgment. [35] 1st CA Judgment, §122. [36] Ch’ng Poh at 657. [37] Section C of this judgment. [38] Section D of this judgment. [39] 1st CA Judgment, §128. [40] See for example Mahmud v Bank of Credit and Commerce International SA [1998] AC 20, per Lord Nicholls of Birkenhead at 35 and Lord Steyn at 45-46. [41] “To make further and better provision for the prevention of bribery and for purposes necessary thereto or connected therewith”. [42] Including in this Court in HKSAR v Ng Po On (2008) 11 HKCFAR 91 at §§51 and 69. [43] Commissioner of ICAC v Ch’ng Poh [1997] HKLRD 652 at 656. [44] Ibid at 657. Italics supplied. [45] Prevention of Corruption Ordinance, Cap 215, section 4(a) (enacted in 1948), referring to any agent who “corruptly accepts or obtains [etc] ... any gift or consideration as an inducement or reward [etc]”. [46] 18th November 1970, Resumption of debate on second reading (21.10.70), Hansard p 196-197. [47] Mr Denys Roberts, ibid, p 201. [48] (2009) 12 HKCFAR 568 at §14. [49] Set out in Section C above. [50] [1961] HKLR 13 at 94 (Full Court). [51] Section 4(a) of the Prevention of Corruption Ordinance (Cap 215) which provided that if any agent corruptly accepts any gift as an inducement or reward for doing or forbearing to do or for having done or forborne to do any act in relation to his principal's affairs, he shall be guilty of an offence. [52] [2008] 5 HKLRD 846. [53] Ibid at §3. [54] Ibid at §37. [55] Cap 200. [56] [2008] 5 HKLRD 846 at §39. [57] Ibid at §40. [58] Ian McWalters SC, Bribery and Corruption Law in Hong Kong (Lexis Nexis 3rd Ed), §9.5. [59] (2016) 19 HKCFAR 110 at §36. [60] 2nd CA Judgment, §93. [61] (2008) 11 HKCFAR 91. [62] At §37. [63] Section 94A of the Criminal Procedure Ordinance (Cap 221) which relieves the prosecution of negativing exceptions or exemptions or qualifications to the operation of a law creating an offence. [64] Cap 200. Section 159A(2): “Where liability for any offence may be incurred without knowledge on the part of the person committing it of any particular fact or circumstance necessary for the commission of the offence, a person shall nevertheless not be guilty of conspiracy to commit that offence by virtue of subsection (1) unless he and at least one other party to the agreement intend or know that that fact or circumstance shall or will exist at the time when the conduct constituting the offence is to take place.” [65] (2008) 11 HKCFAR 91 at §11. [66] Appearing with Ms Maggie Wong, Mr Derek C L Chan and Mr Samuel Sung for Tseng. [67] Such as the rules of evidence contained in POBO sections 10, 20, 21 and 21A. [68] Pursuant to section 83A of the Criminal Procedure Ordinance (Cap 221) in conjunction with section 17(2) of the Hong Kong Court of Final Appeal Ordinance (Cap 484). [69] Para 4 above. [70] A popular artiste in the employ of TVB. [71] Yeung VP, Cheung and Yuen JJA, CACC 355/2011 and CACC 103/2012 (21 November 2012). [72] Para 7 above. [73] The issue is complicated by the fact that we are concerned with the charge of conspiracy. See section K of Ribeiro PJ’s judgment. [74] Like Ribeiro PJ, I will not consider whether s 24 infringes the presumption of innocence. [75] Taikato v R (1996) 186 CLR 454 at 464. [76] All references are to Cap 201 unless otherwise stated. [77] Section 9(2) provides a corresponding offence for the offeror. It is not necessary to deal separately with him. [78] No reliance on such permission. [79] DCCC 1214/2010, para 29. [80] Section 4(2)(a). Section 4(1) contains the corresponding offence for the offeror, with which we are not concerned. [81] It was not the prosecution case that Chan was acting in his capacity as a public servant. [82] At p 656. [83] Section 9(4) and (5) were introduced by amendment in 1980. Section 4 of Cap 215 was based on s 1 of the Prevention of Corruption Act 1906 (“the 1906 Act”). [84] Para 1.31, following Cooper v Slade (1858) 6 HLC 746, Willes J and R v Smith [1960] 2 QB 423. [85] During the second reading. [86] Hansard 18 November 1970 at 201. [87] However, if the soliciting or acceptance was made with permission by the principal in compliance with s 9(4) and (5), then neither the agent nor the offeror would be guilty of an offence under s 9(1)(a) or (b). [88] There was a discussion at the hearing over whether if a junior clerk employed by TVB were to return to work after office hours for a contracted cleaner to clean TVB’s premises whether he could come within s 9. I feel sure the defence of reasonable excuse would be available. It would no more affect his employer if he was engaged after work to make sandwiches for the caterer who supplied them to his employer. But, the matter is fact sensitive. The situation of a manager who owns an outside catering service and sells sandwiches to his employer without any disclosure may be more problematical. Here Chan’s contract of employment with TVB did not permit outside work without the written consent of TVB. Mr Caplan QC rightly accepted that this has no bearing on whether Chan’s performance in “Be My Guest” related to TVB’s affairs or business. But, whether his appearance in the “Be My Guest” related to the affairs or business of TVB is not easily resolved. [89] P 657. [90] 1043G. [91] Para 103 above. [92] Lord Judge CJ, Openshaw, Irwin JJ. [93] Together with Ashworth and Browne JJ. [94] With the agreement of Ashworth and Browne JJ. [95] P 1056e. [96] (1948) 33 Cr App Rep 5 at 9. [97] Paras 61-65 above. [98] Para 73 above. [99] R v Wellburn and Others (1979) 69 Cr App Rep 254 at 265, CA, Lawton LJ, Cantley and Willis JJ. [100] Para 28 above. [101] Rafferty LJ, Henriques J. [102] Lord Thomas also pointed out that s 1 also covered public servant which has a bearing on its construction. [103] I ignore lawful authority or permission under subsections (4) and (5) which are irrelevant for the present purpose. [104] Second reading, Attorney General, Hansard 21 Oct 1970, p 131. [105] For a long time, tipping was expected for many public service, including service in public hospitals. [106] Yeung VP, Yuen and Pang JJA. [107] Complying with ss (4) and (5). [108] Para 94 above. [109] Bowstead and Reynolds on Agency 20th edition 6 – 039. |
Mr Justice Ribeiro PJ: 1. I agree with the Judgment of Mr Justice Tang PJ. Mr Justice Tang PJ: 2. Part X of the Insurance Companies Ordinance, Cap 41 (“the Ordinance”) was added by amendment in 1994 “to put into place a scheme for the supervision of self regulation by the insurance industry of insurance agents and brokers.”[1] The Secretary for Financial Services in moving the second reading of the Bill, explained: “The main objective of the Bill is to define the role of agents and brokers. … It is also an objective of the Bill to strengthen protection for policy holders by requiring agents and brokers to meet specified standards before being appointed or authorized. Insurers are required to comply with the Code of Practice drawn up by the Hong Kong Federation of Insurers and approved by the Insurance Authority for the appointment and administration of agents.” 3. Part X requires the Hong Kong Federation of Insurers (“HKFI”), with the approval of the Insurance Authority, to issue a Code of Practice for the Administration of Insurance Agents (“the Code”).[2] An insurer is required to comply with the Code.[3] Failure to do so carries potential criminal consequences.[4] An insurance agent[5] is also required by the Ordinance to comply with the Code of Practice. Under s 67(5), the Insurance Authority may require “an insurance agent to supply information that verifies … the insurance agent’s, compliance with the code of practice” and it is an offence under s 77(6) if an insurance agent fails “to supply information that is required under s 67(5) that verifies compliance with the code of practice”. 4. A Code of Practice was duly issued and the Insurance Agents Registration Board (“IARB”) was established by the HKFI to administer the Code of Practice. We are concerned with the June 2004 version of the Code of Practice. Under para 8 of the Code: “The IARB may issue Guidance Notes from time to time as to how it intends to exercise its powers and fulfil its responsibilities under this Code. Such Guidance Notes shall not form part of this Code.” We are concerned with the Guidance Note revised on 13 June 2005. 5. The Code also contained provisions for the regulation of a technical representative which is defined to mean: “a person (not being an insurance subagent who is classified as an insurance agent for the purpose of this Code) who provides advice to a policy holder or potential policy holder on insurance matters for such insurance agent, or arranges contracts of insurance in and from Hong Kong or behalf of that insurance agent.” 6. A technical representative is not an insurance agent but they share many common characteristics[6] and there is little difference in the regulation of insurance agents and technical representatives under the Code.[7] Indeed, given their common qualification, a technical representative is also qualified to work as an insurance agent. As indeed was the case with Mr Singh, the appellant who was the defendant at trial. For the purpose of this appeal, it is sufficient to note first that a person could not be appointed as a technical representative by an insurance agent unless the IARB had confirmed his registration as such in its sub-register of technical representatives on application made by the insurance agent.[8] That upon the cessation of appointment, the insurance agent should inform the IARB of that fact within 7 days of such cessation[9] and upon such notification the IARB shall remove the technical representative from the sub-register relating to that insurance agent. 7. Secondly, a technical representative is required to undergo Continuing Professional Development (“CPD”).[10] Under the Guidance Note,[11] it was the responsibility of the insurance agent to collect evidence of compliance with the CPD requirements from its technical representatives and supply them to the IARB. Should such evidence not be provided in accordance with the Note, the technical representative would suffer a mandatory de-registration as well as being barred from registration for 3 months. The detailed provisions on compliance with the requirements of the CPD program in relation to technical representatives and the responsibilities of insurance agents who have appointed them are stated in clause 6(b) of the Guidance Notes as follows: “Responsibilities of insurance agents who have appointed TRs: (i) dispatch copies of Declaration Form[12] to all of their TRs; (ii) arrange sufficient CPD training for their TRs, if necessary; (iii) issue evidence/record of attendance to prove a TR who has attained a course sponsored by the insurance agent with the number of CPD credits/hours and type of credits printed on evidence/record of attendance; (iv) monitor the compliance of their TRs with the CPD requirements; (v) collect Declarations Forms from their TRs by 14 August; (vi) file the Annual Return to the IARB and report on those who fail to achieve the CPD credits/hours by 15 September; and (vii) offer help to their TRs in maintaining proof of compliance with CPD requirements.” 8. The consequence of non-compliance is stated in clause 7. For brevity, I call this, the duty to report CPD credits to IARB. 9. The appellant (“Mr Singh”) was appointed a technical representative by the respondent, Dah Sing Insurance Services Limited (“Dah Sing”), an insurance agent, by a contract dated 23 January 2007 (“the contract”).[13] The contract provided expressly that it should take effect from 1 January 2007. However, at trial it was agreed that the appointment only took effect from 19 January 2007 which was the date when Dah Sing obtained confirmation of the IARB.[14] Under the contract, his appointment could be terminated by a month’s notice. On 23 August 2007, his employment was duly terminated by notice. In his counterclaim against Dah Sing, he complained first that because Dah Sing had failed to inform the IARB of the cessation of his appointment, he could not work as a technical representative. In respect of this claim, he was awarded damages equivalent to one month’s loss of earning.[15] It was not disputed at trial and was the evidence of Dah Sing’s witness, that unless, the cessation of his appointment had been reported to IARB, he could not work for another insurance agent. His other complaint was that, although he had complied with the CPD requirements and supplied the necessary information to Dah Sing, Dah Sing had failed to report his CPD credits to IARB, as a result he suffered 3 months’ compulsory de-registration. He was awarded damages equivalent to 3 months’ income in respect of this claim.[16] 10. At trial Mr Singh relied on breach of contract, negligence and breach of statutory duty. However, counsel for Dah Sing at trial, who did not appear in the subsequent appeals, limited the dispute to whether as a matter of fact there was any breach.[17] It was not disputed in relation to the deregistration that if that was the result of Dah Sing’s fault, 3 months’ loss of income should be awarded. 11. On appeal, the District Judge’s judgment was reversed. The Court of Appeal took the view that there was no actionable breach of statutory duty and that Dah Sing owed Mr Singh no duty of care at common law. It also held that notwithstanding Dah Sing’s failure to report the cessation of his appointment as a technical representative, because Mr Singh could work as an insurance agent for more than one insurer, he had not suffered any loss. For this reason it also allowed the appeal in relation to this claim. 12. The Appeal Committee gave leave to appeal, first on: “whether the relationship between insurers and insurance agents of the one part and insurance agents [and] technical representatives of the other part can give rise to a duty of care owed by the former to the latter to comply with the mandatory requirements in the code of practice and guidance note, for the breach of which, a claim for damages may arise.”[18] 13. Leave was also granted on the “or otherwise” basis so that we could consider whether in the circumstances of this case, the Court of Appeal should have, on its own motion, refused to accept or abide by the concession made by the plaintiff that before the cessation of his appointment was reported he could not work for another insurance agent. Although Mr Singh also sought leave to argue that he had a cause of action for breach of statutory duties, leave was not granted. 14. In this appeal the focus of the argument of Ms Eu SC, for Mr Singh, was on tortious duty of care to which I now turn. Duty of Care 15. Ms Eu SC submitted that Dah Sing owed Mr Singh a duty of care to comply with the requirement of the Code to report the cessation of Mr Singh’s appointment within 7 days of the cessation as well as to report his CPD credits to the IARB. She relied in particular on these words of Lord Bridge of Harwich in Caparo Industries Plc v Dickman [1990] 2 AC 605 at 617 that: “… in addition to the foreseeablity of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of ‘proximity’ or ‘neighbourhood’ and that the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope upon the one party for the benefit of the other.” 16. Foreseeability of loss is straightforward. In the case of failure to report the cessation of appointment, it was accepted that Mr Singh could not work as a technical representative for another insurance agent until cessation of his appointment had been reported by Dah Sing.[19] In the case of failure to report the CPD credits, the penalty was mandatory and it was not disputed that he could not work during the 3 months when he was de-registered. 17. “Proximity” or “neighbourhood” are not the only relevant concepts in cases of omissions involving pure economic loss. The House of Lords in Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 preferred the concept of “assumption of responsibility”. Lord Goff of Chieveley[20] said the concept of assumption of responsibility appeared, at 181: “… to have been adopted, in one form or another, by all of their Lordships in Hedley Byrne [1964] A.C. 465.” and that: “Furthermore, especially in a context concerned with a liability which may arise under a contract or in a situation ‘equivalent to contract,’ it must be expected that an objective test will be applied when asking the question whether, in a particular case, responsibility should be held to have been assumed by the defendant to the plaintiff: see Caparo Industries Plc v Dickman [1990] 2 A.C. 605, 637, per Lord Oliver of Aylmerton.” 18. But, whether the applicable concept is “proximity”, “neighbourhood” or “assumption of responsibility”, Lord Hoffmann explained in Customs and Excise Commissioners v Barclays Bank plc [2007] 1 AC 181 at 198 and 199: “the answer does not depend upon what the defendant intended but, as in the case of contractual liability, upon what would reasonably be inferred from his conduct against the background of all the circumstances of the case. The purpose of the inquiry is to establish whether there was, in relation to the loss in question, the necessary relationship (or ‘proximity’) between the parties and, as Lord Goff of Chieveley pointed out in Henderson v Merrett Syndicates Ltd [1995] 2 AC 145, 181, the existence of that relationship and the foreseeability of economic loss will make it unnecessary to undertake any further enquiry into whether it would be fair, just and reasonable to impose liability.” 19. Earlier at 190, Lord Bingham of Cornhill regarded an assumption of responsibility which is to be applied objectively: “as a sufficient but not a necessary condition of liability, a first test which, if answered positively, may obviate the need for further enquiry.” 20. In the present appeal, I prefer to approach the question of liability by considering whether, viewed objectively, Dah Sing could be said to have assumed the responsibility to report the cessation of his appointment or report his CPD credits. The answer depends on what could be inferred from the circumstances of this case. I have already mentioned the contract and said that although it expressly stated that its effective date was 1 January 2007, it did not become effective until 19 January 2007 when Dah Sing obtained confirmation from IARB of the registration. There were two other contractual documents between the parties, both dated 14 February 2007. Although they were dated later, there was no suggestion that they were not agreed contemporaneously with the contract. First, an offer letter signed by the parties under which Mr Singh was appointed “senior district manager” with effect from 1 February 2007 and which required that Mr Singh be registered with the HKFI as an agent[21] representing the company. Under the offer letter Mr Singh was paid an one off sign-on fee of $150,000. By a separate letter of understanding signed by Mr Singh and Dah Sing, he undertook to perform all his duties and to remain as a bona fide insurance agent[22] of the company for a minimum of 5 years and to repay the sign-on fee if his contract was terminated in the first 3 years.[23] Mr Singh’s counter claim was made in response to Dah Sing’s claim for a refund of the sign-on fee because his appointment was terminated in the first year. It is clear that the foundation of all these contractual documents was the registration of Mr Singh as a technical representative of Dah Sing which required the application by Dah Sing and his continued registration which depended on Dah Sing reporting his CPD credits to the IARB.[24] 21. Mr Tong SC relied on the fact that the contract of appointment expressly placed upon Mr Singh the responsibility to comply with the Code[25] whereas it was silent so far as Dah Sing was concerned. I would not read too much into this. As I have said,[26] in my view, Dah Sing was obliged by the Ordinance to comply with the provisions of the Code, that being the case, the requirement for compliance by Dah Sing could be taken for granted and no express provision was required. 22. In Henderson, Lord Goff of Chievely spoke of the importance of the possession of special knowledge or special skill in the person said to have assumed responsibility.[27] Here, we are not concerned with special knowledge or special skill, but Dah Sing was in an analogous position because of its role under the Code in reporting the cessation of appointment and reporting of CPD credits. Moreover, it was obvious that Mr Singh relied on Dah Sing to perform its role. The provisions set out in para 7 above outlined the many duties which Dah Sing as an insurance agent had to perform to enable its technical representatives to obtain the CPD credits including the supply of a copy of the necessary declaration which is essential for reporting the CPD credits. Also, the reporting could only be done by Dah Sing. It was obvious that Mr Singh would rely on Dah Sing. In these circumstances, I believe it is clear that Dah Sing must be taken to have assumed the responsibility to comply with these requirements. 23. The Code provided that the appointment of a technical representative could not take effect before registration by the IARB on the application of Dah Sing. I asked Mr Tong SC who appeared for Dah Sing whether it was his submission that, although under the Code Mr Singh could not begin work until his registration as a technical representative with the IARB upon application by Dah Sing had been confirmed, Dah Sing was not obliged to apply for registration. Mr Tong said it was. With respect, it seems to me clear that Dah Sing was under a duty to report the appointment of Mr Singh to IARB. The duty may be both contractual as an implied term of the contract to give it business efficacy as well as a tortious duty arising out of the relationship between the parties under which Dah Sing must be taken to have assumed such responsibility. As for the report of cessation of appointment and the CPD credits, given the clear foreseeability of loss to Mr Singh in the event of Dah Sing’s failure and Dah Sing’s assigned role under the Code, viewed objectively, Dah Sing must be taken to have assumed responsibility to do so. 24. Kwan JA in the Court of Appeal referred to and relied on what Ribeiro PJ said in Leung Tsang Hung v Incorporated Owners of Kwok Wing House (2007) 10 HKCFAR 480 at paras 49 to 53. But, with respect, what his Lordship said at para 54 is more apposite. His Lordship said[28] in cases where one has: “… actually done acts or entered into relationships or undertaken responsibilities which give rise to a common law duty of care. … The duty rests upon a solid, orthodox common law foundation and the question is not whether it is created by the statute but whether the terms of the statute (for example, in requiring a particular thing to be done or conferring a discretion) are sufficient to exclude it. The law in this respect has been well established since Geddis v Proprietors of the Bann Reservoir (1878) App Cas 430.” 25. Given the assumption of responsibility, the foreseeability of loss and Mr Singh’s reliance on Dah Sing to report the cessation of his appointment and his CPD credits in accordance with Dah Sing’s assigned role under the Code, I believe one could also conclude that it would be fair, just and reasonable to impose a duty of care on Dah Sing. 26. Mr Tong also relied on some of the provisions of the contract of appointment to show that Dah Sing had not assumed any contractual responsibility to report termination of appointment. Assumption of responsibility which would otherwise give rise to tortious liability may be excluded by contract if the latter is inconsistent with it.[29] 27. First, clause 13.4.6, which provided that: “Upon termination of this Agreement and subject to the provisions of Clause 13.5: ‘the Company, shall, if termination is for a cause relating to a breach of the Code or relevant Ordinance, notify the IARB of the relevant particulars and notify the Technical Representative that it has done so.’” 28. And clause 13.7 of the contract which provided that Dah Sing: “… shall not be liable to pay any compensation to the Technical Representative for any loss or damages howsoever arising from or in connection with the termination, for whatever reason, of this Agreement.” 29. Clause 13.7 does not help, the losses complained of flowed not from “the termination, for whatever reason” but failure to report cessation of his appointment or report of CPD credits. Nor would clause 13.4.6 help Mr Tong. Clause 13.4.6 expressly required Dah Sing to notify IARB and the technical representative of the termination of the appointment for a cause related to a breach of the Code or relevant Ordinance. We are not concerned with notification of any breach and I cannot read clause 13.4.6 as being inconsistent with a tortious liability to report cessation of appointment which is unrelated to any breach at all. 30. Mr Tong also sought to argue that Mr Singh had suffered no loss as a result of the deregistration because it was said that Mr Singh was not aware of the deregistration until after it was over. This is a point which had not been taken in any of the courts below nor had leave been given by us to raise the point. We would not entertain it. Or otherwise 31. We also gave leave on the or otherwise basis.[30] It is here that I turn to an important difference between an insurance agent and a technical representative which I can deal with briefly. Under clause 19 of the Code, an insurance agent could work for 4 principals provided he has the consent of the principal for whom he acts as an insurance agent.[31] However, in the case of a technical representative, clause 33 provided that he could not act as a technical representative for more than one insurance agent. At trial there was no dispute that unless the cessation of appointment was reported by Dah Sing, Mr Singh could not work for another insurance agent and it was Mr Singh’s claim that he suffered loss of income as a result. It was never Dah Sing’s case that even if they were in breach Mr Singh could have worked. It was Mr Singh’s clear evidence that he couldn’t work. His evidence was not contradicted. Indeed, Ms Kan Chuy Hant who gave evidence for Dah Sing, said during cross-examination: “Q: Right, so the code de-registration[32] is for enabling the agent[33] concerned to work in another company, right? If the code is not de-registered, he will not be able to work in another company, do you agree? A: Agree” 32. In the teeth of such evidence, the Court of Appeal of its own initiative,[34] referred to Mr Singh’s “Insurance Agents Registration History” and found against Mr Singh on this part of his claim. Kwan JA said: “78. This was not a point taken by the plaintiff at the trial. Mr Li [leading counsel for Mr Singh] has referred us to the evidence of the plaintiff’s witness who agreed in cross-examination with the suggestion that if an agent was registered with one insurer, he could not be appointed as agent by another insurer. But this concession of the witness was plainly incorrect. Under clause 19 of the Code, an agent could work for not more than four principals simultaneously, of whom no more than two shall be long term insurers. This was borne out by the Insurance Agents Registration History of the defendant, there were two periods (from July 1995 to December 1996, and from December 1996 to May 1998) when he was registered as an agent of two insurers at the same time. There were other instances when his appointment as agent was subsisting with more than one insurer. 79. On this evidence which cannot be refuted, the defendant had failed to establish that any loss of income was caused by the failure of the plaintiff to report his termination of employment. So for this reason as well, the award of damages of one month’s loss of income should also be set aside.” 33. I have quoted at length from the judgment because, with respect, I find these paragraphs difficult. Mr Singh was a technical representative and under clause 33 he could not act as a technical representative for more than one insurance agent. The Code is silent on whether whilst still registered as a technical representative, he could work as an insurance agent. I am unable to tell whether it was Kwan JA’s view that Mr Singh could at the same time be both a technical representative and an insurance agent. But the fact that in the past he had been insurance agent for 2 insurers was not to the point. At para 7 of her judgment, she said Mr Singh was registered as a “technical representative of insurance agency” of Dah Sing but at para 5 she said “He was appointed as the plaintiff’s insurance agent …” which is wrong. I believe her Ladyship might have been misled by the fact that in his defence and counterclaim, Mr Singh said he entered into an “agent contract”. Furthermore, Ms Eu told us it was only after the receipt of Court of Appeal’s judgment that Mr Singh’s lawyers realized that the court regarded the fact that he had once worked for more than one insurer significant. 34. With respect, I do not believe the Court of Appeal was at liberty to take a new point on appeal against the clear evidence at trial. The parties could be expected to know, as a matter of common understanding within the profession and practical reality, whether Mr Singh could work before the cessation of his appointment by Dah Sing had been reported. His clear and uncontradicted evidence was that he could not. Moreover Mr Singh in his second affirmation has set out the prima facie relevant evidence which he could have adduced had the point been raised at first instance. In these circumstances, I would also allow Mr Singh’s appeal on this point. Mr Justice Fok PJ: 35. I agree with the Judgment of Mr Justice Tang PJ. Mr Justice Stock NPJ: 36. I agree with the Judgment of Mr Justice Tang PJ. Mr Justice Spigelman NPJ: 37. I agree with the Judgment of Mr Justice Tang PJ. Mr Justice Ribeiro PJ: 38. The appeal is unanimously allowed. We make an order nisi for costs to be paid by the respondent to the appellant here and below, with liberty to the parties, if so advised, to lodge written submissions on costs within 14 days of the date of the handing down of this judgment. In default of such submissions, the order nisi is to stand as an order absolute without further direction. Mr Ronny Tong SC, Mr Norman Nip and Ms Prisca Cheung, instructed by Keith Lam, Lau & Chan, for the plaintiff (respondent) Ms Audrey Eu SC and Mr Kelvin Leung, instructed by T C Lau & Co, assigned by the Director of Legal Aid, for the defendant (appellant) [1] Explanatory Memorandum to the Insurance Companies (Amendment)(No 3) Bill 1993. [2] s 67(1). [3] Para 67(4). [4] s 67(5), s 77(6)(a). [5] Defined in the Ordinance to mean “a person who holds himself out to advise on or arrange contracts of insurance in or from Hong Kong as an agent or sub-agent of one or more insurers”. [6] But there are also important differences, for example, an insurer cannot exclude or limit its liability for the actions of its appointed insurance agents, s 68(2). This is not the case with technical representatives and this and other measures meant to protect policy holders or potential policy holders can be circumvented by an insurer appointing an “inhouse” insurance agent. [7] The Court of Appeal in its judgment mainly referred to provisions in the Code which concern insurance agents. This, as will be seen, has given rise to some confusion, because there is one important difference in the Code concerning them, namely, under clause 33 a person cannot act as a technical representative for more than one insurance agent but an insurance agent could work for as many as 4 insurers. See para 31 below. [8] Clauses 26 and 27. [9] Clause 31. [10] Clauses 65 and 67. [11] The Guidance Note on compliance with CPD Programme issued on 30 November 2004 and revised on 13 June 2005. [12] Under clause 6(a)(iii), a technical representative has to complete this as part of the reporting process. [13] In his defence and counterclaim, he called this “an agent contract”. Be that as it may, the learned trial judge was aware that he was a technical representative. See para 1 of his judgment. However, in the Court of Appeal, although at para 7 of Kwan JA’s judgment, it said Mr Singh was “registered as ‘a technical representative of insurance agency’ of [Dah Sing]”. At para 5, it said that “He was appointed as [Dah Sing’s] insurance agent …”. This confusion may be important when we come to deal with the appeal on the “or otherwise” ground. [14] Clause 26 provided that an insurance agent shall obtain IARB’s confirmation before confirming the appointment of a technical representative. [15] Para 91, DC judgment. [16] Para 92, DC judgment. [17] Para 50, DC judgment. [18] Determination, 4 August 2015. [19] I will deal with the Court of Appeal’s contrary view below at para 32. [20] With the concurrence of all their Lordships. [21] In context as a technical representative and not an insurance agent or sub-agent. But in both Mr Singh and the evidence of Ms Kan Chuy Hant, the only witness of Dah Sing, he was referred to as “agent”, a term used, no doubt, colloquially. [22] See para 4 but Mr Singh was not an insurance agent. Dah Sing as an insurance agent could not appoint an insurance agent, only an insurer could appoint an insurance agent. [23] 100% in the event of termination during the first year, 66.66% the second year and 33.34% the third year. [24] See para 7 above. [25] Clause 6. See para 7 above. [26] See para 3 above. [27] Henderson at 180. [28] Quoting from Gorringe v Calderdale Metropolitan Borough Council [2004] 1 WLR 1057 at 1068. [29] Henderson at 193C. [30] See footnote 7 above. [31] Clause 21. [32] This was the expression used to refer to the report of cessation of appointment. [33] I believe this was also used colloquially and not a reference to “insurance agent” as defined in the Ordinance or the Code. [34] See para 11 of the court’s decision refusing leave to appeal. The point was not mentioned in the skeleton submissions before the Court of Appeal. |
The Court: 1. At the conclusion of the oral argument the Court ordered that the appeal be dismissed. What follows are our reasons for supporting that order. The Trial 2. Part XII (ss 117-159) of the Crimes Ordinance (Cap 200) is headed “Sexual and Related Offences”. Section 118(1) states: “A man who rapes a woman shall be guilty of an offence and shall be liable on conviction on indictment to imprisonment for life.” Section 4B of the Evidence Ordnance (Cap 8) abrogates any requirement for the judge at a trial of an offence under Part XII to give the jury a warning about convicting the accused on the uncorroborated evidence of the complainant. 3. The appellant stood trial in the High Court before Barnes J and a jury of 7 on five counts of rape of a girl (X), born in 2003. The particulars of the offences specified rental premises in the New Territories (“Room D”) of which the appellant was the landlord. The appellant contended that the whole case against him was fabricated, that X’s mother (Y) was his “kept woman”, that he had been supporting Y and X, and that Y had abetted X to accuse him falsely of rape with a view to extorting further money from him. 4. For counts 1 and 2 the particulars included the phrase “on an unknown date in March 2014”, count 3 “an unknown date between the 1st day of April 2014 and 31st day of May 2014, both dates inclusive” and for count 4 “an unknown date in May 2014”. Count 5 was unique in identifying a specific date, 4 June 2014. At the trial on 22, 23 June 2016 the appellant was convicted on counts 1, 2, 3 and 4 by a majority verdict of five to two. The appellant was sentenced to imprisonment for a total of 10 years. He was, significantly, unanimously acquitted of count 5. 5. Barnes J had given her directions to the jury in Chinese and references in these reasons are to the English translation. She observed in her directions to the jury that “the evidence is most basically the oral evidence of only two witnesses…just X and the Defendant”. With respect to count 5 the appellant had given evidence of a specific alibi. He contended that at the time of the offence charged in count 5, around 1 pm on 4 June 2014, he could not have been in Room D. This was because at that time he was negotiating with one Madam Lee for the renting of another room, he signed a lease with her, and, during this period, he had 11 records of phone conversations with other people. Appeal to the Court of Appeal 6. Section 82(2)(b) of the Criminal Procedure Ordinance (Cap 221) (“the Procedure Ordinance”) provides for an appeal, with the leave of the Court of Appeal on, inter alia, any ground which appears to the Court “to be a sufficient ground of appeal”. An application by the appellant in respect of his four convictions was dismissed by the Court of Appeal (Yeung VP, Poon JA, Chan J) in a comprehensive judgment, dated 8 December 2017 and extending to 80 paragraphs. 7. Section 83(1)(a) of the Procedure Ordinance provides for a conviction to be set aside “on the ground that under all the circumstances of the case [the conviction] is unsafe or unsatisfactory”. The Court of Appeal refused to grant leave to appeal because it did not find anything unsafe or unsatisfactory in the convictions of the appellant. 8. In particular, the Court of Appeal rejected the appellant’s submissions that because the jury found him not guilty on count 5 this rendered his conviction on the counts 1-4 unsafe and unsatisfactory. Appeal to this Court 9. On the application to this Court for leave particular reliance was placed upon what appeared to be a direction required by R v Markuleski[1], and upon the outcome in Jones v The Queen[2] where, the High Court of Australia held that, given the acquittal on one count of sexual intercourse with a female child, it was not open to the jury on the whole of the evidence to be satisfied beyond reasonable doubt of guilt on the other two counts. 10. On 15 November 2018, this Court granted leave to appeal from the Court of Appeal on two questions of law: (1) Although the standard direction to the jury is that they should consider each count in the indictment separately and may accept part of a witness’s evidence and not accept other parts of the same witness’s evidence, should that direction be qualified in cases of sexual offences where the only direct evidence of commission of the offences is that of the complainant and, if so, how? (2) What is the proper approach of an appellate court to inconsistent verdicts in cases of sexual offences where, although not logically inconsistent, they are based on the uncorroborated evidence of the complainant? 11. This Court also granted leave “on the basis that it is reasonably arguable that the different verdicts of the jury on the indictment against the [appellant] resulted in substantial and grave injustice being done to him”. 12. On his appeal, the appellant sought an order quashing his conviction on counts 1-4, having regard to what he submitted was the correct approach to the impact of acquittal on count 5. Question 1 - Markuleski Direction 13. With respect to Question 1, in his Written Case the appellant relied in particular on what was said by Spigelman CJ in R v Markuleski[3]. The passages in question read: “184. … I express considerable reluctance to add to the number of directions and warnings which trial judges are already required to give. McHugh J noted in KRM v The Queen [(2001) 206 CLR 221 at 37]: ‘The more directions and warnings juries are given the more likely it is that they will forget or misinterpret some directions or warnings.’ 185. Nevertheless, the case law on inconsistent verdicts, particularly in the context of sexual assault cases but not limited to that context, indicates that there is a recurring difficulty in this respect. It may appear to be obvious that a reasonable doubt about one aspect of a complainant's evidence ought to be taken into account when assessing that witness's evidence on other matters. However, there have been a significant number of cases in which courts of criminal appeal have acted on the basis that the jury may have failed to do so. 186. In the light of the number of cases it is desirable that the traditional direction as to treating each count separately is supplemented in a word against word case. Some reference ought to be made to the effect upon the assessment of the credibility of a complainant if the jury finds itself unable to accept the complainant's evidence with respect to any count. … 187-190 … 191. The precise terminology must remain a matter for the trial judge in all the particular circumstances of the specific case. The crucial matter is to indicate to the jury that any doubt they may form with respect to one aspect of the complainant's evidence, ought be considered by them when assessing the overall credibility of the complainant and, therefore, when deciding whether or not there was a reasonable doubt about the complainant's evidence with respect to other counts.” (italics added) 14. In his judgment in KRM McHugh J (with the other members of the Court) rejected the submissions that on the trial of multiple counts of sexual offences against the same complainant the judge was obliged to direct the jury that if they found the accused guilty on one or more counts they could not use that finding to reason that the accused had a propensity making him likely to commit the offences charged in the other counts. While Markuleski is not immediately directed to a propensity warning, McHugh J’s following observations are in point. He said[4]: “It has become the standard practice in cases where there are multiple counts, however, for the judge to direct the jury that they must consider each count separately and to consider it only by reference to the evidence that applies to it (a ‘separate consideration warning’). The universal giving of a separate consideration warning and the omission of a universal propensity warning indicates that the giving of a separate consideration warning is ordinarily sufficient to avoid miscarriages of justice in cases such as the present. This indication is confirmed by the many cases where juries acquit accused persons of some charges and convict them of others where the presentment contains multiple counts involving the same or similar offences.” 15. The nature and effect of the “separate consideration warning” will be considered below when dealing with Question 2. 16. The italicised passage from Markuleski set out above at para 13 above may suggest that the supplementary direction is mandatory. That is not how the matter has been considered in subsequent appellate decisions in Queensland, New South Wales, Victoria and Western Australia which were collected and discussed by Keane JA (as he then was) in R v Ford[5]. Rather, as his Honour pointed out, it is not the position that “the Markuleski direction is always necessary, or even desirable, as a counterweight to the ‘separate offences’ direction”; it must first be clear that the risk of unfairness to the accused “has truly arisen”. The New South Wales Court of Criminal Appeal in DF v The Queen[6] recently referred with approval to the judgment of Keane JA. 17. It may be noted that in Ford[7] Keane JA had approved a statement by Buchanan JA in R v PMT[8] (with citations omitted): “I think it unlikely that a jury given a separate consideration direction will be entirely uninfluenced by the impressions they derive from the evidence of a witness taken as a whole; I doubt that such a natural tendency needs judicial encouragement in the form of a Markuleski direction. Further, I am of the opinion that the proposed direction is likely to promote propensity reasoning and produce confusion rather than assist a jury to properly evaluate the evidence. In my view, in this case it was well within the ability of the jury to assess the evidence of the complainant in the light of their own experience and with the benefit of the addresses of counsel, without the necessity of the warning advocated by counsel for the applicant.” 18. Further, in England the Court of Appeal in R v Fanning[9], with reference to MacKenzie v The Queen[10], reaffirmed that the constitutional position of the jury includes an ameliorative aspect which allows for a “merciful” view of the facts on one or more of a plurality of counts. 19. We are of the view that Ford and Fanning put Markuleski properly in context. 20. Several points are to be made respecting what on this appeal was the appellant’s approach to Markuleski. First, correctly, the appellant did not contend that the extended direction is necessarily required in word against word cases. Rather, it was submitted in the Written Case (para 20) that: “[The] approach suggested in Markuleski allows the trial judge to tailor the direction to suit the individual circumstances of each particular case, and if necessary, to give strong direction to the jury that if they acquit on one count, it is very difficult for them to convict on other counts. This allows the judge to give suitably strong direction to the jury to acquit without usurping the function of the jury, while avoiding the danger of asking the jury to use the guilt in one count to add to the propensity of the defendant in committing the offences in the other counts.” (italics added) 21. Secondly, at the trial the jury sought assistance with several questions and counsel for the appellant saw this as indicating that the jury was not sure as to on how many of the charges they were inclined to return a guilty verdict. Counsel sought from the trial judge a direction that: “If they have a reasonable doubt about the girl’s evidence on any of the rape charges, they must take that reasonable doubt into consideration when [they] consider the other charges.” Her Ladyship responded with a proposed direction and counsel reacted: “Right, [they] have to consider whether the evidence that makes them cast doubt on the girl would affect her evidence in respect of the other charges.” Her Ladyship then gave a direction with particular reference to count 5: “Whether the situation of the fifth count is slightly different from those of the first, second, third and fourth, you people will have to consider whether it will affect the evidence in the case; [whether] it might not necessarily affect the first, second, third and fourth. This is for you to decide. But what is the most important thing: Most importantly, what [you] have to bear in mind is that there is no other evidence to support [the version of] this witness.” 22. Thirdly, in the appellant’s Written Case counsel contends that the direction did not go far enough. Paragraphs 27 and 28 state: “27. It is respectfully submitted that the learned judge should have directed the jury that: - (i) They may think that there is nothing to distinguish the evidence of [X] on the 5th count and the other counts. (ii) They may think that the Appellant’s alibi evidence is so credible that it is difficult to convict on the 5th count. (iii) Because [X] did not give specific dates of the offences in counts 1-4, it is impossible for the Appellant to call alibi evidence on counts 1-4, which is a serious disadvantage to the defence. (iv) If they find a reasonable doubt in [X’s] evidence in relation to count 5 they must take that into consideration of X’s credibility in relation to counts 1-4, and they may believe that it is difficult to see how [X’s] evidence could be accepted in relation to counts 1-4. (v) If they find the Appellant not guilty on the 5th count, they may consider it very difficult to find him guilty on any of the other counts. 28. In the circumstances, because of the inadequate direction to the jury as indicated above, the Appellant has not been given a fair trial and therefore the conviction should be quashed.” 23. At the trial counsel had not sought to invite the trial judge to expand the direction she did give by a further detailed direction as set out above. 24. Given these circumstances is there substance in the above submission that the appellant was denied a fair trial? The answer must be in the negative. 25. Question 1 asks whether the “separate offences” direction should be qualified in cases of sexual offences where the only direct evidence of commission of the offences is that of the complainant, and, if so, how? The qualification, if necessitated by the state of the evidence, would be a Markuleski direction, usually in terms to the effect of the directions sought and given in the present case. 26. The necessity for such a direction may be urged by counsel, or, the issue may be raised by the trial judge for consideration and submissions by counsel. The direction is not lightly to be given and the use of the term “necessary” indicates the overarching criterion of the conduct of a fair trial. Whether the state of the evidence raises that necessity is determinable only on the specific circumstances. The approach of the trial judge in this case provides a positive example of the necessity. The judge gave the direction to the jury that was requested of her. 27. The terms in which the direction is given will be indicated by the state of evidence in the case. Whether in this case, if then sought, it would have been appropriate for the trial judge to give a direction in the detailed terms now sought by the appellant’s counsel is a question upon which, at this distance from the trial, this Court should not enter. It was not obvious that such a direction should have been given. Question 2 – Inconsistent Verdicts 28. We turn now to Question 2 and inconsistent verdicts in sexual cases. 29. In MacKenzie v The Queen[11] the High Court of Australia observed: “A distinction must be drawn between cases of legal or technical inconsistency and cases of suggested factual inconsistency. The former will generally be easier to resolve. On the face of the court's record there will be two verdicts which, in law, cannot stand together. Examples include the case where the accused was convicted both of an attempt to commit an offence and the completed offence[12] or of being, in respect of the same property and occasion, both the thief and the receiver[13] . There are other like cases[14]. Where technical or legal inconsistency is established, it must be inferred that the jury misunderstood the judge's directions on the law; compromised disputes amongst themselves; or otherwise fell into an unidentifiable error. The impugned verdict or verdicts must be set aside and appropriate consequential orders made.” 30. The issue on this appeal concerns “factual inconsistency” which is said to arise between different verdicts against the same accused. 31. In R v Fanning[15] the English Court of Appeal reaffirmed, with respect to an argument on an appeal that the jury had returned inconsistent verdicts, the requirement associated with remarks of Devlin J (as he then was) in R v Stone[16] and their adoption by the Court of Appeal in R v Durante[17]. The criterion is that no reasonable jury which had applied their minds properly to the facts of the case could have returned the verdict called into question. In Fanning the Court of Appeal rejected those English decisions given after Stone which indicated that verdicts could be treated as inconsistent because the jury was satisfied about some parts of the evidence given by a witness but unable to be sure to the requisite standard as to other parts of that evidence.[18] 32. In Hong Kong Durante was adopted in R v Cheng Man To[19], as explained by the Court of Appeal in HKSAR v Wu Wing Hong[20]. It follows from the disposition of the present appeal that this remains the position in Hong Kong and Question 2 is to be answered accordingly. 33. In Cheng Man To[21] the appellant was convicted on two counts of incest with his daughter and acquitted on six counts in the one indictment. It appeared to the Court of Appeal that “being very careful” the jury had not been prepared to convict on charges not relating to specific dates and had convicted only where the complainant alleged specific dates. However, cases will arise where different verdicts on counts in sexual offences cases are held to be irreconcilable and “an affront to logic and common sense”.[22] 34. In Australia, the decision in Jones v The Queen[23] was read by the New South Wales Court of Criminal Appeal in R v RAT[24] as adding to the “separate offences” direction referred to above at para 14 in cases of multiple counts of sexual assault where the only direct evidence was that of the complainant. In RAT the Court held that in such cases, if the jury is not satisfied to the criminal standard upon one or more counts, and there is no independent evidence respecting the other counts, they must acquit on all counts. However, subsequently in MFA v The Queen[25] the High Court held that it was erroneous to treat Jones as authority for the proposition that not guilty verdicts on some counts necessarily support a conclusion that the complainant was untruthful and unreliable and so was of damaged creditability. Jones was to be treated as deciding that on its facts the necessary justification in logic and reasonableness was missing. 35. In MFA[26] Gleeson CJ, Hayne and Callinan JJ emphasised of a verdict of not guilty in a case of sexual offences: “It may simply reflect a cautious approach to the discharge of a heavy responsibility. In addition to want of supporting evidence, other factors that might cause a jury to draw back from reaching a conclusion beyond reasonable doubt in relation to some aspects of a complainant's evidence might be that the complainant has shown some uncertainty as to matters of detail, or has been shown to have a faulty recollection of some matters, or has been shown otherwise to be more reliable about some parts of his or her evidence than about others.” 36. On the hearing of the present appeal it became clear that counsel for the appellant accepted Stone and Durante, and founded the appellant’s case on the submission that, given the acquittal on count 5, no reasonable jury could have returned a guilty verdict on counts 1-4. 37. The appellant pointed to several matters which together were said to provide a sufficient basis for that conclusion, but the respondent cogently countered these submissions. First, the absence of corroboration of the evidence of the complainant was a feature of many sexual offence cases and while a relevant factor could not of itself be decisive. Secondly, there had been no undue delay, the alleged offences being committed in 2014, the indictment preferred on 22 October 2015 and the evidence of X at the trial being given in June 2016. Thirdly, there had been an apparent difference in the quality of X’s evidence; counts 1-4 were included in the letter written by X to herself, referring to events of April-May, but count 5, placed in June was not mentioned; count 5 was pleaded with reference to a specific date, which had been contradicted by the appellant’s asserted alibi; the alibi and the omission from the letter were considered in the summing up and should be taken to have been considered by the jury. 38. The acquittal on count 5 may reflect the cautious approach described in the passage from MFA quoted above in para 35. Viewed overall the differing verdicts in the present case were not inconsistent such as to necessitate intervention on appeal. Substantial And Grave Injustice Not Established 39. There being no departure from any norm of substantive or procedural law, it follows that the appellant failed to establish that his conviction resulted in substantial and grave injustice being done to him. Mr Wong Man Kit SC and Mr Joe Chan, instructed by Foo & Li, for the Appellant Mr Martin Hui SC, Consultant Counsel and Mr Ivan Cheung, SPP, of the Department of Justice, for the Respondent [1] (2001) 52 NSWLR 82 at 121-122. [2] (1997) 191 CLR 439. [3] (2001) 52 NSWLR 82 at 121-122. [4] (2001) 206 CLR 221 at [36]. [5] [2006] QCA 142 at [123]–[126]. [6] (2012) 222 A Crim R 178 at [28]. [7] [2006] QCA 142 at [126]. [8] (2003) 8 VR 50 at 59. [9] [2016] 1 WLR 4175 at [11], [16], followed in R v Fletcher [2017] EWCA Crim 1778 at [26]; R v Electricity North West Ltd [2018] 4 WLR 148 at [41]. [10] (1996) 190 CLR 348 at 366-368. [11] (1996) 190 CLR 348 at 366. [12] R v Roach [1948] NZLR 677. [13] R v Irvine [1976] 1 NZLR 96. [14] See, eg, R v Mitchell [1971] VR 46 at 51; Connecticut v Hinton (1993) 630 A 2d 593. [15] [2016] 1 WLR 4175. [16] [1955] Crim LR 120. [17] [1972] 1 WLR 1612 at 1617. [18] [2016] 1 WLR 4175 at 4188. [19] [1987] 2 HKC 261 at 265. [20] [1998] 1 HKLRD 508 at 511. [21] [1987] 2 HKC 261 at 267-268. [22] For example, BG v Western Australia (2005) 152 A Crim R 207 at [53]-[54]; R v Bond [2018] QCA 130 at [100]-[105]. [23] (1997) 191 CLR 439. [24] (2000) 111 A Crim R 360 at 371. [25] (2002) 213 CLR 606 at [35], [89], [97]. [26] (2002) 213 CLR 606 at [34]. See also MC v R [2017] NSWCCA 274 at [83]-[92] per Hoeben CJ at CL; Cabot (pseudonym) v R [2018] NSWCC A 265 at [54]-[58] per Leeming JA. |
Mr Justice Ribeiro PJ: 1. I agree with the judgment of Lord Neuberger of Abbotsbury NPJ. Mr Justice Tang PJ: 2. I agree with the judgment of Lord Neuberger of Abbotsbury NPJ. Mr Justice Fok PJ: 3. I agree with the judgment of Lord Neuberger of Abbotsbury NPJ. Mr Justice Bokhary NPJ: 4. I agree with the judgment of Lord Neuberger of Abbotsbury NPJ. Lord Neuberger of Abbotsbury NPJ: Introductory 5. This is an appeal brought by Moody’s Investors Service Hong Kong Limited (“Moody’s”) against a decision of the Court of Appeal (Hon Lam VP, and Yuen and Kwan JJA) given on 8 June 2017, [2017] 3 HKLRD 565. At the end of the hearing, we indicated that we would dismiss the appeal, and give our reasons later. These are our reasons. 6. By their decision, the Court of Appeal substantially upheld a determination of the Securities and Futures Appeals Tribunal (“the Tribunal”, Hon Hartmann NPJ, Chairman, and Dr Billy Mak Sui-choi and Ms Ding Chen, Members), given on 31 March 2016. In that determination, the Tribunal upheld in part a Decision Notice (“the Notice”) issued by Securities and Futures Commission (“the Commission”) dated 3 November 2014. 7. The Notice stated that, pursuant to section 194 of the Securities and Futures Ordinance Cap 571 (“the Ordinance”), Moody’s had failed to meet the standards, or to comply with the practices, expected of a corporation licensed under the Ordinance, in its preparation and publication of a report published on 11 July 2011 (“the Report”). After Moody’s had made representations as to the appropriate sanction, the Commission went on to decide to impose a public reprimand and a financial penalty of HK$23 million. 8. On Moody’s application for a review, the Tribunal upheld some, but not all, of the criticisms in the Notice, and, while maintaining the public reprimand, it reduced the financial penalty to HK$11 million. Although the Court of Appeal disagreed with the Tribunal on one aspect, it made no difference to the outcome, and so Moody’s appeal was dismissed. Moody’s now appeals to the Court of Final Appeal. The regulatory background 9. Moody’s is the Hong Kong arm of the eponymous global credit rating agency network, which trades under the names Moody’s Investors Services (“MIS”) and Moody’s Analytics. The network’s website claims that its services are “an essential component of the global capital markets, providing credit ratings, research, tools and analysis that contribute to transparent and integrated financial markets”. The website also states that MIS is “a leading provider of credit ratings, research, and risk analysis”, whose ratings cover the great majority of sovereign nations, and tens of thousands of entities which issue bonds. 10. The influence of credit ratings agencies (“CRAs”), and in particular the largest two or three CRAs (which on any view include MIS), on global capital markets became apparent following the worldwide financial crisis of 2007-2008. In a nutshell, it was thought that a large proportion of investors and traders in government, corporate and other debt and debt-related instruments placed great weight on the ratings issued by the CRAs. As a result, in many jurisdictions where the CRAs were not subject to specific regulatory control, they were brought within the regulatory system. Hong Kong was one such jurisdiction, and CRAs were specifically brought within the ambit of the Ordinance in 2011. 11. The Ordinance in its present form contains provisions for the licensing, regulating and disciplining of any person who wishes to carry on specified “regulated activities” in financial markets. Part 1 of Schedule 5 currently sets out twelve types of such activities. Type 10 is “providing credit rating services”. 12. Part 2 of the same Schedule contains two relevant definitions. The first is “credit ratings” which are defined as: “opinions, expressed using a defined ranking system, primarily regarding the creditworthiness of – (a) a person other than an individual; (b) debt securities ….”. The second relevant definition is “providing credit rating services”, which is as follows: “(a) preparing credit ratings- (i) for dissemination to the public, whether in Hong Kong or elsewhere; … or … (b) preparing credit ratings- (i) for distribution by subscription, whether in Hong Kong or elsewhere; … … but does not include – (c) preparing, pursuant to a request made by a person, a credit rating which is exclusively prepared for, and provided to, the person, and that is neither intended for dissemination to the public or distribution by subscription …”. 13. Part IX of the Ordinance is concerned with “Discipline, etc”. The first section of this Part, section 193, includes in subsection (1) a definition of “misconduct”, which has five paragraphs. Paragraphs (a) to (c) cover contraventions of provisions of the Ordinance, of provisions of any relevant licence or registration, or of any other condition. Paragraph (d) – “section 193(1)(d)” - is in these terms: “an act or omission relating to the carrying on of any regulated activity for which a person is licensed or registered which, in the opinion of the Commission, is or is likely to be prejudicial to the interest of the investing public or to the public interest”. Section 194 is concerned with “Disciplinary action [by the Commission] in respect of licensed persons, etc”, and it sets out the powers of the Commission when, inter alia, it concludes that a regulated person “is, or was at any time, guilty of misconduct”. 14. Three other sections of the Ordinance should be mentioned. Section 169(1) empowers the SFC to publish codes of conduct: “for the purpose of giving guidance relating to the practices and standards with which intermediaries ... are ordinarily expected to comply in carrying on the regulated activities for which the intermediaries are licensed”. Section 217 provides that a person who has been found to be guilty of misconduct by the Commission can apply to the Tribunal for a review, and section 229 enables a person who wishes to challenge a decision of the Tribunal on a point of law to appeal to the Court of Appeal. The relevant substantive facts 15. Prior to 1 June 2011, when the regime regulating CRAs came into force, Moody’s operated in Hong Kong, as it was entitled to do, as an unlicensed credit ratings agency. In that capacity, Moody’s prepared and circulated a number of reports which were undoubtedly credit ratings, and, of course, it continues to carry out those activities to this day. Then, as now, Moody’s reports covered a large number of different types of companies and other institutions. Those companies included a total of 61 high-yield non-financial Chinese companies (“the 61 Companies”). Inevitably, its rating assessment of any of those companies would vary from time to time as the information about a company, and the environment in which it operated, changed and more information came to light. 16. On 1 June 2011, when the regime regulating CRAs came into force, Moody’s became licensed under the Ordinance to carry on Type 10 regulated activity. 17. Some six weeks later, Moody’s issued the Report, the subject of these proceedings. The Report described itself as a “Special Comment Report”, and was entitled “Red Flags for Emerging-Market Companies: A Focus on China”. It ran to 25 pages, and began with a section headed “Overview”, which explained that: “Red flags as a screen. In rapidly developing emerging markets, the use of frameworks to assess elements of credit risk provides consistency in identifying relative strengths and weaknesses across a growing pool of rated issuers. In this report, we look at 20 red flags, grouped into five categories, that highlight issues meriting scrutiny to identify possible governance or accounting risks for non-financial corporate issuers in emerging markets”. The five categories of red flags were then identified, and in summary terms they were (i) weakness in corporate governance, (ii) riskier and more opaque business models, (iii) fast-growing businesses strategies, (iv) poor quality of earnings or cash flow, and (v) concerns over auditors and quality of financial statements. The Overview then continued by explaining that in “this inaugural report”, the framework is applied to “61 rated Chinese entities”, viz. the 61 Companies. 18. The Overview then explained that “for non-property firms” there was “a degree of correlation” between previously issued ratings and the number of red flags, but that this did not appear so true for property companies. The Overview then stated that “[t]hese findings show that screens for governance or accounting risks can help identify areas to investigate but cannot serve as mechanisms to rank order credit risk.” The Overview also pointed out that Moody’s “ratings already factor in the inherent challenges of analyzing young, fast-growing Chinese companies”, but added that “[t]he red flags provide further clarity and detail, but do not represent a change in our rating methodologies”. 19. The next section of the Report was headed “Red Flags An Interesting Screen”, and it began by referring to recent public expressions of concern about Chinese companies’ financial reporting. The Report then stated that in order “[t]o address investors’ concerns and provide transparency on our approach to ratings, this report identifies warning signs – so-called ‘red flags’ – for our rated, high-yield …, non-financial Chinese companies”. The point was then made that “[t]he identified issues that we flag do not represent a change to our analytical approach”. It was then stated that “[o]ur ratings already account for the inherent challenges in assessing Chinese companies”. 20. The following section of the Report was headed “Framework Focuses on Five Key Categories”, namely those very briefly summarised in [17] above. After discussing the numbers in very general terms, the Report set out in Figure 1 the three “rating categor[ies]” Ba, B, and Caa, of 49 of the 61 Companies (“the 49 Companies”), broken down into “Chinese property” and “Chinese non-property” companies. Figure 2 set out the “No. of red flags tripped by rating category”, and showed the “average no. of red flags tripped” against each rating categories of “Investment Grade”, Ba, B, and Caa. After some further discussion, the Report stated that a company’s “tripping of many red flags does not represent an immediate rating concern”. The Report then turned to discuss six of the 49 Companies individually. 21. In Appendix 1 to the Report each of the five categories of warning signs was discussed, and, in relation to each category, a Figure was included showing the red flag scores for each category of company - ie listed by reference to their respective credit ratings. Appendix 2 described certain adjustments which are irrelevant for present purposes. Appendix 3 set out in two Figures (one for property companies the other for non-property companies) against the names of each of the 49 Companies, its current credit rating, the number of red flags tripped, and the nature of the company’s business. Appendix 4 set out against each of the 49 Companies, its current credit rating and, in greater detail than Appendix 3, a breakdown of the red flags for each company. 22. In an Announcement which accompanied the publication of the Report (“the Announcement”), Moody’s stated that the “framework” disclosed by the Report “adds consistency in approach to challenging and often non-transparent situations that are part of the credit decision-making process in new markets”. The Announcement also described the framework as “supplemental to Moody’s methodological approach to rating non-financial corporates in the emerging markets …”. 23. As the Tribunal recorded, the Report was issued at a time when there was considerable concern as to the accounting and corporate governance standards of mainland Chinese companies. Accordingly, “not unsurprisingly”, the Report “received extensive local and international media attention”, and it “had a material impact on the market”. The prices of shares in many of the 49 Companies, particularly those with a large number of tripped red flags, fell substantially (well over 10% in some cases) on the date of the Report’s publication. While acknowledging that many factors can affect share prices, the Tribunal was satisfied that these falls were “principally occasioned by the contents of the Report”, and that Moody’s “must have appreciated … that in all probability the Report would have a material impact on the market”. The procedural history 24. The Commission formed the view that, in preparing and subsequently circulating the Report, Moody’s had not lived up to the standards to be expected of a licensed CRA. In particular, the Commission considered that Moody’s had “failed to have the required procedural safeguards in place to ensure the integrity of the Report and that the Report itself was in a number of material respects misleading, confusing and inaccurate to the extent that the publication was, or was likely to be, prejudicial to the interests of the investing public, including Moody’s own clients, and prejudicial also to the integrity of the market” – to quote the Tribunal’s “broad description” of the Commission’s views. 25. More particularly, the Commission was of the view that the Report (i) had caused confusion in the market because its nature and purpose were unclear; (ii) failed to disclose justifications for the red flags; (iii) awarded a number of inappropriate red flags; (iv) identified six companies as “negative outliers” since they attracted the most flags, even though Moody's acknowledged that the number of flags did not correlate with a higher credit risk; (v) contained 12 factual errors; and (vi) was published without adequate internal control procedures. 26. The Commission concluded that, as a result, Moody's had failed to comply with three provisions of the Code of Conduct for Persons Licensed by or Registered with the Commission (“the Code of Conduct”), which had been issued pursuant to section 169 of the Ordinance. In summary terms, those failures were as follows: a. Three breaches of General Principle 1 (“GP1”), which requires licensed persons to conduct their business “honestly, fairly and in the best interests of their clients and the integrity of the market”; b. A breach of General Principle 2 (“GP2”), which requires licensed person conducting their business to “act with due skill, care and diligence, in the best interests of their clients and the integrity of the market”; c. A breach of paragraph 4.3 (“para 4.3”), which requires licensed persons to have appropriate “internal control procedures and operational capabilities”. 27. Accordingly, the Commission issued a Notice of Proposed Disciplinary Action against Moody’s on 14 February 2013, in answer to which Moody’s made representations, which did not persuade the Commission to change its view. Accordingly, as mentioned above, the Commission issued the Notice in November 2014 fining Moody’s and declaring it unfit. 28. On Moody’s application for review, the Tribunal: a. Upheld two of the three breaches the Commission had found of GP1, but overturned one finding of breach; b. Upheld the breach the Commission had found of GP2; c. Overturned the Commission’s finding of a breach of para 4.3. Accordingly, the Tribunal reduced the financial penalty, but maintained the declaration, and ordered Moody’s to pay 60% of the Commission’s costs. 29. More centrally for present purposes, the Tribunal rejected Moody’s argument that the Commission (and therefore the Tribunal) had no jurisdiction to discipline Moody’s under Part IX of the Ordinance because the publication of the Report could not constitute “misconduct” because it did not “relat[e] to the carrying on of any regulated activity”. 30. In that connection, the Tribunal primarily held that the publication of the Report amounted to the “carrying on of a regulated activity”, because, in the light of its contents, the Report constituted the provision of credit rating services, and therefore it fell within the ambit of the section. As the Tribunal put it, “the red flag framework constituted a well-defined system or mechanism for judging levels of credit risk and, as such, constituted a credit rating” and was “therefore a regulated activity”. Alternatively, the Tribunal held that, if that was wrong, then in the light of Moody’s existing activities, which undoubtedly involved the provision of credit rating services, the publication of the Report amounted to “an act or omission relating to the carrying on of [a] regulated activity” within the ambit of section 193(1)(d). As the Tribunal expressed it, the Report “was intended to be read as amplifying and supplementing Moody’s ratings, as being so intimately attendant upon them that it constituted more than mere comment and became part and parcel of Moody’s ratings themselves”. 31. On Moody’s appeal, the Court of Appeal upheld the decision of the Tribunal. However, while the Court of Appeal did not differ from the Tribunal in so far as the criticisms of Moody’s were concerned, they took a narrower view than the Tribunal on the jurisdiction issue, namely as to how the preparation and publication of the Report fell within the ambit of section 193(1)(d). In particular, the Court of Appeal rejected the view that the Report constituted an exercise of credit rating. They decided that, since it addressed only two elements bearing on credit risk, namely corporate governance and accounting risks, the Report did not come within the definition of “credit rating”, because it could not be regarded as expressing an opinion primarily on creditworthiness of the companies concerned. 32. However, the Court of Appeal agreed with the Tribunal on its alternative ground for accepting that the Commission had jurisdiction. In that connection, the Court said at [31] that: “[E]ven though the red flag framework was not part of the methodology in arriving at Moody’s credit ratings of a classic kind (a point which the Tribunal fully acknowledged …), the Report did constitute additions and clarifications which were meant to be read together with such classic ratings and as such the publication of the Report was an activity relating to the ratings within the meaning of section 193.” 33. It is against that conclusion that, with leave from the Appeal Committee, Moody’s appeals to this Court. The meaning and effect of the phrase “relating to” 34. On behalf of Moody’s, Mr Paul Shieh SC argued that, in the context of section 193(1)(d), the preparation and publication of a document such as the Report, which did not itself involve the provision of credit rating services, could only be said to “relat[e] to” the provision of such services if it had been (or was understood, or would reasonably have been understood to have been) involved in the preparation of credit ratings. Unless such a clear and limited meaning is given to the phrase, he contended, the law would be uncertain, which is particularly inappropriate in the context of Part IX of the Ordinance, given that it creates an offence and involves curtailing freedom of expression. 35. This interpretation of the section involves giving the phrase “relating to” an inappropriately narrow and specific effect. At any rate as a general proposition, it is a phrase with a wide and broad import. Like the words “in respect of”, the phrase could be said to be “colourless” and to have “the widest possible meaning of any expression intended to convey some connection … between the two subject-matters to which the words refer” - see the authorities cited by Fok PJ in Securities and Futures Commission v Pacific Sun Advisors Ltd (2015) 18 HKCFAR 138, at [23]. And it is worth noting that in Mariner International Hotels Ltd v Atlas Ltd (2007) 10 HKCFAR 1 at [51], after observing that the word “involving” was “one of the broadest words of association known to the English language”, Bokhary PJ said that “[p]erhaps only phrases like ‘in relation to’, ‘relating to’ and ‘with respect to’ are wider”. 36. Mr Shieh referred to a decision of the High Court of Australia, Tooheys Ltd v Commissioner of Stamp Duties (1961) 105 CLR 602, and in particular observations in the judgment of Taylor J at pp 620-621 about the meaning of the expression “relating to” in an Australian taxing statute. He said that “the expression ‘relating to’ is extremely wide but it is also vague and indefinite”. And he went on to say that the expression “predicates the existence of some kind of relationship but it leaves unspecified the plane upon which the relationship is to be sought and identified”. Those observations appear to be entirely consistent with the passages cited in [35] above and to be of general application. 37. While the phrase “relating to” has a naturally wide meaning, like any word or set of words it must, in any particular case, take its meaning from its context. Accordingly, a particular context can justify giving a narrower meaning to a term with a generally wide meaning. However, a court should be cautious before holding that, where the legislature has used an expression with a naturally wide meaning, it is nonetheless appropriate to give it a limited effect. 38. To depart from the naturally wide meaning of an expression in a statute requires cogent grounds, because otherwise one may be subverting the expressed aims of the legislature. For the same reason, when the legislature has used words which are very general in their natural ambit, such as “relating to” it is inappropriate, in the absence of a cogent reason, to attribute a relatively specific meaning to those words. Yet that is what Mr Shieh is arguing for in this case. 39. In order to support his case in this connection, Mr Shieh relied on two propositions. The first was the principle that legislation, especially if it creates an offence, should be clear, and in cases of real doubt should be construed beneficially to alleged offenders. Secondly, Mr Shieh argued that legislation which cuts down freedom of expression should be given a narrow effect. 40. The proposition raised in the first point in [39] above will rarely justify, on its own, giving an artificially narrow meaning to a term in a statute. It is more usually invoked to justify not giving a provision an unusually wide meaning, or favouring a narrower meaning when the provision is equally capable of bearing a wider meaning. Further, when one considers the purpose of section 193(1)(d), it appears, if anything, to point away from giving its provisions a narrow meaning. The section is in a Part of the Ordinance which is concerned with regulating and sanctioning “regulated activity” in financial markets, by licensed persons. It therefore should be interpreted bearing in mind that it was enacted as a part of a scheme introduced to protect members of the public and financial markets against inappropriate or substandard behaviour, and which is directed to sophisticated people, expert and experienced in financial markets, who will, as Mr Shieh acknowledged, be in a privileged position as a result of being licensed, and who will often have ready access to legal advice, and some of whom will be (in many cases perfectly properly) keen to find ways of avoiding or minimising any control over their activities. 41. As to the second point made in [39] above, an Ordinance which is aimed at encouraging high standards, and which penalises substandard work, when carrying out activities which can affect financial markets and investors, is clearly in the public interest. And, in order to be effective, such legislation has to include provisions for disciplining and penalising those who do not live up to the requisite standards. It is hard in those circumstances to see much mileage for Moody’s argument based on freedom of expression. The correct viewpoint for interpreting the Report 42. In the present context, we are concerned with the publication of a report which is said to relate to the provision of credit rating services. It is clear both from the nature of those services and from the statutory definition of “providing credit rating services” that such services involve communication of information to potential investors and dealers in debt and debt-related instruments, either to the market generally or to subscribers. The Report itself was published to the market generally. Indeed, its publication was essential to the complaint against Moody’s: if the Report had not been published, there would have been no Notice, and publication to the market is an inherent feature in paragraphs (a), (b), and (c) of the statutory definition of “providing credit rating services”. 43. It follows that the question whether the Report can be said to have been “relating to” the provision of credit rating services must, at least primarily, be assessed by reference to how it was, or could reasonably have been expected to be, understood by the people to whom it was addressed – viz. investors and traders in the market for debt and debt-related instruments. That is of some significance not merely of itself, but also because Mr Shieh relied quite heavily on the fact that Moody’s did not regard the Report as part of, or connected with, its credit rating service. He contended that Moody’s personnel regarded the Report as something of a pilot or new experiment. Although such evidence could conceivably be relevant when it comes to assessing the culpability of Moody’s conduct, it is inadmissible on the issue we have to resolve, in the same way that a party’s subjective understanding or assumption as to the effect or meaning of a contract is inadmissible on the issue of its meaning or effect (it is also by no means clear that, if this evidence was admissible, it would help Moody’s case, but it is unnecessary to address that point further). 44. Strictly speaking, it is unnecessary to decide whether the issue in this case should be determined by reference to how the market actually treated the Report, or how the market could reasonably have been anticipated to treat the Report. That is because the Tribunal concluded that Moody’s ought reasonably to have anticipated that the market would react to the publication of the Report in the way that it actually did react. However, it is right to say that the correct approach is the latter formulation, namely how the market would reasonably have been anticipated to treat the Report. That is because one is ultimately judging the actions of Moody’s in preparing and publishing the Report, and the market reaction occurred after publication. However, that does not mean a tribunal deciding the issue cannot take into account the way the market actually reacted when determining what someone (perhaps particularly someone with considerable experience of the market) should have expected of the market. 45. This is scarcely a surprising conclusion. We are here concerned with a document which was intended to be read by people in the debt and debt-related instrument market. Accordingly, the question whether it related to other services provided to people in that market by the compiler of the document, ought, on normal principles of interpretation of documents, to be determined by how it would have been understood by a reasonable person in the position of the people to whom it was addressed, and not by reference to the private intentions of its compiler. And that involves considering the document by reference to what it says, reading it in a practical and realistic way in its commercial context. Did the Report relate to Moody’s credit rating services? 46. Having indicated the correct approach to the meaning of “relating to” and to the interpretation of the Report, it is now appropriate to turn to consider the contents of the Report coupled with Moody’s relevant prior activities. Once one does so, it appears to be an inescapable conclusion that, even accepting that it did not itself involve the provision of credit rating services, the Report related to the provision of such services by Moody’s. 47. Moody’s is renowned for providing credit rating services, and indeed that is the only one of the twelve Types of regulated activity for which it is licensed under the Ordinance. Even in the absence of any of the other factors mentioned in [48] to [54] below, there must at least be a substantial risk that many people in the market will assume that any report emanating from Moody’s, especially if it is concerned with the soundness of the accounting and governance processes and the quality of earnings of specific companies, is in some way related to its credit rating service. Of course, a fair reading of such a report might satisfy a reader that it is not in fact so related. However, when one examines the Report, far from negativing such an assumption, it is possible to identify a number of significant features which would have served to confirm it. 48. Thus, the Report covered 61 Chinese high yielding non-financial companies, all of which were the subject of Moody’s existing published credit ratings. Indeed, they were the only Chinese high yielding non-financial companies for which Moody’s provided credit ratings. This fact on its own seems to tie in the Report with Moody’s previous credit rating reports on those companies. A clear and convincing disclaimer might have discharged that view, but there was none. 49. Additionally, in the text of the Report, there were frequent references to the credit ratings of the 49 Companies, albeit mostly in general terms. More specifically, in the introductory Overview, Moody’s stated that the red flag results, with which the Report is concerned, are shown “by rating category”, which strongly suggests a connection. 50. Quite apart from these points, reflecting what was said in the Overview, in all of the eight Figures, and in three of the four Appendices of the Report, the “tripped” red flags in relation to companies, or categories of companies, were compared with the credit rating of the companies or categories respectively. 51. It is true that the Report emphasised that the red flag system which it introduced did not represent or justify a departure from the previous ratings accorded by Moody’s to any of the 61 companies in its previous credit rating reports. But the obvious message to any remotely acute trader or investor was that the red flags attributed to a particular company in the Report should at least be borne in mind when considering that company’s existing credit rating. Revealingly, the Report stated that a large number of red flags “does not represent an immediate rating concern”, which was a pretty clear hint that the rating in question may very well change negatively in the future. 52. It is also true that the Report largely concentrated on corporate governance and accounting risks which are but two of the many factors which a credit rating takes into account. While this represents a powerful reason for concluding (as the Court of Appeal did) that the Report did not constitute a credit rating service, this point goes nowhere in the context of the present issue. Apart from anything else, those two factors play an important part in assessing credit risk, and it cannot seriously be suggested that a document cannot relate to credit rating reports unless it covers every factor which is taken into account when arriving at such a rating. 53. Another significant factor which tells against Moody’s arguments is the Announcement accompanying the Report, which described the contents of the Report as being “supplemental to Moody’s methodological approach to rating non-financial corporates in the emerging markets”. If a document is “supplemental” to something, one would have thought that, while it ultimately depends on the context, it would also “relate to” that thing. And, while it is true that “Moody’s methodological approach to rating” is not the same as its actual rating reports, it is little more than playing with words to invoke the difference in the present context. Of course, Moody’s own description of the Report cannot be determinative of the nature or character of the Report as a matter of law, but, especially when it is a contemporaneous published description, it is a telling feature. 54. In addition to these points, there is the external factor of the market reaction to the Report, a reaction which should, according to the Tribunal, have been foreseen by Moody’s. Given the importance accorded by the market to the ratings attributed to companies or to company debt by the two or three main rating agencies, the only sensible interpretation of the market reaction to the Report is that it was indeed seen as providing a negative sort of qualification to the existing ratings of the 61 Companies, or at any rate at least the great majority of the 49 Companies. Conclusion 55. For these reasons, Moody’s appeal must be dismissed. 56. The Commission argued in its written submissions that we should reverse the conclusion of the Court of Appeal overturning the Commission’s primary reason for holding that section 193(1)(d) applied, namely that the production and publication of the Report constituted the “carrying on of [a] regulated activity”, namely the “preparing [of a] credit rating…for dissemination to the public”. After we had indicated that we would be dismissing Moody’s appeal, the Commission did not press us to decide the point, and we saw no benefit in considering or determining it in the context of the facts of this case. 57. Finally, we invited submissions on costs at the end of the hearing and Mr Shieh realistically conceded that he could not oppose the Commissioner’s application for the costs of this appeal, which we accordingly grant. Mr Paul Shieh SC and Ms Zabrina Lau, instructed by Linklaters, for the appellant Mr Benjamin Yu SC and Mr Laurence Li, instructed by Securities and Futures Commission, the respondent |
Hon Cheung CJHC: The facts 1. These appeals are from the judgment of Au J dated 15 November 2016. 2. The controversy leading to these appeals is so great and so widely reported that it is unnecessary, particularly in view of the urgency of the matter, to give any detailed account of the facts. Suffice it to say, Sixtus Leung Chung Hang (“Leung”) and Yau Wai Ching (”Yau”) were elected in their respective geographical constituencies in the general election for the Legislative Council (“LegCo”) held in September this year. Their terms of office as members of the LegCo started on 1 October 2016. 3. As stipulated in section 19 of the Oaths and Declarations Ordinance (Cap 11) (“the Ordinance”): “ A member of the Legislative Council shall, as soon as possible after the commencement of his term of office, take the Legislative Council Oath which – (a) if taken at the first sitting of the session of the Legislative Council immediately after a general election of all members of the Council and before the election of the President of the Council, shall be administered by the Clerk to the Council; (b) if taken at any other sitting of the Council, shall be administered by the President of the Council or any member acting in his place.” 4. Section 16(d) and Schedule 2, Part IV of the Ordinance require the LegCo Oath to be in the following terms: “ I swear that, being a member of the Legislative Council of the Hong Kong Special Administrative Region of the People’s Republic of China, I will uphold the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, bear allegiance to the Hong Kong Special Administrative Region of the People’s Republic of China and serve the Hong Kong Special Administrative Region conscientiously, dutifully, in full accordance with the law, honestly and with integrity.” 5. The first meeting of the LegCo was held on 12 October 2016. On that day, both Leung and Yau were duly requested to take the LegCo Oath before the Clerk to the LegCo, as the election of the President of the Council had yet to take place. Both Leung and Yau purported to do so, but in ways and manners, detailed in paragraph 5 of the judgment below, which departed substantially from the statutory contents of the LegCo Oath, and evinced objectively an intention on their respective parts not to be bound by it. 6. In particular, it is plain, as the learned judge below analysed in paragraphs 45 and 46 of his judgment, that neither Leung nor Yau intended to uphold the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, or bear allegiance to the Hong Kong Special Administrative Region of the People’s Republic of China. Both elements are mandatory parts of the LegCo Oath. But not only that – they actually constitute the core substantive requirement of article 104 of the Basic Law: “ When assuming office, the Chief Executive, principal officials, members of the Executive Council and of the Legislative Council, judges of the courts at all levels and other members of the judiciary in the Hong Kong Special Administrative Region must, in accordance with law, swear to uphold the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China and swear allegiance to the Hong Kong Special Administrative Region of the People's Republic of China.” 7. On 18 October 2016, the President of the LegCo (elected to his office after the oath taking incident described above) gave a written “ruling”, after obtaining senior counsel’s advice, that “[Leung and Yau] could not be serious about their oath and were unwilling to be bound by it” (paragraph 6), and their oaths were invalid. Nonetheless, he said he was “prepared to allow Mr LEUNG and Ms YAU to take their oath afresh at a Council meeting if they put forward their requests in writing” (paragraph 7), which requests Leung and Yau immediately made on the same day. 8. As is only too well-known, these events triggered the urgent commencement by the Chief Executive and the Secretary of Justice of two sets of proceedings below on 18 October 2016, which were described in some detail in paragraphs 9 to 12 of the judgment below, as well as an interpretation by the Standing Committee of the National People’s Congress (“NPCSC”), pursuant to article 67(4) of the Constitution of the People’s Republic of China and article 158(1) of the Basic Law, of the true meaning of article 104 on 7 November 2016 (“the Interpretation”)[1]. The judgment below 9. After an expedited hearing, the judge concluded in his judgment that what Leung and Yau did amounted to their respectively declining or “wilfully” omitting to take the LegCo Oath when duly requested to do so. The consequence of what they did, the judge decided, is governed by section 21 of the Ordinance: “ Any person who declines or neglects to take an oath duly requested which he is required to take by this Part, shall- (a) if he has already entered on his office, vacate it, and (b) if he has not entered on his office, be disqualified from entering on it.” 10. Rejecting an argument to the contrary, the judge decided that once a person declines or neglects to take the relevant oath when duly requested to do so, he is automatically regarded as having vacated his office in question under section 21. In other words, what Leung and Yau did on 12 October 2016 led automatically, by operation of law under section 21, to the vacation of their respective offices as Legislative Councillor. 11. In those circumstances, the judge agreed with the Chief Executive and the Secretary for Justice that contrary to his ruling dated 18 October 2016, the President of the LegCo had no power to give Leung and Yau a second chance to take the LegCo Oath again. The judge rejected various arguments raised by Leung and Yau, including their main argument based on the non-intervention principle, and decided the proceedings in favour of the Chief Executive and the Secretary for Justice by granting declaratory and other relief against the President, “on the basis that Mr Leung and Ms Yau have already vacated the office as a member of the LegCo, and are not entitled to act as a member of the LegCo” (paragraph 130(2)(a)). In other words, Leung and Yau have lost their seats in the LegCo, their offices are vacant and there will be by-elections. The arguments on appeal 12. Aggrieved by the judge’s decision, Leung and Yau appealed. Mr Hectar Pun SC (Mr Anson YY Wong with him), for Leung, essentially argued that the principle of non-intervention applied to the present case so that the judge was wrong to interfere with the internal workings or business of the LegCo, that is, the taking or the retaking of the LegCo Oath by Leung. Mr Pun accepted that the principle of non‑intervention as applied in Hong Kong “is subject to the constitutional requirements of the [Basic Law]” (paragraph 12(1) of his skeleton arguments), but he emphasised that in the present case, the constitutional requirement under article 104 of the Basic Law was simply “not engaged” because the dispute here was not about whether his client had taken the LegCo Oath – he had not. Rather, the issue was about the consequence of his failure to do so, which turned on whether Leung had declined or neglected to take the LegCo Oath – in which case section 21 of the Ordinance would be triggered and his client would be obliged to vacate his seat. Mr Pun submitted that section 21 does not form part of the constitutional requirement under article 104. He argued that the present case was not distinguishable from the English case of Bradlaugh v Gossett (1884) 12 QBD 271, where the English court refused to interfere with an oath taking dispute between Parliament and one of its members. 13. Mr Pun further argued neither the Clerk nor the President had determined that Leung had declined or neglected to take the LegCo Oath on 12 October 2016, whereas Leung had indicated in evidence that he had been “ready, prepared and willing” to take the Oath afresh at the next meeting on 19 October 2016 and had not “declined” or “neglected” to do so. Furthermore, the President had indicated in his capacity as the oath administrator that he was prepared to allow Leung to take the Oath afresh on 19 October 2016. All these matters were internal business of the LegCo in which the courts cannot intervene. 14. Mr Pun took the further point, relying on Makucha v Sydney Water Corporation [2013] NSWCA 177, that even if a LegCo member had declined or neglected to take the LegCo Oath, there was to be no automatic vacation of office. Rather, section 21 merely requires the member to vacate it. Mr Pun submitted that the member had to resign or the President could make a declaration, pursuant to article 79(1) of the Basic Law,[2] that the member was “no longer qualified for the office” as he or she had “[lost] the ability to discharge his or her duties as a result of ... [section 21]”. 15. Mr Pun also submitted that section 73 of the Legislative Council Ordinance (Cap 542)[3], based on which one set of proceedings below was commenced, does not confer any jurisdiction on the court to determine matters such as whether a LegCo member has been disqualified from being a member or has ceased to be one, and does not therefore provide a bypass to the non-intervention principle. He argued that as Leung had not been “disqualified” under section 21 of the Ordinance, section 73(1) simply had no application. Section 73(1) is only applicable after a declaration under article 79(1) of the Basic Law has been made by the President as described above. In any event, section 73(1) does not give the Chief Executive any locus to sue. 16. Mr Pun further argued that the judge was wrong in usurping the fact-finding function of the President regarding whether Leung had declined or neglected to take the LegCo Oath. 17. Insofar as may be necessary but not otherwise, Mr Pun relied on the Interpretation, particularly paragraph 2(3) and (4) to say that whether an oath taker has fallen foul of section 21 by declining to take the LegCo Oath is a matter for the Clerk or President, but not the court to decide. However, insofar as the Chief Executive and the Secretary for Justice sought to make a case against his appeals based on the Interpretation, Mr Pun raised the issues of whether the Interpretation has retrospective effect in the sense that it covers the present case now before the court, and whether it is truly an interpretation falling within the meaning of article 158 of the Basic Law (or merely an interpretation in name but an amendment of the Basic Law in substance). 18. Finally, in written submissions, Mr Pun also prayed in aid article 77 of the Basic Law regarding members of the LegCo’s immunity from suit, and argued that the immunity covered the oath taking event in the present case. 19. Mr Philip Dykes SC (Mr Jeffrey Tam with him), for Yau, also relied on the principle of non-intervention. Essentially, Mr Dykes submitted that oath taking is an internal business of the LegCo. Primarily, it is for the Clerk or the President to determine whether an oath has been validly taken, and in particular, whether the member has declined or neglected to take the oath. Mr Dykes accepted that once a decision has been made by the Clerk or the President, the court has the jurisdiction to decide whether article 104 of the Basic Law has been complied with. However, Mr Dykes submitted, neither the Clerk nor the President has made any such decision. It is simply premature for the court to intervene in the matter. 20. Likewise, counsel submitted, an application made under section 73 of the Legislative Council Ordinance is, except in the case of a member’s resignation, predicated on a declaration by the President under article 79 of the Basic Law. In the present case, the President has made no such declaration. 21. As Mr Benjamin Yu SC (Mr Johnny Mok SC, Mr Jimmy Ma and Mr Jenkin Suen with him) for the Chief Executive and the Secretary for Justice submitted, the applicants’ arguments essentially raised several subject matters, that is, the non-intervention principle; the role of the oath administrator; whether vacation of the office is automatic under section 21 of the Ordinance; the scope of application of section 73 of the Legislative Council Ordinance; and the immunity from suit under article 77 of the Basic Law. Counsel submitted that the appellants’ arguments were unsustainable. The principle of non-intervention 22. The principle of non‑intervention has been dealt with by the courts in recent years: Leung Kwok Hung v President of Legislative Council [2007] 1 HKLRD 387; Cheng Kar Shun v Li Fung Ying [2011] 2 HKLRD 555; Leung Kwok Hung v President of the Legislative Council of the Hong Kong Special Administrative Region, CACV 123/2012, 1 February 2013 (CA); affirmed on appeal: (2014) 17 HKCFAR 689 (CFA). It is an established principle of common law which is of seminal importance and high constitutional significance. Historically, it was derived from or justified by historical development, functional necessity, the constitutional doctrine of separation of powers and (in the United Kingdom) the sovereignty of Parliament. The preferred view in a jurisdiction like Hong Kong now is to justify it on the common law principle of separation of powers. The principle makes good constitutional as well as practical sense. Under it, the court respects and recognises the exclusive authority of the legislature in managing its own internal processes in the conduct of its business. The court will not intervene to rule on the regularity or irregularity of the internal processes of the legislature but will leave it to determine exclusively for itself matters of this kind. On a practical level, this principle allows the legislature to be left freely to manage and to resolve its internal affairs, free from intervention by the courts and from the possible disruption, delays and uncertainties which could result from such intervention. Freedom from these problems is both desirable and necessary in the interest of the orderly, efficient and fair disposition of the legislature’s business. Leung Kwok Hung (CFA), paragraphs 27 to 30. 23. In the United Kingdom where Parliament (or more precisely, the Queen in Parliament), replacing the absolute monarchy in old times, is supreme and sovereign, a further explanation for this principle of non-intervention is that it gives effect to Parliament’s supremacy and sovereignty. In the context of Parliament’s law making function, the court’s role there is confined to interpreting and applying what Parliament has enacted. When an enactment is passed there is finality unless and until it is amended or repealed by Parliament: The Bahamas District of the Methodist Church v Symonette [2000] 5 LRC 196, 207h‑208a. 24. However, in a jurisdiction like Hong Kong where a written constitution (that is, the Basic Law), rather than the legislature, is supreme, where the rule of law reigns and where the courts are given under the constitution the independent power of adjudication, this principle of non-intervention has its own inherent limit. 25. First and foremost, the supremacy of the Basic Law means that no one – the legislature included – is above the Basic Law. In other words, where a constitutional requirement under the Basic Law is in issue, even the legislature cannot act contrary to that requirement under the Basic Law. Secondly, given that the courts are given under the constitution the independent power of adjudication of the Special Administrative Region, the question of whether that constitutional requirement has been complied with or breached is a matter which it is both the power and responsibility of the courts to decide. As the Court of Final Appeal importantly pointed out in Leung Kwok Hung, paragraph 32: “In this respect it is important to recognise that the principle of non-intervention is necessarily subject to constitutional requirements.” Article 104 is a constitutional requirement 26. In the present case, there cannot be any doubt that article 104 of the Basic Law lays down a constitutional requirement. Article 104 is found in Chapter IV of the Basic Law setting out the political structure of the Hong Kong Special Administrative Region. It contains six sections, dealing respectively with the Chief Executive, the Executive Authorities, the Legislature, the Judiciary, District Organizations and lastly, Public Servants. In essence, it covers everyone who is empowered to and charged with the responsibility for running the Special Administrative Region. At the very end of this long chapter, one finds article 104, which expressly requires that when assuming office, the Chief Executive, principal officials, members of the Executive Council and of the LegCo, judges of the courts at all levels and other members of the judiciary to, in accordance with law, swear to uphold the Basic Law and swear allegiance to the Special Administrative Region. 27. As the judge correctly explained (paragraphs 31 to 33), the taking of an oath and pledging of allegiance are serious matters. When taking an oath, no less a promissory oath such as the LegCo Oath, both the form and the substance matter greatly. The requirement under article 104 is plainly designed to secure the genuine, solemn and sincere declaration and pledge by the holders of the important offices mentioned in that article to do their utmost, in accordance with the Basic Law, to discharge the high responsibilities entrusted to them in running the Special Administrative Region in their respective roles assigned under the Basic Law. Article 104 clearly lays down a constitutional requirement that an oath must be taken in accordance with what is required under that article. Moreover, it says “when assuming office”, the oath must be taken. It must mean that taking the oath is a prerequisite and precondition to the assumption of office. 28. All this is now put beyond doubt by the Interpretation. Consequence of non‑compliance is part of the constitutional requirement 29. The Interpretation gives the true meaning of article 104. Paragraph 2(3) of the Interpretation specifically sets out the consequence of an oath taker’s declining to take the relevant oath – automatic disqualification, as part of the true meaning of article 104. It conclusively defeats Mr Pun’s argument that the consequence of a failure to take the relevant oath as required by article 104 does not form part of the constitutional requirement, so that the principle of non‑intervention applies. 30. Furthermore, article 104 says the oath must be taken “in accordance with law”. The relevant provisions in the Ordinance actually predated the drafting of the Basic Law. When article 104 refers to law, the drafters must have in mind the provisions in the Ordinance. Section 21(a) of the Ordinance says that if an office holder declines or neglects to take the relevant oath, he shall vacate his office. That is perfectly consistent with article 104. Since article 104 specifically refers to the implementing law, it provides another reason for rejecting Mr Pun’s argument that article 104 is not engaged but only section 21(a) of the Ordinance is – and therefore the principle of non‑intervention still applies. It is neither right nor realistic to look at article 104 without looking at its implementing law (in the present case, the relevant provisions in the Ordinance) together, or to look at the statutory provisions without looking at article 104 at the same time, in deciding whether the constitutional requirement under article 104 has been satisfied. 31. Mr Pun argued that “law” in the phrase “in accordance with law” only includes sections 16 and 19 of the Ordinance, but not section 21. With respect, this is taking far too narrow a reading of article 104. “Law” in article 104 must be a reference to the whole of the implementing law, including in particular that part of the law which prescribes the consequence of a failure to take the oath in question (that is, section 21). As Mr Yu submitted, when article 104 lays down a requirement, the consequence of failing to meet that requirement is necessarily part and parcel of the requirement itself. The principle of non‑intervention cannot prevent the court from adjudicating on the consequence of a failure to meet the constitutional requirement. A matter for the court to decide 32. Since articles 19(1) and (2) and 80 of the Basic Law vest the independent judicial power of the Special Administrative Region in the courts, giving the courts “jurisdiction over all cases in the Region”, and establishing them as the judiciary of the Region, “exercising the judicial power of the Region”, it is for the courts, not anyone else, to determine whether the constitutional requirement described above has been satisfied. 33. This disposes of three arguments mounted on behalf of Leung and Yau. First, as mentioned, the courts cannot shrink from their constitutional duty to adjudicate on the question of whether the constitutional requirement under article 104 has been satisfied by not intervening in the present dispute in the name of the principle of non-intervention or separation of powers. The Basic Law, not the legislature, is supreme. Secondly, it also disposes of the further argument that it is for the oath administrator (that is, the Clerk or the President) to determine whether Leung and Yau have respectively taken a valid oath, and if not, whether they have respectively declined or neglected to take the oath. Thirdly, it also disposes of the more limited argument raised by Mr Dykes that before the oath administrator makes a decision on the issues just described, it is premature to invite the court to intervene.[4] Plainly, section 21 says none of these. Nor does the principle of non‑intervention require any such interpretation be put on section 21, as the principle simply has no application given that a constitutional requirement is involved. 34. All these arguments must be rejected. Paragraph 2(4) of the Interpretation 35. Mr Pun relied on paragraph 2(4) of the Interpretation to back his argument that it is for the oath administrator, rather than the court, to decide whether the LegCo Oath has been validly taken, or whether the (purported) oath taker has declined or neglected to take the oath. I reject the argument. Paragraph 2(4) of the Interpretation reads in Chinese: “宣誓必須在法律規定的監誓人面前進行。監誓人負有確保宣誓合法進行的責任，對符合本解釋和香港特別行政區法律規定的宣誓，應確定為有效宣誓；對不符合本解釋和香港特別行政區法律規定的宣誓，應確定為無效宣誓，並不得重新安排宣誓。” 36. It is clear from the Chinese version, particularly the use of the words “應確定” (which is better rendered as “should confirm/affirm”), that paragraph 2(4) seeks to emphasise the important administrative duty of the oath administrator to ensure that the oath taker has taken the relevant oath properly and validly in full accordance with the Interpretation and the law, and that when the office holder declines to take the oath (paragraph 2(3)), the oath administrator must resolutely say so and refuse to make any administrative arrangement for the retaking of the oath. What it plainly does not say is it gives the oath administrator any judicial power of the Special Administrative Region to determine whether the oath taken is in accordance with the requirements of the Basic Law and the Ordinance. Still less does it take away the courts’ judicial power of the Special Administrative Region, granted under the Basic Law, to adjudicate on a dispute. 37. Neither does the Interpretation give the oath administrator any fact-finding role in any judicial sense. In other words, it does not give the oath administrator a judicial power of the Special Administrative Region to make any finding of fact. Nor does it constitute the oath administrator as a sort of administrative tribunal of fact (subjecting him thereby to all that standard administrative law requires of such a tribunal of fact to observe by way of procedural fairness etc). Still less does it exclude the courts’ judicial power, conferred under the Basic Law, to make the relevant findings of fact. 38. If anything, paragraph 4 highlights the absolute importance of full compliance with the oath taking requirements under article 104 and the implementing law. Indeed, one may ask rhetorically: if the oath administrator is required, as indeed he is under paragraph 2(4), to use his utmost to ensure compliance, how much more are the courts of the Special Administrative Region expected and required to do so? 39. In the final analysis, what is at stake is the compliance of a constitutional requirement of great significance. In any given set of facts, this can admit of one correct answer only. There is no room for a court to simply sit back without correcting an answer given by the oath administrator which the court considers to be wrong, at the expense of the constitutional requirement. What is in issue is squarely a judicial matter which the courts alone are given the judicial power of the Special Administrative Region under the Basic Law to determine. What is involved is not an ordinary judicial review type of situation where the court only conducts a Wednesbury unreasonableness review. Rather, there can be only one right answer when the issue of compliance with the constitutional requirement is raised and nothing short of a full merit review will suffice. The court, according to the Basic Law, is the ordained organ to determine the question. 40. Of course, what I have said above does not prevent at all a court from, when hearing a dispute on the validity of an oath taken or one regarding whether the oath taker has declined or refused to take the oath when duly requested to do so, receiving evidence from the oath administrator on what his views are and the reasons for those views, insofar as they are relevant and admissible, and according them weight accordingly. Both Leung and Yau have declined to take the Oath 41. On the facts, there can be no dispute that both Leung and Yau have declined respectively to take the LegCo Oath. They have put forward no argument to dispute this. Nor can they. There can be no innocent explanation for what they uttered and did on 12 October 2016. What has been done was done deliberately and intentionally. This conclusion, reached by the judge after careful consideration, is unassailable. Disqualification forthwith and automatic vacation of office 42. As a matter of law and fact, Leung and Yau have failed the constitutional requirement. They are caught by paragraph 2(3) of the Interpretation as well as section 21 of the Ordinance which gives effect to the constitutional requirement. Under the former, they were automatically disqualified forthwith from assuming their offices. Under the latter, they “shall ... vacate [their respective offices].” There is therefore no question of allowing them to retake the LegCo Oath. 43. That leaves only the question of whether vacation of office under section 21 is automatic. This is a necessary plank to Mr Pun’s and Mr Dykes’ procedural argument, based on section 15(1)(e) of the Legislative Council Ordinance[5], that a declaration by the President under article 79(1) of the Basic Law is a prerequisite to any proceedings under section 73 of the Legislative Council Ordinance. 44. I agree with the judge that vacation of office is automatic. It simply serves no useful purpose to require a further step to be taken by the person in question to vacate his office. By definition, this is someone who has declined or wilfully neglected to do the very first and basic thing required of him or her when assuming office, that is, to take the oath when duly requested to do so. There is simply no point in requiring him or her to take the further step of vacating the office. To do so would simply invite further dispute as well as create confusion and uncertainties. The Australian case of Makucha is not binding on this court. It was dealing with a totally different situation, and the court there was simply expressing an obiter view without any reasoning (paragraph 18). It is fair to say that the court there was mainly concerned with upholding the judicial acts done by the judge below the validity of whose judicial oath was called into question. Article 79(1) of the Basic Law 45. I reject the further argument based on article 79(1) of the Basic Law. With respect, one only needs to read the Chinese text of article 79(1)[6] to see that it plainly does not apply to the present type of situation. Disqualification under section 21 is miles away from “無力履行職務” (“loses the ability to discharge his or her duties”) in article 79(1). Section 73 of the Legislative Council Ordinance 46. In any event, I reject the argument that the scope of application of section 73(1) is limited to those situations set out in section 15 of the Legislative Council Ordinance. It does not say so. The fallacy of the argument is to treat section 15 as being exhaustive. It is not. 47. Given my views above, the arguments over the scope of application of section 73 of the Legislative Council Ordinance are of little significance so far as the principle of non-intervention is concerned. It is unnecessary to resort to section 73 to get round, as it were, the principle of non‑intervention. When a constitutional requirement is at stake, this court’s jurisdiction is not founded on the legislature’s voluntary concession of jurisdiction. This court’s jurisdiction is conferred by the Basic Law, the exercise of which is a matter of constitutional duty, which is not restrained by the common law principle of non‑intervention. 48. Section 73 is of significance in the arguments raised in these appeals also for a procedural reason. It is said that section 73 only gives the Secretary for Justice, but not the Chief Executive, the locus to sue. Further, it is said that section 73(7) excludes all other forms of proceedings. 49. All I wish to say is this. I accept that proceedings under section 73 may only be brought by the Secretary for Justice or an elector, but not the Chief Executive in his official capacity as such. However, I do not agree that apart from section 73, no proceedings can be brought by the Chief Executive. Given the Chief Executive’s constitutional role under article 48(2) of the Basic Law (to be responsible for the implementation of the Basic Law and other laws), any attempted restriction on the Chief Executive’s right to take steps, including the commencement of court proceedings, to implement the Basic Law must be incompatible with article 48(2) and therefore invalid. Plainly, section 21J of the High Court Ordinance (Cap 4)[7] entitles the Chief Executive to sue. On its proper construction, section 73(7) does not prevent the Chief Executive from doing so. 50. In any dispute, one must look at the facts concerned and the relief one seeks to determine whether proceedings should be commenced under section 73 of the Legislative Council Ordinance, or under section 21J of the High Court Ordinance by means of an application for judicial review (section 21K(1)(b) of the High Court Ordinance), or both. Immunity from suit under article 77 51. Immunity from suit enjoyed by legislators under article 77 of the Basic Law has no relevance in the present dispute. The article gives members of the LegCo immunity from legal action in respect of their statements at meetings of the Council. It is neither necessary nor desirable to define the scope of immunity conferred by that article in these appeals. One thing is clear. The Basic Law must be read as a whole. Article 77 must be read together with article 104. Given the importance of article 104 as explained above, it is simply unarguable that the drafters of the Basic Law intended to permit members of the LegCo – yet not anyone else as article 77 only applies to them – to get round the constitutional requirement on oath taking laid down in article 104 via the backdoor of article 77. It would make a mockery of article 104 and serve no discernable, meaningful purpose. Thus analysed, the old English case of Bradlaugh v Gossett, a case heavily relied on by Mr Pun and Mr Dykes, loses much if not all of its relevance in the present debate. First, the English court there was not faced with a constitutional requirement. Secondly, Parliament is supreme and sovereign in the United Kingdom. The English court was simply not in a position to adjudicate on the dispute between Parliament and its member in question. In any event, the English case is not binding on this court, and insofar as may be necessary, I would, with respect, decline to follow it. The Interpretation 52. Finally, I turn to Mr Pun’s arguments on the Interpretation. 53. First, the Interpretation, by definition, sets out the true and proper meaning of article 104 from day one. The question of whether it applies “retrospectively” to any given set of facts whether pending before the court or not therefore cannot and does not arise, save for the situation specifically provided in article 158(3) of the Basic Law, which is not the case here. As the Court of Final Appeal explained in Lau Kong Yung v Director of Immigration (1999) 2 HKCFAR 300, 326D: “The Interpretation, being an interpretation of the relevant provisions, dates from 1 July 1997 when the Basic Law came into effect. It declared what the law has always been.” 54. Secondly, regarding Mr Pun’s argument that an interpretation only applies retrospectively if it merely clarifies the law in question but not when it supplements it, this submission has no support from the authorities. The Court of Final Appeal said in Director of Immigration v Chong Fung Yuen (2001) 4 HKCFAR 211, 222J‑223C: “ The Standing Committee’s power to interpret the Basic Law is derived from the Chinese Constitution and the Basic Law. In interpreting the Basic Law, the Standing Committee functions under a system which is different from the system in Hong Kong. As has been pointed out, under the Mainland system, legislative interpretation by the Standing Committee can clarify or supplement laws. Where the Standing Committee makes an interpretation of a provision of the Basic Law, whether under art. 158(1) which relates to any provision, or under art. 158(3) which relates to the excluded provisions, the courts in Hong Kong are bound to follow it. Thus, the authority of the Standing Committee to interpret the Basic Law is fully acknowledged and respected in the Region. This is the effect of the Basic Law implementing the ‘one country, two systems’ principle as was held by the Court in Lau Kong Yung. Both systems being within one country, the Standing Committee’s interpretation made in conformity with art. 158 under a different system is binding in and part of the system in the Region.” 55. No distinction is drawn between the two types of situations under discussion. The suggested distinction by Mr Pun must be rejected. 56. Thirdly, as to the submission that the Interpretation is only an interpretation in name but an amendment of the Basic Law in substance which can only be done by the National People’s Congress in accordance with article 159 of the Basic Law, this argument does not even get off the evidential ground and must be rejected. Here, as explained in Chong Fung Yuen in the passage cited above, one is in the interface of “one country two systems”, and, in particular, one is concerned with the other system – that is, the civil law system practised on the Mainland, when it comes to an interpretation by the NPCSC. When the NPCSC interprets the Basic Law, it is operating under the Mainland’s civil law system. 57. In the absence of any evidence to show what, under a civil law system, particularly the civil law system practised on the Mainland, is regarded as the proper scope of an interpretation of the present type, one simply has no material to argue, let alone to conclude, that what has been done has gone outside the permissible scope of an interpretation. The view of a common law lawyer, untrained in the civil law system, particularly the civil law system practised on the Mainland, is, with respect, simply quite irrelevant. 58. But more importantly, this present argument raises an a priori question of whether under the Basic Law, the courts of the Hong Kong Special Administrative Region have ever been vested with the jurisdiction to determine whether an interpretation officially promulgated as such by the NPCSC in accordance with article 67(4) of the Constitution and article 158 of the Basic Law and the procedure therein is invalid on the ground under discussion. Apart from citing to the court a passage in Ng Ka Ling v Director of Immigration (1999) 2 HKCFAR 4, 26A-B which must be read together with Ng Ka Ling (No 2) (1999) 2 HKCFAR 141, where the Court of Final Appeal clarified in no uncertain terms that the courts in Hong Kong cannot question “the authority of the National People’s Congress or the Standing Committee to do any act which is in accordance with the provisions of the Basic Law and the procedure therein” (p 142E), Mr Pun has simply made no submission on this fundamental question of jurisdiction. 59. In my view, the court has no jurisdiction to deal with the issue raised. Disposal 60. For all these reasons, I would dismiss these appeals with costs. Hon Lam VP: 61. I respectfully agree with the judgment of the Chief Judge and for the reasons he gave the appeals must be dismissed. In view of the constitutional importance of these appeals and the apparent misapprehension on the scope of the principle of non-intervention, I would add some observations of my own. 62. As accepted by Mr Dykes (but disputed by Mr Pun), in Hong Kong the principle of non-intervention is only a self-restraint imposed by the courts in the exercise of jurisdiction rather than a matter that goes to jurisdiction. 63. The Basic Law is the foundation of all executive, legislative and judicial authorities in Hong Kong. As my Lord the Chief Judge pointed out, the judicial power of the courts in Hong Kong and the correspondent adjudicative authority are derived from article 80 of the Basic Law. Further, under article 85, the courts shall exercise judicial power independently and free from any interference. In the exercise of judicial power, judges must adjudicate issues strictly in accordance with laws, and nothing else. The laws, as set out in article 8 are, subject to a very important rider, the common law and statutes. The rider is that these laws must not contravene the Basic Law. 64. Thus, as explained by the Chief Judge, the LegCo, whilst designated as the legislative authority under the Basic Law, must also be subject to the Basic Law. In this respect, our LegCo is different from Parliament of the United Kingdom. 65. The Basic Law does not confer any judicial authority on the LegCo. Hence, in respect of issues arising from disputes concerning compliance with the Basic Law, the LegCo does not have any judicial authority. Whilst article 79 of the Basic Law does confer authority on the President of the LegCo to declare a member no longer qualified for office in certain specified circumstances, it is not the same as saying that the President has judicial authority to determine all questions relating to membership of the LegCo. A clear example where membership of LegCo is to be determined by courts through a judicial process is election petition concerning LegCo elections. 66. Since the source of the courts’ judicial power is derived from the Basic Law, a judge has a constitutional duty to consider the constitutionality of legislation passed by the LegCo if it is an issue arising from the facts of a case before him. Likewise, where there is a complaint as to the non-compliance with a constitutional prerequisite before assumption of office, our courts are duty-bound to examine the same according to law. As explained by the Chief Judge, article 104 is an important constitutional requirement and the courts have a constitutional duty to uphold the same. 67. The exercise of such judicial power should not be perceived as the courts being embroiled in political disputes. In the judgment of the U.S. Supreme Court in Powell v Mc Cormack (1969) 395 US 486cited by Mr Dykes, Warren CJ held at pp.548-9 that the determination of a Congressman’s right to sit required no more than an interpretation of the Constitution which fell within the traditional role accorded to courts to interpret the law. Even if the exercise of such power conflicted with the resolution of the Congress, Warren CJ said these: “The alleged conflict that such an adjudication may cause cannot justify the courts’ avoiding their constitutional responsibility.... For, as we noted in Baker v Carr ... it is the responsibility of this Court to act as the ultimate interpreter of the Constitution.” 68. As I have said, in adjudicating on these issues the courts only concern themselves with legal questions, and the issues before us in these appeals are whether the requirement in article 104 has been complied with and if not, what are the consequences. In our deliberations, we address legal arguments advanced before us and apply the law (including the Interpretation, which upon its pronouncement becomes part of our laws) strictly as we find them. It is for this very reason that the Chief Judge had to stop Mr Yu when counsel at one stage unwittingly treaded beyond the proper scope of legal arguments by quoting from Socrates on abuse of democracy. It is important that we keep politics out of the judicial process. 69. Nor should the exercise of judicial power in these instances be regarded as the court’s intervention into the internal affairs of the LegCo. The principle of non-intervention is a principle governing the exercise of the court’s jurisdiction, placing importance on the integrity and efficiency of the legislative process. Thus, in cases where the intervention of the court would disrupt the legislative process as in Cheng Kar Shun v Li Fung Ying [2011] 1 HKLRD 555 and Leung Kwok Hung v President of the Legislative Council (2014) 17 HKCFAR 689, the court would refrain from intervention. But the court would not shy away from examining the products of such process as in cases where the courts examined the constitutionality of a piece of legislation. In Leung Kwok Hung, the Court of Final Appeal highlighted at [39] to [43] that in cases where the legislative authority is subject to a written constitution (as in the case of our LegCo), the judicial authority will determine whether the legislature has a particular power, privilege or immunity though it would not exercise jurisdiction to determine the occasion or the manner of the exercise of the same. 70. The Court of Final Appeal expressed the principle of non-intervention in these terms at [28] by reference to the relationship between the legislature and the courts: “....This relationship includes the principle that the courts will recognise the exclusive authority of the legislature in managing its own internal processes in the conduct of its business ...The corollary is the proposition that the courts will not intervene to rule on the regularity or irregularity of the internal processes of the legislature but will leave it to determine exclusively for itself matters of this kind...” 71. The Court of Final Appeal also stressed that the principle of non-intervention is necessarily subject to constitutional requirements, see [32]. This has been consistently regarded by our courts as the limits of that principle, see the decision at first instance in Leung Kwok Hung v President of the Legislative Council [2012] 3 HKLRD 483, at [36]; at the Court of Appeal, in CACV 123 of 2012, 1 Feb 2013, at [24]; Cheng Kar Shun v Li Fung Ying, supra at [220]. 72. For the reasons given by the Chief Judge, the non-compliance with the oath-taking prerequisite in article 104 and its consequence are matters of constitutional requirement which the courts have a constitutional duty to examine when it is an issue in a case coming before us. Compliance with such constitutional requirement is not merely a matter of internal process of the LegCo. Oath taking is not simply a requirement of LegCo’s internal rules. Though it took place within the walls of the LegCo Building, it is a matter of immense importance to the whole Hong Kong Special Administrative Region including the Government as well as its general public because the requirement underpins the allegiance owed to the Hong Kong Special Administrative Region of the People’s Republic of China and the sincerity and integrity of the oath taker in upholding the Basic Law. Without the oath properly taken, the member concerned could not assume office and no authority is conferred upon him or her to act as our lawmaker. 73. As illustrated by election petition cases, membership of LegCo is not an internal matter for the LegCo. The courts must intervene when non-compliance with article 104 is brought to our attention. 74. The soundness of this analysis is easily borne out by examining a hypothetical case where a member is wrongly ruled by the Clerk or President to have failed to comply with article 104 and disqualified under Section 21 accordingly. It is hard to see why in such circumstances such a member cannot come to court to seek relief notwithstanding that the oath taking took place within the walls of the LegCo Building. Mr Dykes and Mr Pun readily agreed that the court must intervene in such circumstances. 75. In the converse situation, where a member should have been disqualified but was not so disqualified, electors in the electoral constituency of that member should, as a matter of law, be entitled to have a by-election for the seat and other candidates should also be entitled to run for the same. Hence, it is impossible to characterise the oath taking as a mere internal affair or a matter in the internal process of the LegCo. There is no reason why the courts should refrain from intervening in such circumstances. 76. Properly understood, Bradlaugh v Gossett (1884) 12 QBD 271 on which Mr Pun placed great reliance cannot stand in the way of the above analysis. What was in issue in that case was the resolution of the House of Commons excluding a member from the House until he shall engage not to attempt to take the oath in disregard of the resolution of the House then in force. What happened was that Mr Bradlaugh was prohibited from taking the oath because he did not believe in the existence of a Supreme Being, see AG v Bradlaugh (1885) 14 QBD 667, also the judgment of Stephen J in Bradlaugh v Gossett, supra at p.279. In that case, Mr Bradlaugh sued the Serjeant-at-Arms who excluded him from the House pursuant to the resolution of the House. It was in such context that Lord Coleridge CJ said at p.275: “What is said or done within the walls of Parliament cannot be inquired into in a court of law... The jurisdiction of the Houses over their own members, their right to impose discipline within their walls, is absolute and exclusive.” Coleridge CJ obviously regarded it as a matter of internal discipline as he said at pp.276-277: “Consistently with all the statements in the claim, it may be that the plaintiff insisted on taking the oath in a manner and under circumstances which the House had a clear right to object to or prevent.” At p.277 he also agreed with Stephen J’s broader analysis as to why the court should not examine the basis on which the House passed the resolution. Stephen J proceeded on the assumption that there was inconsistency between the resolution and the Parliamentary Oaths Act and he ruled that the court should not intervene because (a) The court could not do justice without infringing the dignity and independence of the House as it would necessitate the examination of the reasons for the House’s resolution, see pp.280-281; (b) In respect of matters of parliamentary privilege in respect of affairs within the House of Commons, even if the House decided the same not in accordance with law, it would be akin to an error by a judge whose decision was not subject to any appeal, see p.284-286. 77. It should be noted that the courts did not hold that they had no jurisdiction to examine if the affirmation adopted by a member of the House was valid. In earlier proceedings in Clarke v Bradlaugh (1881) 7 QBD 38, the court held that the affirmation by Mr Bradlaugh purportedly under section 4 of the Parliamentary Oaths Act 1870 was invalid as he was not a person falling within the scope of that section. Though the actual result was overturned on appeal in the House of Lords reported in (1883) 8 App Cas 354 as the court held that the person who brought the proceedings had no locus to do so, the finding on the invalidity of the affirmation was not disturbed. Stephen J accepted that the courts had the power to make such decision in Bradlaugh v Gossett, supra, at pp.281 to 282. Subsequently in AG v Bradlaugh (1885) 14 QBD 667, in proceedings brought by the Attorney General penalty was imposed by the Divisional Court on account of Mr Bradlaugh’s sitting and voting in the parliament despite his invalid affirmation and it was upheld on appeal to the Court of Appeal. Thus, the reference to the court’s inability to investigate into what happened within the walls of the Parliament should not be taken too literally. 78. Whatever the position may be in respect of the relationship between the courts and the House of Commons in 19th century England, for the reasons already given, the respective roles of the courts in Hong Kong and the LegCo as prescribed by the Basic Law are different. As the Chief Judge observed, LegCo is subject to the Basic Law. By reason of article 104, there is no right on the part of any elected member to assume office in LegCo without fulfilling the constitutional requirement under that article and the refusal or neglect to take the oath when duly requested would lead to vacation from office or disqualification. Hence, it is not a matter of internal discipline. Nor is it a matter of parliamentary privilege. Instead, it is a constitutional requirement which our courts have the constitutional responsibility to adjudicate on in the same way as the U.S. Supreme Court did in Powell v Mc Cormack, supra. 79. The above analysis also resolves the question as to identity of the decision maker under Section 21. Though the oath administrator would have the power to administer the oath under Section 19, he is not given any judicial role in the determination if an oath taker has declined or neglected to take the oath. In this connection, Section 21 does not say that an oath taker would be disqualified if he or she had, in the opinion of the oath administrator, declined or neglected to take the oath. I agree with the Chief Judge that paragraph 2(4) of the Interpretation does not confer any judicial role upon the oath administrator and any dispute on the application of Section 21 has to be determined by the courts. It also follows that in the determination of such dispute, the courts must conduct a full merit review with full opportunity for the parties to adduce relevant and admissible evidence on the issues instead of the limited review by way of traditional approach in a judicial review. 80. My analysis also reinforces the conclusion of the Chief Judge that Section 15 of the Legislative Council Ordinance is not exhaustive as to the circumstances in which a member is disqualified. Though the scope of Section 73 is of little significance in the present appeals (as 2 sets of proceedings have been commenced in respect of each Interested Party), it would be helpful if we can give some guidance on the interface between Section 73 and Section 21J. 81. In my view, these statutory jurisdictions have a common origin in the prerogative writ of quo warranto by which the authority of a person holding a public office could be challenged in courts. In Hong Kong, the prerogative writ has become obsolete and been largely (if not wholly) overtaken by statutory jurisdictions. Section 21J is a general provision, applicable to any public office created by any enactment whilst Section 73 specifically applies to a person acting or claiming to be entitled to act as a member of LegCo. Proceedings under Section 21J must be brought by way of judicial review, see Section 21K(1) of the High Court Ordinance and they are subject to the rules governing applications for judicial review. Leave is therefore required and it is subject to the usual time constraint in applications for judicial review. On the other hand, Section 73 is to be brought by way of some other form of civil proceedings and leave is not required. However, the time limit is 6 months: section 73(2) must be construed purposively as referring to 6 months from the date on which the person first acted or claimed to be entitled to act whilst disqualified, otherwise the time limit will be meaningless. Further, Section 73 proceedings can only be brought by an elector or the Secretary for Justice, see Section 73(1). In the case of proceedings by an elector, such proceedings would be stayed pending the payment of security for costs, a sum to be ordered by the court which shall not exceed $20,000 in respect of each member challenged, see Section 73(5) and (6). 82. Section 73(7) provides that proceedings within the scope of that section can only be brought in accordance with that section. In other words, it would not be open to persons coming within the scope of this section to bring proceedings by other means like an application for judicial review under Section 21J. 83. However, the Court of Final Appeal in Albert Ho v Leung Chun Ying v Ho Chun Yan, Albert (2013) 16 HKCFAR 735 held that election petition is not the only means to challenge an election and judicial review is an available alternative for those who are not eligible to bring proceedings under section 33 of the Chief Executive Election Ordinance. By the same token, it may be arguable that Section 73(7) does not preclude someone who is not an elector to commence proceedings under Section 21J in respect of a disqualified legislator. As the Chief Judge observed, the Chief Executive is not a person who is entitled to proceed under Section 73. He has to proceed under Section 21J to seek the remedy of declaration and injunction against the Interested Parties in HCAL 185/2016. 84. In any event, given that Section 73 was enacted to protect members of the LegCo against unlimited challenges to their offices (by way of security for costs and time limit for application), I believe even in cases where an applicant is outside the scope of that section and an application is brought by way of judicial review, the court must bear such protection in mind in assessing whether leave should be granted. In particular, given that judicial review should not be permitted when an alternative remedy by way of Section 73 is available, the court should consider whether an applicant who is not an elector in the constituency of the member concerned should be allowed to make the challenge and enquire whether the Secretary for Justice or any elector is willing to bring proceedings under Section 73. The court must also examine the locus standi of such an applicant carefully if neither the Secretary for Justice nor any elector in that constituency is willing to bring proceedings under Section 73. Hon Poon JA: 85. I agree with the judgment of the Chief Judge and the judgment of Lam VP. I would like to add a few words of my own on the principle of non-intervention in the Hong Kong context. 86. As the Court of Final Appeal pointed out in Leung Kwok Hung, supra, at [32], the common law principle of non-intervention is necessarily subject to the constitutional requirements in the Basic Law. As our written constitution, the Basic law is supreme. It binds all organs and branches of the government, including LegCo. The court is the guardian of the Basic Law. The court is constitutionally tasked to protect the provisions of the Basic Law and to ensure that all governmental organs and branches, including LegCo, stay within its bounds. 87. Being subject to the Basic Law, LegCo must uphold and abide by its provisions, always acting within its framework and fulfilling its constitutional requirements. So must all LegCo Members, whether they are elected from functional constituencies or geographical constituencies through direct elections. When disputes arise as to whether LegCo has acted in breach of the constitutional requirements in the Basic Law, such as passing a law which is contrary to certain provisions of the Basic Law, or whether individual LegCo Members have breached the constitutional requirements as mandated in the Basic Law, such as the present, the court has a constitutional duty to adjudicate and rule on the matters. In so doing, the court does not seek to undermine the authority or function of LegCo as the legislature or diminish the mandate that the electors gave to the LegCo Members concerned. Rather the court ensures that LegCo or the Members concerned exercise their powers lawfully in accordance with the constitutional requirements of the Basic Law. Only thus can the public confidence in LegCo be maintained. Only thus can the integrity of the very many important acts performed by LegCo be preserved. Hon Cheung CJHC: 88. Accordingly, the appeals are dismissed with costs to all other parties (including the LegCo President for his costs for the hearing on 17 November 2016) together with a certificate for 3 counsel. The costs order is made on a nisi basis and any application to vary it shall be dealt with by written submissions only. 89. As indicated at the conclusion of the hearing, we will hear any application for leave to appeal to the Court of Final Appeal tomorrow at 9:30 am. All time requirements are abridged accordingly, and we will accept undertakings to file and serve the formal documents in lieu of actual filing or service before the hearing so long as draft documents are made available to the court and the opposite parties in advance. Mr Benjamin Yu SC, Mr Johnny Mok SC, Mr Jimmy Ma and Mr Jenkin Suen, instructed by the Department of Justice, for the 1st and 2nd applicants in CACV 224 & 225/2016 and the 1st and 2nd plaintiffs in CACV 226 & 227/2016 Mr Hectar Pun SC and Mr Anson Wong Yu Yat, instructed by Ho Tse Wai and Partners, for the 1st interested party in CACV 224 & 225/2016 and the 2nd defendant in CACV 226 & 227/2016 Mr Philip Dykes SC and Mr Jeffrey Tam, instructed by Khoo & Co, for the 2nd interested party in CACV 224 & 225/2016 and the 1st defendant in CACV 226 & 227/2016 Lo & Lo, for the respondent in CACV 224 & 225/2016 and the 3rd defendant in CACV 226 & 227/2016, did not appear [1] The Interpretation reads: “1. ‘To uphold the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China’ and to bear ‘allegiance to the Hong Kong Special Administrative Region of the People’s Republic of China’ as stipulated in Article 104 of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, are not only the legal content which must be included in the oath prescribed by the Article, but also the legal requirements and preconditions for standing for election in respect of or taking up the public office specified in the Article. 2. The provisions in Article 104 of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China that ‘When assuming office’, the relevant public officers ‘must, in accordance with law, swear’ bear the following meaning: (1) Oath taking is the legal prerequisite and required procedure for public officers specified in the Article to assume office. No public office shall be assumed, no corresponding powers and functions shall be exercised, and no corresponding entitlements shall be enjoyed by anyone who fails to lawfully and validly take the oath or who declines to take the oath. (2) Oath taking must comply with the legal requirements in respect of its form and content. An oath taker must take the oath sincerely and solemnly, and must accurately, completely and solemnly read out the oath prescribed by law, the content of which includes ‘will uphold the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, bear allegiance to the Hong Kong Special Administrative Region of the People’s Republic of China’. (3) An oath taker is disqualified forthwith from assuming the public office specified in the Article if he or she declines to take the oath. An oath taker who intentionally reads out words which do not accord with the wording of the oath prescribed by law, or takes the oath in a manner which is not sincere or not solemn, shall be treated as declining to take the oath. The oath so taken is invalid and the oath taker is disqualified forthwith from assuming the public office specified in the Article. (4) The oath must be taken before the person authorized by law to administer the oath. The person administering the oath has the duty to ensure that the oath is taken in a lawful manner. He or she shall determine that an oath taken in compliance with this Interpretation and the requirements under the laws of the Hong Kong Special Administrative Region is valid, and that an oath which is not taken in compliance with this Interpretation and the requirements under the laws of the Hong Kong Special Administrative Region is invalid. If the oath taken is determined as invalid, no arrangement shall be made for retaking the oath. 3. The taking of the oath stipulated by Article 104 of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China is a legal pledge made by the public officers specified in the Article to the People’s Republic of China and its Hong Kong Special Administrative Region, and is legally binding. The oath taker must sincerely believe in and strictly abide by the relevant oath prescribed by law. An oath taker who makes a false oath, or, who, after taking the oath, engages in conduct in breach of the oath, shall bear legal responsibility in accordance with law.” [2] Article 79(1) of the Basic Law reads: “ The President of the Legislative Council of the Hong Kong Special Administrative Region shall declare that a member of the Council is no longer qualified for the office under any of the following circumstances: (1) When he or she loses the ability to discharge his or her duties as a result of serious illness or other reasons;” [3] Section 73 reads: “ (1) An elector, or the Secretary for Justice, may bring proceedings in the Court against any person who is acting, [or] claims to be entitled to act, as a Member on the ground that the person is disqualified from acting as such. ... (7) Proceedings against a person on the ground that the person has, while disqualified from acting ..., [acted,] or claimed to have been entitled to act, as a Member may be brought only in accordance with this section. (8) For the purposes of this section, a person is disqualified from acting as a Member if the person- (a) is not qualified to be, or is disqualified from being, a Member; or (b) has ceased to hold office as a Member.” [4] In any event, I take the view that the President has already in his ruling on 18 October 2016 decided, in substance (although not in so many words), that both Leung and Yau have declined or wilfully neglected to take the LegCo Oath. With respect, what he did not do (upon strong legal advice) was to follow that decision to its logical conclusion, and apply and act on section 21 accordingly. [5] Section 15(1) of the Legislative Council Ordinance reads: “(1) A Member’s office becomes vacant if the Member - (a) resigns in accordance with section 14 or is taken to have resigned from that office in accordance with section 13; or (b) dies; or (c) subject to subsection (2), alters either the Member's nationality or the fact as to whether the Member has a right of abode in a country other than the People's Republic of China as declared under section 40(1)(b)(ii); or (d) is the President and has been found under the Mental Health Ordinance (Cap. 136) to be incapable, by reason of mental incapacity, of managing and administering his or her property and affairs; or (e) is declared in accordance with Article 79 of the Basic Law to be no longer qualified to hold that office.” [6] Article 79(1) reads in Chinese: “香港特別行政區立法會議員如有下列情況之一，由立法會主席宣告其喪失立法會議員的資格： (一) 因嚴重疾病或其他情況無力履行職務；” [7] Section 21J reads: “(1) Where a person not entitled to do so acts in an office to which this section applies, the Court of First Instance may - (a) grant an injunction restraining him from so acting; and (b) if the case so requires, declare the office to be vacant. (2) This section applies to any public office or office which has been created by any enactment.” |
Chief Justice Ma (giving the Reasons of the Court): 1. The present appeal was brought by the Defendant against the Judgment of the Court of Appeal[1] dismissing her appeal from the First Instance judgment of Recorder Horace Wong SC.[2] Leave to appeal to this Court was granted by the Court of Appeal[3] under the former s 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance Cap 484 on the basis that the subject matter of the appeal concerned property over the value of $1 million; in other words, an appeal under the previous “as of right” provision in that Ordinance.[4] 2. After hearing counsel for the Defendant appellant,[5] we dismissed the appeal with costs,[6] stating that the Reasons for Judgment would be handed down in due course. The appeal was wholly without merit. 3. The Plaintiff respondent is the mother of the Defendant, her daughter. At the time of the trial before the learned Recorder, she was aged 85. The case concerned the transfer of some properties by the Plaintiff to the Defendant in 1999. As we shall presently see, the determination of the factual disputes between the parties by the Recorder on the evidence before him was critical to the outcome of the litigation. The Court of Appeal upheld the trial judge’s findings of fact, so that there were concurrent findings of fact before this Court. As the parties were reminded, the Court does not, save in rare and exceptional cases, review concurrent findings of fact. It is no part of the Court of Final Appeal’s function to debate “yet again the factual findings made at first instance and previously reviewed by the Court of Appeal” in the hope on the part of an appellant of finally obtaining favourable findings.[7] This was decisive in our dismissing the Defendant’s appeal. We shall briefly explain why the Court arrived at this conclusion. 4. The dispute between the parties concerned two properties (“the properties”): a shop located in Che Cheung Building in Kowloon (“the shop”) and a flat located in Ha Heung Road, also in Kowloon (“the flat”). These properties were at one stage owned by the Plaintiff’s husband, Tam Yuk Lam (“Tam”), together with another property in Manning Theatre Building (“the Manning Theatre Building property”). The Plaintiff and Tam had four children (three sons and their daughter, the Defendant), all born in the Mainland where the Plaintiff once lived. In 1982, the Plaintiff and the Defendant settled in Hong Kong, the three sons remaining in the Mainland. At the time, Tam was already living in Hong Kong and had taken a concubine, a Madam Lou Nui[8], with whom he had three children. 5. After the flat was purchased by Tam in 1986, the Plaintiff began to live there, with Tam staying there every other day. The Defendant, who by this time had married, did not live in the flat. She married in 1984 and had three children of her own. In 1995, she divorced her husband. From July 1984, she began to live on Comprehensive Social Security Assistance (“CSSA”). 6. In August 1997, having suffered a stroke in 1994, Tam divided his properties between the Plaintiff and Lou Nui. The shop and the flat were transferred to the Plaintiff while the Manning Theatre Building property was transferred to Lou Nui. 7. In relation to the transfer of the properties to the Defendant in 1999, according to land search records, the shop was assigned by the Plaintiff to the Defendant on 22 September 1999 and the flat was assigned to the Defendant on 5 October 1999. The Assignments were prepared by an executive in the offices of Messrs George YC Mok and Co. (“GYCM”). The parties advanced at trial different versions of the circumstances surrounding these Assignments :- (1) According to the Plaintiff, one day in early 1999, the Defendant went to the flat to show her a letter which indicated that Tam intended to reclaim both properties and to transfer them to Lou Nui. This letter was not produced at trial. The Plaintiff was told by the Defendant that Tam had given her ten days to move out. When the Plaintiff became worried at this, the Defendant then suggested that if the properties were to be transferred into her (the Defendant’s) name, Tam would not then be able to claim the properties for himself. The Plaintiff agreed. There was, however, no intention on her part to transfer the beneficial title in the properties to the Defendant; it was merely a device to avoid Tam’s threatened claims. (2) The Defendant’s version was that the Plaintiff intended to make a gift of the properties to her. According to the Defendant, it was the Plaintiff who told her about the letter and Tam’s intentions regarding the properties. The Plaintiff said she wanted to make a gift of them to her for essentially two reasons: first, Tam had already made provision for the Defendant’s brothers but not her and therefore the Plaintiff wanted to ensure that the Defendant was also looked after; secondly, in any event the Plaintiff would rather her daughter benefited from having the properties than Lou Nui. The Defendant claimed she was at first reluctant to agree to this transfer (albeit the beneficial interest in the properties would pass to her) since she would no longer be able to receive CSSA. It was only when the Plaintiff agreed to let her have the rental incomes for the properties as well[9] (less $1,000 for the Plaintiff’s own use) that the Defendant was persuaded to agree to the transfer. 8. The Assignments of the properties showed on their face a purchase by the Defendant of the Plaintiff’s interest in them. The consideration for the shop was said to be $300,000, the consideration for the flat, $500,000. The Plaintiff also signed receipts for these amounts. It was common ground that the Plaintiff did not receive these (or any) amounts from the Defendant, evidently so because on both sides’ cases, the Assignments did not intend and were never intended to reflect the true arrangements between them. This is a point of some importance as it effectively disposed of one of the Defendant’s arguments sought to be raised in this appeal, namely, that the Plaintiff was estopped by deed from denying the contents of the two Assignments. 9. Subsequent to these transfers, the Plaintiff continued to live in the flat, paying the various expenses associated with the flat such as rates and telephone bills. She also (as the Recorder eventually found) paid the Defendant the rental income of the two properties less $1,000 for herself. From 2003 to 2009, the Plaintiff lived intermittently in the flat, dividing her time between Hong Kong and the Mainland (where her sons lived). She lived in Huidong from June 2007 to June 2009. When she returned to Hong Kong, she found that the locks to the door in the flat had been changed. In August 2010, the Defendant sold the flat to a third party, Land Crown International Limited, for $2,988,000, with an additional $1,328,000 as “decoration and removal expenses”. 10. The trial judge heard evidence[10] from 4 witnesses: the Plaintiff, the Defendant, and a conveyancing executive and solicitor from GYCM who had handled the assignment of the properties. In a 48-page judgment, the Recorder analyzed the evidence, assessed the credibility of the witnesses and concluded that the Plaintiff’s intention in making the Assignments was merely to avoid Tam’s threatened actions (accepting the Plaintiff’s version) but not to make a gift of the properties to the Defendant (rejecting the Defendant’s version). The legal effect was that the properties were held by the Defendant on resulting trust for the Plaintiff. Apart from making declarations to this effect, the Recorder also ordered the Defendant to provide an account of her dealings with the properties and that there should be the liberty to apply in relation to both the declarations and the order for an account.[11] 11. In his judgment, Recorder Wong SC gave detailed reasons for his conclusions. It is not necessary to go through them in detail; they are amply set out in the written judgment. He found the Plaintiff to be a credible witness but doubted the credibility of the Defendant and found her to be evasive. Wewould only by way of example highlight some of the reasoning:- (1) There was no sensible reason for the Plaintiff to make an outright gift of the properties to the Defendant. She had four children and the Recorder saw no justification for the Plaintiff to favour the Defendant above her brothers. There was, moreover, no evidence to suggest that Tam had made any provision for the sons as the Defendant had alleged. (2) While the Recorder found that the Plaintiff allowed the Defendant to keep the rental income from the properties subsequent to the Assignments, it did not however make sense to divest herself of the beneficial interest in the properties. They were, after all, her only source of wealth, she having no other income. She also continued to pay the rates and other expenses of the flat. (3) The Defendant’s version was found to be unconvincing. In particular, the Recorder found it difficult to believe the Defendant when she claimed to hesitate to receive a gift of the properties on the ground she would then lose her entitlement to CSSA: as the Judge remarked, the value of the properties far outweighed any CSSA to which she may have been receiving.[12] Further, on the Defendant’s version, her hesitation was eventually overcome only when the Plaintiff agreed to let her have the rental income for the properties (less $1,000). As stated earlier, the Judge did find as a fact that the Defendant was permitted to keep the rental income, but this was clearly consistent with the Plaintiff’s version of events. It was however inconsistent with the Defendant’s version: if she was indeed to take the beneficial interest in the properties, it could not have been any additional incentive to have the rental income as well. She would surely be entitled to such income as beneficial owner. 12. The Court of Appeal could not fault the Recorder’s analysis of the evidence. This is conveniently summarized in one paragraph in Cheung JA’s judgment (with whom the other Judges agreed) :- “8.3 The defendant is challenging the Recorder’s finding of fact. The principle is clear that the appellate court will not disturb a finding of fact by the trial Judge who had the benefit of hearing and observing the evidence at first hand, unless the finding is plainly wrong. In our view the defendant has failed to overcome this high threshold. As the Recorder had made it plain, he decided the issue without reliance on presumptions. His express finding is that the plaintiff did not intend to benefit the defendant when she transferred the properties to her and it was solely done to avoid the properties coming into the hands of Lou Nui. He observed that there really was no reason why the plaintiff should suddenly give the properties to the defendant in 1999 when they were her only valuable assets and she was dependent on them. He also found that the defendant was aware of the plaintiff’s intention at that time.” 13. There being concurrent findings of fact along these lines, the Judge and the Court of Appeal were fully entitled to reach the legal conclusion they did, namely, that despite the Assignments, the Defendant held the properties on resulting trust for the Plaintiff. 14. Despite recognizing this difficulty, Mr Chu sought first to maintain before us that the analysis and assessment of the evidence by the Recorder was faulty and that his erroneous approach had been perpetuated by the Court of Appeal. This was hopeless and amounted to no more than a third attempt by the Defendant to seek to persuade a court to try the case again. 15. Various attempts were made in the Appellant’s written Case and in the oral submissions before us to raise legal issues to undermine the decisions of the lower courts. They were all, in ourview, equally hopeless (with some points all but abandoned when Mr Chu made his submissions before us). Weneed only deal with them briefly:- (1) First, it was said that a resulting trust had not been properly pleaded by the Plaintiff. Both the trial Judge and the Court of Appeal rejected this argument and were right to do so. The Statement of Claim specifically pleaded that the properties were assigned to the Defendant at her suggestion to avoid Tam’s claims and that accordingly, the Defendant held them as trustee for her.[13] The Defendant was under no misapprehension as to what claim she was facing. In her Defence and Counterclaim, in denying the Plaintiff’s claim, she pleaded facts to make out her case that the assignment of the properties represented a gift. The object of pleadings is “fairly and precisely to inform the other party or parties in the litigation of the stance of the pleading party (in other words, that party’s case) so that proper preparation is made possible, and to ensure that time and effort are not expended unnecessarily on other issues.”[14] The Plaintiff’s pleadings in the present case did exactly that. (2) Next, in the Appellant’s Case, Mr Chu argued that the Recorder and the Court of Appeal failed to consider the impact of Chinese customary law on the issue whether the Plaintiff ought to have been believed when she said she only agreed to transfer the properties to the Defendant so as to put them out of Tam’s reach. The point sought to be derived from this reliance on Chinese customary law was that the threat on the part of Tam to reclaim the properties was an empty and legally unsustainable one. This was an entirely new point raised for the first time in this Court (and unpleaded as well) without the benefit of the views (not to mention, assessment) by the Recorder or the Court of Appeal.[15] It was also pointless: it will be remembered that as part of the defendant’s own case, there was a threat by Tam to reclaim the properties.[16] It was immaterial whether this claim had merit or not. It was enough that the threat was regarded by both Plaintiff and Defendant as a real one. (3) Thirdly, the Defendant relied on estoppel by deed, meaning that the Plaintiff was bound by the terms of the two Assignments of the properties as well as the receipt clauses in which the Plaintiff confirmed receipt of the purchase monies. Quite apart from the principle that the law will not permit instruments such as an assignment to be used as an instrument of fraud,[17] the Defendant’s own case at trial was that the Assignments did not represent what they purported to say. (4) Fourthly, before us, Mr Chu sought to argue that the Plaintiff had not come to court with clean hands. This was again a point never raised before and therefore not developed or dealt with by the courts below. 16. Finally, weshould just briefly mention the presumption of advancement. Both the Judge and the Court of Appeal discussed this doctrine at some length before coming to the view that in any event the presumption, even if it applied, was displaced by the evidence before the court. Interesting though the question may be, in particular whether a modern view should be taken of the presumption to include transfers from mother to daughter (this presumption, if it applies, is of course usually relevant only for evidential purposes), a detailed consideration was and is simply not called for in the present case. We would reserve a detailed consideration of this doctrine for another occasion. 17. For these reasons, the appeal was dismissed. Mr George Chu, instructed by Joseph Li & Co, assigned by Director of Legal Aid, for the Defendant / Appellant Ms Josephine Tjia, instructed by Tsangs, assigned by Director of Legal Aid, for the Plaintiff / Respondent [1] Dated 4 July 2014 (Cheung & Chu JJA and Mimmie Chan J). [2] Dated 15 August 2013. [3] On 29 December 2014. [4] Section 22(1)(a) of the Ordinance was repealed by s 8(1) of the Administration of Justice (Miscellaneous Provisions) Ordinance 2014. Although the repeal of the provision took effect as from 24 December 2014, it only applied to final judgments of the Court of Appeal after that date: see s 7 of the 2014 Ordinance. [5] Mr George Chu. Ms Josephine Tjia appeared for the Plaintiff respondent. Though not called upon to make oral submissions, we have taken into account the Respondent’s Case drafted by her. [6] As both parties were legally aided, we also made an order that the costs of the plaintiff and the defendant should be taxed in accordance with the Legal Aid Regulations. [7] See Sky Heart Ltd v Lee Hysan Co Ltd (1997-98) 1 HKCFAR 318, 333I-338D; Chinachem Charitable Foundation Ltd v Chan Chun Chuen (2011) 14 HKCFAR 798, at para 57. [8] Lou Nui has been referred to throughout the proceedingsas a concubine. If this was indeed her status, this must have been attained before 7 October 1971 : see ss 2 and 5(1) of the Marriage Reform Ordinance Cap 178. [9] The evidence showed that the shop was leased out. The Plaintiff lived in only a part of the flat. The other parts were rented out. [10] In a trial lasting 4 days. [11] The reason was that, as we have seen, subsequent to the Assignments, in August 2010 the Defendant sold the flat to a third party. The proceeds of sale are held by GYCM as stakeholders pending the outcome of the present case. [12] Adopting the figure of $8,000 (which Defendant said she was receiving by way of CSSA every month) and taking into account the figure of $4,316,000 alone (the consideration for the sale of the flat in 2010), this purchase price represented about 45 years in CSSA payments. [13] The Statement of Claim pleads a constructive trust but it is clear that what was meant was a resulting trust. [14] Kwok Chin Wing v 21 Holdings Ltd (2013) 16 HKCFAR 663, at para 21 referring to Wing Hang Bank Ltd v Crystal Jet International Limited [2005] 2 HKLRD 795. [15] The principles of Flywin Co Ltd v Strong and Associates Ltd (2002) 5 HKCFAR 356 therefore apply. [16] See para 7(2) above. [17] See, among many authorities, Booth v Turle (1873) LR 16 Eq 182. |
The Court: 1. These two appeals, heard together, raise overlapping issues concerning the offences of unlawful assembly and riot under sections 18 and 19 of the Public Order Ordinance (“POO”).[1] 2. The appellant Lo Kin Man (“Lo”) was convicted after trial before A Pang J and a jury[2] of the offence of riot contrary to section 19 of the POO involving an occurrence of public disorder in Portland Street, Mongkok, on 8 and 9 February 2016. His appeal to the Court of Appeal was dismissed.[3] Leave to appeal to this Court was granted by the Appeal Committee[4] in respect of the questions of law and the “substantial and grave injustice” ground set out in Annex 1 to this Judgment. We shall refer to the proceedings leading to the present appeal as “the Lo Case”. 3. In relation to the second appeal, Tong Wai Hung (“Tong”) was charged alongside two other defendants with unlawful assembly and riot under POO sections 18 and 19 in connection with a riot which occurred some three years later amidst the widespread and serious social unrest which has been described in Kwok Wing Hang v Chief Executive in Council.[5] The riot in question took place on 28 July 2019 at Des Voeux Road West. He was acquitted after trial before HH Judge Anthony Kwok in the District Court.[6] This prompted the Secretary for Justice to refer two questions of law to the Court of Appeal for its opinion pursuant to section 81D of the Criminal Procedure Ordinance (“CPO”).[7] Having been provided with its opinion,[8] Tong applied for certification of the two abovementioned questions for leave to appeal to this Court. The Court of Appeal was aware of the grant of leave in the Lo Case and, noting the overlapping issues, granted certification.[9] By consent, the Appeal Committee granted leave to appeal in respect of the said questions which are set out in Annex 2 to this judgment. The proceedings leading to the present appeal are referred to as “the Tong Case”. 4. The questions raised in the two Annexes concern a proper understanding of the structure and elements of the offences created by sections 18 and 19 and their relationship with certain common law doctrines. In particular, issues arise as to (i) the existence and nature of a requirement (if any) for proof of a “common purpose” shared by the defendant and other persons assembled;[10] (ii) the applicability of the doctrine of joint enterprise to the two statutory offences and whether that doctrine enables liability to be established without the defendant being present at the scene;[11] and (iii) whether a defendant can be found guilty under sections 18 and 19 on the basis of “encouragement through [the defendant’s] presence”, without committing acts specifically prohibited by those sections.[12] Under the “substantial and grave injustice” heading, a question is raised as to the consequences of the indictment having made no mention of any participants in the riot other than the named co-defendants who were not convicted after trial together with the defendant.[13] A. The structure and elements of the offences under sections 18 and 19 A.1 The sections 5. A textual examination of the statutory offences is the appropriate starting-point. Indeed, as the relevant provisions form part of a codifying Ordinance, the primary emphasis should be on giving effect to their terms, properly construed, rather than delving too extensively into pre-existing common law authority. As Lord Herschell explained in The Governor and Company of the Bank of England v Vagliano Brothers:[14] “I think the proper course is in the first instance to examine the language of the statute and to ask what is its natural meaning, uninfluenced by any considerations derived from the previous state of the law, and not to start with inquiring how the law previously stood, and then, assuming that it was probably intended to leave it unaltered, to see if the words of the enactment will bear an interpretation in conformity with this view. If a statute, intended to embody in a code a particular branch of the law, is to be treated in this fashion, it appears to me that its utility will be almost entirely destroyed, and the very object with which it was enacted will be frustrated. The purpose of such a statute surely was that on any point specifically dealt with by it, the law should be ascertained by interpreting the language used instead of, as before, by roaming over a vast number of authorities in order to discover what the law was, extracting it by a minute critical examination of the prior decisions, dependent upon a knowledge of the exact effect even of an obsolete proceeding such as a demurrer to evidence.” 6. POO section 18 (unlawful assembly) provides as follows: “(1) When 3 or more persons, assembled together, conduct themselves in a disorderly, intimidating, insulting or provocative manner intended or likely to cause any person reasonably to fear that the persons so assembled will commit a breach of the peace, or will by such conduct provoke other persons to commit a breach of the peace, they are an unlawful assembly. (2) It is immaterial that the original assembly was lawful if being assembled, they conduct themselves in such a manner as aforesaid. (3) Any person who takes part in an assembly which is an unlawful assembly by virtue of subsection (1) shall be guilty of the offence of unlawful assembly and shall be liable – (a) on conviction on indictment, to imprisonment for 5 years; and (b) on summary conviction, to a fine at level 2 and to imprisonment for 3 years.” 7. And section 19 (riot) states: “(1) When any person taking part in an assembly which is an unlawful assembly by virtue of section 18(1) commits a breach of the peace, the assembly is a riot and the persons assembled are riotously assembled. (2) Any person who takes part in a riot shall be guilty of the offence of riot and shall be liable- (a) on conviction on indictment, to imprisonment for 10 years; and (b) on summary conviction, to a fine at level 2 and to imprisonment for 5 years.” 8. As was done in HKSAR v Leung Chung Hang Sixtus,[15] it is convenient for the purposes of exposition to divide up and number (in square brackets) the elements making up the two offences as follows: Unlawful assembly (section 18) [1] When 3 or more persons, [2] assembled together, [3] conduct themselves in a disorderly, intimidating, insulting or provocative manner [4] intended or likely to cause any person reasonably to fear that the persons so assembled will commit a breach of the peace, or will by such conduct provoke other persons to commit a breach of the peace, [5] they are an unlawful assembly. [section 18(1)] [6] It is immaterial that the original assembly was lawful if being assembled, they conduct themselves in such a manner as aforesaid. [section 18(2)] [7] Any person who takes part in an assembly which is an unlawful assembly by virtue of subsection (1) shall be guilty of the offence of unlawful assembly ... [section 18(3)] Riot (section 19) [8] When any person taking part in an assembly which is an unlawful assembly by virtue of section 18(1) [9] commits a breach of the peace, [10] the assembly is a riot and the persons assembled are riotously assembled. [section 19(1)] [11] Any person who takes part in a riot shall be guilty of the offence of riot ... [section 19(2)] A.2 Unlawful assembly 9. Elements [1] to [4] are the constituent elements of an unlawful assembly. Where they are established, the assembly is (as [5] declares) an unlawful assembly. Element [1] requires there to be 3 or more persons [2] assembled together, who conduct themselves in the disorderly manner specified in [3], with the intended or likely consequences stated in [4]. Those persons will be referred to as “the constituent offenders” and their conduct specified in [3] and [4] as “the prohibited conduct”. The true construction of element [4] is dealt with in detail in HKSAR v Leung Chung Hang Sixtus.[16] Notably, the “likely” limb is an aspect of the actus reus requiring the objectionable conduct, objectively assessed, to be likely to produce the reasonable fear of a breach of the peace specified.[17] 10. Element [6] reflects the scheme of graduated liability. An assembly might start off as lawful, then turn into an unlawful assembly and then become a riot. The time such a transformation may take will vary according to the circumstances. An unlawful assembly could develop almost immediately into a riot. 11. Element [7] is the offence-creating provision. Any person who “takes part” in an assembly which is an unlawful assembly commits the section 18 offence. The actus reus is “taking part”. This may or may not involve the same acts as, and should not be confused with, the prohibited conduct of the constituent offenders referred to in [3] and [4]. 12. If the defendant was one of the constituent offenders, by engaging in the prohibited conduct, he or she will (along with other constituent offenders) have taken part in the unlawful assembly that they will together have brought into being. But the defendant need not be one of the constituent offenders and can “take part” by joining in later. This is clear from element [7] which provides that the offence is committed by any person who takes part in the unlawful assembly. The submissions of Ms Gladys Li SC[18] to the contrary are rejected. 13. What then constitutes “taking part” in the unlawful assembly? What acts must the defendant perform? The sections do not spell out the meaning of those words. As a matter of textual analysis, it is implicit that if the defendant is one of the constituent offenders whose conduct falls within [3] and [4] he or she would “take part” since it is by such acts that the unlawful assembly is established, being of the essence of the offence. And if the defendant was not among the constituent offenders, but joined in and similarly did acts prohibited by [3] and [4], he or she would also be found to have “taken part”. 14. However, the offence is not confined to such conduct. As a matter of language, “taking part” is a broad expression. In our view, those words also embrace conduct which does not itself fall within [3] and [4] but which involves the defendant facilitating, assisting or encouraging the performance of such conduct by others participating in the assembly. Such conduct would traditionally give rise to accessorial liability but, by offering such facilitation, assistance or encouragement, the defendant acts in furtherance of the prohibited conduct and may thus also be regarded as “taking part” in the unlawful assembly. In so doing, he or she may attract liability either as a principal offender under section 18 or an aider and abettor. 15. An important feature which emerges from the statutory language is that unlawful assembly is what might be called a “participatory offence”. Thus, the offence requires the constituent offenders who are “assembled together” to “conduct themselves” in the prohibited manner so that the intended or likely fear of a breach of the peace is fear of what “the persons so assembled” will do. Element [6] draws the line between lawful and unlawful assemblies by reference to persons who “being assembled” engage in the prohibited conduct. The offence is committed by someone “taking part” in the unlawful assembly. 16. The defendant must therefore be shown not merely to have been engaging in disorderly conduct alone, but to have acted as part of an assembly with others who were also participants. The offence is “participatory” in that sense. Such participation is a requirement recognised by Lam JA (as Lam PJ then was) in SJ v Leung Kwok Wah,[19] holding that the defendant’s conduct has to be assessed to see if a sufficient nexus with other participants exists to justify regarding them as acting together.[20] His Lordship held that their conduct has to justify the inference that they had what he called “a common purpose in acting in the statutorily prescribed manner;”[21] ie, a shared objective of engaging in the ‘prohibited conduct’ forming elements [3] and [4]. 17. The defendant must accordingly intend to take part in, that is, become part of, the unlawful assembly, being aware of the related conduct of other participants and intending, while assembled together with them, to engage in or act in furtherance of the prohibited conduct. The defendant must, in other words, have what we will call a “participatory intent”. 18. It follows (leaving aside for now accessory and inchoate liability (especially regarding liability for conspiracy and incitement) that may be incurred by a person who is absent[22]), that to be guilty under section 18 as a principal offender, the defendant has to be present as part of the assembly, together with other participants. A.3 Riot 19. The offence of riot builds on that of unlawful assembly. Its starting-point is that an unlawful assembly exists, ie, that elements [1] to [5] are established. Element [8] specifies that when any person taking part in the unlawful assembly [9] commits a breach of the peace, the assembly [10] becomes a riot and the people assembled are riotously assembled. The actus reus of the offence of riot under section 19 is committed [11] when any person “takes part” in the riot. 20. Thus, as with unlawful assembly, the offence of riot has its initial constituent elements which are distinct from the actus reus of “taking part in a riot”. Any person taking part in an unlawful assembly may turn that assembly into a riot by committing a breach of the peace. That person does not have to be one of the constituent offenders who initially constituted the unlawful assembly, but he or she has to be a participant in the unlawful assembly. Any person who “takes part” in a riot which has come into existence commits the offence of riot [11]. Such a person does not have to be the person responsible for the initial, constituent breach of the peace. Neither does he or she have to have taken part in the unlawful assembly prior to it turning into a riot. Any person may take part by joining in after the unlawful assembly has become a riot. 21. Mirroring the analysis regarding unlawful assembly, the defendant’s conduct amounting to “taking part” in the riot must involve acts in furtherance of the riot. It must involve committing breaches of the peace or doing acts facilitating, assisting or encouraging breaches of the peace by others, making the defendant guilty as a principal or as an aider and abettor. We will return below[23] to consider what committing a breach of the peace entails. 22. The offence of riot is also participatory in nature. The constituent act involves a breach of the peace by a person who was taking part in an unlawful assembly. When that occurs, the “persons assembled” are declared by element [10] to be “riotously assembled”. The person who first committed a breach of the peace would thus be taking part in an assembly which has become a riotous assembly. Any other person who commits the offence by “taking part” in the riot, does so as part of the “riotous assembly”. Such person must have a participatory intent, intending to take part in the riot by committing, or acting in furtherance of, breaches of the peace together with other participants engaged in riotous activities. 23. As with unlawful assembly, it follows that liability for the offence of riot as a principal implicitly requires the defendant to be present and acting with the others riotously assembled. Again, this is subject to what is said about accessorial and inchoate liability incurred by persons who are absent, discussed below.[24] 24. It should be noted that the Court of Appeal in the Lo Case[25] and Poon CJHC writing for the Court in the Tong Case[26] omitted reference to the offence-creating, “taking part” provisions when setting out sections 18 and 19. This failure to focus on “taking part” as the actus reus of the two offences appears to have had an important influence on their approach to joint enterprise to which we shall return.[27] B. “Common purpose” 25. In the Lo Case, the appellant’s propositions on “common purpose”, reflected in Annex 1, Questions 1a-1d, may be summarised as follows: (a) The offences of unlawful assembly and riot were common law offences. At common law, it was necessary for the prosecution to prove against the defendant all the elements of the unlawful assembly which then became a riot. These included the prohibited disorderly conduct and a shared intent to engage in such conduct (what we have called a “participatory intent”). (b) Additionally, so the argument runs, it was necessary to prove that the assembled persons had a “common purpose” which they jointly intended to pursue, such as to wreck a dinner or cause a work stoppage.[28] Such a purpose may be referred to as an “extraneous common purpose” which is distinct from and goes beyond the participatory intent to engage in the prohibited conduct or to commit breaches of the peace. It is “extraneous” in that it is not a purpose which relates to any element of the offences but involves an external objective motivating the offenders. Lo’s submission is that the common law required such an extraneous purpose, which might or might not be lawful in itself, to be shared in common by those taking part in the unlawful assembly or riot. (c) It is argued that an extraneous common purpose continues to be required by the POO as a necessary element of both unlawful assembly and riot. The Judge, it is said, erred in failing to recognise, and give directions on, this additional element. 26. The prosecution’s position, adopted by the Judge in her directions to the jury and upheld by the Court of Appeal,[29] is that the prosecution has to prove that the defendant, assembled together with other persons, acted with a participatory intent, intending together with others assembled to behave in the prohibited manner or to commit or further the commission of the prohibited acts or breaches of the peace; but that there is no extraneous common purpose to be proved. 27. The competing arguments raise two questions: (i) What was the position regarding “common purpose” at common law? (ii) To what extent is the common law position still applicable after passage of the POO in 1967? B.1 Common purpose at common law 28. The common law authorities were in some disarray. Some, for instance, referred to the persons assembled having an extraneous common purpose but without necessarily suggesting that such a purpose was an essential ingredient of the offences. Their emphasis was rather on the use of unlawful means to achieve such purpose. 29. Thus, in R v Graham and Burns,[30] many persons assembled with the common purpose of holding a public meeting in Trafalgar Square to demand the release of certain Irish politicians, but the emphasis in Charles J’s direction to the jury (which has often been cited) was on the unlawfulness of the means adopted to pursue that objective: “It has not been suggested that the object of that meeting was not perfectly innocent. There is no doubt whatever that a meeting of British citizens can be held to protest, if they think fit, against the imprisonment of Mr O’Brien, but that is not the point… [The] question is, whether the mode in which it was attempted to assert the right of meeting in Trafalgar-square was or was not unlawful, that is the question you have to consider and decide.”[31] 30. In Field and Others v The Receiver of Metropolitan Police,[32] a number of youths conducted themselves in a disorderly way, pushing against a wall, leading to its collapse. As soon as it fell the caretaker of the premises came out into the street and the youths then dispersed in different directions. Phillimore and Bray JJ conducted a review of the early English authorities, including Lord Coke, Blackstone, Hawkins, Stephen and Lord Holt CJ which revealed markedly different views. Their Lordships concluded from the passages cited: “... that there are five necessary elements of a riot—(1.) number of persons, three at least; (2.) common purpose; (3.) execution or inception of the common purpose; (4.) an intent to help one another by force if necessary against any person who may oppose them in the execution of their common purpose; (5.) force or violence not merely used in demolishing, but displayed in such a manner as to alarm at least one person of reasonable firmness and courage.”[33] 31. Their Lordships therefore held that a riot required proof of a common purpose and its execution “or inception” (elements (2) and (3)). While they considered that there was evidence to justify the judge’s finding that those elements were satisfied, they commented that they “should not have found the same way.” However, the appeal was allowed on the basis that elements (4) and (5) had not been established. The youths had run away when the caretaker emerged so that there was no evidence of any “intent to help one another by force if necessary against any person who may oppose them in the execution of their common purpose”. [34] 32. In R v Caird,[35] the Cambridge riot might be said to have involved the extraneous common purpose of wrecking the restaurant and Greek-themed dinner for political motives. However, Sachs LJ stressed that what mattered was the violence of the protesters’ conduct: “When there is wanton and vicious violence of gross degree the Court is not concerned with whether it originates from gang rivalry or from political motives. It is the degree of mob violence that matters and the extent to which the public peace is being broken.”[36] 33. In R v John McKinsie Jones,[37] a case where picketers who were trying to force a work stoppage visited several different sites sequentially, James LJ stated: “The ingredients of the offence are (i) the actus reus of being or coming together—the assembly, and (ii) the mens rea involved in the intention of fulfilling a common purpose in such a manner as to endanger the public peace.” So again, while a common purpose was mentioned, it was the manner in which it was pursued, endangering the public peace, that was important. 34. McHugh JA (as His Honour then was) when sitting in the New South Wales Court of Appeal,[38] examined the English authorities and stated: “Despite the antiquity of the offence, the precise elements of the offence of riot are not settled. But there is almost unanimous agreement that an essential element is that the rioters must have an intention mutually to assist one another against any person who opposes them.”[39] 35. The mutual assistance element is derived from Hawkins, Pleas of the Crown (1st ed, 1716), Bk 1, p 155. The judgment holds that it was essential for the assembled persons to have a common purpose and an intention to render such mutual assistance: “... the authorities strongly support the proposition that it is an essential element in the offence of riot that each of the participants had the intention to help each other, by force if necessary, against any person who might oppose them in the execution of their common purpose. It necessarily follows that, if a number of persons are charged with the one offence of riot, they must have each had both a common purpose and an intention to help each other, by force if necessary, against any person who might oppose them in execution of that common purpose.”[40] 36. When the English Law Commission reported on Offences Relating to Public Order,[41] it stated, “There is no agreement as to precisely what constitutes an unlawful assembly” and counselled against relying on the authority of the older institutional writers. In relation to “common purpose”, they adopted the alternatives forming part of a working definition of the offence put forward by Smith & Hogan,[42] namely: “(1) An assembly of three or more persons; (2) a common purpose (a) to commit a crime of violence or (b) to achieve some other object, whether lawful or not, in such a way as to cause reasonable men to apprehend a breach of the peace.” 37. Subsequently, the common law offences of unlawful assembly and riot (as well as rout and affray) were abolished and replaced by new statutory offences under the Public Order Act 1986 in England and Wales. Notably, the offence of riot as defined by section 1 is differently structured from the offence under POO section 19 and expressly requires proof of a “common purpose” to be inferred from conduct.[43] B.2 “Common purpose” and sections 18 and 19 38. In our jurisdiction, statutory changes were introduced somewhat earlier by the Public Order Bill 1967 (“POB”).[44] At the Bill’s First Reading, the Attorney-General[45] explained that it was a codifying Bill, stating that it was: “... intended to be a comprehensive piece of legislation dealing with all aspects of public order ... [and] more than a mere consolidation of existing laws ... the opportunity [having] been taken to expand certain provisions and to fill in some gaps ...” He added: “Some of the requirements of the common law in relation to these offences were rather technical and ill-adapted to modern conditions. Although the basic principles of unlawful assembly and riot have been retained therefore certain modifications have been made.” 39. The Objects and Reasons of the Bill[46] make it clear that sections 18 and 19 “replace the common law” as part of the codification exercise. In particular, the intention is to eliminate any requirement for proof of a “common purpose”: “Clauses 18 and 19 introduce provisions dealing with unlawful assemblies and riots and replace the common law in this respect. The proposed statutory provisions are not identical with the common law, which is not adequate in certain respects for local circumstances. Firstly, there will no longer be the necessary element of common purpose before a crowd is an unlawful assembly or a riot. Secondly, an unlawful assembly will become a riot if any person taking part in the assembly commits a breach of the peace.” (Italics supplied) 40. The drafters of the POO were evidently aware of the uncertainties concerning the element of “common purpose” at common law. As we have seen, a common purpose – in the sense of an extraneous common purpose – is not one of the elements of either offence as presently enacted. The Objects and Reasons indicate that this was a deliberate feature of the codification. Thus, it is preferable not to refer to “common purpose” but to recognise instead the requirement of a participatory intent, reflecting the participatory nature of the two offences. It is in any event clear that no requirement for proof of an extraneous common purpose exists. 41. As previously noted, that was the approach to section 18 adopted by Lam JA (as Lam PJ then was) in SJ v Leung Kwok Wah.[47] His Lordship held that the elements of the offence reflected what he called the “corporate” nature of the offence: “... the conduct of the defendants had to be assessed together to see whether this criterion can be satisfied. There must be a sufficient nexus between the conduct of these defendants to justify having them considered together. And the fear required is that such persons so assembled, viz acting together, will commit a breach of the peace.”[48] 42. He added: “... if three persons in a lawful assembly committed acts of the prescribed nature at different parts of the place of assembly for different purposes, sparking off different incidents, involving and affecting an entirely different mix of persons, there would not be a sufficient nexus to turn these independent acts into an unlawful assembly of those three persons.”[49] 43. His Lordship was thus concerned with identifying the participatory requirements of unlawful assembly as a matter of statutory construction and held that the “corporate nature” of the offence entailed proof of a “common purpose” in the sense of what we have called a “participatory intent”. This is how his statement that “the requirement of having a common purpose in acting in the statutorily prescribed manner remains good law in dealing with a charge under s 18”[50] should be understood. He was certainly not suggesting that an additional element involving proof of an extraneous common purpose is required. 44. A Pang J below adopted the same approach, stating in her written directions that a necessary ingredient was that the relevant defendant “assembled together with those people for the common purpose of conducting themselves in a disorderly, intimidating, insulting or provocative manner”.[51] She was thus referring to an intention to take part in the unlawful assembly by doing the prohibited acts, not to an extraneous common purpose. 45. The Court of Appeal endorsed Lam JA’s approach[52] stating (in translation): “According to the true construction of s 18(1), the actus reus that constitutes unlawful assembly must have corporate nature to satisfy the requirement of offenders being jointly responsible. The offenders must have assembled together and conducted themselves in the manner prescribed in the ordinance when assembling. The offenders must have a common purpose so that the court can regard them as assembling to act together. Therefore, the requirement of having a common purpose is still applicable to s 18(1). In other words, the common law requirement of having a common purpose remains an ingredient of the offence of unlawful assembly under s 18(1).”[53] 46. The “common law requirement of having a common purpose” is clearly a reference to a participatory intent. The Court made this clear by adding: “... if the offenders just had the common purpose of conducting themselves in the prescribed manner, it is sufficient to satisfy the requirement of common purpose under s 18(1)”.[54] The Court was not endorsing an “extraneous common purpose”. Indeed, the submission that such a purpose is required was rejected as “completely wrong in law”.[55] 47. The foregoing analysis is equally applicable to the offence of riot. A defendant committing the offence must have a participatory intent. He or she must intend to take part in the riot along with other participants in the riotous assembly. No extraneous common purpose has to be shown. 48. The notion of an extraneous common purpose poses conceptual and practical problems. Rioters may nurture various purposes: to attack the police; to breach a police cordon so as to attack a target on the other side; to disrupt a transportation or other infrastructural system; to oppose a government policy; to cause a government minister to resign; and so forth. They might even be motivated to riot in return for payment by an instigator. Quite apart from the practical difficulties of proving that one or other purpose was shared by the defendants, arguments would arise as to how the extraneous common purpose should be formulated and as to whether motive has to be distinguished from purpose in this context. In contrast, proof of a defendant’s participatory intent may generally be inferred from his or her conduct. 49. Ms Li SC submitted that it is necessary to prove that a defendant took part in a particular unlawful or riotous assembly, sharing a specific extraneous common purpose with other participants in that peculiar assembly, such purpose and such assembly to be identified and spelt out in the indictment and distinguished from other unlawful or riotous assemblies pursuing different extraneous common purposes, forming part of the general mob. Those submissions are rejected. We have already excluded any requirement of proving an extraneous common purpose. Certainly nothing in the language or intent of sections 18 and 19 lends any support for the unworkable and unrealistic approach espoused by Counsel. 50. We would therefore answer Questions 1a and 1b in Annex 1, which postulate the possible requirement of an extraneous common purpose, in the negative. As to Question 1c, as explained above, the defendant must have a participatory intent, intending to participate in the unlawful assembly or riot in concert with other participants, being aware of their related prohibited conduct. We would answer Question 1d, which addresses what we have called a “mutual assistance” element, in the negative as it represents an aspect of the common law that is no longer applicable. C. Joint enterprise and sections 18 and 19 51. Question 2a in Annex 1 asks “Whether the doctrine of joint enterprise applies to the offences under sections 18 and 19 of the POO”. Question 1 in Annex 2 is to like effect. In answering those questions, it is important to note, as explained in HKSAR v Chan Kam Shing,[56] that the common law has developed two forms of the joint enterprise doctrine, referred to as the basic and extended forms. C.1 Basic Joint Enterprise (“BJE”) and Extended Joint Enterprise (“EJE”) 52. The basic form (which Lord Hoffmann called “the plain vanilla version of joint enterprise”[57]) – BJE – involves the co-adventurers simply agreeing to carry out and then executing a planned crime. It is taking part in this criminal joint enterprise that makes all participants guilty as principals, whoever the actual perpetrator(s) of the actus reus might have been. Such liability is independently based on each defendant’s participation in the joint criminal enterprise with the requisite mental state to constitute the offence relevant to the defendant in question.[58] The doctrine is especially efficacious in dealing with situations of evidential uncertainty where, for instance, it is clear that A and B agreed to carry out a murder but it is unclear whether A or B actually struck the fatal blow. Of course, if it is known that both A and B struck the blows which cumulatively killed the victim, they would be jointly guilty of murder as principals. And if it was known that A did the killing while B was present and helped or encouraged A to do it, B would be guilty on the basis of secondary liability as an aider and abettor.[59] And if the agreement to commit the murder is proved, both are liable as conspirators. 53. The extended version of joint enterprise – EJE – addresses the situation where certain defendants (say A, B and C) agree on a certain BJE but, where in the course of carrying out the agreed plan (say, a burglary), one of them (say A) commits a more serious offence (say, murder). The common law (as applied in Hong Kong)[60] holds that B and C are equally guilty of A’s crime on the basis of EJE if it is proved that A’s commission of the further offence (if murder, meaning his acting with intent to kill or at least to cause grievous bodily harm) was foreseen by them as a possible incident of the execution of their planned joint enterprise. 54. As was pointed out in Chan Kam Shing,[61] the joint enterprise doctrine operates alongside the traditional accessorial liability principles. Thus, CPO section 89 makes any person who aids, abets, counsels or procures the commission by another person of any offence guilty of the like offence and so punishable to a like extent. The joint enterprise doctrine also operates alongside the principles relating to inchoate liability for conspiracy, incitement and attempt which are also punishable to the like extent as the principal offences.[62] 55. In examining how far the joint enterprise doctrine applies to unlawful assembly and riot, two questions arise in the present context: (i) is the doctrine invoked in the courts below the BJE or the EJE form of the doctrine? (ii) What consequences does the prosecution allege to flow from application of the doctrine to unlawful assembly and riot? C.2 The Judge’s summing-up and the Court of Appeal’s decision in the Lo Case 56. The trial Judge summed up for the jury on the footing that the defendants could be convicted on the basis of joint enterprise and elaborated as follows (in translation): “If two or more people commit criminal offences together, as mentioned before, but I read out once again, even if each person assumes a different role, if they act in accordance with a common criminal enterprise or agreement, each shall be guilty. Similarly, the words ‘plan’ and ‘agreement’ do not mean that there has to be any formality about it. An agreement commit an offence may arise on the spur of the moment. Nothing needs be said at all. It can be made with a nod and a wink, or a knowing look, or it can be inferred from the behaviour of the parties. The essence of the joint culpability for a criminal offence is that each defendant shares a common intention to commit the offence and played his part in it (however great or small) so as to achieve that common object. In other words, the prosecution alleged in his case that with regard to Counts 3 and 4, they said that the defendant in question committed the offence of riot together with the other defendants listed in the charges.” 57. And in relation to riot, in her written directions, her Ladyship stated: “Where a criminal offence is committed by two or more persons, even if each of them may play a different part, but where they are acting together as part of a joint plan or agreement to commit the offence, each one of them is guilty.”[63] 58. The Judge’s direction therefore concerned a BJE involving participation in an unlawful or riotous assembly. 59. In the Court of Appeal, the focus was on an alleged misdirection on “common purpose”[64] and the Court did not comment on the applicability of the doctrine of joint enterprise while upholding the conviction. It therefore implicitly accepted that the BJE doctrine applies to sections 18 and 19. C.3 The decisions of the Judge and the Court of Appeal in the Tong Case 60. The issue was directly addressed both at first instance and in the Court of Appeal in the Tong Case. The Judge had acquitted the defendants, declining to find by inference that they had been physically present and either taking part in the riot in person or encouraging others who were committing the offence. His Honour also rejected the prosecution’s contention that even if the defendants were not present as part of the said assembly, they should be convicted as participants in a joint enterprise with other rioters. He held that the doctrine was excluded as a matter of statutory construction.[65] As we have seen, this caused the Secretary for Justice to submit questions for the opinion of the Court of Appeal now reproduced in Annex 2 of this judgment. The objective of the Secretary for Justice was to establish that, by operation of the joint enterprise doctrine, it is possible to fix a defendant with liability for riot as principal without that person being present at the scene of the riot. 61. Poon CJHC, with whom the other members of the Court of Appeal agreed, held that Questions 1 and 2 should be answered in the affirmative, taking the view that the joint enterprise doctrine filled what would otherwise be a significant gap in the law of unlawful assembly and riot. He was particularly anxious to hold that persons who played important roles in unlawful assemblies and riots while not physically present at the scene of the criminal assembly should not escape liability: “... unlawful assemblies and riots nowadays are highly fluid in nature. They involve a myriad of participants playing various roles and sometimes with a rather sophisticated division of labour among them. Some physically participate in the unlawful assembly or riot at the scene. Some aid or abet the participants at the scene. Some may not even be present but are clearly participants under the doctrine of joint enterprise. Take the following examples: (1) A mastermind of the unlawful assembly or riot who remotely oversees the situation and gives commands or directions to the participants on the ground. (2) A person who funds or provides materials for the unlawful assembly or riot. (3) A person who encourages or promotes the unlawful assembly or riot by making telephone calls or spreading messages on social media. (4) A person who provides back-up support to the participants in the vicinity of the scene, such as collecting gear, bricks, petrol bombs, other weapons, and other materials to be used by the participants. (5) A lookout stationed in the vicinity who alerts the participants to the advance or deployment of the police. (6) A person who drives a getaway car to allow the participants to leave the scene.”[66] 62. It is evident that Poon CJHC was, like the trial Judge in the Lo Case, referring to the BJE form of the doctrine. The only offences under consideration were the offences of unlawful assembly or riot. No one was seeking to charge any of the participants with a more serious offence committed in the course of their agreed criminal venture so that no question of EJE arose. C.4 On the applicability of the joint enterprise doctrine 63. In our view: (a) On a proper construction of sections 18 and 19 of the POO, the joint enterprise doctrine is not applicable as a basis for fixing a defendant with liability for the offences of riot or unlawful assembly as a principal if he or she was not present at the scene and was not taking part in the criminal assembly. (“The absence point”) (b) On their true construction, POO sections 18 and 19 leave no room for operation of the common law doctrine in its BJE form because the statutory language renders that doctrine otiose and its application would give rise to duplication and possible confusion regarding the central actus reus element of “taking part” in the criminal assembly. (“The taking part point”) (c) The EJE form of the doctrine may be applicable if certain participants in the unlawful assembly or riot can be proved to have foreseen commission by one or more of their number of a more serious offence as a possible incident of the execution of their planned joint participation in the unlawful assembly or riot. (“The EJE point”) (d) The foregoing propositions do not affect potential secondary or inchoate liability for offences under sections 18 or 19 of persons who are not present at the scene. C.5 The absence point 64. The issue here is whether a defendant who is absent and so does not take part in the unlawful or riotous assembly together with others so assembled, can be found guilty of unlawful assembly or riot as a principal offender on the basis of the BJE doctrine. As noted previously, the Court of Appeal in both the Lo Case[67] and the Tong Case[68] omitted reference to the centrally important actus reus element of “taking part” in sections 18 and 19. That resulted in focus on the participatory nature of the offences being lost. 65. As analysed in Sections A.1 to A.3 of this judgment, guilt as a principal offender requires proof that the defendant engaged collectively with other participants in or in furtherance of the prohibited conduct or breaches of the peace. The Ordinance defines participatory offences requiring a defendant not just to “take part”, but to do so as part of an “assembly”, as a person “assembled together” with others taking part. Thus, its language imports a requirement of presence at the scene before one can be held guilty as a principal offender. Such a statutory requirement cannot be displaced by the common law BJE doctrine. The proposition that at common law, a defendant may in certain circumstances be held guilty as a principal according to his own mens rea even though he was not present at the scene where the actus reus was committed only holds good where operation of that doctrine is not excluded by inconsistent statutory provisions. In Chan Kam Shing[69] and Sze Kwan Lung[70] the doctrine was applicable since the substantive offences involved were murder and manslaughter and not statutory offences requiring presence at the scene. C.6 The taking part point 66. This point, which concerns the applicability of the joint enterprise doctrine where the defendant is present at the scene, also flows from recognising the centrality of “taking part” as the actus reus of both offences. Since, as we have just seen, the offences under sections 18 and 19 require proof of the defendant taking part in the disorderly or riotous conduct in common with the other persons assembled, it is otiose and confusing to introduce as a requirement, a prior layer of common intention and collective conduct which merely mirrors the statutory requirement of “taking part”. 67. As noted above, a BJE involves the co-adventurers agreeing to carry out and then executing a planned crime. With the offences of unlawful assembly and riot, proving that the defendants executed their plan would provide proof of their “taking part” in the unlawful assembly or riot and thus establish guilt of the statutory offences, without any need to pray in aid the doctrine of joint enterprise. Their participatory intent would be inferred from their prohibited conduct while assembled together, so from the prosecution’s viewpoint, invoking the BJE doctrine would add the unwarranted burden of showing a prior agreement. From the trial Judge’s point of view, jettisoning BJE in this context would avoid possibly confusing the jury by trying to explain two layers of “taking part” – first in the joint enterprise and then in the unlawful or riotous assembly. 68. This analysis does not leave any gap. As was pointed out in Chan Kam Shing,[71] while a principal carries out the prohibited conduct with the necessary mens rea and an aider and abettor is one who is present and renders assistance or encouragement to the principal in the commission of the offence, liability as a counsellor or procurer does not require the defendant’s presence at the scene: “A person who counsels or procures an offence (referred to also as an accessory before the fact) is not present but provides assistance or encouragement prior to the commission of the offence. Such a person performs the actus reus of ‘procuring’ an offence ‘by setting out to see that it happens and taking the appropriate steps to produce that happening’. A person ‘counsels’ an offence by soliciting or encouraging its commission.”[72] Nor does a defendant who commits the inchoate offence of conspiracy or incitement have to be present at the scene where the principal offence is committed. 69. Thus, to take the examples given by Poon CJHC:[73] The “mastermind” who remotely oversees the situation and gives commands or directions to the participants on the ground would be guilty of incitement or as counsellor and procurer of the criminal assembly. So would the persons who fund or provide materials for the unlawful assembly or riot; or who encourage or promote it on social media. Those who provide back-up support to the participants in the vicinity of the scene, collecting bricks, petrol bombs and other weapons; or who act as lookouts in the vicinity of the riot may either be “taking part” as principals under the POO or liable as aiders and abettors if present at the scene; or, if not present, liable as counsellors or procurers. The culpability of the person who drives a getaway car to help participants leave the scene is likely to include liability for assisting an offender under section 90 of the CPO.[74] 70. There is accordingly no lacuna.[75] Public order can be fully enforced relying on secondary liability and inchoate offences, consistently with the true construction of the statutory offences and without stretching the concept of being “assembled together” beyond its proper limits. As previously pointed out, persons so convicted as accessories or for inchoate crimes are punishable to a like extent as principal offenders.[76] C.7 The EJE point 71. The difficulties associated with applying the BJE doctrine to unlawful assembly or riot do not arise in relation to EJE. There is no duplication or confusion since the liability based on the EJE doctrine relates to the further offence committed in execution of the plan and not just to taking part in the criminal assembly in question. 72. To take a hypothetical example, A, B and C may be among numerous other persons taking part in a riot (satisfying all the statutory elements of the offence) and C then proceeds to commit a further offence – say, of murder, by deliberately stabbing someone to death. If A and B are shown to have participated with C in the riot and foreseen that C might commit murder, meaning his assaulting a victim with intent to kill or with intent to cause grievous bodily harm as a possible incident of the execution of their planned participation in the riot, they could be found guilty of murder on the EJE basis. 73. The point does not arise in the present case since no EJE case is sought to be made against Lo. It is however not an unrealistic consideration. It might, for instance, be possible to prove that a group of persons agreed to take part together in a riot, intending to destroy public property and to erect barriers stopping traffic, while knowing that some amongst them would take along petrol bombs or potentially lethal weapons which they might use. If they proceeded with their plan and the petrol bombs or other weapons were then used to cause serious injury, the EJE doctrine might apply to fix the rioters who foresaw the intentional infliction of such injury as a possible incident of the execution of their agreed plan with liability for the more serious offence. C.8 Presence and the location and scope of the assembly 74. The Court noted in Kwok Wing Hang v Chief Executive in Council,[77] that at the height of the disturbances in 2019: “The frequency of outbreaks of violent protests increased and the locations at which they took place also spread from one or two areas to become a phenomenon described colloquially as ‘blossoming everywhere’in which multiple outbreaks of violence happened simultaneously on Hong Kong Island, in Kowloon and in the New Territories.” 75. And as Poon CJHC observed in the Tong Case:[78] “... unlawful assemblies and riots nowadays are highly fluid in nature.” He pointed to participants assuming different roles and communicating with each other using their phones and on social media. Offenders could not be expected to be assembled as a stationary group with a fixed membership in a single location. Participants would move around in varying groups along main thoroughfares, running into side streets and buildings, spreading out and re-coalescing whether in response to action by the police, in pursuit of different targets or for other reasons. Violence would periodically flare up and die down. Participants would often be in communication with each other, coordinating their activities. 76. It will be necessary in each case for the tribunal to determine where and when an unlawful assembly or riot took place and whether a defendant, if charged as a principal, was present and took part. However, the abovementioned fluidity should be taken into account and an overly rigid view should not be taken of what constitutes the assembly, its location and duration. Evidence regarding the geographical area affected, the conduct of and communications maintained among the participants and the duration of the disturbances should be considered as a whole. The defendant’s role in the assembly, if any, should be considered for the purposes of assessing his or her potential principal, accessorial or inchoate liability. 77. A realistic view should be taken of the duration of the unlawful assembly or riot. So long as three or more participants remain actively engaged in the criminal assembly (not necessarily including the constituent offenders establishing the unlawful assembly nor the person or persons whose breach or breaches of the peace transformed the unlawful assembly into a riot – they may have left), the unlawful assembly or riot remains in being as a matter of law. Such an assembly remains in being as long as the participants remain at the scene even if, in the case of a riot, the violence ebbs and flows. Any person taking part in such a riotous assembly commits the offence. 78. The focus should be on whether the evidence directly proves or supports an irresistible inference that the defendant had taken part in the unlawful assembly or riot. Evidence which might support such an inference could include such matters as the time and place of arrest and items found on the defendant, such as a helmet, body armour, goggles, a respirator, a radio transceiver, plastic ties, laser pointers, weapons and materials to make weapons such as petrol bombs which might have been used by those taking part in the criminal assembly. Such fluidity and the basis of the defendant’s alleged liability should also be borne in mind in the drafting of the charge, catering for alternative possibilities. D. Encouragement 79. Question 2d in Annex 1 asks whether a person can be found guilty of riot “without specific conduct on his part falling under the prescribed conduct provided in sections 18 and 19”, but “merely by virtue of alleged encouragement through his presence”. 80. In her directions to the jury, the Judge stated (in translation): “... mere presence at the scene of crime is not enough to prove guilt. But if you are sure that a particular defendant was at the scene, deliberately by his [mere] presence tried to and did encourage the others to use violent [sic] or threaten to use violence; or if you are sure that his presence at the scene was for playing his role in achieving the purpose of committing riot as jointly agreed by him and other defendants, then he (that is, the defendant) is guilty.” The second occurrence of the word “mere” does not represent a correct translation of the original Chinese and is ignored. 81. It is obviously important to avoid treating innocent passers-by who find themselves caught up in an unlawful assembly or riot as guilty of an offence just because they were present at the scene. Presence at the scene in itself is not enough to constitute “taking part” or aiding and abetting.[79] As the Queensland Court of Appeal held in R v Cook,[80] at common law, mere presence in an unlawful assembly or riot is generally insufficient to found liability. It has traditionally been considered necessary that there be some intentional activity in furtherance of the riot.[81] 82. That is not to say that the bar is set high. It does not take a great deal of activity on the defendant’s part to move the case from the “mere presence” to the “encouragement” category. Thus, in 1810, Mansfield CJ stated in Clifford v Brandon:[82] “The law is, that if any person encourages or promotes, or takes part in riots, whether by words, signs, or gestures, or by wearing the badge or ensign of the rioters, he is himself to be considered a rioter, and he is liable to be arrested for a breach of the peace.” 83. This was echoed more recently in Caird,[83]where Sachs LJ said: “It is the law … that any person who actively encourages or promotes an unlawful assembly or riot, whether by words, by signs or by actions, or who participates in it, is guilty of an offence which derives its great gravity from the simple fact that the persons concerned were acting in numbers and using those numbers to achieve their purpose.” 84. And as Byrne J stated in R v Cook:[84] “Generally, mere presence at the scene of a crime does not involve criminal responsibility. But presence to facilitate the commission of an offence by others has every potential to attract criminal responsibility under s 7 [of the Criminal Code (Qld)]. And so those present to ‘lend the courage of their presence to the rioters, or to assist, if necessary’ may be guilty with the active participants.” 85. Whether a defendant has done enough to constitute “taking part”, especially if by way of encouragement, is a matter of fact and degree, taking all the circumstances into account. 86. Question 2d contains certain rolled-up propositions. Aiders and abettors or counsellors and procurers may obviously perform acts which are not themselves acts of disorderly conduct or breaches of the peace but which offer encouragement or assistance to others in the commission of such acts, thus founding secondary liability (or, as previously explained, possibly also liability as principals for “taking part”). Thus, if the defendant’s presence occurs in circumstances qualifying it as “encouragement” of the prohibited conduct by others, then the answer to Question 2d would be in the affirmative. But mere presence without more is not treated as encouragement, whether for the purpose of “taking part”, or accessorial or inchoate liability. 87. In her summing-up (including in her written directions), the Judge did on a number of occasions correctly direct the jury that their task was to decide whether the appellant had taken part in the riot, coupled with the requirement of a “common purpose” in the sense of a participatory intent discussed above. The case against Lo was that he was a principal offender who had repeatedly performed acts amounting to breaches of the peace. He was not just an innocent by-stander nor even someone who had merely encouraged others. The appellant’s defence was that he had been misidentified, a defence which the jury plainly rejected. E. Breach of the peace 88. As we have seen, breaches of the peace are the distinguishing feature of a riot. In this jurisdiction, R v Howell[85] has often been cited as authority for what constitutes such a breach. Watkins LJ there stated: “... there is a breach of the peace whenever harm is actually done or is likely to be done to a person or in his presence to his property or a person is in fear of being so harmed through an assault, an affray, a riot, unlawful assembly or other disturbance. It is for this breach of the peace when done in his presence or the reasonable apprehension of it taking place that a constable, or anyone else, may arrest an offender without warrant.”[86] 89. With its focus on an act which actually harms a person, or in his presence, harms his property, or is likely to cause such harm, etc, this appears to be a markedly narrow formulation. In recent experience, rioters have often engaged in wanton damage to property which is not privately owned and not done in the presence of the owner – such as tearing down road railings to make barriers, digging up bricks to use as projectiles, smashing traffic lights, damaging CCTV cameras, throwing Molotov cocktails into Mass Transit Railway stations and vandalising shops identified with persons of opposing political views. Such acts often occurred in the middle of the night when the premises were closed and no owner was present. Plainly, such conduct also constitutes breaches of the peace. 90. In R (Laporte) v Chief Constable of Gloucestershire,[87]Lord Bingham of Cornhill put the proposition derived from Howell more widely, stating that “the essence of the concept was to be found in violence or threatened violence”. We would adopt that as a general approach to the phrase “breach of the peace” in the context of section 19. Someone who commits or threatens an act of violence against another person or another’s property or acts so that such violence may reasonably be apprehended, commits a breach of the peace. 91. As is apparent from the passage cited above, Watkins LJ’s statement in Howell was made in affirming the existence of a common law power of arrest without warrant. His reason for referring to the presence of the person apprehending a breach of the peace is indicated as follows (especially in the words italicised): “... even in these days when affrays, riotous behaviour and other disturbances happen all too frequently, we cannot accept that there can be a breach of the peace unless there has been an act done or threatened to be done which either actually harms a person, or in his presence his property, or is likely to cause such harm, or which puts someone in fear of such harm being done. There is nothing more likely to arouse resentment and anger in him, and a desire to take instant revenge, than attacks or threatened attacks upon a person’s body or property.”[88] 92. Thus, the power of arrest, based on an apprehended breach of the peace, was held to arise so that such situations could be prevented from deteriorating into public disorder involving provoked retaliation by persons present and feeling threatened in respect of their persons or property. 93. In POO sections 18 and 19, that policy consideration is covered by element [4]. Conduct prohibited under section 18(1) includes conduct which would “provoke other persons to commit a breach of the peace”. Thus, the concept of a “breach of the peace” in sections 18 and 19 includes, but is not confined to, situations which might give rise to provoked retaliation as envisaged in Howell. In cases involving actual or threatened violence to property, the owner of such property need not be present for there to be a breach of the peace. F. Substantial and grave injustice: non-conviction of the named co-defendants 94. The indictment against Lo alleged that: "LEUNG Tin-kei, LEE Nok-man, LO Kin-man [the appellant] and LAM Ngo-hin, between the 8th day of February, 2016 and the 9th day of February, 2016, at Portland Street, Mong Kok, Kowloon, in Hong Kong, took part in a riot.” 95. Where justified by the evidence, it is common (and good practice) to add the allegation that the defendant’s participation in the unlawful assembly or riot was also “with persons unknown” or “with persons not before the court”. That was not done in Lo’s case and, at the end of the trial, while he was convicted, the jury were unable to reach a verdict in respect of the other three named defendants. Since the offence requires proof of the collective action of at least three persons assembled together as a constituent element, it was a material irregularity to convict the appellant alone without an averment in the indictment regarding the existence of other constituent offenders. Lo argues that this amounted to such a substantial and grave injustice as to require the quashing of his conviction. 96. Such a situation was addressed by the English Court of Appeal in R v Abdul Mahroof,[89] where the appellant was charged with two others (named Biney and Sayers) with violent disorder contrary to section 2 of the Public Order Act 1986, an offence which is constituted “Where three or more persons who are present together use or threaten unlawful violence and the conduct of them (taken together) is such as would cause a person of reasonable firmness present at the scene to fear for his personal safety ...”. 97. The facts were decidedly different from the present case. The evidence was that the appellant and Sayers went to Biney’s home to confront him about a debt he owed the appellant. The threatened violence was alleged only to involve those three men, they being the only persons named in the indictment as participants. A witness testified that there were also two other persons present but they “appeared to be on the fringe of the argument by just adding the odd word during the argument”.[90] The jury acquitted Biney and Sayers, and the question arose whether, given the elements of the offence, the appellant could nonetheless be convicted on his own. 98. On this issue, the Lord Chief Justice stated: “... the question comes down to this: Was it a sufficient allegation in the indictment if no mention was made in the indictment of any other potential participant except the three men, namely, Biney, Mahroof and Sayers? ... It seems to us that the answer to that, and as a consequence the answer to the certified question, is ‘Yes, subject to two very important qualifications’: first of all, that there is evidence before the jury that there were three people involved in the criminal behaviour, though not necessarily those named in the indictment; secondly, that the defence are apprised of what it is they have to meet.”[91] 99. The Court held that it was a material irregularity to convict the appellant in the circumstances. Application of the proviso was considered but, on the facts described above, the Court felt unable to say that there was no miscarriage of justice. The only other persons who might have supplied the needed three participants were the two men at the fringes of the argument, offering little basis on the evidence for being treated as constituent offenders under section 2. The Court decided instead to substitute a conviction for an offence that did not depend on the participation of others. 100. The circumstances of Lo’s case are very different. It is important to note that the guilt of a defendant charged under POO sections 18 or 19 is not dependent on the conviction of anyone else. The prosecution must prove that he or she took part in the criminal assembly which was constituted by at least three persons. If the evidence is incontrovertible that there was such a criminal assembly and that the defendant took part in it with the necessary participatory intent, the elements of the offence are proved and the fact that no one else was charged or convicted, including the only persons named as co-participants, does not exonerate the defendant. In cases where the defendant is convicted but not the only other alleged participants, the failure to include a reference in the indictment to “persons unknown” or “persons not before the court” as co-participants is a material irregularity but by no means necessarily fatal to the prosecution. 101. There was undoubtedly evidence before the jury in the present case that there were at least three persons other than his co-defendants who had taken part in the criminal assembly in which Lo had participated. Thus, the Court of Appeal noted that some 500 people gathered on Portland Street that night behaving in a riotous manner[92] and considered it incontrovertible that Lo (referred to as the 2nd applicant) directly took part in the riot: “The 2nd applicant appeared in Portland Street back at around 9 o’clock in that evening, assisting the hawkers to push hawker trolleys out to the pavement; and subsequently he together with others scolded the FEHD staff and obstructed the police in the investigation of the taxi incident. Police officers testified that they witnessed the 2nd applicant twice throwing objects from the crowd to the police line. The footage produced in court also showed that the 2nd applicant at later stages threw objects to the police line and picked up mud and sand from the ground to attack the police for a total of 11 times.”[93] 102. The evidence of the mob’s activity was described in detail, the Court of Appeal observing[94] that: “The trial judge took into consideration that there were some 500 people gathering on Portland Street, and that the crowd confronted the police for almost four hours, threw objects at the police line, splashed liquid in front of the police line and put up resistance by holding weapons, and also that a police officer was persistently kicked on his head after being pushed to the ground. Moreover, the case happened in a very crowded area of the city on the night of Lunar New Year Day. The violence involved caused extreme danger to the safety of citizens. In the course of it, someone was hit by a concrete slab thrown out, immediately fell onto the ground and lost consciousness. Someone was injured and bled as a result of being struck by a brick. The trial judge found the violence on Portland Street to be of large scale and extremely serious.” 103. The trial Judge’s written directions required the jury to be sure that Lo did take part in an unlawful assembly and a riot involving “3 or more than 3 persons assembled together”, not limited to his named co-defendants. Her Ladyship expanded on this in her oral directions: “The third point is in relation to Count 3 we reviewed yesterday, namely the riot on Portland Street where [Lo] was involved. You will remember what I said. I said that the prosecution relied on the scene, the situation at the scene, the number and state of the crowd and the behaviour of [Lo] etc. to prove the first element of the offence of unlawful assembly ... Of course, the prosecution case, as I said, was to look at the overall situation on Portland Street, the number of people, and the actions of [Lo], etc. that night. He asked us to infer that at Portland Street that night [Lo] did take part in an unlawful assembly.” 104. It was on this basis that the Court of Appeal noted that in sentencing Lo, “the trial Judge held that he “had been actively taking part in the riot of Charge 3”.[95] There was thus ample evidence for the jury to be satisfied of Lo’s participation and so for the first condition referred to in R v Abdul Mahroof to be met. 105. There can also be no doubt that Lo was fully aware that the case against him was of his participation in the riot in Portland Street over some six hours, culminating in his arrest at about 3:00 am. He knew that the prosecution case, based on video footage, was that he had, among other things, on eleven occasions in the course of the riot, thrown objects at the police. He denied having done this, his defence being one of misidentification. But the jury obviously found the case against him proved beyond reasonable doubt. 106. Ms Li SC relied on R v Worton,[96] a case involving a fight in a public house, where the English Court of Appeal held that the two Mahroof conditions had been satisfied but, Lloyd LJ, giving judgment for the Court, went on to say: “In cases of this kind, where there are only three defendants accused of violent disorder, it is not in our view sufficient that the offence should be defined in general terms, as it was here. It is necessary that the Judge should go on and warn the jury specifically that if any one of the three defendants should be acquitted of violent disorder, then they must necessarily acquit the other two, unless satisfied that some other person not charged was taking part in the violent disorder. This the recorder in the present case never did.”[97] 107. While holding that a direction in the aforesaid terms is necessary, it is clear that Lloyd LJ was not ruling out application of the proviso in cases where that direction is not given. Thus he noted that the prosecution had invited the Court to apply the proviso but declined that invitation on the basis that “... we cannot be convinced that the jury would necessarily have reached the same result if they had been given a full and proper direction.”[98] 108. In the present case, in the light of the evidence described above, we are satisfied that the jury plainly would have reached the same conclusion if fully directed so that application of the proviso is appropriate. The case for quashing the conviction on the basis of substantial and grave injustice is not made out. G. Conclusions and disposition of the appeals 109. We summarise our conclusions as follows: (a) POO section 18 defines the elements which constitute an unlawful assembly and makes “taking part” in the unlawful assembly so constituted the actus reus of the offence. The constituent elements are for three or more persons assembled together to conduct themselves in the prohibited disorderly, etc, manner intended or likely to cause a reasonable apprehension that the persons so assembled will commit or provoke a breach of the peace. Any person who takes part in an unlawful assembly commits the offence. (b) POO section 19 builds on section 18, making the existence of an unlawful assembly one of the constituent elements of the offence of riot. A riot comes into being when any person taking part in an unlawful assembly commits a breach of the peace, turning the assembly into a riotous assembly. The offence is committed by any person who takes part in a riot so constituted. (c) Both offences are participatory in nature. The defendant must be shown not just to have been acting alone but to have taken part in the unlawful or riotous assembly, acting together with others so assembled, being aware of their related conduct and with the intention of so taking part, ie, with a participatory intent. There is no requirement for the persons taking part to share some extraneous common purpose. (d) To “take part” in the relevant criminal assembly, the accused must perform the acts prohibited, ie, by behaving in the prohibited disorderly, etc fashion (section 18); or committing a breach of the peace (section 19); or acting in furtherance of such prohibited conduct by facilitating, assisting or encouraging those taking part in the criminal assembly. (e) Mere presence at the scene of an unlawful or riotous assembly does not give rise to criminal liability. However, if the accused, being present, provides encouragement by words, signs or actions, he or she may be held to be “taking part” and guilty as a principal or held to be an aider and abettor. In deciding whether a defendant was present at the scene, the court should take into account the possible fluidity of the criminal assembly and the communications maintained by participants with each other in ascertaining the time, place and scope of the assembly in question. (f) To be guilty as principal offender under section 18 or 19, the defendant must be present at the scene, taking part in the unlawful or riotous assembly together with others so assembled. However, a person who promotes or acts in furtherance of an unlawful assembly or riot while not present at the scene may be guilty as a counsellor and procurer of the relevant offence or guilty of conspiracy or incitement to commit such offence and would be punishable to a like extent as the principal offender. Moreover, a person who assists an offender is liable under section 90 of the CPO. (g) The common law doctrine of joint enterprise in its basic form cannot operate in a manner inconsistent with the statutory language. It cannot be relied on to fix liability as a principal offender on a defendant who was not present and not acting as part of an assembly together with others so assembled, as required by the two sections. Even in cases where the defendant is present at the scene, the basic joint enterprise doctrine is inapplicable, being otiose and liable to cause confusion, since the actus reus of each of the statutory offences already involves “taking part” with others assembled together. (h) The inapplicability of the basic joint enterprise doctrine does not leave any gap since culpable conduct of absent defendants who engage in promoting or acting in furtherance of a criminal assembly is covered by secondary and inchoate liability offences. In given circumstances, the extended form of joint enterprise may operate to fix participants with liability for more serious offences committed in executing their joint plan. (i) “Breach of the peace” in the context of sections 18 and 19 includes, but is not confined to, situations which might give rise to provoked retaliation. It extends to cases involving actual or threatened violence to persons or property, without any need for the owner of such property to be present. (j) In drafting an indictment alleging unlawful assembly or riot against a defendant, it is good practice to allege, where the evidence permits, participation by other persons unknown. Failure to do so may be a material irregularity where the defendant is convicted but not the only other named defendants so that the requirement of 3 or more constituent offenders may not be met. In such cases, the question whether the proviso should be applied depends on whether the evidence plainly establishes that there were at least three persons involved in the criminal assembly in which the defendant took part and on whether the defendant fairly knew the case he or she had to meet. 110. Lo’s appeal must be dismissed. The ground of appeal[99] based on the submission that the Judge had erred in not requiring the jury to find an extraneous common purpose has been rejected.[100] The other grounds, reflected in the other questions in Annex 1 have little bearing on Lo’s case. While the trial Judge erroneously considered joint enterprise applicable, this had no practical effect in Lo’s case since his conviction does not depend on application of that doctrine. Nor was it alleged against him that he was guilty by having encouraged others by his presence.[101] The case against him, amply supported by the evidence and properly dealt with in the summing-up, was that he was present and actively took part in the riot over several hours. We have held that the content of the indictment and non-conviction of the other named defendants constituted a material irregularity but that this is a clear case for application of the proviso. 111. The Tong Case comes to this Court via a reference under CPO section 81D to the Court of Appeal on two questions of law. Since, by virtue of section 81D(4), such a reference does not affect Tong’s acquittal, the issues before this Court are confined to the questions of law set out in Annex 2. It is unnecessary and would be inappropriate to conduct a review of the trial Judge’s findings of fact. In answer to Question 1, we have held that BJE is inapplicable but that, in given circumstances, EJE may be applicable. As to Question 2, we have held that the doctrine attributing liability as a principal offender to a defendant who is absent by application of the BJE doctrine is inapplicable as inconsistent with the statutory language. We have emphasised that a defendant who promotes or acts in furtherance of an unlawful assembly or riot while not present at the scene may be liable as a secondary party or as a conspirator or inciter of the main offence and punishable to the same extent. We have also dealt with the effect of mere presence and what constitutes encouragement in the present context.[102] We have accordingly addressed the questions set out in Annex 2 and so disposed of Tong’s appeal. There is no need for any consequential orders to be made. FACC 6/2021 Ms Gladys Li SC and Mr Lawrence Lau (both assigned by the Director of Legal Aid), Mr Kin Lau and Mr Jason Ko (both on a pro bono basis), instructed by Bond Ng Solicitors, for the Appellant Mr Anthony Chau, DDPP(Ag), Mr Ivan Cheung, SPP, Ms Karen Ng, PP and Mr Wilson Lam, PP, of the Department of Justice, for the Respondent FACC 7/2021 Mr Philip Dykes SC, Mr Hectar Pun SC, Mr Anson Wong Yu Yat and Ms Ferrida Chan, instructed by S. T. Cheng & Co, for the Appellant Mr Anthony Chau, DDPP(Ag), Mr Ivan Cheung, SPP, Ms Karen Ng, PP and Mr Wilson Lam, PP, of the Department of Justice, for the Respondent Annex 1 Question 1a In order to establish the offence of riot under section 19 of the Public Order Ordinance (Cap 245) (“POO”), whether proof of the unlawful assembly required that at least 3 persons be assembled together for a “common purpose” which was distinct from the intention of committing the statutorily prescribed acts, namely, conducting oneself in a disorderly, intimidating, insulting or provocative manner; and therefore whether the Trial Judge had erred in law in directing the jury that the element of “common purpose” is satisfied if they are satisfied that the Applicant assembling together with other defendants had the intention of conducting themselves in a disorderly, intimidating, insulting or provocative manner? Question 1b If the answer to Question 1a is in the affirmative, whether there is a legal requirement that the said prescribed acts and the breach of the peace must be committed with the specific intent to achieve the “common purpose” by such means? Question 1c For the common purpose to be a substantive element in the offence of riot, whether the Prosecution is required legally to prove that such alleged common purpose must be shared, mutually understood or communicated between the accused to a standard that there is a meeting of minds, or the Prosecution is simply required to prove that the same purpose was held individually by the accused without the need to prove further mutual understanding or communication? Question 1d Whether it is a distinct element of riot under section 19 of POO that the defendants must have the mutual intention to assist each other, by force if necessary, against any person who might oppose them in the execution of the common purpose? Question 2a Whether the doctrine of joint enterprise applies to the offences under sections 18 and 19 of the POO? Question 2d Whether a person could be found guilty of riot without specific conduct on his part falling under the prescribed conduct provided in sections 18 and 19, but merely by virtue of alleged encouragement through his presence? On the substantial and grave injustice ground, whether a material irregularity arises in that the indictment does not mention any potential participants other than the co-defendants who were not convicted. Annex 2 Question 1 (1) “For the offences of unlawful assembly and riot respectively under sections 18 and 19 of the Public Order Ordinance, Cap 245, whether the common law doctrine of joint enterprise as elucidated in HKSAR v Chan Kam Shing (2016) 19 HKCFAR 640 is applicable?” (“Question 1”), and Question 2 (2) “If Question 1 is answered in the affirmative, for the offences of unlawful assembly and riot, whether the principle that a defendant’s presence at the scene is not always necessary for criminal liability under the common law doctrine of joint enterprise as enunciated in Sze Kwan Lung & Others v HKSAR (2004) 7 HKCFAR 475 is applicable?” (“Question 2”) [1] Cap 245. [2] HCCC 408/2016 (18 May 2018). [3] Poon CJHC, Chu and Pang JJA, cited as HKSAR v Leung Tin Kei [2020] HKCA 275 (29 April 2020) (“CA-Lo Case”). [4] Ribeiro Ag CJ, Fok PJ and Stock NPJ [2021] HKCFA 17 (17 May 2021). [5] (2020) 23 HKCFAR 518 see §§87-97. [6] [2020] HKDC 588 (24 July 2020). [7] Cap 221. [8] Poon CJHC, Macrae VP and A Pang J, cited as Secretary for Justice v Tong Wai Hung [2021] HKCA 404 (25 March 2021) (“CA-Tong Case”). [9] [2021] HKCA 807 (7 June 2021). [10] Annex 1, Questions 1a to 1d. [11] Ibid Question 2a; Annex 2, Questions 1 and 2. [12] Ibid Question 2d. [13] Annex 1. [14] [1891] AC 107 at 144-145. In a criminal law context, see also R v Fulling [1987] QB 426 at 431-432; R v Smurthwaite (1994) 98 Cr App R 437 at 440; and R v Platt (2016) 1 Cr App R 22 at §27. [15] [2021] HKCFA 24 at §17. [16] [2021] HKCFA 24. [17] Ibid at §§37 and 40. [18] Appearing for Lo with Mr Lawrence Lau, Mr Kin Lau and Mr Jason Ko. [19] Sitting as an additional Judge of the Court of First Instance, on an appeal by way of case stated [2012] 5 HKLRD 556. [20] Ibid at §19. [21] Ibid at §§22 and 83. [22] See §§68-70 below. [23] Section E of this judgment. [24] See §§68-70 below. [25] CA-Lo Case at §24. [26] CA-Tong Case at §§35-36. [27] In Sections C.4 to C.7 below. [28] Examples taken from R v Caird (1970) 54 Cr App R 499 and R v John McKinsie Jones (1974) 59 Cr App R 120 discussed in Section B.1 below. [29] CA-Lo Case at §§51-63. [30] (1888) 16 Cox CC 420. Along the same lines, see Tse Chung v R [1967] HKLR 452 at 455-456, per McMullin J. [31] Ibid at 432. [32] [1907] 2 KB 853. [33] Ibid at 860. [34] Ibid. [35] (1970) 54 Cr App R 499. [36] Ibid at 506. [37] (1974) 59 Cr App R 120 at 127. [38] Anderson v A-G (NSW) (1987) 10 NSWLR 198. [39] Ibid at 113. [40] Ibid at 114-115. [41] Law Com No 123 (24 October 1983) at §5.2. [42] Criminal Law, 4th ed, (1978) p 750. [43] Section 1(1): “Where 12 or more persons who are present together use or threaten unlawful violence for a common purpose and the conduct of them (taken together) is such as would cause a person of reasonable firmness present at the scene to fear for his personal safety, each of the persons using unlawful violence for the common purpose is guilty of riot.” ... (3): “The common purpose may be inferred from conduct.” [44] While such changes were made against the background of the extremely serious riots in 1967, the legislation had apparently been in preparation for some two years previously: Second Reading of the Bill, Official Report of Proceedings of the Legislative Council 15 November 1967, p 474. The POO came into force on 17 November 1967. [45] Sir Denys Roberts, later Mr Justice Roberts NPJ. Official Report of Proceedings of the Legislative Council 1 November 1967, pp 438 and 440. [46] Ibid, p 444at §9. The Explanatory Memorandum of a Bill, including its Objects and Reasons, is admissible for ascertaining the statutory purpose: See HKSAR v Cheung Kwun Yin (2009) 12 HKCFAR 568 at §§12-14; HKSAR v Li Kwok Cheung George (2014) 17 HKCFAR 319 at §37; and, most recently, Secretary for Justice v Leung Kwok Hung [2021] HKCFA 32 at §25. [47] [2012] 5 HKLRD 556. [48] Ibid at §19. [49] Ibid at §21. He added that in such a case, such persons might each be separately guilty of an offence under POO section 17B. [50] Ibid at §22. [51] CA-Lo Case at §26. [52] Ibid at §§57-61. Lam JA’s approach was also cited with approval by the Court of Appeal in CA-Tong Case at §63. [53] Ibid at §58. [54] Ibid at §61. [55] Ibid at §§59 and 60. [56] (2016) 19 HKCFAR 640 at §41. [57] Brown & Anor v The State (Trinidad And Tobago) [2003] UKPC 10 at §13. [58] HKSAR v Chan Kam Shing (2016) 19 HKCFAR 640 at §§33 and 63. [59] Ibid at §§41-44, 63. [60] Ibid at §§45-56, upholding the Privy Council’s decision in Chan Wing Siu [1985] 1 AC 168; and declining to follow R v Jogee [2017] AC 387. The narrow view adopted in the UK in Jogee that the intent must be both shared and specific, is not part of the law of Hong Kong. [61] Ibid at §98. [62] Crimes Ordinance (Cap 200) sections 159A and 159C (conspiracy); sections 159G(1) and 159J(1) (attempts). Incitement is punishable at common law. [63] See CA-Lo Case at §26. [64] CA-Lo Case at §23. [65] CA-Tong Caseat §§4-5, 19-24. [66] Ibid at §56. [67] CA-Lo Case at §24. [68] CA-Tong Case at §§35-36. [69] HKSAR v Chan Kam Shing (2016) 19 HKCFAR 640 at §6. [70] Sze Kwan Lung v HKSAR (2004) 7 HKCFAR 475 at §37 (offences of manslaughter and arson). [71] (2016) 19 HKCFAR 640 at §§8-14. [72] Ibid at §12. [73] Cited at §61 above. [74] Section 90(1): “If a person has committed an arrestable offence, any other person who, knowing or believing him to be guilty of the offence or of some other arrestable offence, does, without lawful authority or reasonable excuse, any act with intent to impede his apprehension or prosecution shall be guilty of an offence.” [75] As was acknowledged by Mr Anthony Chau, DDPP (Ag) appearing for the Respondent with Mr Ivan Cheung, SPP, Ms Karen Ng, PP and Mr Wilson Lam PP. [76] CPO, section 89 and Crimes Ordinance (Cap 200) sections 159A, 159C, 159G(1) and 159J(1). [77] (2020) 23 HKCFAR 518 at §90. [78] CA-Tong Case at §56. [79] HKSAR v Chan Kam Shing (2016) 19 HKCFAR 640 at §10. [80] (1994) 74 A Crim R 1 at 6. [81] See R v Atkinson (1869) 11 Cox CC 330 at 332; Anderson v A-G (NSW) (1987) 10 NSWLR 198 at 212; Boxer v R (1995) 81 A Crim 299 at 310. [82] (1810) 2 Camp 358 at 370; 170 ER 1183 at 1187. [83] (1970) 54 Cr App R 499 at 505. [84] (1994) 74 A Crim R 1 at 8-9. [85] [1982] QB 416. [86] Ibid at 427. [87] [2007] 2 AC 105 at §§27-28. Cited in Chow Nok Hang (2013) 16 HKCFAR 837 at §77. [88] [1982] QB 416 at 426. [89] (1989) 88 Cr App R 317. [90] Ibid at 319-320. [91] Ibid at 321. [92] CA-Lo Case at §13. [93] Ibid at §14. [94] Ibid at §37. [95] Ibid at §39. [96] (1989) 154 JP 201. [97] Ibid at 203-204. [98] Ibid at 204. [99] Reflected in Questions 1a-1d of Annex 1. [100] Section B.2 of this judgment. [101] As reflected in Questions 2a and 2d of Annex 1. [102] Sections C.8 and D of this judgment. |
Chief Justice Ma: 1. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Ribeiro PJ: 2. This appeal raises questions concerning the relationship between offences involving dental companies under the Dentists Registration Ordinance (“DRO”)[1] and disciplinary charges relating to unprofessional conduct brought before the Dental Council of Hong Kong (“the Council”). Issues concerning procedural fairness and the jurisdiction of the Court of Final Appeal and the Court of Appeal to remit issues for re-hearing by the Council also arise. A. Relevant provisions of the DRO and the Disciplinary Code 3. A person who wishes to practise dentistry is required to be registered under the DRO after having passed the qualifying examinations. Practising dentistry without being registered is an offence punishable by a fine and three years’ imprisonment on summary conviction and by five years’ imprisonment on conviction on indictment, and if injury to the “patient” results, by imprisonment for up to seven years.[2] 4. Additionally, the DRO provides that a registered dentist “shall not practise as a dentist in Hong Kong, unless he is the holder of a practising certificate which is then in force”.[3] Practising certificates are issued by the Council’s Secretary and are valid for 12 months. 5. Section 15(3)(ba) provides that the Council may order the removal of a registered dentist’s name from the General Register if he or she has practiced dentistry in Hong Kong for a period exceeding 6 months without having obtained a valid practising certificate. 6. DRO section 12(1) enables a body corporate[4] to carry on the business of dentistry provided (inter alia) that “a majority of the directors and all persons practising dentistry are registered dentists”. 7. Section 12(3) requires every body corporate carrying on the business of dentistry to file an annual return with the Registrar of Dentists (“the Registrar”), stating the names and addresses of all persons who are directors or managers of the company, or who perform dental operations in connection with the business of the company. The subsection goes on to provide that “if any such body corporate fails so to do, it shall be deemed to be carrying on the business of dentistry in contravention of the provisions of this section.” 8. If a company carries on the business of dentistry in contravention of section 12, the company “and every director and manager thereof” commits an offence and is liable on summary conviction to a fine of $2,000 for each offence.[5] However, in relation to a director or manager, section 12(2A) makes it “a defence for him to prove that the offence alleged to be committed by the body corporate was committed without his knowledge.” 9. Section 17 of the Code of Professional Discipline for the Guidance of Dental Practitioners in Hong Kong (“the Code”) issued by the Council[6] refers dentists to DRO section 12 and states the Council’s position regarding directors of dental companies in the following terms: “The Council wishes it to be understood that a dental practitioner ... who becomes a director of a body corporate carrying on the business of dentistry thereby accepts responsibility for the maintenance of a high standard of professional conduct in that practice or business and may be required to answer to the Council for any act or omission in the conduct of that practice or business which appears to the Council to be such as would, if attributed to an individual dental practitioner, constitute unprofessional conduct. Attention is directed to Section 12 of the Dentists Registration Ordinance.” 10. DRO section 27, headed “Covering” provides as follows: “Any registered dentist who practises dentistry in premises in which an unregistered person practises dentistry commits an offence and is liable on summary conviction to a fine at level 3 and to imprisonment for 6 months.”[7] 11. This is also referred to in section 15 of the Code (also headed “Covering”) as follows: “15.1 The Council considers that a dental practitioner should in no way countenance, help, encourage or assist, either wilfully or by neglect, the practice of dentistry by an unregistered person. 15.2 Section 27 of the Dentists Registration Ordinance reads “Any registered dentist who practises dentistry in premises in which an unregistered person practises dentistry shall be guilty of an offence...” 15.3 Section 2(2) of the Ordinance sets out in what circumstances a person practises dentistry...” 12. DRO section 18 empowers the Council to conduct disciplinary proceedings and provides that it may, after due inquiry, if satisfied that any registered dentist has (inter alia) been convicted of any offence punishable with imprisonment or been guilty of unprofessional conduct, impose sanctions ranging from removal of the dentist’s name from the General Register down to a reprimand. 13. It is important for the purposes of this appeal to note that “unprofessional conduct” is defined as: “... an act or omission of a registered dentist which would be reasonably regarded as disgraceful or dishonourable by registered dentists of good repute and competency.”[8] B. The disciplinary proceedings, leave to appeal and the Council’s concession B.1 The disciplinary proceedings 14. The facts are not in dispute. The four appellants are registered dentists who were directors of a dental company called Health & Care Dental Clinic Limited (“the company”) over the relevant period. On 8 August 2005, the company employed Dr Jeremy Tung (“JT”) who had been registered as a dentist three days earlier. JT held valid practising certificates for the years 2005, 2006 and 2007. However, although he was repeatedly asked by company staff for his renewed practising certificate, he failed to renew his practising certificate for the years 2008, 2009 and 2010. His failure to renew led (apparently unknown to himself) to the removal of his name from the General Register on 17 July 2008. However, JT continued thereafter to practise dentistry as an employee of the company. Part of his routine involved practising on Tuesdays and Thursdays at the clinic which the 2nd appellant (“Dr Chu”) attended on Fridays. 15. It was an agreed fact that JT’s failure to apply for renewal of his practising certificate in 2008 was “unknown to the [appellants] and unknown to [the company]”.[9] It was also agreed that: “As soon as it was brought to the attention of the [appellants] on 16th April 2010, that [JT] had failed to maintain his annual practising certificate, they immediately suspended his duties, and subsequently terminated his employment on 6 May 2010.”[10] 16. JT applied to be restored to the General Register, but on 22 March 2011, the Council refused his application and referred his case to the police. The Council’s refusal was quashed for procedural unfairness in judicial review proceedings brought by JT.[11] However, he was prosecuted for practising dentistry as an unregistered person, pleaded guilty and was fined $20,000. The Court was informed that JT has since been restored to the General Register. B.2 The disciplinary charges 17. In 2013, disciplinary charges (as amended) were laid against each of the appellants in the following terms: “That you, being a registered dentist, during the period from 17 July 2008 to 16 April 2010 – (i) and being a director of [the company], employed [JT] to perform dental service when he was no longer a registered dentist after his name had been removed from the General Register on 17 July 2008 (“the 1st charge”); and/or (ii) failed to take adequate steps to ensure that there was no unregistered person practising dentistry in the premises in which you practised dentistry (“the 2nd charge”); and that in relation to the facts alleged you have been guilty of unprofessional conduct.” 18. All the appellants were convicted on the 1st charge and Dr Chu alone was convicted on the 2nd charge since only he practised at the same premises as JT (although on different days of the week). 19. The appellants’ appeal to the Court of Appeal was dismissed.[12] B.3 The grant of leave to appeal 20. The Appeal Committee[13] granted leave to appeal in respect of the following questions of law (which reflect the Court of Appeal’s reasoning, to which I shall return):- "In disciplinary proceedings charging registered dentists who are directors of a dental company for unprofessional conduct by reason of that company having breached its statutory duty under the Dentists' Registration Ordinance (Cap 156) section 12 by employing an unregistered person to perform dental services:- (i) Was the Council entitled to find unprofessional conduct is made out even though that unregistered person had previously been duly registered and his removal from the General Register was unknown to the applicants and unknown to the dental company over the relevant period? ("Question 1") (ii) Does the answer to the foregoing Question depend on whether such absence of knowledge is properly characterised as negligent or as involving negligence rising 'to the level of an elemental and grievous failure'? ("Question 2") (iii) Was the Court of Appeal right to hold that directors of dental companies have a professional duty to ensure that only registered dentists are employed by the company, to verify the registered status of employed dentists in compiling the annual return and to confirm the accuracy of the annual return; and that inserting the relevant person's name in the annual return required to be filed by DRO section 12(3) amounted to a warranty that he was a registered dentist? ("Question 3") 21. In addition, leave was granted on the “or otherwise” limb on the basis that reasonably arguable questions arise relating to want of procedural fairness. B.4 The Council’s concession 22. Mr Stewart Wong SC, appearing for the Council,[14] concedes that the appellants’ convictions cannot stand because of procedural unfairness. The Council acknowledges that the appellants did not know about JT’s lack of registration but submits that the convictions can nonetheless be sustained on the basis that such lack of knowledge was due to “negligence to a level of elemental or grievous failure” on the appellants’ part. The Council accepts, however, that “the Appellants did not have a fair opportunity to deal with this issue at the Inquiry as this had not been expressly and fairly put as part of the case against them (whether in the Charges (originally or as amended) or as presented at the Inquiry).” Thus, while it does not seek to support the convictions, the Council invites the Court, after answering the Questions 1 to 3 in order to “provide authoritative guidance to the Council in this and future cases, to remit the matter back to the Council for fresh consideration (and with further amendment to the Charges (with leave of the Council) if thought fit)”. 23. The premise of this invitation to the Court is that Questions 1 to 3 should be affirmatively answered and that the appellants may properly be found guilty of disciplinary offences as directors of the company on the basis of the high level of negligence contended for despite having no knowledge of JT’s unregistered status. Mr Johnny Mok SC, appearing for the appellants,[15] takes issue with that premise. The appellants also argue that the Court lacks jurisdiction to remit or alternatively, that such remitter would be oppressive and unfair and so should be refused in the exercise of the Court’s discretion. 24. Given that the Council does not seek to uphold the convictions, it would be open to the Court simply to decide whether it can and should remit the case to the Council. However, since the Council’s invitation to remit is premised on affirmative answers to Questions 1 to 3 and, as those questions have been fully argued, it is appropriate for them to be addressed. C. The Council’s decision 25. The Council treated the first charge as based on the offence created by section 12(2) of DRO, interpreting that section as requiring a dental company “to ensure that it employs only registered dentists to perform dental operations”.[16] In support of this interpretation, it relied on section 12(3), stating: “... under section 12 of the Ordinance the dental company is required to make an annual return to the Registrar of Dentists setting out, inter alia, all persons who perform dental operations in connection with the business of the company, stating the status of each of such persons. The company must verify the registered status of each person who performs dental operations before making the annual return in the prescribed form ... This can easily be done by verifying from the General Register which is published on the website of the Dental Council.”[17] 26. The Council regarded the duty of the company so conceived as extending to the appellants, its directors, whom it regarded as the “brain and mind of the company” and “directly responsible for” its affairs.[18] It held that the fact that the staff had repeatedly urged JT to renew his practising certificate meant that: “... they knew that he was practising dentistry without a valid practising certificate.”[19] 27. The Council found that the company had failed to verify, or had turned a blind eye to, JT’s non-registration. It held that: “In either case, the 4 Defendants as directors failed to fulfill their statutory duty to ensure that all persons employed to perform dental operations are registered dentists.”[20] 28. In reaching that conclusion, the Council also referred to section 17 of the Code and decided that failure to ensure that all persons performing dental operations in the dental company were registered dentists was conduct which would be reasonably regarded as disgraceful or dishonourable by registered dentists of good repute and competency. 29. The Council referred to DRO section 27 as the basis for the second disciplinary charge, holding that it “imposes a positive duty on every registered dentist to ensure that there is no unregistered person practising dentistry in the same premises with him”. Pointing out that DRO section 14 requires dentists conspicuously to exhibit their certificates of registration at the premises where they practise, coupled with the fact that Dr Chu was a director of the company, the Council held that it was an “irresistible inference” that Dr Chu knew that JT was practising in the same premises and that it was unprofessional conduct for Dr Chu to have failed to ensure that JT was not an unregistered person so practising. 30. On the 1st charge, the Council ordered the name of the 1st appellant to be removed from the General Register for a period of three months and the names of the other appellants to be removed for a period of two months. On the 2nd charge, Dr Chu’s name was ordered to be removed from the General Register for a period of one month to run concurrently with the order made on the 1st charge. D. The Court of Appeal’s decision 31. The Court of Appeal noted that unprofessional conduct was not confined to conduct constituting an offence under the DRO[21] and also that the Code did not exhaustively list all instances of such conduct.[22] 32. In assessing the appellants’ conduct, it repeatedly stressed the importance of the “regime of registration” laid down by the DRO[23] and held that the Council was entitled to impose professional responsibilities on dentists in order to support the statutory registration regime and to prevent any “dilution” of the protection it affords against members of the public receiving treatment from unregistered persons practising dentistry. McWalters JA, giving the reasons of the Court, put this as follows: “Against this backdrop of the statutory scheme of the DRO, we can see no legal reason why the Dental Council cannot quite properly regard as unprofessional conduct acts or omissions by a dentist which significantly undermine the effectiveness of the registration regime. For the purpose of the disciplinary process it is for the Council to determine what professional responsibilities will be required of dentists and what standards will be set for them in the performance of those responsibilities.”[24] 33. Like the Council, the Court of Appeal found that the appellants were subject to a professional duty as directors of the dental company to ensure that all persons employed by the company to practise dentistry were registered dentists.[25] Although McWalters JA suggested that the Council was not purporting to reach a conclusion as to the legal effect of section 12(2) but merely “expressing its understanding of the spirit and effect of section”[26] in determining whether there had been unprofessional conduct, the Council evidently considered the statutory and professional duties to overlap completely and found that the appellants “as directors failed to fulfil their statutory duty to ensure that all persons employed to perform dental operations are registered dentists”.[27] Indeed, this view of the effect of section 12 was endorsed by the Court of Appeal stating: “In the way the Council approached the statutory provisions of the DRO, and specifically section 12 of that Ordinance, we can find no fault in the Council’s conclusion that the appellants, as directors failed to fulfill their statutory duty to ensure that all persons they employed were registered dentists.”[28] 34. This is reinforced by the Court of Appeal bolstering that conclusion by construing DRO section 12(3) as imposing a “duty to ensure” the registered status of persons employed by the company to practise dentistry before listing them in the annual return. McWalters JA stated: “... it is implicit that by the act of inserting a person’s name in the return the body corporate is warranting that such a person is a registered dentist. Such a representation is crucial to the registration regime and should not be made without verification of the registered status of each person whose name is being included in the return.”[29] 35. Summarising its conclusion, the Court of Appeal held: “We can see nothing wrong in the Council concluding that directors of dental companies have a professional duty to ensure that only registered dentists are employed by the company, have a duty to verify the registered status of employed dentists in compiling the annual return and have a duty to confirm the accuracy of the annual return.”[30] 36. McWalters JA, however, went on to hold that the Council’s finding was “based on negligence”: “It is clear that the Council’s finding was a finding based on negligence. Such a basis for a finding of unprofessional conduct is permitted by the law, but the negligence must be more than ordinary negligence and must rise to the level of ‘an elemental and grievous failure’.”[31] He continued: “Applying this test to the facts of this case as contained in the Statement of Agreed Facts, we are of the view that it was open to the Council to find unprofessional conduct merely on the basis of permitting Mr Tung to practise dentistry through a failure by the appellants to properly discharge their statutory duties. This was a failure, as we have mentioned, that continued over 28 months and encompassed two annual returns. It totally undermined the registration regime and was at the most serious level of non-wilful conduct. The appellants took all the benefits that went with operating a dentistry business through a body corporate but failed to properly discharge their responsibilities that accompanied such a form of practice. In convicting the appellants of non-wilful conduct the Dental Council, in our view, had a correct appreciation of the gravity of the appellants’ conduct. We can see no reason for concluding that it applied the wrong test.”[32] 37. It is not entirely clear how this “test” involving negligence amounting to an “elemental and grievous failure” – which I shall call “gross negligence” – fits in with the postulated “duty to ensure”. It is perhaps best understood as proposing that a failure to ensure the registered status of relevant persons in the absence of knowledge of (or wilful blindness as to) such unregistered status, only constitutes unprofessional conduct if the failure is the result of gross negligence. 38. McWalters JA also pointed to the absence of evidence of what the appellants individually had done to ensure that an adequate administrative system was in place, stating that the evidence “merely described the efforts of various administrative staff of the dental company and did not reveal any specific actions by the appellants”;[33] adding: “The appellants made a deliberate decision not to adduce any evidence to supplement the Statement of Agreed Facts. That left the Council with no evidence from them in respect of what actions, if any, each of them may have taken in the administration of the company and particularly with regard to completing the annual return and ensuring the accuracy of its contents. If the appellants wished to maintain that they had adequate administrative systems in place notwithstanding the obvious failure of those systems in the present case, then it was for them to place such evidence before the Council.”[34] 39. It is unclear whether the Court of Appeal was implicitly convicting the appellants of failing to have in place an “adequate administrative system” and, if so, how that would fit in with the posited duty to ensure or duty based on gross negligence. It is perhaps best understood as translating the postulated duties into a duty placing a burden on defendants to show individual efforts at maintaining an adequate administrative system. 40. In relation to Dr Chu, the Court of Appeal reiterated the legitimacy of imposing professional obligations to bolster the registration regime.[35] It pointed to the “warning” against “covering” set out in section 15 of the Code (which refers dentists to DRO section 27) and stated: “It is hardly surprising in the light of this warning that the Council would view this appellant’s conduct, as a director of the dental company, as constituting unprofessional conduct. Whether the Council would have found the second appellant guilty of unprofessional conduct had he not been a director is another matter. But, that he was a director was clearly a key reason for the Council’s finding for it recognized that there was an overlap in the second appellant’s culpability for the second charge with his culpability for the first charge. Hence, its order that the removal of the second appellant from the General Register for the second charge run concurrently with its removal order in respect of the first charge.”[36] 41. In upholding its decision, the Court of Appeal accorded weight to the Council’s views, stating: “It has long been recognised that bodies, such as the Dental Council, set up to regulate different professions are best placed to decide what standards are required of the professionals subject to their authority and what conduct should constitute professional misconduct.”[37] E. Diffidence of the courts 42. A preliminary matter that arises concerns the degree of diffidence that the courts should show in questioning the disciplinary rulings of the Council. 43. The starting point is section 18(2) which defines unprofessional conduct as “an act or omission of a registered dentist which would be reasonably regarded as disgraceful or dishonourable by registered dentists of good repute and competency”. As the Code explains: “The question of whether any particular course of conduct amounts to unprofessional conduct, and the gravity of such unprofessional conduct and of any conviction, are matters which the Council will determine after considering the evidence in each individual case.”[38] 44. This must of course be understood in the light of the governing statutory definition. What the Code is saying is that the Council decides whether the dentist’s conduct in a particular case should be “reasonably regarded as disgraceful or dishonourable” in accordance with the statutory definition and if so, how grave that misconduct is. It is not saying that the question of what amounts to unprofessional conduct is at large, to be determined by the Council as it sees fit. 45. As noted above the Court of Appeal’s approach was to regard bodies like the Council as best placed to decide whether a dentist’s conduct should be regarded as constituting professional misconduct. In addressing that question within the framework of the statutory definition, that proposition will often be correct. However, much depends on the nature of the issue in question. 46. Thus, in Ghosh v General Medical Council,[39]Lord Millett, delivering the judgment of the Privy Council regarding sentences imposed for professional misconduct, emphasised that the courts’ powers “are not as limited as may be suggested by some of the observations which have been made in the past.”[40] His Lordship held that while the Board would “accord an appropriate measure of respect to the judgment of the committee whether the practitioner's failings amount to serious professional misconduct and on the measures necessary to maintain professional standards and provide adequate protection to the public”, it would “not defer to the committee's judgment more than is warranted by the circumstances.” 47. In Preiss v General Dental Council,[41] Lord Cooke of Thorndon pointed out that with the coming into operation of the Human Rights Act 1998, the tendency to “read down rights of appeal in disciplinary cases is to be resisted”. Echoing Lord Millett in Ghosh v General Medical Council, Lord Cooke added: “An instance, on which some reliance was placed for the General Dental Council in the argument of the present appeal, is the observation in Libman v General Medical Council [1972] AC 217, 221, suggesting that findings of a professional disciplinary committee should not be disturbed unless sufficiently out of tune with the evidence to indicate with reasonable certainty that the evidence was misread. That observation has been applied from time to time in the past, but in their Lordships’ view it can no longer be taken as definitive. This does not mean that respect will not be accorded to the opinion of a professional tribunal on technical matters. But, as indicated in Ghosh, the appropriate degree of deference will depend on the circumstances.” 48. This approach was adopted by the Court of Appeal in Lau Koon Leung v Medical Council of Hong Kong.[42] While acknowledging that the courts should remain cautious in respect of sentences, Yuen JA explained that the earlier reluctance of the courts to interfere was consistent with professional bodies not then being required to give reasons for their disciplinary rulings, the position having since changed. This approach, in which the “appropriate degree of deference” depends on the circumstances, was approved by this Court in Solicitor (24/07) v Law Society of Hong Kong.[43] 49. Clearly, it is sensible for the Court to be diffident about interfering with a disciplinary body’s assessment of matters calling for professional judgment and expertise. This is likely to be the case, for instance, where professional misconduct is alleged in connection with technical or clinical judgments or competence. It may also be the case where the unprofessional conduct raises questions of professional ethics governing, for instance, the relationship between a professional and his or her clients or patients or fellow members of the profession. But diffidence is not called for where the alleged misconduct does not concern such areas of professional expertise. The Court in Mallon v General Medical Council,[44] expressed this as follows: “The spectrum of serious professional misconduct can range from conduct that is entirely non-clinical, such as defrauding the National Health Service or sexually harassing an employee or colleague, to conduct in the course of clinical practice, such as the carrying out of a reckless surgical procedure. In a case of the former kind, a court might conclude that there was little to inhibit it from substituting its own judgment for that of the panel if it should have cause to differ from it. In a case of the latter kind, which involves a technical question of medical malpractice, the court is, we think, at a serious disadvantage to the panel whose decision is impugned.” 50. The present case does not call for reticence on the Court’s part. The alleged unprofessional conduct concerns the responsibility of director-dentists for the fact that their company had employed a dentist who had, without their knowledge or the company’s knowledge, continued to practise after failing to renew his practising certificate and consequently been de-registered. It is not a case involving technical or clinical judgment or professional expertise. It involves attributing responsibility to directors for a corporation’s failure to comply with a regulatory requirement – a matter that the Court is itself well-equipped to deal with albeit in the context of the practice of dentistry. F. The 1st charge 51. The Council was right to concede that the convictions cannot be sustained. The many flaws in the process leading to those convictions began with the way the 1st charge is formulated. 52. Since the case against the appellants was that they were guilty of unprofessional conduct, it was incumbent on the Council, applying the definition in section 18(2), to identify the act or omission which it was alleged would be reasonably regarded as disgraceful or dishonourable by registered dentists of good repute and competency. The 1st charge[45] simply alleges that the appellants “employed JT to perform dental service when he was no longer a registered dentist” and were thereby guilty of unprofessional conduct. The act relied on was therefore the act of employing JT. The transcript shows that, prosecuting the case on the Council’s behalf, its Legal Officer essentially did no more than read out the charges, the Statement of Agreed Facts and official documents relating to registration and annual returns. On that basis, he advised the Council that “The Secretary has no difficulty in proving charge (i)”. The solicitor appearing for the appellants said that she “accepted the facts of charge (i)” and had no comments to make. 53. It was an agreed fact that the act of employing JT was the act of the company with whom he had an employment agreement. It was not the act of the appellants. 54. The charge was thus defective. But as it is framed against each appellant as someone “being a registered dentist ... and being a director [of the company]”, the Council’s intention was evidently to allege unprofessional conduct mirroring the statutory offence created by section 12(2) which applies to director-dentists. The Council’s ruling[46] expressly refers to the appellants as being in breach of the section 12 “statutory duty” and 12(3) is relied on in support. G. Errors in the Council’s decision 55. The Council appears to have drawn no distinction between the appellants as directors and the company itself, stating that they were the company’s “brain and mind” and were “directly responsible for its affairs”. In so far as they were approaching the disciplinary offence as involving unprofessional conduct which reflects the section 12(2) offence, a distinction plainly had to be drawn: the section 12(2A) defence only avails directors and not the company. Directors are not liable if they did not know of the company’s contravention of section 12 whereas the company has no such defence. Directors therefore cannot simply be equated with the company for the purposes of a disciplinary charge based on section 12. 56. The Council attributed to the company knowledge that JT was practising dentistry “without a valid practising certificate”[47] because its staff had repeatedly chased JT for his certificate. It was unnecessary to make such an attribution since the lack of knowledge defence was not in any event available to the company. It may however be that, having equated the directors with the company, the Council wished to treat such knowledge as attributable also to the appellants. If so, that approach was flawed in several respects. 57. First, the administrative staff’s knowledge cannot in law be attributed to the directors, even if it might be attributed to the company. And it cannot somehow be attributed to the directors via an attribution of knowledge to the company. 58. Secondly, the 1st charge concerned employment of JT “when he was no longer a registered dentist after his name had been removed from the General Register”. Practising when de-registered is a very different thing from practising dentistry “without a valid practising certificate”. Section 15(3)(ba) only permits the Council to order the removal of a dentist’s name from the General Register if he or she has practiced dentistry in Hong Kong for a period exceeding six months without having obtained a valid practising certificate. JT’s name was only removed some seven months after his practising certificate had expired at the beginning of 2008. A registered dentist may thus not have a valid practising certificate while remaining on the General Register for a period of six months or more. To infer that the staff knew that JT was practising without a valid practising certificate does not justify a finding that they knew he was no longer registered. 59. Thirdly, and most importantly, it was an agreed fact (read out at the hearing) that neither the appellants nor the company knew that JT was unregistered. It was therefore not open to the Council to find the 1st charge proved on the basis that the appellants is to be treated as having knowledge of JT’s unregistered status. Moreover, the 1st charge as formulated was not based on any attribution of knowledge and it was not suggested at the hearing that the alleged knowledge of the staff should be ascribed to the appellants because they were “directly responsible for” the company’s affairs. Factual questions concerning the management role played by the appellants were not explored and no evidence was adduced to justify a finding that they were “directly responsible for its affairs”. 60. It may be that in order to overcome the difficulties posed by the agreed fact that the appellants had no knowledge, the Council also found that the appellants had failed to verify or had “turned a blind eye” to JT’s non-registration and found them guilty for “failing to fulfil their statutory duty to ensure that all persons employed to perform dental operations are registered dentists”. This too is flawed. “Turning a blind eye” is generally equated in law with knowledge so that this finding remains contrary to the agreed facts. Secondly, the posited statutory duty on the appellants as director-dentists to ensure that all persons employed to perform dental operations were registered dentists cannot be found. Section 12 is of course the prime candidate provision. It penalises the company for carrying on business in contravention of that section but exempts directors who can show that the company’s contravention occurred without their knowledge. Provisions which exclude directors from liability where they are unaware of the company’s default (an agreed fact in the present case) cannot be read as placing on them a duty under section 12 “to ensure that all persons employed to perform dental operations are registered dentists” regardless of the state of their knowledge. 61. Regarding the 2nd charge (which the Council took to be based on DRO section 27), the Council – in my view correctly – considered it necessary to establish knowledge on the part of the dentist charged that the unregistered person was practising dentistry in the same premises. On its face, section 27 penalises the common use of premises for practising dentistry even where the two persons concerned are unaware of each other and have no mutual interaction of any kind. Such a penalty would serve no useful purpose and the legislative intention cannot have been to lay down such a strict, Draconian, liability.[48] Section 27 therefore requires to be construed employing the presumption of mens rea[49] and the Council was right to ask whether Dr Chu knew that JT was practising in the same premises when no longer registered. 62. The Council concluded that such knowledge was irresistibly to be inferred in the present case because (i) DRO section 14 requires dentists conspicuously to exhibit their certificates of registration at the premises where they practise; and (ii) Dr Chu was a director of the company. That inference was, however, contrary to the agreed fact that the appellants, including Dr Chu, did not know of JT’s unregistered status. 63. In my view, the decision of the Council was fatally flawed and the appellants should not have been convicted on either charge. H. Errors in the Court of Appeal’s judgment H.1 Endorsement of the Council’s decision based on section 12 64. Two main strands are detectable in the Court of Appeal’s judgment. First, the Court endorsed the Council’s appellants’ conviction of unprofessional conduct based on breach of their postulated statutory duty under section 12. It supported the finding that the appellants, as directors, had failed to fulfil their statutory “duty to ensure that all persons employed to perform dental operations are registered dentists” under section 12.[50] When construing section 12(3), it held that by filing the annual returns, the company had warranted that JT was a registered dentist.”[51] 65. The Court of Appeal then proceeded from implying this warranty by the company to holding that each of the appellants as directors were individually in breach of both a statutory and a professional duty “to ensure that only registered dentists are employed by the company, ... to verify the registered status of employed dentists in compiling the annual return and ... to confirm the accuracy of the annual return.”[52] 66. McWalters JA found the Council’s inference of knowledge “problematic”,[53] but sought to explain it as a finding “not based on a factual finding that each of the appellants knew the unregistered status” of JT but merely reflecting the Council’s finding of a failure to verify as required by section 12(3).[54] His Lordship held that it was “clear that the Council’s finding was a finding based on negligence”, going on to add that in the present case, this provided a good basis for the conviction since the Council was entitled to view the appellants’ negligence as “more than ordinary negligence” and negligence rising “to the level of an ‘elemental and grievous failure’.”[55] 67. For the reasons given in Section G above, the reasoning of the Council is seriously flawed and the Court of Appeal’s endorsement of that reasoning cannot be supported. I would add that I can see no basis for implying the asserted warranty from the words of section 12(3). As further discussed in Section H.2b below, that subsection merely requires a dental company to make annual returns setting out the names and addresses of the directors or managers of the company and those who perform dental operations in connection with the business of the company. Failure to do so results in the company being deemed to be carrying on the business of dentistry in contravention of section 12, which would then expose the directors to liability under section 12(2) but always subject to the section 12(2A) defence of lack of knowledge – which is available on the facts agreed. The assertion that it was “clear that the Council’s finding was a finding based on negligence” is surprising since there appears to be no such suggestion in the Council’s decision. H.2 A disciplinary offence to support the registration regime 68. The second strand of the Court of Appeal’s decision is based on breach of a professional duty fashioned as a necessary adjunct to the statutory registration regime to prevent dilution of the protection that regime affords to the public. McWalters JA stated that: “It has long been recognised that bodies, such as the Dental Council, set up to regulate different professions are best placed to decide what standards are required of the professionals subject to their authority and what conduct should constitute professional misconduct.”[56] 69. His Lordship held that the Court of Appeal could see no legal reason why the Dental Council cannot “quite properly regard as unprofessional conduct acts or omissions by a dentist which significantly undermine the effectiveness of the registration regime”[57]. Emphasising that the Council is not confined by any mens rea or other requirements of statutory offences in the DRO,[58] McWalters JA added: “If, within the context of the DRO and the registration regime it creates, the Council can reasonably adjudge that imposition on dentists of certain responsibilities will assist in ensuring the effectiveness of the registration regime and contribute to protecting the public from having dental services provided to them by unregistered dentists, then it is entitled to determine that a failure to comply with those responsibilities may, depending on the circumstances of the individual case, constitute unprofessional conduct.”[59] 70. On this strand of its reasoning, it appears that the Court of Appeal considered professional misconduct sufficiently established if gross negligence is proved.[60] 71. So far as penalising individual directors of a dental company was concerned, McWalters JA held that: “Regarding these directors as ‘directly responsible for the affairs of the company’ is quite uncontroversial and consistent with both the law and common sense.”[61] 72. As we have seen, the Court of Appeal concluded that a professional duty could be deduced as follows: “We can see nothing wrong in the Council concluding that directors of dental companies have a professional duty to ensure that only registered dentists are employed by the company, have a duty to verify the registered status of employed dentists in compiling the annual return and have a duty to confirm the accuracy of the annual return.”[62] 73. Moreover, the Court of Appeal evidently considered it a facet of this duty to ensure or verify, that each director was required to make individual efforts to ensure that an adequate system existed to verify the registered status of dentists in the position of JT. 74. With respect, in my view, this strand of the Court of Appeal’s reasoning cannot be supported for three main reasons. H.2a “Unprofessional conduct” and section 18(2) 75. In the first place, it is not correct to hold that the Council is free to create a head of unprofessional conduct simply because the Council “can reasonably adjudge that imposition on dentists of certain responsibilities will assist in ensuring the effectiveness of the registration regime”. 76. What constitutes “unprofessional conduct” is not at large. It is not dependent simply on the Council’s view as to what might reasonably be required to support a desirable statutory objective. The Council’s disciplinary powers are conferred by DRO section 18(1) which provides that if, after due inquiry the Council is satisfied (inter alia) that a registered dentist has been guilty of unprofessional conduct, it may impose specified penalties on him ranging from de-registration down to a reprimand. Crucially, section 18(2) defines “unprofessional conduct” for these purposes as “an act or omission of a registered dentist which would be reasonably regarded as disgraceful or dishonourable by registered dentists of good repute and competency.” 77. This is not to suggest that unprofessional conduct is confined to matters prohibited by specific DRO offences on proof of the elements necessary to sustain criminal liability. On the contrary, the Council is plainly entitled to identify classes of acts or omissions as constituting unprofessional conduct and to give guidance to that effect in the disciplinary Code as well as to adjudicate charges relating to such conduct in individual cases, provided always that the relevant acts or omissions would be reasonably regarded as disgraceful or dishonourable by registered dentists of good repute and competency.[63] While, as noted above,[64] the Court is likely to be reluctant to interfere with the Council’s determination of what constitutes such misconduct where the decision involves clinical expertise or a professional ethical judgment and less reluctant to do so where it involves no such specialist expertise, the question whether the acts or omissions relied on are properly classified as unprofessional conduct is ultimately a question of whether section 18(2) has been properly applied – a matter to be decided by the Court. 78. The first difficulty with the Court of Appeal’s second strand of reasoning is that it seeks to justify the convictions on the basis of a professional duty founded solely on a perceived need to reinforce the statutory registration regime without reference to the section 18(2) definition. The Court of Appeal held that such professional misconduct was established if the appellants’ “failure to ensure” was grossly negligent and that “[applying] this test to the facts ... contained in the Statement of Agreed Facts, ... it was open to the Council to find unprofessional conduct merely on the basis of permitting Mr Tung to practise dentistry through a failure by the appellants to properly discharge their statutory duties”.[65] That was evidently a reference to a failure to verify JT’s registered status when filing annual returns “that continued over 28 months and encompassed two annual returns”.[66] Leaving aside the difficulty of construing section 12 as imposing such a duty discussed above, the key question – whether and if so, how, their alleged failure in relation to the company’s duty to make such annual returns can be reasonably regarded as disgraceful or dishonourable by registered dentists of good repute and competency – was not addressed. H.2b The statutory registration regime and the appellants’ conduct 79. On a proper appreciation of the nature of the statutory registration regime and of any default that may be attributable to the appellants, I am unable to see how their conduct could reasonably be said to fall within the section 18(2) definition. This is the second main reason for my inability to accept this strand of the Court of Appeal’s reasoning. 80. The Court of Appeal evidently considered the conduct of the appellants such as to “significantly undermine the effectiveness of the registration regime”.[67] McWalters JA went so far as to hold that their failure to verify JT’s registered status “totally undermined the registration regime and was at the most serious level of non-wilful conduct”.[68] I am unable to accept that this represents a realistic or fair assessment. 81. It is no doubt correct to say that the registration regime is important in that it lays down the threshold conditions for being permitted to practise dentistry and provides the basic framework for the Council’s regulation of the profession. However, the DRO’s provisions show that the scheme is intended to involve a system for monitoring the registration of dentists operated by the Council and the Registrar. The primary obligation to secure and maintain one’s registered status is placed on the individual dentist. 82. Thus, it is the Council that sets the licensing exams which (alongside university degrees) qualify a dentist for registration.[69] It is the Registrar who keeps and maintains the General and Specialist Registers and it is to the Registrar that a dentist applies for registration.[70] It is the Council that issues the certificate of registration and (through its Secretary) the annual practising certificate.[71] And it is the Council which has power to order the name of a registered dentist to be removed from the Register.[72] 83. The fact that the Council issues both the registration and practising certificates and orders de-registration means that it knows at any moment who are the persons holding such certificates and also who has been de-registered or failed to renew their practising certificates. As the Court of Appeal noted, the Council publishes the names of dentists in the General Register on its website.[73] 84. By requiring a dental company to file an annual return stating the names and addresses of all persons who are directors or managers of the company, or who perform dental operations in connection with the business of the company, section 12(3) is designed to give the Council all the information it needs to enforce the company’s duty not to carry on business in contravention of section 12. Once a company files its annual return, the Council is able to tell from its own records whether any of the persons listed as dentists have not been issued with a registration or practising certificate or has had his or her name removed from the General Register. There is no need to imply a warranty that the company – much less its directors – has independently verified the registered status of all its dentists. The Council, doing its job, would in any event naturally be expected to check the annual return against its own authoritative records. 85. As DRO section 3 makes clear, the system places the primary duty to maintain one’s registered status on the individual dentist. It makes it a criminal offence for any person to practise dentistry, not being a registered dentist, the penalty on summary conviction being a fine of up to $100,000 and imprisonment for three years; and upon conviction on indictment being imprisonment for 5 years or, in cases where injury results, imprisonment for 7 years. 86. In contrast, the maximum penalty prescribed by section 12(2) where a dental company carries on business in contravention of section 12 is a fine of $2,000. This would apply where the company fails to file a proper section 12(3) annual return or where it carries on business without every person practising dentistry as part of that business being a registered dentist. The regime obviously casts dental companies in a merely incidental role, limited to providing the information required in the annual return. By giving directors a defence if they can show that the company’s default occurred without their knowledge, the regime places an even smaller responsibility on them. 87. Significantly, under DRO section 18(1)(a), one of the conditions for the Council to exercise its disciplinary powers is a registered dentist’s conviction “of any offence punishable with imprisonment”. It follows that even if the appellants had been convicted of an offence under section 12(2), such conviction would not have been sufficient to ground disciplinary proceedings since the offence is not punishable with imprisonment. 88. There is therefore no basis in the present case for thinking that the appellants “undermined the effectiveness of the registration regime” significantly or at all. The system might be undermined if something had been done to mislead the Council or prevent it from knowing the true registered status of a person practising dentistry. The appellants did nothing of the sort. In filing the annual returns, the company duly provided the information required. The Council was well aware from its own records that JT had not renewed his practising certificate and, seven months later, it took his name off the General Register. They knew from the annual returns that he had been practising dentistry with the company during that period and brought disciplinary proceedings against the appellants. I am therefore quite unable to see how the appellants’ acts or omission could reasonably be regarded as disgraceful or dishonourable by registered dentists of good repute and competency. There was no justification here for creating a disciplinary offence going beyond the existing statutory sanctions with the purported aim of buttressing the system of registration which has no discernible need for such buttressing. 89. Concern was expressed by the Court of Appeal as to how undermining the registration regime would dilute protection of the public from unregistered dentists. Certainly, in a case involving an unqualified, unlicensed backstreet practitioner, the registration requirement and the severe penalties under DRO section 3 would play an important role to protect the public against the unregistered practitioner. But no such concerns apply in cases like the present. 90. The third reason for my inability to accept the second strand of the Court of Appeal’s reasoning relates to procedural unfairness. The disciplinary offence elaborated by the Council and the Court of Appeal is far removed from the charges faced by the appellants and their convictions are based on factual and legal bases which were not part of the Council’s case and were contrary to the agreed facts, namely: that they were directly responsible for the company’s affairs and could be treated as knowing of JT’s unregistered status; that they were guilty of gross negligence in failing to ensure or to verify the registered status of JT; that they had failed to make individual efforts to ensure that an adequate administrative system existed in the company to verify his registered status; and that by their conduct, they had undermined the statutory registration regime. As Mr Wong SC rightly concedes, the appellants were not given the opportunity to address these issues. I. The Questions on which leave to appeal was granted[74] 91. The Questions of law have substantially been answered in the course of the foregoing discussion. I.1 Questions 1 and 2 92. Questions 1 and 2 can be taken together. The Questions are premised on the unprofessional conduct being based on the company’s breach of section 12. On that footing the answer to Question 1 is plainly “No”. Since Question 1 accepts that the appellants did not know of JT’s removal from the General Register, the appellants are exonerated under section 12(2A). On this footing, the answer to Question 2 would also be “No”. The absence of knowledge would be decisive and unprofessional conduct mirroring statutory liability under section 12 could not be established on the basis of either ordinary or gross negligence. 93. However, I have examined the Court of Appeal’s second strand of reasoning which seeks to justify the convictions on the basis of a free-standing head of unprofessional conduct that is not a mere reflection of the statutory offence. It is fashioned as described in Section H.2 above, and conceives of misconduct consisting of a grossly negligent breach of a duty to ensure JT’s registered status penalised in order to bolster the registration regime. For the reasons set out above, I have concluded that there is no justification for convicting the appellants of such unprofessional conduct and so would equally give negative answers to Questions 1 and 2 on this alternative basis. I.2 Question 3 94. For the reasons given in Sections H.1 and H.2b above, the answer to Question 3 is “No”. A professional duty on individual director-dentists to verify the registered status of employed dentists and to confirm the accuracy of the section 12(3) annual return cannot be imposed on the basis that filing such an annual return amounts to warranting such registered status. J. Remitter and disposal of the appeal J.1 Jurisdiction to remit 95. The Council has invited the Court to “remit the matter back to the Council for fresh consideration (and with further amendment to the Charges (with leave of the Council) if thought fit)”. The first question is therefore whether the Court has jurisdiction to remit. 96. Section 17 of the Court’s statute[75] relevantly provides: (1) The Court may confirm, reverse or vary the decision of the court from which the appeal lies or may remit the matter with its opinion thereon to that court, or may make such other order in the matter, including any order as to costs, as it thinks fit. (2) For the purpose of disposing of an appeal, the Court may exercise any powers of the court from which the appeal lies (including the power to order a retrial), or may remit the case to that court. 97. Mr Mok SC submits that section 17(1) has no application since the Council is not suggesting a remitter back to the Court of Appeal but to the Council which is obviously not the court from which the appeal lay. 98. He also argues that Section 17(2) does not assist because the Court of Appeal itself does not have jurisdiction to order a remitter since DRO section 23 only authorises that Court to “affirm, reverse or vary” the order or decision of the Council appealed from, making no mention of a power to remit. He points out that in contrast, the Medical Registration Ordinance (“MRO”)[76] expressly empowers the Court of Appeal to “remit the case to the [Medical] Council for an, or another, inquiry”. 99. In support of his argument, Counsel traces the legislative history of DRO section 23 which shows that the “affirm, reverse or vary” formula has remained unchanged since 1959, leading the Court of Appeal in Dr Roger Gordon Bishop v The Dental Council of Hong Kong,[77] and Chow Wai Fu v Medical Council of Hong Kong,[78] to hold that there was no jurisdiction to order a re-hearing and to Fuad JA (who delivered both judgments) suggesting that the DRO be amended to add such a power. 100. Mr Mok SC furthermore points out that although the MRO was amended in 1996[79] to insert the express power to remit, when the DRO, including section 23, was amended in 2006,[80] the legislature did not do likewise. 101. Although those submissions were attractively put, I do not accept that jurisdiction to remit is lacking. 102. It is true that DRO section 23, unlike certain other Ordinances, does not expressly confer a power to remit. However, I agree with Mr Wong SC’s submission that an express power to remit is unnecessary in the light of the provisions of Order 59 r 10 of the Rules of the High Court[81] which, by Order 59 r 1,[82] are made applicable to every appeal to the Court of Appeal (subject to immaterial exceptions). Order 59 r 10 relevantly provides as follows: “(2) The Court of Appeal shall have power to receive further evidence on questions of fact, either by oral examination in court, by affidavit, or by deposition taken before an examiner, but no such further evidence (other than evidence as to matters which have occurred after the date of the trial or hearing) shall be admitted except on special grounds. (3) The Court of Appeal shall have power to draw inferences of fact and to give any judgment and make any order which ought to have been given or made, and to make such further or other order as the case may require. (4) The powers of the Court of Appeal under the foregoing provisions of this rule may be exercised notwithstanding that no notice of appeal or respondent's notice has been given in respect of any particular part of the decision of the court below or by any particular party to the proceedings in that court, or that any ground for allowing the appeal or for affirming or varying the decision of that court is not specified in such a notice; and the Court of Appeal may make any order, on such terms as the Court thinks just, to ensure the determination on the merits of the real question in controversy between the parties.” 103. These provisions are intended to supplement enactments which create a right of appeal to the Court of Appeal, making it unnecessary for them to spell out these general powers on each occasion. Order 59 r 10(4) is important. First, it indicates that the powers conferred by the earlier sub-rules are intended to apply in tandem with the Court of Appeal’s powers “for allowing the appeal or ... affirming or varying” the decision appealed from. And secondly, it empowers the Court of Appeal to “make any order, on such terms as the Court thinks just, to ensure the determination on the merits of the real question in controversy between the parties.” 104. Those latter words are apt to cover a situation where the Court of Appeal considers a remitter appropriate consequential upon its disposal of the appeal. Thus, it may for instance decide to reverse the Council because of a procedural flaw, but think that, on the merits, there may have been serious professional misconduct which ought to be investigated. The Court may thus order a remitter so that the merits of the real question in controversy – the charge of unprofessional conduct – can properly be determined. 105. Even where, as applies in this Court, no similar rule has been expressly enacted, it is well-established that there is implied power to make orders reasonably required for the effective exercise of the statutory jurisdiction conferred upon it,[83] mirroring the power provided for in Order 59 r 10(4). 106. In Dr Bishop’s case,[84] the absence of a power to remit was conceded by counsel without reference to the general powers conferred by Order 59 r 10. Similarly, in Chow Wai Fu’s case,[85] those powers were not referred to and the point was not discussed in any detail. 107. Little can be made of the fact that section 23 was not amended to insert an express power to remit when the DRO was amended in 2006. As the Hansard and legislative briefing materials show,[86] the purpose of the amendment was to create a Specialist Register putting practitioners of specialist dentistry on a statutory footing and, in relation to section 23, to lay down a time limit for appealing to the Court of Appeal. The scope of the powers of the Court of Appeal was not touched upon. In the light of Order 59 r 10, an amendment expressly to provide for a power to remit was in any event unnecessary. 108. I therefore conclude that this Court has jurisdiction, in exercising a power available to the Court of Appeal, to remit a disciplinary inquiry to the Council for re-hearing. J.2 Whether there should be a remitter as a matter of discretion 109. In my view, there are powerful discretionary reasons for refusing to order a remitter in the present case. 110. The Council’s purpose in seeking a remitter is to bring disciplinary proceedings on a modified basis, alleging a grossly negligent failure on the appellants’ part to ensure or verify JT’s registered status. That purpose is premised on affirmative answers to Questions 1 to 3. Those questions have, however, been answered in the negative and I have concluded that the proposed alternative basis for alleging unprofessional conduct rests on an erroneous understanding of the registration regime and a flawed assessment of the culpability of the appellants. No viable basis has been demonstrated for describing the conduct of the appellants – who would be exonerated for lack of knowledge of the company’s default if charged under section 12 – as involving acts or omissions which would be reasonably regarded as disgraceful or dishonourable by their peers. The Council’s intended purpose would therefore not be achieved by a remitter. 111. The appellants have had these proceedings hanging over their heads since January 2010. They have had to cope with findings of professional misconduct and severe sentences, upheld by the Court of Appeal, which I have concluded were seriously deficient from the outset. If a remitter were ordered, as Mr Wong SC acknowledged, the Council would not simply be asked to retry the existing disciplinary charges since they are plainly defective. The appellants would have to face quite different charges tailored, if possible, to this Court’s judgment. As a matter of discretion, I can see no justification for permitting the Council such a second bite of the cherry. J.3 Disposal of the appeal 112. For the foregoing reasons, I would allow the appeal and refuse an order remitting the matter back to the Council. In the light of the view I have taken that the proceedings were flawed from the outset, I would make an order nisi that the Council pay the appellants their costs here and below, including the costs of the Inquiry. I would direct that any submissions which the parties may wish to make as to costs should be lodged in writing within 21 days from the date of the judgment and that, in default of such submissions, the order as to costs should stand as an order absolute without further direction. Mr Justice Tang PJ: 113. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Fok PJ: 114. I agree with the judgment of Mr Justice Ribeiro PJ. Lord Phillips of Worth Matravers: 115. I agree with the judgment of Mr Justice Ribeiro PJ. Chief Justice Ma: 116. The Court unanimously allows the appeal and makes the orders referred to in the final paragraph of Mr Justice Ribeiro PJ’s judgment. Mr Johnny Mok SC and Ms Catrina Lam, instructed by Ching & Co., for the Appellants Mr Stewart Wong SC, Mr Anthony Ismail and Ms Bonnie Y.K. Cheng, instructed by the Department of Justice, for the Respondent [1] Cap 156. [2] DRO section 3. The fine on summary conviction is at level 6 (up to $100,000: Criminal Procedure Ordinance, Cap 221, section 113B and Sch 8). The qualifying examinations are prescribed by DRO section 8. [3] DRO section 11A(1). [4] Section 12 deals specifically with dental companies. [5] DRO section 12(2). [6] Promulgated on 1 September 2000 and revised in July 2008. [7] A level three fine is a fine of up to $10,000: Criminal Procedure Ordinance, Cap 221, section 113B and Sch 8). [8] DRO section 18(2). [9] Statement of Agreed Facts §4. [10] Ibid §11. [11] Jeremy Tung v The Dental Council of Hong Kong, HCAL 35/2011 (14 August 2012: Au J) which contains an account of JT’s evidence as to the circumstances of his failure to renew his practising certificate. [12] Hon Lam VP, Kwan and McWalters JJA, CACV 149/2013 (3 July 2014). [13] Ribeiro, Tang and Fok PJJ, FAMV 2/2015 (22 March 2016). [14] With Mr Anthony Ismail and Ms Bonnie Y K Cheng. [15] With Ms Catrina Lam. [16] Inquiry §17. [17] Inquiry §19. [18] Inquiry §15. [19] Inquiry §18. [20] Inquiry §19. [21] Court of Appeal §§46-47. [22] Court of Appeal §39. [23] Court of Appeal §§32-34, 44-45, 47-50, 54, 67-68. [24] Court of Appeal §44. See also §45. [25] Court of Appeal §51. [26] Court of Appeal §49. [27] Inquiry§19 and §21, italics supplied. [28] Court of Appeal §51. This was reiterated at §65. [29] Court of Appeal §50. [30] Court of Appeal §51. [31] Court of Appeal §66, citing Dr Young Yau Yau, Cecilia v The Dental Council of Hong Kong, (Unreported) CACV 150/2007 (30 July 2008). [32] Court of Appeal §67. [33] Court of Appeal §59. [34] Court of Appeal §60. [35] Court of Appeal §68. [36] Court of Appeal §69. [37] Court of Appeal §65, citing O Ting Yuen v The Medical Council of Hong Kong (Unreported) CACV 820/2000 (21 March 2001). [38] Code, Introduction. [39] [2001] 1 WLR 1915 (PC) at §34. [40] Citing Evans v General Medical Council (unreported) 19 November 1984 where the Board said: “The principles upon which this Board acts in reviewing sentences passed by the Professional Conduct Committee are well settled. It has been said time and again that a disciplinary committee are the best possible people for weighing the seriousness of professional misconduct, and that the Board will be very slow to interfere with the exercise of the discretion of such a committee… The committee are familiar with the whole gradation of seriousness of the cases of various types which come before them, and are peculiarly well qualified to say at what point on that gradation erasure becomes the appropriate sentence. This Board does not have that advantage nor can it have the same capacity for judging what measures are from time to time required for the purpose of maintaining professional standards.” [41] [2001] 1 WLR 1926 (PC) at §27. [42] [2006] 3 HKLRD 225 at §§64-72. [43] (2008) 11 HKCFAR 117 at §§53 and 119-120. [44] 2007 SC 426 at §20. [45] Set out in Section B.2 above. [46] Discussed in Section C above. [47] Inquiry §18. [48] Section 15 of the Code indicates that the mischief of “covering” as a form of unprofessional conduct involves a registered dentist countenancing, helping, encouraging or assisting the practice of dentistry by an unregistered person. These are actions involving a form of knowing interaction (although the Code says such conduct may be performed “wilfully or by neglect”). [49] See Hin Lin Yee v HKSAR (2010) 13 HKCFAR 142. [50] Court of Appeal §§51, 62, 63, 65. [51] Court of Appeal §§49 and 50. [52] Court of Appeal §51. [53] Court of Appeal §57. [54] Court of Appeal §63. [55] Court of Appeal §66, citing Dr Young Yau Yau, Cecilia v The Dental Council of Hong Kong, (Unreported) CACV 150/2007 (30 July 2008). [56] Court of Appeal §65, citing O Ting Yuen v The Medical Council of Hong Kong (Unreported) CACV 820/2000 (21 March 2001). [57] Court of Appeal §44. [58] Court of Appeal §46. [59] Court of Appeal §45. [60] Court of Appeal §§66 and 67. [61] Court of Appeal §48. [62] Court of Appeal §51. [63] An example of such a situation is Ng Kin Wai v Dental Council of Hong Kong [2011] 6 HKC 378 which concerned the use by a dentist the title of specialist and the dentist’s duty to familiarise himself with the relevant legislation concerning professional registration and the use of titles. [64] Section E of this judgment. [65] Court of Appeal §67. [66] Ibid. [67] Court of Appeal §44. [68] Court of Appeal §67. [69] DRO sections 4A and 8. [70] DRO sections 6, 7, 9 and 15. [71] DRO sections 10(1) and 11A. [72] DRO section 15(3). [73] Court of Appeal §9. [74] Set out in Section B.3 above. [75] Hong Kong Court of Final Appeal Ordinance (Cap 484). [76] Cap 161, section 26(1). [77] (Unreported) Leonard VP, Cons and Fuad JJA, CACV 52/1983 (12 July 1983) at p 18. [78] (Unreported) Fuad VP, Macdougall and Nazareth JJA, CACV 205/1991 (4 March 1992) at p 18. [79] Medical Registration (Amendment) Ordinance (No 7 of 1996). [80] Dentists Registration (Amendment) Ordinance (No 11 of 2006). [81] Cap 4A. [82] Order 59 r 1 also provides that “references to ‘the court below’ apply to any Court, tribunal or person from which such appeal lies”. [83] PCCW-HKT Telephone Ltd v Telecommunications Authority (2005) 8 HKCFAR 337 at §§40 and 60; Joint & Several Liquidators of Kong Wah Holdings Ltd v Grande Holdings Ltd (2006) 9 HKCFAR 795 at §13; Hall v HKSAR (2014) 17 HKCFAR 17 at §11. [84] (Unreported) Leonard VP, Cons and Fuad JJA, CACV 52/1983 (12 July 1983) at p 18. [85] (Unreported) Fuad VP, Macdougall and Nazareth JJA, CACV 205/1991 (4 March 1992) at p 18. [86] Second Reading of the Dentists Registration (Amendment) Bill, Hansard (6 July 2005); Legislative Council Brief for Bills Committee, LC Paper No CB(2)400/05-06(01) 18 November 2005; Answer to Bills Committee queries, LC Paper No CB(2)1767/05-06(02) 18 April 2006; Legislative Council Report of the Bills Committee for the House Committee meeting on 28 April 2006, LC Paper No CB(2)1831/05-06 28 April 2006. |
The Court: A. INTRODUCTION 1. Since June 2019, Hong Kong has experienced serious social unrests and public disorders marked by protests, escalating violence, vandalisms and arsons across the territory. It is a dire situation that has not been seen in the last 50 years. 2. The increasing violence has resulted in widespread property damage, assaults on persons, serious damage and interruptions to major public transport facilities and highways. The violence and damage are mostly caused by protestors wearing masks and dressed in black outfits. At the same time, it is a common phenomenon that many other protestors participating in public assemblies and processions who are not involved in violence are also wearing masks and dressed in black outfits. 3. To tackle the dire situation, on 4 October 2019, the Chief Executive‑in‑Council (“the CEIC”), in the exercise of the power under section 2 of the Emergency Regulations Ordinance (Cap 241) (“the ERO”), announced the enactment of the Prohibition on Face Covering Regulation (Cap 241K) (“the PFCR”) on the basis that there was an occasion of “public danger” in Hong Kong. 4. In gist, the PFCR makes it an offence for anyone without reasonable excuse wearing a mask that will prevent identification at public assemblies or processions, and empowers the police to demand any person to remove the mask and, if that person refuses to do so, to remove it with force if necessary. The PFCR took effect at midnight on 5 October 2019. 5. Soon thereafter, the applicants under HCAL 2945/2019 (collectively, “KWH”) and the applicant under HCAL 2949/2019 (“LKH”) brought these judicial review proceedings to challenge the PFCR on the basis that it is unlawful and invalid as (a) the ERO is itself (i) unconstitutional (Ground 1); (ii) was impliedly repealed (Ground 2); (iii) falls foul of the “prescribed by law” requirement (Ground 3); and (b) in any event, the PFCR (i) is ultra vires by reason of the principle of legality (Ground 4); and (ii) amounts to disproportionate infringement on the protected fundamental rights to freedom of expression, assembly, movement and the right to privacy (Ground 5A on section 3 and Ground 5B on section 5). 6. The rolled-up hearing of these judicial reviews were heard before G Lam and Chow JJ (collectively, “the Judges”) on 31 October and 1 November 2019. By the judgment (“the Judgment”) and decision (“the Decision”) handed down respectively on 18 and 22 November 2019, the Judges allowed the applicants’ judicial reviews under Grounds 1, 5A and 5B, and declared that: (1) The ERO insofar as it empowers the CEIC to make regulations on “any occasion of public danger” is unconstitutional as it is incompatible with the Basic Law (“BL”). (2) The PFCR is therefore also invalid and of no effect. (3) In any event: (a) sections 3(1)(b), (c) and (d) of the PFCR are incompatible with BL27 and Articles 14, 16 and 17 of the Hong Kong Bill of Rights (“BOR”) and are therefore null, void and of no effect; (b) section 5 of the PFCR is also incompatible with BL28 and BOR5, and is therefore null, void and of no effect. 7. By way of the Notices of Appeals filed on 25 November 2019[1], the respondents appeal against the Judgment and the Decision. 8. In response, KWH filed a Notice of Cross Appeal (“KWH‑NoCA”) under CACV 583/2019 seeking to cross-appeal against the Judges’ decision of rejecting Grounds 2 and 3 of their judicial review. They also filed a Respondent’s Notice (“KWH-RN”) in CACV 542/2019 seeking to affirm the Judges’ decision on additional grounds, in particular on Ground 4. 9. On 16 December 2019, LKH also filed a Notice of Cross Appeal and Respondent’s Notice (“LKH-NoCA”) under CACV 541/2019 against the Judges’ decision seeking to challenge: (1) the Judges’ holding on “legitimate aims” and “rational connection” in the proportionality analysis of section 5 of the PFCR under Ground 5B: LKH-NoCA, [1] - [3]; (2) the Judges’ rejection of Ground 3: LKH-NoCA, [4]; and (3) the Judges’ purported refusal to grant him leave to apply for judicial review on Ground 1 and Ground 5A: LKH-NoCA, [5] - [8]. 10. On 17 December 2019, this Court directed that [5] - [8] of LKH‑NoCA would not be entertained in these appeals. In other words, LKH is only permitted to make submissions in relation to Ground 3 and Ground 5B as set out in the LKH-NoCA. B. BACKGROUND 11. The recent months of protests and social unrest leading to the unprecedented scenes of escalating violence and danger on the streets of Hong Kong were triggered in February 2019 when the Government introduced the Fugitive Offenders and Mutual Legal Assistance in Criminal Matters Legislation (Amendment) Bill 2019 (“the Bill”) to the Legislative Council (“the LegCo”).[2] The Bill was very controversial. Many members of the public, different organisations and professional bodies had expressed grave concerns about it. Many different public assemblies and processions had since been held to urge the Government to amend, delay or withdraw the Bill. 12. After proposing further amendments to the Bill, the Government indicated that it would seek to have the Bill debated and passed by the LegCo before the end of the LegCo session in July 2019. This only led to even more massive protests and public processions. 13. At [2] ‑ [4] of the Judgment, the Judges pointed out that: (1) Although the protests began in opposition to the Bill, the unrest had continued notwithstanding the Government’s decision in June 2019 to suspend the legislative process for the Bill, the acknowledgement since 9 July that the Bill was “dead”, the announcement on 4 September that the Bill would be formally withdrawn and the actual withdrawal of the Bill in the LegCo on 16 October. (2) Since 9 June to 4 October 2019, according to the Government’s records, over 400 “public order events” (referring to assemblies and processions) arising out of the Bill and other matters had been held, with a significant number of them ending up in outbreaks of violence. (3) The degree of violence had escalated and, in particular, on 29 September and 1 October, gatherings took place in many districts in which certain protestors blocked major thoroughfares, vandalised Mass Transit Railway (“MTR”) stations and facilities, government offices and selected shops, and hurled petrol bombs at police officers, vehicles and police stations. 14. Most pertinently, the uncontested evidence shows that the outbreaks of violence are escalated by the more radical and violent protestors employing the “black-bloc” tactics[3] to avoid identification and arrests, who are to a certain extent supported or at least condoned (and hence emboldended) by protestors who participate in initially peaceful public assemblies or processions. Such tactics is facilitated in light of the following[4]: (1) Public order events are highly fluid in nature. A public meeting or procession that is initially lawful and peaceful can quickly turn into an unauthorized or unlawful assembly. (2) The most violent and radical protestors are those who have their faces covered and therefore their identities concealed. They are also often equipped with gas masks and refuse to disperse even when the police deploy tear gas. (3) These radical and violent protestors with their faces covered often mix themselves into a larger group of protestors (taking part in a largely peaceful public meeting or procession) who are also wearing masks. This has rendered identification most difficult when the violent protestors with their faces concealed can easily slip away amidst the chaos they have aroused. (4) The more radical and violent protestors are often supported by many less violent protestors (also wearing facial covers to avoid recognition) by, for example, the provision of resources (such as food and water), tools and even weapons, as well as free rides when the police are taking actions of dispersal and arrests. (5) Moreover, the more radical and violent protestors committing criminal conducts are encouraged by and find it essential to regard that they have the support or back-up of those peaceful protestors who themselves are also wearing face covering masks and present at the public assemblies or processions. (6) In this respect, as the expert evidence shows[5], mask functions as a facilitator of anonymity. When anonymity joins with group function, participants’ responsibilities become easily diffused or shared. Individuals tend to feel they are being supported by a lot of people. This is an emboldenment effect. If the dominant group value or purpose in the situation is anti‑social, the individual will conform to that and more likely to act antisocially[6]. 15. Large scale incidents of breach of peace in Hong Kong ensued. In blatant defiance of the law, the more radical and violent protestors have perpetrated widespread criminal conducts ranging from unlawful assembly to serious property damage, assault on persons, arsons and use of lethal weapons. 16. The unchallenged evidence shows that from 9 June to 4 October 2019, violent and radical protestors had[7]: (1) forcefully and repeatedly charged police cordon lines with the use of weapons whilst protected by body armour, and blocked roads and tunnels (including main thoroughfares) with various objects which had resulted in persons trapped with or in their vehicles and, on some occasions, attacked on drivers who voiced displeasure at such blockages; (2) vandalised and wrecked serious damage to public facilities (such as pavements, roadside fences and barriers, signages, dust bins, lamp posts, traffic lights, street lights and CCTV cameras, etc) and Government buildings (such as the Legislative Council Complex, Police Headquarters, Cheung Sha Wan Government Offices, etc), set fire by burning public properties outside or at police stations and on the streets in multiple districts, and hurled inflammable liquid bombs at police vehicles, police stations and even police officers and at and within the MTR stations; (3) damaged private shopping malls, shops and restaurants, etc; there were also reports of looting and theft in some of the shops that were damaged; (4) damaged residential quarters and harassed residents of the same; (5) crippled the operations of critical transport infrastructure including the Hong Kong International Airport, a large number of the MTR stations and tracks (notwithstanding and in breach of relevant injunctive orders in place, and at the same time causing massive, serious and repeated destruction of facilities in the MTR stations resulting in the closure of multiple MTR stations due to safety concerns and the need for urgent repair as well as taking deliberate acts to stop or delay MTR trains from operating during morning rush), and the Cross-Harbour Tunnel, etc; (6) harassed and attacked ordinary citizens and police officers holding different political views by a range of objects and lethal weapons, such as high-powered laser pointers (which were sometimes shone directly into the eyes of the victim from a short distance), slingshots and catapults to launch a variety of projectiles, sharp or sharpened objects (including box cutters and sharpened bamboo poles), bricks and inflammable liquid bombs etc, causing numerous injuries of various degree; and (7) stopped vehicles and threatened drivers with damage to their vehicles to force them to yield up their mobile telephones for examination or to pay the protestors a sum of money. 17. The evidence therefore has shown that by the beginning of October 2019, the above acts of radical and violent protesters had seriously breached public peace, and posed a grave and genuine danger to the police and other members of the public. Normal functions of the Hong Kong community had been severely disrupted. More importantly, there were signs of and even declared intent by violent protestors to procure further escalation in the degree of violence and vandalism in unlawful assemblies which might as a result turn into riots, pushing Hong Kong to a most perilous situation[8]. 18. As acknowledged by the Judges[9], it was under this “dire situation” of Hong Kong, that the CEIC on 4 October 2019 enacted the PFCR under the ERO. 19. In announcing the reasons and basis for enacting of the PFCR at the press conference on 4 October 2019, the Chief Executive (“the CE”) emphasized that the decision to invoke the ERO as Hong Kong was in “an occasion of serious danger” and was a necessary one in the public interest[10]. In particular: (1) In relation to the current situation, the CE mentioned that: “Protests arising from [the Bill] have continued for nearly four months now. Over this period, protesters’ violence has been escalating and has reached a very alarming level in the past few days, causing numerous injuries and leading Hong Kong to a chaotic and panic situation. We are particularly concerned that many students are participating in these violent protests or even riots, jeopardising their safety and even their future. As a responsible government, we have the duty to use all available means in order to stop the escalating violence and restore calmness in society.”[11] (2) In relation to the PFCR, the CE mentioned that: “… [the PFCR] will create a deterrent effect against masked violent protesters and rioters, and will assist the Police in its law enforcement… … … the objective of [the PFCR] is to end violence and restore order, and I believe this is now the broad consensus of Hong Kong people. … [the PFCR] targets rioters or those who resort to violence. That’s why [the PFCR] contains defence and exemptions to cater for legitimate needs to wear a mask, and we believe that by so doing we have struck the necessary balance.”[12] C. THE ERO AND THE PFCR 20. The ERO is a short piece of legislation with only three substantive sections. They provide as follows: “2. Power to make regulations (1) On any occasion which the Chief Executive in Council may consider to be an occasion of emergency or public danger he may make any regulations whatsoever which he may consider desirable in the public interest. (2) Without prejudice to the generality of the provisions of subsection (1), such regulations may provide for— (a) censorship, and the control and suppression of publications, writings, maps, plans, photographs, communications and means of communication; (b) arrest, detention, exclusion and deportation; (c) control of the harbours, ports and waters of Hong Kong, and the movements of vessels; (d) transportation by land, air or water, and the control of the transport of persons and things; (e) trading, exportation, importation, production and manufacture; (f) appropriation, control, forfeiture and disposition of property, and of the use thereof; (g) amending any enactment, suspending the operation of any enactment and applying any enactment with or without modification; (h) authorizing the entry and search of premises; (i) empowering such authorities or persons as may be specified in the regulations to make orders and rules and to make or issue notices, licences, permits, certificates or other documents for the purposes of the regulations; (j) charging, in respect of the grant or issue of any licence, permit, certificate or other document for the purposes of the regulations, such fees as may be prescribed by the regulations; (k) the taking of possession or control on behalf of the Chief Executive of any property or undertaking; (l) requiring persons to do work or render services; (m) payment of compensation and remuneration to persons affected by the regulations and the determination of such compensation; and (n) the apprehension, trial and punishment of persons offending against the regulations or against any law in force in Hong Kong, and may contain such incidental and supplementary provisions as appear to the Chief Executive to be necessary or expedient for the purposes of the regulations. (3) Any regulations made under the provisions of this section shall continue in force until repealed by order of the Chief Executive in Council. (4) A regulation or any order or rule made in pursuance of such a regulation shall have effect notwithstanding anything inconsistent therewith contained in any enactment; and any provision of an enactment which may be inconsistent with any regulation or any such order or rule shall, whether that provision shall or shall not have been amended, suspended or modified in its operation under subsection (2), to the extent of such inconsistency have no effect so long as such regulation, order or rule shall remain in force. (5) Every document purporting to be an instrument made or issued by the Chief Executive or other authority or person in pursuance of this Ordinance or of any regulation made hereunder and to be signed by or on behalf of the Chief Executive or such other authority or person, shall be received in evidence, and shall, until the contrary is proved, be deemed to be an instrument made or issued by the Chief Executive or that authority or person. 3. Penalties (1) Without prejudice to the powers conferred by section 2, regulations made hereunder may provide for the punishment of any offence (whether such offence is a contravention of the regulations or an offence under any law applicable to Hong Kong) with such penalties and sanctions (including a maximum penalty of mandatory life imprisonment but excluding the penalty of death), and may contain such provisions in relation to forfeiture, disposal and retention of any article connected in any way with such offence and as to revocation or cancellation of any licence, permit, pass or authority issued under the regulations or under any other enactment as to the Chief Executive in Council may appear to be necessary or expedient to secure the enforcement of any regulation or law or to be otherwise in the public interest. (2) Any person who contravenes any regulation made under this Ordinance shall, where no other penalty or punishment is provided by such regulations, be liable on summary conviction to a fine of $5,000 and to imprisonment for 2 years. 4. Declaratory provision as to effect of an amending Ordinance For the purpose of removing doubts it is hereby declared that the words in subsection (1) of section 2 ‘he may make any regulations whatsoever which he may consider desirable in the public interest’ shall be deemed always to have included power to make such regulations as are mentioned in paragraph (g) of subsection (2) of section 2 and it is further declared that the provisions of subsection (4) of section 2 shall be deemed always to have been incorporated herein.” 21. The history of the enactment of the ERO and its use since its enactment in 1922 has been summarized at [15] ‑ [20] of the Judgment. We will elaborate on it when we deal with the submissions pertaining to the ERO below. 22. The PFCR is also a short piece of regulation with six sections. The substantive provisions relevant for the present purposes are as follows[13]. 23. Section 3 of the PFCR imposes a prohibition on the use of and makes it an offence to use facial covering in certain circumstances by providing: “(1) A person must not use any facial covering that is likely to prevent identification while the person is at— (a) an unlawful assembly (whether or not the assembly is a riot within the meaning of section 19 of Cap. 245[14]); (b) unauthorised assembly; (c) a public meeting that— (i) takes place under section 7(1) of Cap. 245; and (ii) does not fall within paragraph (a) or (b); or (d) a public procession that— (i) takes place under section 13(1) of Cap. 245; and (ii) does not fall within paragraph (a) or (b). (2) A person who contravenes subsection (1) commits an offence and is liable on conviction to a fine at level 4[15] and to imprisonment for 1 year.”[16] 24. Section 3 therefore prohibits the use of facial covering likely to prevent identification in four specific situations: (1) Under section 3(1)(a) – at an “unlawful assembly” (非法集結)[17]. (2) Under section 3(1)(b) – at an “unauthorised assembly” (未經批准集結)[18]. (3) Under section 3(1)(c) – at a public meeting (公眾集會) which has been notified to and not prohibited by the Commissioner of Police (“the Commissioner”) and which is not an unlawful or unauthorised assembly[19]. (4) Under section 3(1)(d) – at a public procession (公眾遊行) which has been notified and is not objected to by the Commissioner and which is not an unlawful or unauthorised assembly[20]. 25. In short, the prohibition in section 3(1) applies to persons at unlawful assemblies, unauthorised assemblies, public meetings notified and not prohibited, and public processions notified and not objected to, and does not prima facie apply to public meetings or processions that do not need to be notified, although such meetings or processions may turn into unauthorised assemblies or unlawful assemblies. 26. Section 4 of the PFCR sets out a defence to the offence under section 3(2) of lawful authority or reasonable excuse. The accused thus bears the evidential burden to raise the defence but it is the prosecution’s legal burden to disprove the defence. The scope of reasonable excuse is not exhaustively defined, but three grounds are specifically included, namely, professional or employment reasons, religious reasons and pre‑existing medical or health reasons. 27. Section 5 concerns police powers in relation to facial covering: “(1) This section applies in relation to a person in a public place who is using a facial covering that a police officer reasonably believes is likely to prevent identification. (2) The police officer may— (a) stop the person and require the person to remove the facial covering to enable the officer to verify the identity of the person; and (b) if the person fails to comply with a requirement under paragraph (a) – remove the facial covering. (3) A person who fails to comply with a requirement under subsection (2)(a) commits an offence and is liable on conviction to a fine at level 3[21] and to imprisonment for 6 months.” 28. “Public place” (公眾地方) has the meaning given by section 2(1) of the POO: “any place to which for the time being the public or any section of the public are entitled or permitted to have access, whether on payment or otherwise, and, in relation to any meeting, includes any place which is or will be, on the occasion and for the purposes of such meeting, a public place.” D. PROCEEDINGS BELOW D1. Grounds of judicial review 29. The Judges at [11] of the Judgment summarized the grounds of judicial review that were allowed to be advanced by KWH and LKH and considered by them at the rolled-up hearing. There is no suggestion that the summary is incorrect. We will respectfully adopt them for the purpose of this judgment: (1) Ground 1: the ERO is unconstitutional because it amounts to an impermissible grant or delegation of general legislative power by the legislature to the CEIC and contravenes the constitutional framework under the BL. (2) Ground 2: the ERO was impliedly repealed in 1991 by section 3(2) of the Hong Kong Bill of Rights Ordinance (Cap 383) (“the HKBORO”) either entirely or to the extent it is inconsistent with section 5 of that latter Ordinance; alternatively, it was impliedly repealed in 1997 by Article 4 of the ICCPR[22] (“ICCPR4”) as applied through BL39. (3) Ground 3: the ERO, to the extent that it empowers the CEIC to make regulations restricting fundamental rights protected by the BL and BOR, falls foul of the “prescribed by law” requirement in BL39. (4) Ground 4: by reason of the principle of legality, the general words in section 2(1) of the ERO are not to be read as allowing the CEIC to adopt measures that infringe fundamental rights of the individual in circumstances far removed from emergency situations. The PFCR is therefore ultra vires — beyond the power conferred on the CEIC by the ERO. (5) Ground 5A: section 3 of the PFCR amounts to a disproportionate restriction of a person’s liberty and privacy, freedom of expression and right of peaceful assembly under BOR5, 14, 15, 16, 17 and BL27. (6) Ground 5B: section 5 of the PFCR constitutes a disproportionate interference with the rights and freedoms protected by BL27, 28 and 31 and BOR5(1), 8, 14 and 16. 30. When considering these grounds, it is important to note that [23] : (1) The challenge of the constitutionality of the ERO is confined to the “public danger” ground in the ERO and to the powers it confers when the CEIC considers there to be an occasion of public danger (which is the ground on which the PFCR has been made). (2) All the applicants do not seek to impugn the good faith of the CEIC in invoking the ERO to enact the PFCR. (3) All the applicants do not seek to challenge the CEIC’s decision to enact the PFCR as Wednesbury unreasonable. D2. The Judgment 31. By their comprehensive and detailed Judgment, the Judges allowed the judicial reviews on Grounds 1, 5A and 5B, but rejected all the other grounds. We will look at their reasons in greater details later. For the present purposes, those reasons can be summarised as follows. 32. In allowing Ground 1, the Judges found essentially that: (1) On a proper construction of the BL as a whole, and in particular BL2, 8, 17(2), 18, 48, 56, 62(5), 66 and 73(1), the constitutional order established by the BL after 1997 vests only in the LegCo the general legislative power of the HKSAR. The BL has expressly provided the LegCo to be the legislature of the HKSAR. The CEIC is therefore not given any general legislative power under the BL even though she would have the power to make subordinate legislation. See [38] - [52] of the Judgment. (2) However, on a proper reading of the ERO, and given the widest possible scope and nature of “regulations” that the CEIC can enact under it when the CEIC is “satisfied” that there is any occasion of “public danger” (which by itself is an undefined but very wide term covering many plausible situations), the CEIC is in substance granted or delegated with a general legislative power by the ERO to enact what are in nature primary legislations. This is impermissible under the BL. See [53] - [81] of the Judgment. (3) The theme of continuity and all the relevant authorities decided before 1997 which concluded that the ERO was constitutional and valid do not assist the respondents to uphold the constitutionality of the ERO. This is so as the authorities were premised on the specific constitutional order of Hong Kong before the enactment of the BL and the view that the Hong Kong legislature at that time could be regarded as “supreme” in that respect. These reasons and bases are no longer valid after the enactment of the BL. Under the BL, the LegCo is no longer sovereign and supreme within its province and the constitutional order is that the LegCo is the legislature of Hong Kong. These authorities are therefore distinguishable and no longer applicable. For the same reasons, the ERO also did not become the law of Hong Kong after 1997 through BL8 because the BL does not permit the LegCo to grant to the CEIC “what is essentially the LegCo’s own constitutional power to enact, amend or repeal laws”. See [52] and [82] - [93] of the Judgment. (4) In the premises, the ERO, insofar as it empowers the CEIC to make regulations on any occasion of public danger, is incompatible with the BL. See [37] and [97] of the Judgment. (5) The court leaves open the question of the constitutionality of the ERO insofar as it relates to any occasion of emergency. See [96] of the Judgment. 33. In rejecting Ground 2, the Judges explained at [98] ‑ [109] of the Judgment that: (1) The applicants’ case in support of the implied repeal ground is premised on the argument that the ERO by its terms applies not only in emergencies that fall within the meaning of section 5 of the HKBORO. It therefore allows derogation from the fundamental rights protected by the BOR or ICCPR other than in the exceptional case of “public emergency” specifically defined and permitted under section 5 of the HKBORO or ICCPR4. The ERO is therefore incompatible with section 5 of the HKBORO and, by section 3(2) of the HKBORO, is repealed before 1997. Alternatively, it is inconsistent with ICCPR4 and thus implicitly repealed when the BL commenced operation on 1 July 1997 under BL39[24]. (2) Although accepting that the ERO by its terms is intended to apply not only in emergencies that fall within the meaning of section 5 of the HKBORO[25], the Judges find that the applicants’ argument of compatibility is flawed as it has conflated the concepts of derogation from the BOR itself and restriction of non-absolute rights under and in compliance with the BOR. (3) As rightly accepted by the respondents, the powers of the ERO may not be exercised with the effect of derogation from the BOR except in times of emergency officially proclaimed in accordance with section 5 of the HKBORO. In other occasion of emergencies, measures may be taken under the ERO which have an effect of restricting the rights protected by the BOR, provided the restriction is prescribed by law and compliant with the proportionality test. These are two different concepts. (4) Hence, the proper approach to the ERO is that: (a) Only in times of emergency officially proclaimed and in accordance with the other requirements of section 5 of the HKBORO, measures may be adopted under the ERO which derogate from the BOR. (b) In other situations, measures adopted under the ERO may not derogate from the BOR, and any measure that has the effect of restricting fundamental rights, it has to satisfy the dual requirements that the restriction is prescribed by law and meets the proportionality test. 34. In relation to Ground 3, the Judges rejected the argument that the ERO falls foul of the prescribed by law requirement due to the wide scope of power and the undefined meaning of “public danger”. They concluded that the ERO by itself does not and does not seek to limit any fundamental rights. In the premises, the requirement of legal certainty should be applied to the actual regulations that are enacted under the ERO but not generally to the enabling ERO. See [110] ‑ [120] of the Judgment. 35. Ground 4 seeks to impugn the PFCR itself. Under it, the applicants argued that, properly construed in accordance with the principle of legality, the ERO does not, expressly or by necessary implication, empower the CEIC to make regulations that impose restrictions on fundamental rights of the kind and to the extent found in the PFCR. The Judges found that this ground is inconsistent with Ground 1. Since they had allowed Ground 1, they therefore did not find it necessary to deal with this ground. See [121] ‑ [125] of the Judgment. 36. In allowing Ground 5A, in adopting the 4‑step proportionality test laid down in Hysan Development Co Ltd v Town Planning Board (2016) 19 HKCFAR 372 at [134] - [135][26]: (1) The Judges found that the restrictions imposed by section 3 of the PFCR engage the fundamental rights of the freedom of assembly[27], the freedom of speech or expression[28], and the right to privacy[29]. These rights are however not absolute and may be subject to lawful restrictions satisfying the proportionality test. See [127] - [128] of the Judgment. (2) They concluded that sections 3(1)(a) ‑ (d) of the PFCR satisfy the legitimate aims test[30] and the rational connection test. See: [130] - [146] of the Judgment. (3) Applying the reasonable necessity standard, the Judges also found that section 3(1)(a) (ie, in prohibiting the wearing of facial cover at an unlawful assembly) satisfies steps 3 and 4, in that the restriction is no more than reasonably necessary and strikes a reasonable balance in restricting the relevant fundamental rights and achieving the legitimate aims. They further explained that prohibiting the use of facial cover at unlawful assembly falls within the wide margin of discretion afforded to the Government to devise and implement measures to restrict unlawful and violent conduct. This would not result in an unacceptably harsh burden on the individual. They hold the view that no person should take part in an unlawful assembly in the first place, it being a criminal offence under section 18(1) of the POO. The Judges, therefore concluded that section 3(1)(a) meets the proportionality test and is lawful. See [149] ‑ [151] of the Judgment. (4) However, they did not find that the restrictions under sections 3(1)(b) ‑ (d) satisfy step 3 (and hence not necessary to deal with step 4). They came to that view after considering the following five distinguishing features relating to these provisions[31]: (a) Sections 3(1)(c) and (d) relate to public meetings and processions which may remain authorised and peaceful from beginning to end. The prohibition therefore directly interferes with these participants’ right of privacy or freedom of expression while taking part in perfectly lawful activities in the exercise of their right of peaceful assembly. (b) Although section 3(1)(b) relates to unauthorised assemblies, such assemblies may yet be entirely peaceful, without any violence being used or threatened by anyone participating in them. (c) The prohibition applies to any assembly or procession for whatever causes, but is not restricted to them arising from the Bill. Such assemblies or processions may be taking place for many and different causes, such as LGBT, labour or migrant rights, and traditionally, these gatherings have been orderly and peaceful. Participants in these assemblies or processions may have perfectly legitimate reasons for not wishing to be identified or seen to be supporting such causes. (d) The prohibition applies to any person while he or she is “at” any unauthorised assembly, public meeting or public processions. It is uncertain whether the restrictions imposed by these provisions cover not only participants of the types of gathering referred to in those provisions, but also any person who is physically present at the gathering in question. (e) The prohibition applies to facial covering of any type and used for whatever reasons, even if they are worn for religious, cultural, aesthetic or other legitimate reasons. It catches anyone wearing a facial covering which is “likely” to prevent identification. (5) In the premises, having regard to (a) the reach of the impugned restrictions to perfectly lawful and peaceful public gatherings, (b) the width of the restrictions affecting public gatherings for whatever causes, (c) the lack of clarity as regards the application of the restrictions to persons present at the public gathering other than as participants, (d) the breath of the prohibition against the use of facial covering of any type and worn for whatever reasons, (e) the absence of any mechanism for a case-by-case evaluation or assessment of the risk of violence or crimes such as would justify the application of restrictions, (f) the lack of robust evidence on the effectiveness of the measures, and (g) the importance that the law attaches to the freedom of expression, freedom of assembly, procession and demonstration, and the right to privacy, the Judges did not find the restrictions imposed under sections 3(1)(b) - (d) to be proportionate to the legitimate aims sought to be achieved by imposing those restrictions[32]. See [166] - [167] of the Judgment. 37. In allowing Ground 5B: (1) The Judges found that section 5 engages the non-absolute right of the freedom of the person or right to liberty protected by BL28 and BOR5, and that the measures adopted under it are rationally connected to the legitimate aims to assist in law enforcement, investigation and prosecution by enabling police officers to verify the identity of all masked individuals not during assemblies or processions but also in public places in the prevailing circumstances of public danger in Hong Kong. See [169] ‑ [184] of the Judgment. (2) They however considered that measures provided under section 5 are of a remarkable width: (a) There is practically no limit on the circumstances in which the power under that section can be exercised by a police officer, save that (i) the person is in a public place, and (ii) the facial covering used is reasonably believed by the police officer to be likely to prevent identification; (b) The power can be exercised irrespective of whether there is any public meeting or procession taking place in the vicinity and regardless of whether there is any risk of outbreak of violence or other criminal acts, at the place where the person is found, or in the neighbourhood or anywhere else in Hong Kong; (c) The power may on the face of it be used by a police officer for random stoppage of anyone found wearing a facial covering in any public place. See [185] ‑ [188] of the Judgment. (3) Given this remarkable width, the Judges were of the view that the measures adopted under section 5 exceed what is reasonably necessary to achieve the legitimate aims even in the prevailing turbulent circumstances in Hong Kong, and that they fail to strike a reasonable balance between societal benefits promoted and the inroads made into the protected rights. See [189] ‑ [190] of the Judgment. 38. For all the above reasons, after hearing further submissions on the relief that should be made, the Judges by the Decision, allowed the judicial reviews and declared, among others, that: (1) The ERO, insofar as it empowers the CEIC to make regulations on any occasion of public danger, is incompatible with the BL, and consequently, the PFCR made pursuant to it on an occasion of public danger is also invalid and of no effect. (2) Sections 3(1)(b), (c) and (d) of the PFCR is inconsistent with BL27 and BOR14, 16 and 17, and is therefore null, void and of no effect. (3) Section 5 of the PFCR is inconsistent with BL 28 and BOR5 and is therefore null, void and of no effect. 39. They further ordered that the above declarations be suspended so as to postpone its coming into operation until the end of 29 November 2019 or further order of the court. Given there is no further order later, the declarations eventually took effect on 30 November 2019. 40. The main appeals are brought by the respondents challenging the Judges’ rulings in relation to Grounds 1, 5A and 5B. It is therefore convenient for us to consider these grounds first. E. GROUND 1 E1. Jurisdiction to examine constitutionality 41. Ground 1 involves the court’s scrutiny of the constitutionality of the ERO, a pre‑1 July 1997 law adopted as laws of the HKSAR. The fact that the court has jurisdiction to do so is and should not be controversial. However, given its immense importance, we consider it appropriate to elaborate the point against the relevant framework of the BL as follows. 42. Under BL8, the laws previously in force in Hong Kong, including ordinances, shall be maintained except for any that contravenes the BL, and subject to any amendment by the legislature of the HKSAR. BL18 further provides that the laws in force in the HKSAR shall be the BL, and laws previously in force in Hong Kong as provided for in BL8 and, the laws enacted by the legislature of the Region. BL8 and BL18 are supplemented by BL160(1), which provides that: “Upon the establishment of the [HKSAR], the laws previously in force in Hong Kong shall be adopted as laws of the Region except for those which the Standing Committee of the National People’s Congress (‘the NPCSC’) declares to be in contravention of this Law. If any laws are later discovered to be in contravention of this Law, they shall be amended or cease to have force in accordance with the procedure as prescribed by this Law.” 43. In its Decision dated 23 February 1997 (“the NPCSC’s Decision”), the NPCSC pursuant to BL160 declared that those laws previously in force in Hong Kong listed in Appendixes I and II were in contravention of the BL and were not adopted as the laws of the HKSAR. Other than those laws, all laws previously in force were adopted as laws of the HKSAR. Paragraph 6 of the NPCSC’s Decision repeats the last sentence in BL160(1) with respect to the laws previously in force adopted as laws of Hong Kong. 44. Both BL160 and the NPCSC’s Decision ensure the preeminence of the BL over all pre‑1 July 1997 laws, even after being adopted as laws of the HKSAR upon its establishment. 45. The ERO was enacted in February 1922. It was an ordinance previously in force in Hong Kong prior to 1 July 1997. As it was not included in either Appendix I or II to the Decision, it has been adopted as laws of the HKSAR. It is however not the respondents’ case that the NPCSC’s Decision is final or conclusive on the constitutionality of the ERO. The respondents accept that the constitutionality of the ERO is still subject to judicial scrutiny. The respondents’ position must be correct. For the law on this point is well settled. 46. In HKSAR v Hung Chan Wa & Another (2006) 9 HKCFAR 614, the Court of Final Appeal refused to make a “prospective overruling” in respect of a certain provision which was previously in force but was, after judicial scrutiny on its constitutionality, remedially interpreted to make it constitutionally compliant. Li CJ at [9] said: “[BL 160(1)] supplements articles such as [BL8 and BL18] in making it clear that laws previously in force shall be adopted except for those which the [NPCSC] declares to be in contravention of the Basic Law. Apart from the laws so declared to be in contravention, [BL160] recognizes that there may be laws which are discovered after 1 July 1997 to be in contravention. In relation to them, [BL160(1)] provides that ‘they shall be amended or cease to have force in accordance with the procedure as prescribed by this Law.’…” 47. Li CJ then went on to hold at [11] - [15] that BL160 does not apply to judicial procedure and that the reference of “shall be amended or cease to have force” in BL160(1) connotes a legislative procedure. At [11], Li CJ specifically referred to a judicial declaration of contravention of the BL in relation to a pre‑1 July 1997 law. Evidently, the judicial power to make such a determination derives from BL19(1) and BL80: see Ng Ka Ling & Others v Director of Immigration (1999) 2 HKCFAR 4, per Li CJ at p25G-J. 48. Another ready example of the court scrutinizing the constitutionality of a pre‑1 July 1997 law is W v Registrar of Marriage (2013) 16 HKCFAR 112. There, the Court of Final Appeal, by majority, held that sections 20(1)(d) and 40 of the Marriage Ordinance, underpinned by the common law criteria in Corbett v Corbett (otherwise Ashley) [1971] P 83, for determining who was a “woman” for the purpose of marriage, were unconstitutional because, having regard to the contemporaneous jurisprudence, they failed to give proper effect to the constitutional right to marry under BL37 and article 19(2) of the BOR and impaired the very essence of the right to marry. 49. As BL160(1) and the NPCSC’s Decision both envisage, there may be laws which were previously in force and adopted as laws of the HKSAR but are later found to be in contravention of the BL. Under the framework of the BL, the constitutionality of such a law can be dealt with either by legislative procedure or judicial process when a challenge is mounted in court whereupon the court has the jurisdiction and indeed the constitutional duty to deal with the constitutionality issue and, if found to be the case, to declare such a law to be in contravention of the BL. 50. In so doing, the court does not act contrary to BL160 or in any way diminish the authority of the NPCSC’s Decision. As said, both BL160 and the NPCSC’s Decision maintain the preeminence of the BL over all pre‑1 July 1997 laws, even after adoption as laws of the HKSAR upon its establishment. When law develops, as it must, to cater for the changing needs of the society, it is not inconceivable that a pre‑1 July 1997 law which was formerly constitutional compliant might be found in contravention of the BL later when examined against the context of the current societal circumstances and by reference to the contemporaneous jurisprudence. If and when it happens, the court will declare that law, which is no longer constitutional compliant, to be in contravention of the BL, thereby safeguarding the preeminence of the BL as a living constitutional instrument over all pre‑1 July 1997 laws even after adoption as laws of the HKSAR. This is entirely consistent with the purpose of BL160 and the NPCSC’s Decision. E2. Core issue and the parties’ main submissions 51. For Ground 1, the core issue is whether the emergency regulations made under the ERO are subordinate legislation or primary legislation. If the former, it is acceptable. If the latter, it contravenes the BL, rendering the ERO an unconstitutional delegation of general legislative powers by the LegCo to the CEIC. 52. Mr Yu SC, together with Mr Suen SC, Mr Ma and Mr Lui, for the respondents, complained that in reaching the ruling that the ERO is unconstitutional, the Judges disregarded the theme of continuity which remains despite the change in constitutional order. He submitted that central to the Judges’ reasoning is the erroneous finding that because the constitutional order in Hong Kong has changed, the functions and powers of the LegCo and the Executive have changed so fundamentally under the BL framework that the ERO should be held to be inconsistent with the BL. 53. Further and irrespective of the theme of continuity, Mr Yu argued that the Judges erred in its construction and application of the constitutional order under the BL including BL56(2) which recognizes and reinforces the power of the LegCo to delegate (a fortiori in emergency regulations). He complained that the Judges failed to appreciate the true nature of emergency regulations and the ground of pubic danger, and to examine the same in its analysis and erroneously treated the ERO merely as a piece of legislation authorizing the making of subordinate legislation, having no regard to the true nature of emergency regulations under the ERO. He contended that the Judges erred in ruling that emergency regulations made by the CEIC on the public danger ground are not subordinate legislation referred to in BL56(2). 54. Mr Yu submitted that the real question raised by Ground 1 is whether the ERO contravenes the BL. He argued that there is no such contravention and the Judges erroneously adopted a narrow or rigid approach in construing the BL, and therefore failed to appreciate that the delegation of powers to the CEIC to make subordinate legislation on occasion of public danger is reasonably required and implied under the BL, quite apart from and irrespective of express provisions such as BL56(2) and 62(5). 55. Ms Li SC, with Mr Chan SC, Mr Deng, Mr Tam, Mr Yeung and Ms Wong, for KWH, accepted that the CE has the constitutional power to take emergency measures which can be provided for by suitable legislation catering for the limited circumstances in which derogation from the HKBORO/ICCPR rights are permitted except in the case of non‑derogable rights and/or other circumstances of emergency where no such derogation is permitted and the HKBORO/ICCPR rights as applied to the HKSAR through BL39 must not be infringed. 56. On the theme of continuity, Ms Li emphasized that the Judges did not hold the concept of emergency regulations as no longer constitutional after 1997. The problem is the impermissible and general terms on which this conferment of legislative power was done in the ERO. She argued that the theme of continuity does not operate as a presumption of constitutionality for any particular piece of pre-1997 legislation. Continuity depends on subject matter. The overriding principle is that nothing shall contravene the BL and the principle of continuity must be subject to this overriding principle. There exists core powers and functions that are exclusively reserved to the LegCo as prescribed by the BL which may not be conferred to the CEIC in the manner as the ERO has. She also argued that BL160 does not assist the respondents. 57. Next, Ms Li argued that vague notions of emergency cannot impugn the constitutional scheme. The ERO is exceptionally wide even as an emergency power. The legislative power conferred by the ERO is on the whole general legislative power in substance for the reasons given by the Judges. E3. Theme of continuity 58. In our view, the analysis of the constitutionality of the ERO is informed by the theme of continuity. 59. The theme of continuity is an essential and indeed indispensable policy underlying the BL. In HKSAR v Ma Wai Kwan David & Others [1997] HKLRD 761, Chan CJHC (as he then was) at p774E-F emphasized its utmost importance in these terms: “In my view, the intention of the Basic Law is clear. There is to be no change in our laws and legal system (except those which contravene the Basic Law). These are the very fabric of our society. Continuity is the key to stability. Any disruption will be disastrous. Even one moment of legal vacuum may lead to chaos. Everything relating to the laws and the legal system, except those provisions which contravene the Basic Law, has to continue to be in force. The existing system must already be in place on 1 July 1997. That must be the intention of the Basic Law.” 60. Continuity of course does not mean stagnation of the systems then in place on 1 July 1997: see Chan Yu Nam v Secretary for Justice [2012] 3 HKC 38, per Stock VP (as he then was) at [44]. The systems can further develop to suit the contemporaneous needs and circumstances of our society as Hong Kong progresses as long as they operate within the confines of the BL. 61. That said, Ms Li is correct in submitting that the theme of continuity is not a presumption of interpretation in favour of constitutional compliance when a pre‑1 July 1997 law is challenged. That is not Mr Yu’s argument any way. The significance of the theme for interpreting the BL in this regard is this. 62. As Lord Hoffmann observed in Matadeen v Minister of Education and Science [1999] 1 AC 98 at p108, cited with approval by Stock VP in Chan Yu Nam, at [32]: “… The background of a constitution is an attempt, at a particular moment in history, to lay down an enduring scheme of government in accordance with certain moral and political values. Interpretation must take these purposes into account. ...” Thus, as one of the main policies underlying the BL, the theme of continuity may, depending on the circumstances, relevantly and powerfully inform the interpretation of the provisions of the BL in a challenge against the constitutionality a pre‑1 July 1997 law which has been adopted as part of the laws of the HKSAR after 1 July 1997, such as the ERO. E3.1 History of the ERO in the colonial era 63. In the colonial years, the ERO had been invoked on numerous occasions to cover a host of varying emergencies and public danger. There was a debate in the colonial Legislative Council (“the Pre-97 LegCo”) in 1936 to abrogate one of the emergency regulations made under the ERO. It later survived two challenges before the Full Court in the 1950s. (a) Invocations 64. In The Use and Abuse of Emergency Powers by the Hong Kong Government (1996) HKLJ 47, Norman Miners at pp51 - 55 briefly described the ERO’s legislative history and its invocations since enactment. According to this article, the ERO was not modelled on the then English Emergency Powers Act 1920. Unlike other laws enacted by the Pre-97 LegCo, the emergency regulations made under the ERO were not required to be submitted to London, which meant that they were not subject to the check or censure from London. 65. Over the years, the then Governor in Council (“the GIC”) had made various emergency regulations under the ERO for, inter alia: (1) the general strike and boycott of the colony nearly ruining its economy between June 1925 and October 1926; (2) the fear of subversion by prescribed organizations in 1927; (3) the severe drought in 1929; (4) the prevention and mitigation of cholera in 1932; (5) the outbreak of World War II in 1939; (6) the communist advance to the border in 1949; (7) the banking crisis in 1965; (8) the outbreak of the cultural revolution and riots in 1967; and (9) the oil crisis in 1974. 66. In June 1995, all emergency regulations which were still in force were revoked by the GIC. (b) A failed attempt to abrogate the regulations made under the ERO 67. On 26 August 1936, the Pre‑1997 LegCo debated a motion moved by a member seeking to abrogate an emergency regulation made under the ERO to provide censorship of the Chinese press[33]. The regulation had been made for some 11 years and had not been repealed by the GIC. One of the arguments advanced in support of the motion was that there could not be an existence of emergency or public danger as envisaged under the ERO for so many years. The Government’s position was that the public danger still existed and would continue until a definitely stable government existed in China and in particular, the danger must be admitted to remain while civil war in China was threatening in one of the neighbouring provinces. In the end, the motion was defeated by a majority of 14 to 2. (c) Two challenges in the court 68. The ERO and the emergency regulations made thereunder were challenged in the court in R v To Lam Sin (1952) 36 HKLR 1 and R v Li Bun & Others [1957] HKLR 89. 69. In To Lam Sin, the accused was convicted of being in possession of hand grenades, contrary to regulation 116A of the Emergency (Principal) Regulations made under the ERO. The offence was punishable by death. One of the grounds that the accused sought to quash the conviction was that the ERO was ultra vires the Pre‑97 LegCo. While counsel for the accused conceded that the Pre‑97 LegCo had the power to delegate, he contended that in the case of the ERO, the delegation to the Governor went far beyond the ordinary power of making by‑laws. Counsel argued that it had by the delegation effaced itself, citing Ping Shek and another v The Canossian Institute (1949) 33 HKLR 66 where the Chief Justice at p71 referred to the effacement test. 70. The Full Court (Howe CJ, Gould and Scholes JJ, Howe CJ giving the judgment) apparently did not prefer the effacement test, noting at p12 its limitations: “The word ‘effaced’ may have different shades of meaning. If in the context it is meant to indicate a complete and final parting with legislative authority, we agree that that would be ultra vires, as it would involve an alteration of the Colony’s constitution. That is clearly beyond the powers conferred by the Letters Patent and is clear law. Again, if ‘partial effacement’ means a final parting with legislative authority in some limited sphere the same reasoning applies. But beyond that, the word appears to be of little assistance.” 71. Howe CJ then went on to state that according to the modern judicial view of the colonial legislature as seen from some recent authorities, a colonial legislature was supreme within their own limits and within the powers conferred by the instruments creating it. Based on that modern view, Howe CJ at p14 said: “… the power of a colonial legislature to delegate is a full one, limited only by the necessity not to go outside the powers conferred by or contravene the rights reserved by the Letters Patent or other constitutional document. As is well known, delegation of powers almost parallel with those given by the [ERO] has been resorted to frequently in England under the various Emergency Powers Acts. If the legislature of Hong Kong is supreme (subject to its constitution) in its own area there can be no reason why it should not act similarly – it is not and cannot be suggested that the law is not one for the ‘peace, order and good government’ of the Colony.” 72. Returning to the effacement test, Howe CJ at p14 held that it would not hold that the delegation of the powers was ultra vires because: “Wide though the powers may be, the Legislative Council retains a very firm and close control by virtue of Section 14 of the Interpretation Ordinance (Cap.1). No regulation involving the imposition of the death penalty can become of force or effect without the prior approval of the Legislative Council – this is provided specifically by the [ERO] as well. All other regulations must be laid on the table at the first meeting of the Legislative Council after their publication in the Gazette and the Council may repeal or amend any of them. There is in addition the overriding power to repeal or amend the Ordinance itself. We see nothing there which can be called effacement as we understand it.” 73. In Li Bun, an appeal by way of case stated was brought against convictions for attempting to export motor vehicles without a licence contrary to the Importation and Exportation Ordinance, as amended by the Emergency (Importation and Exportation) (Amendment) Regulations 1953 and 1954 made under the ERO. Two questions of law were raised. The first was whether the ERO was ultra vires the Governor. The second was whether the Emergency (Importation and Exportation) (Amendment) Regulations 1953 and 1954 were ultra vires the ERO. 74. The Full Court (Hogan CJ, Gould and Reece JJ) treated the first question as involving the decision if the ERO was ultra vires the Pre‑97 LegCo. Hogan CJ acknowledged the modern view of a colonial legislature as mentioned in To Lam Sin but at p96 observed that the supremacy of a colonial legislature, even within its own limits, could not be taken to be altogether unqualified. 75. Hogan CJ referred to the effacement test and noted the ERO survived the test in To Lam Sin. He agreed with To Lam Sin but would not place the same reliance on section 14 of the Interpretation Ordinance, as ensuring the control of the legislature over regulations made under the ERO since that section itself was liable to be repealed by the GIC under section 2(3) of the ERO. 76. Hogan CJ next derived from R v Burah 3 AC 889 and In re The Initiative and Referendum Act (1919) AC 935 the proposition that a colonial legislature could not appoint a coordinate or alternative legislative body. Applying it to the ERO, he said at pp101 - 104: “That it may be desirable for the sake of ‘peace, order and good government’ to have, on occasions of emergency or public danger, a delegated power to legislate speedily and effectively in order to meet any and every kind of problem is, I think, obvious. That such power should, as the Attorney General has argued, extend to all existing legislation seems equally apparent, since otherwise its capacity to make adequate provision for some unexpected danger or emergency might be hampered or limited by its inability to alter an existing Ordinance and that, possibly, at a time when the ordinary legislature could not, as a result of the emergency of state of public danger, be brought into session or meet. But however desirable these powers can they be conferred in this way by the Legislature of Hong Kong or should they have been sought by an amendment of the Letters Patent or a similar alteration in the constitution? … … the fact that the powers conferred by the [ERO] are limited to those occasions which in the opinion of the Governor in Council are occasions of public danger or emergency. This, it seems to me, is the one factor or at any rate the principal factor which prevents them from being regarded as that arming, by a dependent Legislature, of another authority with general legislative authority similar in capacity to its own, on which the Privy Council has frowned. It may be argued that to hold so ample a power as falling below the line which cannot be crossed by the Legislative Council, is to push that line so high as to make it almost meaningless; nevertheless it is a real limitation and since it is the principal reason for not treating the ordinance as ultra vires ab initio, a limitation which must, I think, be strictly observed and strictly enforced, since any tendency to regard it as a mere formality would tend to diminish the importance of the principal, if not indeed the only, factor which saves this ordinance from being ultra vires. The decision as to whether an emergency exists is conferred on the Governor in Council and it is of course contemplated that any such decision will be reached bond fide. But it is a decision which must be taken on each occasion that these powers are exercised and to that extent the power thus conferred may be more closely linked with the occasion that gave rise to it than those expressed to be dependent, like so many ‘emergency’ powers, on some formal proclamation and to continue so long as such proclamation remains in force. Indeed, in pursuance of the principle enunciated by Romer J in Land Realisation Co v Postmaster General (1950) Ch 439 when he said:- ‘The legislature in conferring powers … is conferring them on a person who will presumably use those powers bona fide … in furtherance of the objects for the attainment of which the powers were conferred.’ such a power might well be thought to be more closely confined to the purpose of abating the emergency which gave rise to its use than would those powers which are expressed to be exercisable so long as a particular proclamation remains operative.” Hogan CJ therefore agreed that the Full Court in To Lam Sin was right in concluding that the ERO was not ultra vires. 77. Hogan CJ then examined the second question if the Emergency (Importation & Exportation) (Amendment) Regulations were ultra vires the ERO. For the reasons that he set out, he held that they were not. E3.2 Important points to draw from the history 78. From the above history a number of important points arise. They concern (a) the then constitutional arrangements for legislative powers; (b) the Pre-97 LegCo’s role over the emergency regulations made under the ERO; (c) the judicial reasoning in upholding the validity of the ERO; and (d) the varying circumstances of emergency and public danger in which the ERO was invoked with one common feature. They are all highly relevant to the analysis at hand. (a) Constitutional arrangements for general legislative powers 79. We derive from To Lam Sin and Li Bun the following propositions concerning the constitutional arrangements for the exercise of general legislative powers in the colonial era. 80. First, the Pre-97 LegCo was vested with general legislative powers exclusively. The Governor did not have such powers. 81. Article VII of the Letters Patent appeared to have designated the Governor as the law making authority by providing that: “The Governor, by and with the advice and consent of the Legislative Council, may make laws for the peace, order, and good governance of the Colony.” However, the correct understanding of Article VII was that it conferred the general legislative powers on the Pre-97 LegCo. Thus in Li Bun, Hogan CJ at p92 observed that the powers of the Pre-97 LegCo to make laws have their source in Article VII. (Indeed, had the Governor been vested with general legislative powers under Article VII, the question if the ERO was an impermissible delegation of legislative powers by the LegCo to the GIC would not have arisen at all.) Simply put, pursuant to the constitutional arrangement in the Letters Patent on legislative powers, however wide and extensive the powers the Governor otherwise enjoyed under the Letters Patent, and despite the fact the colonial government was very much executive-led, he did not have general legislative powers as the Pre-97 LegCo did. The Governor only had limited legislative power to make subordinate legislation as delegated by the Pre-97 LegCo: see the third proposition below. 82. Second, the Pre-97 LegCo as a colonial legislature was subject to the Letters Patent and other constitutional requirements which established it as the legislature of Hong Kong. Within its constitutional confines, the Pre-97 LegCo was autonomous or “supreme” in exercising is powers and performing its functions and had the authority as plenary and as ample as the Imperial Parliament in the plenitude of its powers possessed and could bestow. 83. Third, under the common law, the Pre-97 LegCo must not act in a manner which effectively abdicated its exclusive general legislative powers, whether completely or partially, by effacement; or divesting itself of such exclusive powers, again whether completely or partially, by creating a co-ordinate legislative authority of a concurrent or alternative character. Subject to this restriction, it could delegate its legislative powers to the Governor to make subordinate legislation. The corollary is that the Governor only had limited legislative powers as properly delegated to him by the Pre-97 LegCo to make subordinate legislation. 84. We pause to add that as a matter of fact, the Pre-97 LegCo had by numerous enabling provisions in various principal ordinances delegated to the GIC and other executive authorities to make regulations in respect of a wide range of matters[34] and even to the Chief Justice to make rules for practice and procedure of court and tribunal[35]. 85. Fourth, an ordinance by which the Pre-97 LegCo delegated to the GIC and other branches of the Government the power to make regulations was subject to judicial scrutiny to see if it was ultra vires the Pre-97 LegCo. The regulations made, like those made under the ERO, were likewise subject to judicial scrutiny to see if it was ultra vires the enabling ordinance. 86. In sum, under the pre-1 July 1997 constitutional arrangement, the Pre-97 LegCo was vested with general legislative powers exclusively by the Letters Patent. The Governor was not. The Pre-97 LegCo was bound by the Letters Patent and other constitutional requirements in exercising its general legislative powers. Under the common law, subject to the restriction that it could not abdicate its general legislative powers, the Pre‑97 LegCo could delegate to the Governor limited legislative power to make subordinate legislation by virtue of a specific enabling ordinance. That was the extent of the Governor’s legislative power. When called upon, the courts would examine the enabling ordinance and the regulations made thereunder to see if they were ultra vires the Pre-97 LegCo or the enabling ordinance, as the case might be. (b) Pre-97 LegCo’s control over emergency regulations 87. Although the attempt to abrogate the emergency regulations in 1936 failed, the whole process of involving a member putting forward of the motion to abrogate the emergency regulations concerned, the ensuing debate and vote by the Pre-97 LegCo as a whole against the motion, clearly showed that despite section 2(3) of the ERO, the Pre-97 LegCo still considered that it had control over the emergency regulations made thereunder and could, if necessary, abrogate it. (c) Judicial reasoning 88. The reasoning of the Full Court in To Lam Sin and Li Bun in holding that the ERO was intra vires the Pre-97 LegCo merits closer attention. Relevantly, the Full Court held: (1) Delegating by the Pre-97 LegCo to the GIC the power to legislate speedily and effectively in cases of emergency and public danger was obviously desirable for “the peace, order and good government of the Colony”, thereby falling within the mandate given to the Pre-97 LegCo under Article VII of the Letters Patent. (2) The GIC’s delegated power to legislate to cater for emergency and public danger should extend to all existing legislation so as not to hamper his capacity to make adequate provision for some unexpected danger or emergency or limit his inability to alter an existing ordinance, possibly, at a time when the Pre‑97 LegCo could not, as a result of the emergency of state of public danger, be brought into session or meet. (3) However, the ERO could only be invoked in the limited circumstances where the GIC considered to be occasions of emergency or public danger. The ERO was not a blanket delegation by the Pre-97 LegCo to the GIC to make any laws under any circumstances. That limitation was not a formality but must be strictly observed and strictly enforced. (4) The GIC must act bona fide in invoking the ERO. He must exercise the powers conferred on him under the ERO for the furtherance of its objects and purposes. (d) Emergency and public danger varied but with one common feature 89. There is no definition of emergency or public danger in the ERO. Based on the past invocations, what constituted, in the opinion of the GIC, emergency or public danger within the meaning of the ERO, warranting the making of the corresponding emergency regulations covered a host of varying circumstances. They ranged from a state of war, which threatened the very existence of Hong Kong; to widespread and serious breaches of public order and security, which threatened the law and order of the entire community; to outbreak of epidemic disease and natural disaster, which threatened life and health of the public; and to financial and other crisis fundamentally rocking Hong Kong’s economy and jeopardizing its citizens’ livelihood. They reflected a broad concept of emergency and public danger with the commonality of serious and immediate threats to Hong Kong and its citizens as a whole subsisting for a period of time. Correspondingly, the provisions of the ERO were wide and flexible enough for the GIC to legislate speedily and effectively to meet all and every kind of emergency and public danger that he had to specifically grapple with at the time. E3.3 After 1 July 1997 90. We first look at the constitutional arrangement for general legislative powers under the BL. (a) Constitutional arrangement for general legislative powers 91. Under the BL, the constitutional arrangement for general legislative powers on the whole mirrors the past subject to the necessary modifications to reflect the change in the constitutional order. 92. First, under the design of the BL, the Government is very much an executive-led government (BL59 - 65): see the observation of Sir Anthony Mason in The Place of Comparative Law in Developing the Jurisprudence on the Rule of Law and Human Rights in Hong Kong (2007) 37 HKLJ 299, at p304. The CE is constituted the head of the HKSAR (BL43) and enjoys wide and extensive powers: see in particular BL48. However, the CE simply does not have general legislative powers. 93. Second, BL56(2) acknowledges that CE may, in consultation with the Executive Council introduce bills and make subordinate legislation. However, as Mr Yu has fairly accepted, BL56(2) is not an enabling provision conferring on the CE the legislative power to make subordinate legislation. The source of such power can only come from the delegation by the LegCo to the CE. 94. Third, BL66 establishes the LegCo as the legislature of the Region to exercise the general legislative powers vested in the HKSAR under BL17(1). BL73 further mandates the LegCo to exercise the powers and functions as prescribed, including, under sub-paragraph (1), to enact, amend, repeal laws in accordance with the provisions of the BL and legal procedures. Importantly, BL11(2) provides that no law enacted by the LegCo shall contravene the BL. 95. Further, as held by this Court in Chief Executive of HKSAR v President of the Legislative Council [2017] 1 HKLRD 460, per Cheung CJHC (as he then was) at [24] - [25] and per Poon JA (as he then was) at [87], the LegCo is subject to the BL and all other constitutional requirements. Within those confines, the LegCo is otherwise a sovereign body under the BL: Leung Kwok Hung v President of Legislative Council [2007] 1 HKLRD 387, per Hartmann J (as he then was) at [10]; Cheung Kar Shun v Li Fung Ying [2011] 2 HKLRD 555, per A Cheung J (as he then was) at [217]. 96. Fourth, the BL does not create a new legislature out of a vacuum: Cheng Kar Shun v Li Fung Ying, supra, per A Cheung J at [121]. In our view, subject to the BL and other constitutional requirements, the common law principles governing the Pre-97 LegCo continue to apply under the theme of continuity. Thus, the principle of delegation in the colonial era under which the Pre-97 LegCo could delegate to the executive branch of government or any person or body to make subordinate legislation continues to apply after 1997, as suitably modified to reflect the change in the constitutional order. Insofar as the CE is concerned, the power to make subordinate legislation pursuant to such delegation is expressly acknowledged in BL56(2). 97. As a matter of fact, the various ordinances by which the Pre-97 LegCo authorized the executive branch of the Government and the Chief Justice to make regulations referred to above remain in force. After 1 July 1997, the LegCo has enacted further ordinances to empower the executive branch and the Chief Justice to make regulations[36]. It demonstrates that the common law principle of delegation continues to thrive in the post-1 July 1997 era. 98. Fifth, it is settled law since the establishment of the HKSAR that our courts, in exercising their independent judicial power vested with them by BL19(1) and BL80, have a constitutional duty to enforce and interpret the BL and to examine whether legislation enacted by the legislature and executive acts are consistent with the BL and, if found to be inconsistent, to hold them to be invalid: Ng Ka Ling & Others v Director of Immigration, supra, per Li CJ at p25G-J. 99. In sum, the constitutional arrangement under the BL for the exercise of legislative power broadly resembles the past before 1 July 1997. The LegCo is the only institution vested with general legislative powers exclusively. Neither the CE nor, for that matter, other branches of the Government has the general power to legislate. In exercising its functions and powers, the LegCo is bound by the BL and other constitutional requirements. Within the constitutional confines and under the common law principle of separation of powers, the LegCo is autonomous. Like the Pre-97 LegCo, the LegCo can under the common law delegate its legislative powers to the CE and other branches of the Government to make subordinate legislation by enacting specific enabling ordinances. Correspondingly, that is the limited extent to which the CE and other branches of the Government can legislate. When a challenge is made, the court can examine the constitutionality of the enabling ordinance, and the constitutionality and vires of the subordinate legislation made thereunder, as the case may be. 100. It follows that under the constitutional framework of the BL, the LegCo can delegate to the CEIC legislative powers by way of an enabling ordinance to make emergency regulations provided that they are subordinate legislation. As we understand the parties’ submissions, they do not differ on this point. 101. This brings us to the ERO. At this juncture, we look at it in the overall context of continuity. (b) The ERO as an integral option for emergency measures 102. The BL contemplates a wide range of options available to the NPCSC and the Government, as the case may be, allowing different and specific measures to be made to address the varying exigencies of emergency or public danger generally. 103. The first option is vested with the NPCSC alone. In the most extreme case of a state of war as declared by the NPCSC or turmoil endangering national unity or security beyond the control of the Government, BL18 enables the Central People’s Government (the “CPG”) to issue an order applying the relevant national laws in Hong Kong. Other than this dire scenario which necessitates the NPCSC’s action, how to tackle emergency and public danger is basically left with the Government. 104. It is worth noting that where there is an official proclamation of public emergency under section 5 of the HKBORO, measures may be taken derogating from the BOR to the extent strictly required by the exigencies of the situation save and except non-derogable rights: section 5(2)(c)[37]. Those measures must be taken in accordance with law: section 5(1). 105. The second option involves the CPG and garrison upon the request of the Government. Under BL14(3), for maintenance of public order or disaster relief, the Government may ask the CPG for assistance from the garrison. 106. Plainly, other occasions of maintenance of public order or disaster relief where the Government does not need to ask the CPG for assistance from the garrison under BL14(3), and many other cases of emergency and public danger, not limited to maintenance of public order of disaster relief, may happen. To cope with those situations, the BL provides the CE with three further options. 107. The CE may adopt executive and administrative measures in emergencies under BL56(2)[38]. The power to do so, it would appear, comes from the general executive powers of the Government[39], of which the CE is the head[40]. 108. If emergency legislative measures are required, the CE may make a request to the President of the LegCo under BL72(5) to convene an emergency session of the legislature to pass the necessary laws. 109. There is another option which the CE can resort to if emergency legislative measures are required, that is, invoking the ERO to make emergency regulations. As explained above, BL56(2) recognizes that the CE can make subordinate legislation under an enabling ordinance pursuant to the common law principle of delegation by the LegCo, including emergency regulations. In respect of emergency and public danger, as at 1 July 1997, the only ordinance, upheld twice by the court, which delegated to the CEIC the power to make emergency regulations was the ERO. So both the ERO and the CEIC’s power to invoke it to make subordinate legislation to deal with emergency and public danger were clearly within the contemplation of the drafters of the BL. They must have regarded the ERO to be compatible with the BL so that it would remain in our statute book after 1 July 1997. 110. Based on the past invocations, the ERO is powerful and versatile enough to enable the CEIC to legislate speedily and effectively to meet all and every kind of emergency and public danger that imposes serious and subsisting threats to Hong Kong and its citizens[41]. 111. In sum, under the theme of continuity, the BL contemplates that the ERO under which the CE has the power to make emergency regulations is one of the integral options for tackling emergency and public danger. The theme of continuity strongly suggests that the ERO is constitutionally compliant and should remain as part of the laws of Hong Kong. If the ERO were held to be unconstitutional, it would leave a significant lacuna in the law for dealing with emergency and public danger generally. The CE would be deprived of the power to respond swiftly, flexibly and sufficiently by making the necessary emergency regulations even though the circumstances clearly warrant it and it is in the public interest to do so. E3.4 The Judges’ views 112. At [82] ‑ [93] of the Judgment, the Judges dealt with the theme of continuity and To Lam Sin and Li Bun in some details. They took the view that the theme of continuity did not assist the respondents for a number of reasons. 113. First, the Judges noted that there was a fundamental change in constitutional order before and after 1997. Before 1997, under Article VII of the Letters Patent, it was the Governor who, by and with the advice and consent of the Pre-97 LegCo, might make laws for the peace, order, and good government of colonial Hong Kong. Further under Article X, the Governor had a discretion to assent or refuse assent to a bill passed by the Pre-97 LegCo or reserved it for the Crown’s signification. And if the Governor refused to give assent, there was nothing the Pre-97 LegCo could do about it. Under the BL, the LegCo is the legislature of Hong Kong (BL66). While a bill passed by the LegCo may take effect only after it is signed and promulgated by the CE (BL76), there are carefully calibrated provisions requiring the CE either to sign bills or refuse to do so in which case a chain of events would be set in motion that could result in the dissolution of the LegCo or resignation of the CE (BL49, 50 and 52). The Judges concluded that the law-making power of the LegCo under the BL is in substance different from that enjoyed by the Pre-97 LegCo whose constitutional role was to provide advice on, and give consent to, bills which the Governor then enacted into law in exercise of the law-making powers conferred on him under the Letters Patent[42]. 114. However, as we have explained above, properly understood, Article VII vested the general legislative powers not with the Governor but with the Pre-97 LegCo. The Pre-97 LegCo was not a mere advisory body assisting the Governor in making laws. It was the legislature of colonial Hong Kong. Had it not been the case, the judicial discussions in To Lam Sin and Li Bun based on the notion that a colonial legislature was sovereign and supreme within its province and how it could permissibly delegate its law making powers to the GIC in the context of the ERO were quite meaningless. And the Full Court would have decided the challenge that the ERO was ultra vires the Pre-97 LegCo on a totally different basis. The references to the difference before and after 1997 regarding the process after passage of a bill do not detract from the fact that the Pre-97 LegCo was the legislature of colonial Hong Kong under the Letters Patent before 1 July 1997, just is the case of the LegCo for HKSAR under the BL after 1 July 1997. 115. Second, the Judges held that the notion that the colonial legislature was sovereign and supreme within its province, which underpinned the reasoning of the Full Court in To Lam Sin and Li Bun, is no longer an apt description of the LegCo. For the BL is now supreme and even the LegCo cannot act contrary to a requirement under the BL. The LegCo no longer has the plenary power enjoyed by the Imperial Parliament but that which is conferred expressly or by implication on it under the BL[43]. They opined that there is a difference between a constitutional order which prescribes the legislature’s authority to make certain laws and binds the legislature to legislate according to certain procedures, and one which treats the legislature as supreme, citing The Executive Council of the Western Cape Legislature & Others v The President of the Republic of South Africa & Others 1995 (4) SA 877, at [59][44]. 116. As we have explained, the Pre-97 LegCo was always subject to the Letters Patent and other constitutional requirements. It was “supreme” or, as what we would prefer, autonomous, within the constitutional confines. That is the same for the LegCo. It is subject to the BL and all other constitutional requirements. Under the constitutional arrangement in the BL and further based on the common law doctrine of separation of powers, it is autonomous within the constitutional confines. The reference to the South African case does not take the analysis any further. 117. Third, the Judges noted that the ERO was enacted at a time when the Pre-97 LegCo consisted of the Governor, the Official Members and not more than six Unofficial Members which were appointed by the Governor, and was presided over by the Governor. They seemed to have endorsed a submission made in Ping Shek and another v The Canossian Institute, supra, at p72 that the GIC was a body that had actually, through its members, a controlling voice in the Pre-97 LegCo itself[45]. They then pointed out under the BL, the transfer of general legislative power by the ERO has to be examined in the context of a constitutional framework that seeks to ensure that laws are enacted, amended or repealed by a legislature constituted by election and whose composition is carefully prescribed. The LegCo is quite separate from the Government. There may be overlap in membership between the LegCo and the Executive Council, but under BL56, the CE need only consult the Executive Council and is not obliged to accept its majority opinion[46]. 118. In our view, the fact that politically the Governor was in control of the Pre-97 LegCo when the ERO was enacted or indeed at any other time does not detract from the fact that constitutionally and legally the Pre-97 LegCo remained the legislature of colonial Hong Kong. The Governor could not make laws on his own without proper delegation by the Pre-97 LegCo. How he was able to secure such delegation politically is irrelevant in terms of legal analysis. 119. Finally, the Judges considered that the reasoning of Hogan CJ in Li Bun, at pp100 and 102 supports the conclusion that inasmuch as the ERO confers “general legislative powers” on the CEIC (subject only to a limitation as to the occasions of public danger or emergency), the LegCo is deprived of any effective role to play in making of regulations which may range over virtually the whole field of legislation. Hogan CJ’s ultimate conclusion that the ERO did not cross the fine line under the then constitutional set-up is not applicable to the constitutional order under the BL[47]. 120. For reasons which we will develop below, we disagree that under the existing constitutional framework the LegCo cannot exercise any real or meaningful control over the emergency regulations made under the ERO. That Pre-97 LegCo, according to Hogan CJ, could not do so because of the restraints under the then constitutional order, is quite beside the point. Further, as will be seen, under the existing constitutional framework the court can also exercise effective control over the CEIC in exercising the powers under the ERO and the emergency regulations made. This is a crucial point in considering the constitutionality of the ERO in the overall constitutional context but was not considered by the Judges. 121. In consequence, the Judges erred in failing to give sufficient weight to the theme of continuity and to To Lam Sin and Li Bun in their analysis. E4. Principal features of the ERO 122. The ERO being constitutionally compliant is not only supported by the theme of continuity. Upon a proper construction by a closer and updated analysis of its principal features with reference to the relevant contemporaneous jurisprudence, the ERO only confers limited legislative power on CEIC to make subordinate emergency regulations, and not primary legislation, on an occasion of emergency or public danger. E4.1 True nature of the ERO and emergency regulations 123. First and foremost, it is imperative to bear in mind the true nature of the ERO and the emergency regulations made thereunder as a matter of substance. 124. There are many reasons for a legislature to delegate to the executive branch of the Government, or any other person or body, by way of an enabling primary legislation, legislative power to make subordinate legislation, as the editors in Bennion on Statutory Interpretation (7th edn), at section 3.1, enumerate: “(a) Modern legislation requires far more detail than Parliament itself has time or inclination for. For example, Parliament may not wish to concern itself with minor procedural matters. (b) To bring a complex legislative scheme into full working operation, consultation with affected interests is required. This can best be done after Parliament has passed the outline legislation, since it is then known that the new law is indeed to take effect and what its main features are. (c) Some details of the overall legislative scheme may need to be tentative or experimental. Delegated legislation provides an easy way of adjusting the scheme without the need for further recourse to Parliament. (d) Within the field of a regulatory Act new developments will from time to time arise. By the use of delegated legislation the scheme can be easily altered to allow for these. (e) If a sudden emergency arises it may be essential to give the executive wide and flexible powers to deal with it whether or not Parliament is sitting.” (emphasis supplied) 125. Scenarios (a) to (d) involve essentially the same legislative technique. The enabling primary legislation legislates on a subject matter in principle usually with a board framework, leaving the subordinate legislation to elaborate by filling in the details as and when required. 126. For scenario (e), the legislative approach can be different for a number of reasons. By nature, emergency or public danger is not capable of exhaustive definition, which means that usually a general or board definition is used. It ordinarily requires an urgent and effective response to avoid an imminent threat, prevent a worsening of the situation or mitigate the effects of the emergency. The executive needs wide and flexible powers to deal with every and all exigencies expeditiously and effectually. It follows that emergency regulations which the primary legislation delegated to the executive to make are necessarily wide and extensive in scope. They may even by virtue of the so-called “Henry VIII Clauses” dis-apply or amend a primary legislation. A ready example of adoption of such legislative approach is the English Civil Contingencies Act 2004. The editors of Wade and Forsyth on Administrative Law, (11th edn), at pp730 - 731 observe: “… [The] definition of an emergency in the 2004 Act is very wide. It comprises ‘serious threats’ to the welfare of any part of the population, the environment, the political, administrative or economic stability or, the security of the United Kingdom. There is no requirement that an emergency be declared, but Her Majesty may by Order in Council make emergency regulations for the purpose of preventing, controlling or mitigating an aspect or effect of the emergency if satisfied that an emergency is occurring or about to occur, that the regulations are necessary and the need is urgent. Practically anything may be required to be done, or prohibited, by the regulations. … The full plenary powers of Parliament have been given to the maker of the regulations for they ‘may make any provision of any kind that could be made by Act or Parliament’ including disapplying or modifying an Act.” 127. As dictated by the considerations peculiar to emergency and public danger, the nature of emergency legislation, both primary and subordinate, differs quite considerably from ordinary primary and subordinate legislations. One must constantly bear this in mind when approaching the constitutionality of the ERO. That is, with respect, what the Judges had failed to do. 128. At [56] of the Judgment, in giving the first reason why, in their opinion, the ERO conferred primary legislative powers on the CEIC, they highlighted the fact that the ERO was not an ordinary piece of primary legislation that legislated on a subject matter in principle leaving another body to devise the detailed legal norms that elaborated or put flesh on the broad matters laid down in the primary legislation. But such a difference always exists and is exactly the reason why the ERO and emergency regulations should be treated differently from ordinary primary and subordinate legislations. In citing that as a reason against the ERO’s constitutionality, the Judges had failed to sufficiently appreciate the true nature of the ERO and emergency regulations. E4.2 Section 2(1) 129. As the main power conferring provision, section 2(1) provides: “On any occasion which the Chief Executive in Council may consider to be an occasion of emergency or public danger he may make any regulations whatsoever which he may consider desirable in the public interest.” 130. Two main points arising from section 2(1) need to be addressed. 131. First, there is no definition for public danger[48]. It is a matter for the CEIC to consider if an occasion of public danger exists. The Judges were understandably concerned. At [60] of the Judgment, they observed that the meaning of public danger could potentially be very broad. They held that since the ERO did not state a “reasonably grounds” test, the discretion conferred by the ERO could be virtually unreviewable. They at [61] went on to query the utility of any review because of the strict confidentiality and pubic interest immunity attaching to information placed before the CEIC. Relying on certain passages in Li Bun, they at [62] noted that the width of the powers left precious little room for the doctrine of ultra vires to operate. 132. In our view, there is nothing objectionable in itself to task the CEIC to determine if an occasion of public danger exists. After all, it is a grave decision with immense consequences which affect the entire community. As the head of the HKSAR, the CE, with the advice of the Executive Council, is evidently the only suitable person to make the call. 133. That said, it does not follow that the CE could act freely without any rein as she wishes. She is subject to close judicial scrutiny. She can only invoke the ERO when there is a public danger. That condition must be strictly adhered to. Although there is no statutory definition for public danger, whether such a state exists at any given time can be objectively gauged by the prevailing circumstances. The past invocations in the colonial era are good examples. As said, they all involved serious and immediate threats to Hong Kong and its citizens as a whole which subsisted for a period of time. In the present instance, the parties do not dispute that a state of public danger arising from the recent ongoing and large-scale social unrest often associated with serious and prevalent violence did exist at the time when the PFCR was made. The present state of affairs shares the same commonality with the past instances of emergency and public danger. In any event, if necessary, the court may provide an interpretation to the meaning of public danger to fill the lacuna, if there is really one, as appropriate[49]. The CE’s decision to invoke the ERO can then be subject to judicial scrutiny by reference to such interpretation. Further, the CE’s decision that an occasion of public danger existed is reviewable under the Wednesbury principle too. She must also act bona fide in furtherance of the statutory purpose of the ERO according to the Padfield principle: Padfield v Minister of Agriculture Fisheries and Food [1968] AC 997. 134. The Judges’ concern that only very limited information is available making a legal challenge against the CE’s decision to invoke the ERO difficult, if not impossible, is misplaced. As will be seen in a while, emergency regulations made under the ERO are subject to the negative vetting procedure. For that procedure, the Government will ordinarily present a LegCo Brief, a public document, to explain the background, the underlying policy, the justification and various matters pertaining to the emergency regulations. The LegCo can also ask the Government for further relevant information. So even assuming that the papers placed before the CEIC are confidential or subject to immunity (which presumably may be waived), the LegCo Brief and any such further information will provide the necessary materials to facilitate the mounting of the legal challenge[50]. 135. The Full Court might have said something in Li Bun suggesting that there was little room for the doctrine of ultra vires to operate. But Li Bun was decided almost 60 years ago. The law has moved on since then. We do not see how Li Bun could have inhibited the application of the doctrine of ultra vires nowadays in any significant way. 136. In any event, all emergency regulations made under the ERO must not contravene the BL. As illustrated by our discussion on the PFCR below, this already provides adequate basis for the court to scrutinize their validity. 137. The second point arising from section 2(1) is this. The powers conferred by section 2(1) on the CEIC are undoubtedly wide and extensive. As explained above, given the nature of the ERO and emergency regulations, such powers are necessary. That the Judges failed to appreciate when they at [57] of the Judgment cited it as a reason for ruling against the constitutionality of the ERO. E4.3 Section 2(2)(g) 138. This is the so-called “Henry VIII Clause”: “Without prejudice to the generality of the provisions of subsection (1), such regulations may provide for– … (g) amending any enactment, suspending the operation of any enactment and applying any enactment with or without modification;” 139. As Hogan CJ observed in Li Bun, at p101, it is necessary to confer on the CE such power, otherwise her capability to make adequate provisions for some unexpected danger or emergency might be hampered or limited by the inability to alter any existing ordinance, especially, when the LegCo could not, for one reason or another, be brought into session or meet. 140. The Judges disagreed for two reasons. 141. At [64] of the Judgment, they first said that there is no provision in the BL that authorizes the CEIC by herself to amend or repeal primary legislation. That must be true. But the CEIC does not derive the power to amend or repeal primary legislation from the BL. She does so from the delegation by the LegCo under the common law. This leads to their second point. 142. At [65] - [66] of the Judgment, the Judges observed that validity of Henry VIII Clauses is based on parliamentary sovereignty which the LegCo does not enjoy and that such Clauses are antithetical to the norm of subsidiary legislation as understood in Hong Kong under section 28(1)(b) of the Interpretation and General Clauses Ordinance (Cap 1) (“the IGCO”) that “no subsidiary legislation shall be inconsistent with the provisions of any Ordinance”. 143. While it is true that the LegCo does not enjoy supremacy in the Diceyan sense, it is wrong to say that it cannot as a matter of Hong Kong common law delegate to the CE the power prescribed by section 2(2)(g) of the ERO in cases of emergency or public danger. There is nothing in the BL or anywhere else to indicate that such common law principle contravenes the BL and has not migrated to the post‑1997 era. 144. The Judges’ reliance on section 28(1)(b) of IGCO is misplaced. Pursuant to section 2(1) of the same Ordinance, the application of the provisions of the IGCO is subject to the contrary intention that appears from the context of any ordinance. Given the context of the ERO, there is definitely a contrary intention to dis-apply section 28(1)(b) to emergency regulations made thereunder. E4.4 Penalties 145. As part of the powers conferred on her, section 3(1) of the ERO enables the CEIC to make regulations to provide for a contravention as a criminal offence with associated penalties up to a maximum of mandatory life imprisonment. This is evidently part and parcel of the wide and extensive powers that the CEIC needs to effectively tackle emergency or public danger, especially when it involves a serious, prevalent and subsisting breach of law and order. 146. The Judges’ only criticism is that it is contrary to the norm for subsidiary legislation under section 28(1)(e) of the IGCO, which specifies the maximum sentence for an offence based on contravention of a subsidiary provision to be a fine of HK$5,000 or six months’ imprisonment. Again, the Judges erred in failing to see that because of the context of the ERO, section 28(1)(e) must have been dis-applied. E4.5 Negative vetting and repeal 147. According to section 2(3) of the ERO, the emergency regulations made shall continue in force until repealed by order of the CEIC. 148. As the Judges rightly held at [69] - [72] of the Judgment, section 2(3), properly construed, does not itself prevent such regulations from repeal by resolution of the LegCo during negative vetting under section 34 of the IGCO or from repeal by a subsequent ordinance. The latter appears to be consistent with what the Pre-97 LegCo did in 1936 in the failed attempt to abrogate the emergency regulations in question. 149. At [74] of the Judgment, the Judges said that it is open to the CEIC, as part of the regulations made under the ERO, to amend or suspend the operation of section 34 of the IGCO. In our view, when the ERO is properly construed, it does not allow the CEIC to do so. Pursuant to section 2A(1) of the IGCO, all laws previously in force in Hong Kong shall be construed with such modifications, adaptions, limitations and exceptions as may be necessary so as not to contravene the BL. Thus the ERO must now be construed to make it compatible with the BL. And under BL73(1), the LegCo’s legislative power to amend or repeal laws in accordance with the provisions of the BL and legal procedures must include the power to scrutinize, and if found necessary, to amend or even repeal, subordinate legislation made by other branches of the Government. So on a proper interpretation to make it in line with BL73(1), the ERO does not empower the CEIC to amend or suspend the operation of section 34, thereby depriving the LegCo the control over the emergency regulations by the negative vetting procedure. E4.6 Check on duration of regulations 150. Despite the point on negative vetting, the Judges at [68] of the Judgment said that there is no time limit on the validity and force of the regulations, nor any mechanism for constant review. However, in accordance with the negative vetting procedure under section 34 of the IGCO, there is a first phase of scrutiny whereby the regulations may take effect pending expiry of the time limit of 28 days, which may be extended for 21 days. If repealed during negative vetting, the regulations will not last beyond such time limit. Further, even if the regulations continue to take effect despite negative vetting, there is a second phase of scrutiny whereby the LegCo can further review them. Nothing can stop the LegCo from stepping in to put an end to the emergency regulations by way of primary legislation. Further, as Mr Yu has rightly accepted, the duration of the emergency regulations is open to challenge by way of judicial review if the CE fails to repeal them when the state of public danger no longer exists. 151. The Judges at [75] - [79] of the Judgment were concerned that once promulgated, the emergency regulations immediately become part of the general law. Even if repealed later, it would not “un-do” the regulation’s effects and revive the original legislation if it was repealed by the regulations. We need not dwell on the point. For such scenario happens whenever a piece of legislation is repealed. By itself it does not operate against the ERO. 152. In our view, when properly analyzed, the emergency regulations which the ERO authorizes the CEIC to make is subordinate legislation. The ERO does not confer on the CEIC general legislative power to make primary legislation. E5. Conclusion 153. In our discussion above, we have not dealt with each and every single point taken by counsel. We consider what we have set out above is sufficient for the present purpose. And for the foregoing reasons, we hold that the ERO does not confer on the CEIC general legislative power to make primary legislation. It does not contravene the BL. 154. In KWH-RN, KWH seek to further support the Judges’ conclusion under Ground 1 on the basis of the principle of legality[51]. In gist, it is submitted that the principle of legality averts a construction of BL17(2), 66 and 73(1) that the drafters intended that the LegCo could enact laws that would have the effect of conferring unlimited and general law‑making power on the CEIC, or conversely that the CEIC could constitutionally rely on BL56(2) and 62(5) to usurp the role of the LegCo. In our views, the principle of legality contention does not add anything further to the applicants’ other contentions that we have considered above. Thus, for the same reasons, we would also reject such contention. 155. In the premises, we would respectfully differ from the Judges and reject Ground 1. We would allow the respondents’ appeal in this regard. F. GROUNDS 5A AND 5B F1. Standard of scrutiny 156. It is not disputed that the PFCR imposed restrictions on fundamental rights protected by the BL and the BOR and must, in addition to being prescribed by law, satisfy the proportionality test in order to be valid. The rights engaged were identified at [127] (BL27 and BOR14, 16 and 17 rights in respect of section 3 of the PFCR) and [169] ‑ [173] (BL27, 28 and 31 and BOR5, 8, 14 and 16 rights in respect of section 5) in the Judgment. 157. The proportionality test involves a four-step examination: (1) whether the restrictions pursue a legitimate aim, and in respect of rights under BOR16 and 17, the legitimate aim must come within the scope of specified purposes set out in those articles; (2) whether the restrictions are rationally connected with such legitimate aim(s); (3) whether the restrictions are no more than necessary for achieving the legitimate aim(s); (4) whether a fair balance has been struck between the societal benefits pursued by the restrictions and the inroads made to the rights of the individuals. 158. In our judgment, notwithstanding that the PFCR touches upon matter of public order and measures which are necessary for the restoration of law and order in Hong Kong and to meet the challenges to the stability of our society presented by the recent turmoil, the appropriate standard that the court should adopt in carrying out the proportionality analysis in this instance should be the stricter standard of “no more than necessary” as submitted by Mr Chan instead of the “manifestly without reasonable foundation” standard advocated by Mr Yu. 159. In Kwok Cheuk Kin v Secretary for Constitutional and Mainland Affairs (2017) 20 HKCFAR 353, Ma CJ explained at [37] ‑ [46] the considerations which guide the Court in deciding the standard to be adopted in the proportionality analysis. Three facets were mentioned in particular: the nature of the right in question and the degree to which it has been encroached upon; the identification of the relevant decision-maker; and the margin of appreciation. 160. The Chief Justice also highlighted the separate constitutional and institutional responsibilities of the judiciary and other organs of the Government. In assessing the extent to which margin of appreciation should be accorded to the decision maker, the court should consider if the decision maker is institutionally likely to be better placed than the court to make an assessment in relation to the particular issue in question. 161. Though we agree with Mr Yu that the provisions in the PFCR do not prohibit the exercise of the rights engaged, viz freedom of expression, right to assembly and demonstration and right to privacy, we also bear in mind that section 3 imposes restrictions which curtail the exercise of these fundamental rights in a substantial manner. In some circumstances (and we recognize that they are real possibilities) the measures may discourage some people from exercising their right of demonstration and even bar them from a particular form or manner of demonstration. 162. Whilst we would not underestimate the onerous and difficult responsibility on the CEIC in deciding whether the prevalent public danger called for measures in the PFCR, as illustrated by previous cases like Leung Kwok Hung & Others v HKSAR (2005) 8 HKCFAR 229, the court is constitutionally and institutionally well-placed to make proportionality assessment in respect of legislation (including subsidiary legislation) relating to the maintenance of law and order in our society. The court is also institutionally tasked with the constitutional duty to strike a balance between conflicting societal interest and fundamental rights of individuals in public order matters. 163. Hence, we respectfully agree with the Judges that the appropriate standard should be the “no more than necessary” standard. 164. Like the Judges, we shall address the proportionality of section 3 and that of section 5 separately. F2. Section 3 F2.1 Legitimate aims and rationality 165. At [130] of the Judgment, the legitimate aims of the PFCR were identified as follows: (1) deterrence and elimination of the emboldening effect for those who may otherwise, with the advantage of facial covering, break the law; (2) facilitation of law enforcement, investigation and prosecution. 166. Mr Yu submitted that these legitimate aims are to be considered against the background of the crisis of public disorder that Hong Kong had experienced in the past few months and that the exercise of the power under the ERO to make the PFCR was deemed necessary by the CEIC in order to restore the stability and to maintain the law and order in the society. 167. Counsel referred to the speech of the CE on 4 October 2019 when she announced the promulgation of the PFCR at a press conference. To recap, the CE recounted the frequent and widespread violent behaviours of some rioters in the course of demonstrations and processions since June 2019 and the escalation in such violence resulting in serious damage (including damage to private properties) and injuries to citizens and law enforcement officers. She also highlighted that lethal weapons were being used by rioters to attack police officers. A high proportion of these violent protesters were students and many of them wore masks and other protective gears to hide their identities in order to escape from criminal responsibilities. 168. In the Judgment, the Judges also alluded to the dire situation facing Hong Kong at [132], reiterating the disorder and violence experienced and witnessed by all those in society incessantly and the development of such violence on an escalating scale. At [137] and [138], the Judges agreed with Mr Yu that many public assemblies or processions which initially took place lawfully and peacefully were turned into unauthorized or unlawful ones with some radical protesters resorting to violence. 169. The Judges found that there could not be a simple dichotomy between peaceful and violent protesters as people’s behaviour may change depending on the circumstances and the influence from others around them. They further accepted that facial covering makes law enforcement, investigation and prosecution more difficult. 170. Against such background, the Judges held that the PFCR served legitimate aims and they are rationally connected with the same. 171. Before us, Mr Chan did not challenge these conclusions of the Judges. He also accepted that the restriction under section 3(1)(a) (prohibition in respect of unlawful assembly) is no more than necessary and strikes a fair balance between individuals’ right and the societal benefit served by the restriction. Mr Pun SC on behalf of LKH likewise did not challenge these conclusions in relation to section 3 (though he challenged the same in respect of section 5, which we shall deal with below). Counsel also accepted section 3(1)(a) is proportionate. 172. Hence, in these appeals, we shall focus on the proportionality of sections 3(1)(b), (c) and (d), in particular, for each of those restrictions whether it is no more than necessary to achieve the legitimate aims and whether a fair balance has been struck. 173. Before we address that key issue, we should first examine the precise scope of operation of section 3(1)(b) (which involves the examination of the concept of unauthorized assembly under the POO and its significance in terms of public order management) and the extent to which it interferes with the fundamental rights of demonstration and freedom of expression. F2.2 Permissible restrictions and scope of section 3(1)(b) 174. We start the analysis by reminding ourselves some relevant authorities on the permissible restrictions on the fundamental rights of demonstration and freedom of expression. 175. The right of demonstration and freedom of assembly are not absolute. In HKSAR v Chow Nok Hang (2013) 16 HKCFAR 837, the Court of Final Appeal highlighted the limits in section B.3 of the judgment. In particular, Ribeiro PJ said at [38] ‑ [40]: “38. Article 17 allows a line to be drawn between peaceful demonstrations (where, as noted above, full rein is given to freedom of expression) and conduct which disrupts or threatens to disrupt public order, as well as conduct which infringes the rights and freedoms of others. In Leung Kwok Hung v HKSAR, having recognized that the interests of ‘public order (ordre public)’ are listed by Article 17 as a legitimate purpose, the Court held that there is no doubt that such concept ‘includes public order in the law and order sense, that is, the maintenance of public order and the prevention of public disorder’. It concluded that a statutory scheme giving the Commissioner of Police discretion to regulate public processions with a view to maintaining public order was constitutionally valid after severance of certain objectionably vague words. 39. Once a demonstrator becomes involved in violence or the threat of violence – somewhat archaically referred to as a ‘breach of the peace’ – that demonstrator crosses the line separating constitutionally protected peaceful demonstration from unlawful activity which is subject to legal sanctions and constraints. The same applies where the demonstrator crosses the line by unlawfully interfering with the rights and freedoms of others. 40. The law therefore imposes bounds on the constitutionally protected activity of peaceful assembly. The need for such limits is sometimes dramatically illustrated in situations involving demonstrations and counter-demonstrations. It is not uncommon for one group, demonstrating in favour of a particular cause, to find itself confronted by another group demonstrating against that cause. The situation may be potentially explosive and the police will generally try to keep them apart. Obviously, if both remain within their lawful bounds, all will be well. But often, conflict and public disorder may result. Sometimes, both sides will have broken the law. But in some cases, the disruption of public order is caused only by one side. The task of the law enforcement agencies and the courts is then to identify the source of such disruption by identifying the demonstrators who have crossed the line into unlawful activity. They thereby avoid curtailing or punishing the constitutionally protected activities of the innocent group.” (emphasis supplied) And at [42]: “42. Lines also have to be drawn where a demonstrator’s conduct impinges unacceptably upon the rights of others (which may or may not be constitutionally protected rights). Such a line had to be drawn, for instance, in Yeung May Wan v HKSAR, where the Court had to decide whether the offence of obstructing a public place was properly applied so as to curtail a static, peaceful demonstration by a small group of Falun Gong protesters which obstructed only part of the pavement, on the basis that they were interfering with the rights of other users of the public highway. To take another example, the Court of First Instance recently had to decide whether the right to demonstrate entitled protesters to take their demonstration into a private residential development without the consent of the owners, or whether that right was constrained by the need to respect the private property rights of the residents.” 176. In the more recent case of Kudrevicius v Lithuania (2016) 62 EHRR 34, the Strasbourg Court considered if the criminal convictions of the applicants were compatible with the right to freedom of assembly. The applicants did not engage in any acts of violence. The regional court found that they had organised a gathering with the aim of seriously breaching public order, viz organising the blockade of a highway. They were convicted of criminal offences and were sentenced to 60 days’ imprisonment which were suspended. The Strasbourg Court held that the criminal conviction was justified as being necessary for pursuing the legitimate aims of prevention of disorder and protection of the rights and freedoms of others and found no violation of the freedom of assembly. 177. In respect of the breach of public order occasioned by blockage of road, the Court observed at [97] (omitting the footnotes): “However, the applicants’ conviction was not based on any involvement in or incitement to violence, but on the breach of public order resulting from the roadblocks. The Court further observes that, in the present case, the disruption of traffic cannot be described as a side-effect of a meeting held in a public place, but rather as the result of intentional action by the farmers, who wished to attract attention to the problems in the agricultural sector and to push the government to accept their demands. In the Court’s view, although not an uncommon occurrence in the context of the exercise of freedom of assembly in modern societies, physical conduct purposely obstructing traffic and the ordinary course of life in order to seriously disrupt the activities carried out by others is not at the core of that freedom as protected by Article 11 of the Convention …” 178. The Court characterized the conduct of the applicants as “reprehensible” (see [101]). Such finding was important because on the facts of the case the demonstration was initially authorized and under Strasbourg case law, a person cannot be subject to a sanction for participation in a demonstration which has not been prohibited so long as that person does not himself commit any reprehensible act on such an occasion, see [149]. The Court further explained the concept of “reprehensible act” at [173] and [174] (omitting the footnotes): “173. As can be seen from the above case-law, the intentional serious disruption, by demonstrators, to ordinary life and to the activities lawfully carried out by others, to a more significant extent than that caused by the normal exercise of the right of peaceful assembly in a public place, might be considered a ‘reprehensible act’ within the meaning of the Court’s case-law. Such behavior might therefore justify the imposition of penalties, even of a criminal nature. 174. The Court considers that, even though the applicants had neither performed acts of violence nor incited others to engage in such acts, the almost complete obstruction of three major highways in blatant disregard of police orders and of the needs and rights of the road users constituted conduct which, even though less serious than recourse to physical violence, can be described as ‘reprehensible.’” 179. In this respect, the concurring speech of Judge Wojtyczek at O1-3 pinpointed the rationale for finding such conducts reprehensible: “… The effects of such roadblocks go far beyond the usual disruptions caused by demonstrations in public places. They also go well beyond the idea of a sit-in protest organised around certain specific places for the purpose of blocking access to them. The applicants took these actions to promote their opinions, not by strength of argument, but by directly undermining the legitimate individual economic interests of a significant number of third parties, and by disrupting the economic life of their country – and thus, more by argument of strength. The demonstrators’ message was meant not only to be heard but also to directly affect their fellow-citizens. In that context, the reasoning of the judgment rightly describes the applicants’ acts as reprehensible …” 180. The Court also reiterated that any measures interfering with freedom of assembly other than in cases of incitement to violence must be subject to careful scrutiny. In particular, at [94] and [146], the Court had these to say: “94. In this connection, it is not without interests to note that an individual does not cease to enjoy the right to freedom of peaceful assembly as a result of sporadic violence or other punishable acts committed by others in the course of the demonstration if the individual in question remains peaceful in his or her own intentions or behaviour. The possibility of persons with violent intentions, not members of the organising association, joining the demonstration cannot as such take away that right. Even if there is a real risk that a public demonstration might result in disorder as a result of developments outside the control of those organising it, such a demonstration does not as such fall outside the scope of paragraph 1 of Article 11, and any restriction placed thereon must be in conformity with the terms of paragraph 2 of that provision. ... 146. … Where the sanctions imposed on the demonstrators are criminal in nature, they require particular justification. A peaceful demonstration should not, in principle, be rendered subject to the threat of a criminal sanction, and notably to deprivation of liberty. Thus, the Court must examine with particular scrutiny the cases where sanctions imposed by the national authorities for non-violent conduct involve a prison sentence.” 181. For demonstration which has not been authorized, the Court made some general observations at [150] ‑ [153]. Whilst acknowledging that it is essential to have a system of prior notification, the absence of prior authorization does not give carte blanche to the authorities in taking enforcement actions. Such actions would still be subject to proportionality requirement. The Court highlighted that though there could be special circumstances which justify the holding of spontaneous demonstrations without prior notification, such exception must not be extended to the point where the absence of prior notification of a spontaneous demonstration can never be a legitimate basis for crowd dispersal. 182. Thus, the proportionality analysis has to be applied on two different levels: (1) examining the systemic proportionality by reference to the legislation or rules in question; (2) examining the operational proportionality by reference to the actual implementation or enforcement of the relevant rule on the facts and specific circumstances of a case at the operational level. 183. In these appeals, it should be emphasized that we are only concerned with the first level of challenges. It remains for the court to assess the proportionality on the second level on the facts and circumstances in a particular case if a charge is brought against person. 184. The Strasbourg Court continued at [155] ‑ [157] in Kudrevicius v Lithuania, supra, to identify the need to have measures to restrict conducts causing disruption to ordinary life to a degree exceeding that which is inevitable for peaceful demonstration and assembly. At [155], the Court alluded to two important mindsets for striking the balance: (1) on the one hand, the public authorities have to show a degree of tolerance; (2) on the other hand, demonstrators should comply with the regulations in force. 185. At [156], the Court said: “The intentional failure by the organisers to abide by these rules and the structuring of a demonstration, or of part of it, in such a way as to cause disruption to ordinary life and other activities to a degree exceeding that which is inevitable in the circumstances constitutes conduct which cannot enjoy the same privileged protection under the Convention as political speech or debate on questions of public interest or the peaceful manifestation of opinions on such matters. On the contrary, the Court considers that the Contracting States enjoy a wide margin of appreciation in their assessment of the necessity in taking measures to restrict such conduct.” 186. The rationale for imposing necessary restrictions was explained at [157]: “Restrictions on freedom of peaceful assembly in public places may serve to protect the rights of others with a view to preventing disorder and maintaining an orderly flow of traffic. Since overcrowding during a public event is fraught with danger, it is not uncommon for State authorities in various countries to impose restrictions on the location, date, time, form or manner of conduct of a planned public gathering.” 187. We shall now turn to consider the effective scope of section 3(1)(b). 188. Section 3(1)(b) prohibits the use of any facial covering that is likely to prevent identification while a person is at an unauthorized assembly. Unauthorized assembly has the meaning ascribed to it as set out in section 17A(2) of the POO. There are three different scenarios: (1) Any public meeting or public procession taking place in contravention of section 7 or 13 of the POO, viz either those without requisite notification being given to the Commissioner or those with notification and the Commissioner does not issue a notice of no objection, or processions not complying with the requirements under section 15. For public meeting, section 7 only applies in respect of a meeting of more than 50 persons. For public procession, section 13 only applies to public procession on public highway or thoroughfare or in a public park which consists of more than 30 persons. (2) Three or more persons taking part in or forming part of a public gathering refuse or wilfully neglect to obey an order given by Commissioner of Police under section 6 of the POO. Under section 6, the Commissioner can control and direct the conduct of all public gatherings and specify the route by which and the time at which any public procession may pass. He may also regulate the playing of music or amplification of human speech or other sound in public places. (3) Three or more persons taking part in or forming part of a public meeting, public procession or public gathering or other meeting, procession or gathering refuse or wilfully neglect to obey an order given under section 17(3) of the POO. Under section 17(3), a police officer may give an order for the purpose of section 17(1) to prevent the holding of, stop or disperse any public meeting in contravention of section 7 or any public procession in contravention of section 13. Also under section 17(3), a police officer of or above the rank of inspector may issue an order for the purpose of section 17(2) to prevent the holding of, stop, disperse or vary the place or route of any public gathering if he reasonably believes that the same is likely to cause or lead to a breach of the peace. Similar orders can be made in respect of public gathering for religious purposes. 189. Public gathering is defined in section 2 of the POO to mean a public meeting, a public procession and any other meeting, gathering or assembly of 10 or more persons in any public place. 190. It should also be noted that: (1) under section 17A(1), any person who refuses or wilfully neglects to obey an order given under section 6 or 17(3) commits an offence; and (2) under section 17A(3), every person who, without lawful authority or reasonable excuse, knowingly takes or continues to take part in or forms or continues to form part of any such unauthorized assembly shall be guilty of an offence. 191. Further, in respect of the conditions imposed for a public meeting which is subject to the requirement of notification under section 7, the conditions would be imposed under section 11(2) instead of section 6. For public procession which is subject to the requirement of notification under section 13, conditions imposed for the same would be issued under section 15(2) instead of section 6. These conditions (unlike conditions imposed under section 6) are subject to the appeal procedure under section 16. 192. Since section 7 applies to public meeting of more than 50 persons and section 13 applies to public procession of more than 30 persons, they cover most public gatherings of a large scale in Hong Kong. 193. The provisions in the POO have to be construed (insofar as it is possible to do so) in a manner which is compatible with the fundamental rights of demonstration and procession: see R v Home Secretary Ex p Simms [2000] 2 AC 115 at p131. They must also be applied in a manner compatible to such fundamental rights. Though section 17A(2)(a) provides that a public meeting or procession taken place in contravention of section 7 or 13 would be an unauthorized assembly, in light of the principle of tolerance and proportionality on the operational level as discussed in Kudrevicius v Lithuania, supra (see [180] ‑ [184] above) as well as a matter of practicality in view of the number of persons present at such gatherings, unless there are violent or other reprehensible conducts on the part of some demonstrators posing serious and imminent risk to public order and safety which requires immediate actions on the part of police, there should be prior warnings and the issuance and announcement of an order under section 17(3) before more drastic actions like arrests and dispersals are taken. 194. For gatherings which are not subject to notification requirement, the Commissioner would not have any advance notice and it is rather unusual for conditions to be imposed by the Commissioner under section 6 for such gatherings. Given that the Commissioner would be unlikely to be present at the scene of gathering, it is also unlikely that a condition will be imposed under section 6 in the course of such gathering. Further, in the context of an unauthorized assembly under section 17A(2)(b), the principle of tolerance and requirement of proportionality on operational level are also engaged. Like the case under section 17A(2)(a), unless there are violent or other reprehensible conducts on the part of some demonstrators posing serious and imminent risk to public order and safety which requires immediate actions on the part of police, there should be prior warnings and the issuance and announcement of an order under section 17(3) before more drastic actions. 195. In cases where conditions are imposed under section 11(2) or 15(2), when there are persons taking part in or forming part of the public meeting or public procession acting in breach of a condition (eg, the routes prescribed under conditions imposed), if the circumstances so required, the proper procedure under the statutory scheme of the POO is for the police to exercise the discretionary power under section 17(1)(a) and (b) with the giving of an order under section 17(3) to prevent the holding of, stop or disperse the gathering. 196. The power to order the stopping and dispersal of a gathering under section 17(3) must be exercised for the purpose of maintenance of public safety, public order and the protection of the rights and freedoms of others since the conditions under sections 11(2) and 15(2) can only be legitimately imposed for such purposes. The purpose of section 17 has to be ascertained by reading all relevant provisions together and in the context of the whole statute: see Medical Council of Hong Kong v Chow Siu Shek (2000) 3 HKCFAR 144. Thus, with the application of the Padfield principle as discussed at great length in Chee Fei Ming v Director of Food and Enviromental Hygiene [2019] HKCA 1425, the power under section 17 cannot be exercised arbitrarily. 197. Further, in terms of unauthorized assembly by virtue of non‑compliance with the notification requirements or the no objection requirement under section 7 or 13, before more direct enforcement actions like actual dispersal or arrest are taken by the police, the proportionality requirement on the operational level (see the discussion at [181] ‑ [184] above by reference to Kudrevicius v Lithuania, supra, prior warnings should have been given about the unauthorized nature of the gathering and an order for stop and dispersal should have been made under sections 17(1) and (3). 198. After such order has been given, the gathering should be discontinued. Otherwise, those without lawful authority or reasonable excuse, knowingly takes or continues to take part in the unauthorized assembly would commit an offence under section 17A(3). 199. Another possibility is that during the course of a public procession or public meeting, the conducts or behaviours of some persons taking part in the gathering lead a police officer of or above the rank of inspector to reasonably believe that it is likely to cause or lead to a breach of the peace. In that case, the police officer may exercise the power under sections 17(2)(a) and (b) in conjunction with the giving of an order under section 17(3) to prevent the holding of, stop or disperse the gathering. 200. Thus, under all these scenarios referred to at [188] above, when it is necessary for the police to take drastic actions like arrests and dispersal in respect of an unauthorized assembly, unless there are violent or other reprehensible conducts on the part of some demonstrators posing serious and imminent risk to public order and safety which requires immediate actions on the part of the police, an order should have been made under section 17(3) and there are at least three or more persons refuse or wilfully neglect to obey the order. 201. There cannot be a refusal or wilful neglect to obey an order unless the persons concerned were aware of the order. 202. Also a person cannot be regarded as knowingly taking part in an unauthorized assembly unless he was aware of the unauthorized nature of the gathering or the order under section 17(3) and that there are three or more persons refusing or wilfully neglecting to comply with such order. 203. The compatibility of the statutory scheme under the POO (in respect of public procession) was examined by the Court of Final Appeal in Leung Kwok Hung & Others v HKSAR, supra. The defendants in that case were convicted of offences under section 17A(3)(b)(i) for holding and assisting in the holding of unauthorized assembly. The assembly in question was a peaceful procession of between 40 and 96 people and it was unauthorized because the defendants refused to give prior notification. 204. At [47], [50] and [54] ‑ [57], the majority of the Court of Final Appeal highlighted that the discretionary powers of the Commissioner must be exercised for the statutory legitimate purposes, viz, he reasonably considers that the restriction is necessary in the interests of national security or public safety, public order or the protection of the rights and freedom of others. The Commissioner must himself apply the proportionality test in that consideration, see [57]. 205. Though the Court of Final Appeal held that the statutory scheme under the then POO (regulating the discretion of the Commissioner by reference, inter alias, to the concept of order public) did not satisfy the “prescribed by law” requirement, the majority held that such reference to order public could be severed and the remaining concept of public order (in the law and order sense, viz, the maintenance of public order and prevention of public disorder, see [82] and [83]) is sufficiently certain. The majority of the Court of Final Appeal also held that the Commissioner’s statutory discretion to restrict the right of peaceful assembly for the purpose of public order is no more than is necessary to accomplish the legitimate purposes: see [92] ‑ [94]. The convictions were upheld accordingly. 206. In this connection, though on the facts of the case the conviction was due to the failure to give notification, the Court of Final Appeal also examined the full range of discretionary powers that the Commissioner and the police could exercise in restricting the freedom of assembly and procession: see the analysis of the statutory scheme and the statutory discretion at [43] ‑ [63]. In light of that, it would be surprising if after the severance of order public from the relevant provisions, the majority of the Court of Final Appeal still regarded some aspects of the statutory discretion concerning unauthorized assembly other than the requirement to give notification to be unconstitutional and made no comment on the same. 207. As explained by the Court of Final Appeal, the public order considerations are not confined to cases where violent confrontations would entail. They also embrace traffic conditions and crowd control. Presence of rival groups and reaction of members of the public are also relevant: see [92(3)]. 208. To sum up, there are valid and serious public order concerns for unauthorized assembly: (1) for those gatherings held without complying with the requisite notification requirement, the justification for imposing criminal sanctions against the same has been explained by the majority in Leung Kwok Hung & Others v HKSAR, supra; (2) for those gatherings involving breach of conditions (including conditions imposed under sections 6, 11(2) and 15(2)), the conditions are imposed in the first place as being necessary in the interests of national security or public safety, public order or the protection of the rights and freedoms of others (and subject to the criteria of proportionality, see Leung Kwok Hung & Others v HKSAR, supra) and in the case of sections 11(2) and 15(2) where a police officer considers that it is necessary to make a further order under section 17(3) to prevent the holding of, stop or disperse the gathering (the making of such order can also be subject to assessment of proportionality on the operational level, see Kudrevicius v Lithuania, supra, as discussed above); (3) for those gatherings involving an order by a police officer of or above the rank of inspector under sections 17(2) and (3), the situations are those where the police officer reasonably believes that the same is likely to cause or lead to a breach of the peace. 209. Unlike the offence of unlawful assembly under section 18 (which is the situation addressed under section 3(1)(a) of the PFCR), there is no specific requirement of an unauthorized assembly under section 17A(2) that the persons assembled conduct themselves in a disorderly, intimidating, insulting or provocative manner intended or likely to cause any person reasonably to fear that they will commit a breach of the peace. 210. Such distinction was regarded by the Judges as significant in assessing if the restriction under section 3(1)(b) is no more than necessary in the proportionality analysis. Thus, at [154] of the Judgment, they observed: “Second, s 3(1)(b) relates to ‘unauthorized’ assemblies as explained in §§26 and 27 above. An assembly which is ‘unauthorized’ may yet be entirely peaceful, without any violence being used or threatened by anyone participating in that assembly, eg a large scale public procession may become an unauthorized procession as a result of the failure by some participants to comply with a condition as regards the route of the procession imposed by the Commissioner under s 15(2) of the POO but the participants may continue to proceed with the procession in an entirely peaceful and orderly manner.” 211. With respect, in so holding, the Judges failed to have regard to the pre-emptive nature of the provisions in imposing sanctions against unauthorized assemblies under the POO and their significance in the context of the maintenance of public order, particularly in the context of the current public danger which, as explained above, the PFCR as a piece of regulations promulgated under the ERO is meant to address. 212. Further, the Judges failed to take account of the actual operation of the statutory scheme as explained above, in particular the circumstances under which an order under section 17(3) of the POO would be made. If it is only a small number of participants deviating from the approved route of procession without any conducts or behaviour causing serious disruption to public order, an order for the stop and dispersal of the gathering will not be compatible with the principle of proportionality on an operational level. 213. As explained above, under the scheme of the POO, in respect of the designation of the route as a condition imposed for a procession under section 15(2), such condition is set because the Commissioner regards it as being necessary and proportionate in the interests of national security or public safety, public order or the protection of the rights and freedoms of others. It follows that deviation from the designated route would have ramifications on the maintenance of public order even though such deviation does not entail violence or threat of violence. 214. Even so, such deviation would not per se turn the procession into an unauthorized assembly. Police officers could give warnings against deviations or take other steps to restore order or to prevent disorder. It is a matter of discretion and judgment on the part of the police officers present at the scene, guided by the principles of law set out in this judgment (in particular the importance of proportionality on the operational level discussed at [180] ‑ [184] and [193] ‑ [197] above), to assess what steps are necessary to redress the disruption to public order occasioned by a deviation. Under section 17(2), a police officer of or above the rank of inspector may vary the route of any public gathering if he reasonably believes that the same is likely to cause or lead to a breach of the peace. There are also other measures that can be taken under sections 17(4) and (6). 215. It is only when a police officer forms a judgment that due to the conducts and behaviours of some participants in breach of conditions imposed for the gathering, such gathering has to be stopped and dispersed and the officer issues an order to that effect under section 17(3) the implications for unauthorized assembly under section 17A(2)(c) (including the application of section 3(1)(b) of the PFCR) kick in. As explained at [201] and [202] above, the persons concerned must have the requisite knowledge before he could be found guilty of the offence under section 17A(3). 216. In this connection, the analysis of the statutory scheme under the POO (and thus the scope of section 3(1)(b) of the PFCR) discussed at [188] ‑ [202] and [212] ‑ [215] above must be borne in mind. In particular, the prerequisite of an order under section 17(3) in cases other than those involving violent or other reprehensible conducts on the part of some demonstrators posing serious and imminent risk to public order and safety which requires immediate actions on the part of the police (see [193] above) and the proportionality on the operational level are safeguards against unjustified interference with the rights of peaceful demonstration and assembly. 217. Thus, the scenario postulated by the Judges that a procession which proceeded peacefully and orderly would by virtue of a deviation of a minor scale turn the whole gathering into an unauthorized assembly is, with respect, rather unreal. 218. At this juncture, we should address the submission that because the use of the word “at” in section 3 of the PFCR, a person could be found guilty simply by virtue of his presence at and wearing a mask in an unauthorized assembly even if he does not participate in the acts occasioning an order being made under section 17(3) and has no knowledge of such order. 219. To recap, section 3(1)(b) of the PFCR provides: “A person must not use any facial covering that is likely to prevent identification while the person is at unauthorized assembly.” 220. A contravention of section 3(1), including subparagraph (1)(b), is an offence by virtue of section 3(2). At the same time, section 4 provides a defence: “(1) It is a defence for a person charged with an offence under section 3(2) to establish that, at the time of the alleged offence, the person had lawful authority or reasonable excuse for using a facial covering. (2) A person is taken to have established that the person had lawful authority or reasonable excuse for using a facial covering if‑ (a) there is sufficient evidence to raise an issue that the person had such lawful authority or reasonable excuse; and (b) the contrary is not proved by the prosecution beyond reasonable doubt. (3) Without limiting the scope of the reasonable excuse referred to in subsection (1), a person had a reasonable excuse if, at the assembly, meeting or procession concerned‑ (a) the person was engaged in a profession or employment and was using the facial covering for the physical safety of the person while performing an act or activity connected with the profession or employment; (b) the person was using the facial covering for religious reasons; or (c) the person was using the facial covering for a pre‑existing medical or health reason.” 221. The problem arising from the word “at” was alluded to by the Judges at [156] of the Judgment: “Fourth, the prohibition applies to any person while he or she is ‘at’ any unauthorized assembly, public meeting or public procession referred to in s 3(1)(b), (c) or (d). It is not clearly stated whether, to be caught by the prohibition, the person must be a participant in the relevant gathering, or whether it suffices for that person to be merely present at the gathering, eg a person who goes to the scene for the purpose of taking photographs, or giving first-aid to persons in need of help, or even a mere passer‑by who has stopped to observe the gathering. The wording of s 3(1) may be contrasted with (i) s 17(3) of the POO, which makes it an offence for any person who, without lawful authority or reasonable excuse, ‘knowingly takes or continues to take part in or forms or continues to form part of’ any unauthorized assembly, and (ii) s 18(3) of the POO, which makes it an offence for any person who ‘takes part in’ an unlawful assembly. It is uncertain whether the restrictions imposed by s 3(1)(b), (c) or (d) cover not only participants of the types of gathering referred to in those sub‑paragraphs, but also any person who is physically present (other than perhaps for a fleeting moment) at the gathering in question.” 222. In his submissions, Mr Yu did not shrink from the position that section 3(1)(b) of the PFCR (as indeed sections 3(1)(a), (c) and (d) also) is applicable when a person is present at the place where the gathering takes place. Counsel submitted that the test of taking part is inappropriate in this context because it has an element of knowingly associated or identified with the unlawful or unauthorized assembly, citing R v Wolfgramm [1978] 2 NZLR 184 and R v Cook & Ors (1994) 74 A Crim R 1. Further, the disorder occurred in the current public danger often arises from gatherings attended by a large number of people. Given the number of people present and the fluidity of the potentially explosive situations, it is more important to require all people taking off facial coverings to minimise the shielding and emboldening effect. This is against the background that one of the legitimate aims of section 3 is to deter the “more peaceful” protestors or bystanders from continuously giving tacit support to the continued challenge of law and order by those radical and violent protestors and shielding the latter from effective police actions and arrests. 223. In our judgment, the taking part in a gathering has to be examined at different stages. It is true that for unlawful assembly, taking part in it requires the proof of knowing association or participation. Apart from the authorities cited by Mr Yu, the same point was made in Secretary for Justice v Leung Kwok Wah [2012] 5 HKLRD 556 at [17] ‑ [22], citing the dicta of Macdougall VP in the earlier case of R v To Kwan Hang [1995] 1 HKCLR 251 at p254. 224. However, in the context of unauthorized assembly, as discussed at [193] above, other than cases involving violent or other reprehensible conducts on the part of some demonstrators posing serious and imminent risk to public order and safety which requires immediate actions on the part of the police, there should be an order issued and announced under section 17(3) of the POO for the stopping or dispersal of the gatherings before further conducts (by way of refusal or wilful neglect to comply) on the part of those at the assembly rendering the assembly unauthorized under section 17A(2)(c). An order of dispersal necessarily requires people at the assembly to leave the scene. If a person remains at the scene notwithstanding the order, he will be acting in defiance of the order. By virtue of section 17A(1)(a), all the persons in the vicinity who are aware of the stop and dispersal order should not remain at the scene. 225. As regards unauthorized assembly held without compliance with section 7 or 13, any person who is at such assembly would be participating in the unauthorized assembly. It is all the more so when such person does not leave the scene after the police announces that an order for stop and dispersal has been made under section 17(3). In this connection, the following observations made by Chantal Masse JCS in the Superior Court of Quebec in Villeneuve v Montreal (City of), 2016 QCCS 2888 at [477] and [478] on demonstration without notification as required by law are pertinent: “[477] Likewise, the fact that police officers may have stated to the representatives that they used the powers conferred on them by Regulation P-6 only when the demonstration involved risks to the safety of citizens does not make it possible to conclude that the provision is not justified. The evaluation of such ‘risks’ necessarily takes into consideration the fact that there is no itinerary. Furthermore, as the organisers and participants have placed themselves in an unlawful situation, they cannot expect that the demonstration cannot be dispersed if it is not peaceful. [478] Moreover, in the context of a demonstration that occurs unlawfully but following a decision to tolerate it, it is not to be expected that the same degree of violence or disturbance is required before it can be dispersed, compared to what would be necessary before ending a demonstration that was taking place legally.” 226. Subject to the requirement of awareness of such person of the unauthorized nature of the assembly and reasonable opportunity being given to those present to disperse and leave the scene, we do not see any fundamental objection to holding him liable for his continued presence at an unauthorized assembly. It is necessary to stress that the maintenance of the rule of law in Hong Kong should be the duty of all citizens who treasure the rule of law as a core value in our society. In the wake of an order for stop and dispersal of a gathering and direction being issued by police to leave the scene, a responsible law-abiding citizen should follow the direction instead of remaining there in defiance of such order and direction. Given the potential for rapid deterioration of the situation and the serious ramifications for the maintenance of law and order and safety of those at the scene in gatherings involving large number of persons, a person who refuses to disperse and leave an assembly after the order is publicly announced perpetuates a state of affairs which disrupts public order and gives rise to a serious threat of breach of the peace. By remaining at the assembly, even without the commission of further act of violence or threat of violence, such person perpetuates the worsening situation which can potentially escalate to serious violent confrontations and frustrates the statutory scheme under the POO for crowd control which is essential to the facilitation of peaceful demonstration and gathering. In short, those choose to remain at the gathering in defiance of an order to stop and dispersal actually participate in the unauthorized assembly. 227. In Secretary for Justice v Leung Kwok Wah, supra, the court observed that section 18 (which deals with unlawful assembly) has a pre-emptive effect and the design of the law is to put a stop to a deteriorating situation. The same observation can be made with regard to the provisions in sections 17 and 17A in relation to unauthorized assembly. The purpose of empowering the police to order a stop and dispersal of a gathering under section 17(3) is to prevent the escalation of confrontation and disorder when a gathering has given rise to imminent threats to the peaceful enjoyment of the right of demonstration and the rights and safety of other citizens. It is essential for effective crowd control and the due performance of the positive duty on the part of the police to facilitate lawful assemblies to take place peacefully (as explained in Leung Kwok Hung & Others v HKSAR, supra) that the police could bring a gathering to a halt when there are signs of such imminent threats. 228. The pre-emptive nature of these provisions is of particular significance in view of the unchallenged evidence on the worrying phenomenon recently witnessed in Hong Kong where the situations were often highly fluid (with peaceful demonstrations rapidly developed into unlawful riots with wanton and reckless violence causing serious damage to properties and even serious injuries to others). The evidence also shows that there were many instances where less radical protestors remaining at the scene to provide moral and actual support (in terms of shielding the identities of those violent protestors). Instead of condemnation of violent acts committed or the public disorder occasioned by the radical protestors, some other protestors provide assistance to the perpetuators of violent and destructive acts. 229. In this connection, it is noteworthy that in the case of Austin v United Kingdom (2012) 55 EHRR 14, the Grand Chamber of the Strasbourg Court had made these observations at [55] and [56] (omitting the footnotes): “55. … In connection with Article 11 of the Convention, the Court has held that interferences with the right of freedom of assembly are in principle justified for the prevention of disorder or crime and for the protection of the rights and freedoms of others where demonstrators engage in acts of violence. It has also held that, in certain well-defined circumstances, Articles 2 and 3 may imply positive obligations on the authorities to take preventive operational measures to protect individuals at risk of serious harm from the criminal acts of other individuals. When considering whether the domestic authorities have complied with such positive obligations, the Court has held that account must be taken of the difficulties involved in policing modern societies, the unpredictability of human conduct and the operational choices which must be made in terms of priorities and resources. 56. As the Court has previously stated, the police must be afforded a degree of discretion in taking operational decisions. Such decisions are almost always complicated and the police, who have access to information and intelligence not available to the general public, will usually be in the best position to make them. Moreover, even by 2001, advances in communications technology had made it possible to mobilise protesters rapidly and covertly on a hitherto unknown scale. Police forces in the contracting states face new challenges, perhaps unforeseen when the Convention was drafted, and have developed new policing techniques to deal with them, including containment or ‘kettling’. Article 5 cannot be interpreted in such a way as to make it impracticable for the police to fulfil their duties of maintaining order and protecting the public, provided that they comply with the underlying principle of Article 5, which is to protect the individual from arbitrariness.” 230. Austin v United Kingdom, supra, was a case about the “kettling” or containment of a group of people carried out by the police on public order grounds. The Strasbourg Court upheld the validity of such measure in the circumstances of that case and rejected submissions that such containment constituted deprivation of liberty. The Court also examined the implications on Article 2 of Protocol No 4 to the European Convention for Protection of Human Rights and Fundamental Freedoms which guarantees the right to liberty of movement. Article 2 §3 of the said Protocol permits restrictions to be placed on the right to liberty of movement where necessary, inter alia, for the maintenance of public order, the prevention of crime or the protection of the rights and freedoms of others. The above observations on maintenance of public order and protection of the rights of others were made in such context. 231. As discussed earlier, there are legitimate public order concerns for unauthorized assembly. In light of the public danger facing Hong Kong with peaceful assemblies or processions by large number of persons wearing masks having a propensity of being hijacked by radical protestors and the rapidity of the worsening of situations, these public order concerns should be accorded with greater weight. Against such background, a deliberate defiance of the regulations against unauthorized assembly which are designed for the maintenance of public order and safety and protection of the rights of others is no less reprehensible than conducts which can be regarded as unlawful assembly. 232. On the other hand, we do not regard bystanders or passer-by as people “at the assembly” notwithstanding that they happened to be at the scene when the assembly becomes an unlawful assembly. Adopting a purposive construction and giving due regard to the principle of legality discussed at R v Home Secretary Ex p Simms [2000] 2 AC 115 at p131 as applied to the basic right of freedom of movement, we are of the view that such bystanders or passer-by cannot be regarded as being “at the assembly” when they are not part of the assembly in the first place nor do they take any steps to join the assembly at some stage. For such persons, a section 17(3) order cannot be directed against them. A person must have joined an assembly at some point in time before he could properly be regarded as “at the assembly” for the purpose of section 3(1) of the PFCR. The Chinese version of “at” in the relevant part of section 3(1) is “身處以下活動時”, not “身處以下活動發生的地點或場所”. In other words, there is a distinction between a person present at the scene or place where the assembly takes place and a person actually present at the assembly. 233. As we shall explain below, we are not minded to uphold the prohibition under section 3(1)(c) and (d) of the PFCR. Thus, there will be cases where a person lawfully wears facial coverings in a lawful public meeting or procession which is somehow hijacked by some people participating in the same gathering. For those persons, we are of the view that the defence of reasonable excuse under section 4 should be applicable when they are not aware of any order made under section 17(3) of the POO; or when they have not had a reasonable opportunity to leave the scene after becoming so aware. 234. As a matter of construction, the scenarios specified under section 4(3) are not exhaustive of the defence of reasonable excuse. By virtue of the potential adverse impact on the right of peaceful demonstration stemming from section 3 of the PFCR, the defence of reasonable excuse should be given a liberal interpretation. As held in R v Home Secretary Ex p Simms, supra, at p131, the principle of legality requires statutes to be interpreted insofar as possible in a manner compatible with fundamental rights. Thus, in cases where there is sufficient evidence to raise an issue of lawful use of facial covering (eg, in the participation of lawful assembly or gathering) and the court cannot be satisfied beyond reasonable doubt that a person remains at the scene (after reasonable opportunity to leave has been given) and persists in wearing such facial covering notwithstanding having made been aware of a section 17(3) order and the breach of the same by others leading to the unauthorized continuation of the assembly or gathering, a defence under section 4 can be made out. 235. In considering sections 3(1)(b), (c) and (d) together (the effect of which is to ban facial coverings from all public demonstrations, processions and gatherings), the Judges found the reasoning in SAS v France (2015) 60 EHRR 11, Yaker v France, Communication No 2747/2016 (17 July 2018) and Villeneuve v Montreal (City of), supra, to be applicable. Those authorities addressed legislations or regulations banning facial coverings in public or public gatherings without distinction as to the nature of the gatherings and their public order significance. For reasons further canvassed below, we agree with them that a total ban of facial coverings from all public demonstrations, processions and gatherings cannot pass the test of reasonable necessity even in the context of the public danger in which the PFCR is meant to address. 236. However, the imposition of such restriction in some defined circumstances can be justified provided that law enforcement officers are not given unduly broad discretionary power to give rise to potential for arbitrariness. In the Guidelines on Freedom of Peaceful Assembly published by a panel of human rights expert, cited by the court in Villeneuve v Montreal (City of), supra, at [496], there is the following commentary: “Restrictions imposed during an assembly: The role of the police or other law-enforcement personnel during an assembly will often be to enforce any prior restrictions imposed in writing by the regulatory body. No additional restrictions should be imposed by law-enforcement personnel unless absolutely necessary in light of demonstrably changed circumstances. On occasion, however, the situation on the ground may deteriorate (participants, for example might begin using of inciting violence), and the authorities may have to impose further measures to ensure that other relevant interests are adequately safeguarded. In the same way that reasons must be adduced to demonstrate the need for prior restrictions, any restrictions imposed in the course of an assembly must be just as rigorously justified. Mere suspicions will not suffice, and the reason must be both relevant and sufficient. In such circumstances, it will be appropriate for other civil authorities (such as an ombudsman’s office) to have an oversight role in relation to the policing operation, and law-enforcement personnel should be accountable to an independent body. Furthermore … unduly broad discretionary powers afforded to law-enforcement officials may breach the principle of legality, given the potential for arbitrariness…” 237. There is no reason why each limb of section 3(1) should not be considered separately. Considering the ban under section 3(1)(b) on its own, given the public order concerns discussed above in respect of unauthorized assembly amidst the fluidity in terms of the rapid deterioration of many large scale processions and demonstrations into violent riots with most of the rioters adopting the black bloc strategy to escape from responsibility for very serious criminal acts, we are of the view that such ban (as interpreted above) is no more than necessary to achieve the legitimate aims. As we have seen, most people who choose to remain at the assembly despite their awareness of the unauthorized nature of the gathering (either because of the issue and notice of an order to stop and disperse made under section 17(3) or warnings given by police that the gathering is unauthorized on account of other reasons) should also be aware that they are at risk of being prosecuted for offences under sections 17A(1)(a) and (3)(a). The need to deter people from wearing facial coverings to frustrate the legitimate aims of the statutory scheme under the POO applies with equal force in the context of unlawful assembly as well as unauthorized assembly. 238. In coming to the above conclusion, we take account of the above analysis as to the scope of section 3(1)(b) of the PFCR (including our construction of the defence of reasonable excuse under section 4) and its potential effects on the right of demonstration and freedom of expression and the background leading to the promulgation of the PFCR and the legitimate aims served by the same. We summarize below the main considerations leading to our conclusion on necessity: (1) The PFCR is intended to operate as an emergency measure when the public danger arising from the events since June 2019 continues to affect Hong Kong. Once the public danger subsides and the overall threat to law and order disappears, it is expected that CEIC would make an order under section 2(3) of the ERO to repeal the same. (2) A significant contributing factor to the current public danger is the impediment to effective law enforcement and efforts to restore law and order in the wake of large scale riots employing the black bloc tactics by the radical rioters backed up by less radical protestors who also wore facial coverings to shield the violent rioters from arrests and criminal sanction. (3) Insofar as section 3(1)(b) is concerned, it only bars the use of facial coverings at unauthorized assemblies. This measure should be assessed against the public danger experienced in Hong Kong from June 2019 onwards. It does not bar the exercise of the right of demonstration or freedom of expression generally. In other words, peaceful demonstration and assembly could still be held and the participants could adopt the wearing of facial coverings as a form of protest provided that the gatherings are authorized and held in accordance with the conditions imposed. (4) The liberty to wear facial coverings is only curtailed when a person remains at an unauthorized assembly and an order to stop and disperse had been made by a police officer under section 17(3) of the POO or in circumstances where violent or other reprehensible conducts on the part of some demonstrators posing serious and imminent risk to public order and safety which requires immediate actions on the part of police. As analysed above, a section 17(3) order could only be made when there is serious public order and safety concerns or immediate need to protect the rights and freedom of other citizens. The enforcement action itself would be subject to proportionality test. (5) Further, the defence of reasonable excuse under section 4 of the PFCR as construed above provides adequate protection to innocent protestors who are unaware of the section 17(3) order or have no reasonable opportunity to leave the scene. (6) As explained above, the refusal to disperse from an unauthorized assembly after a person at the assembly has been notified of the assembly being unauthorized or an order to stop and disperse under section 17(3) being made by itself is an offence. In other words, the persons participating in the unauthorized assemblies are taking part in an unlawful act, liable to be arrested and subject to potential penalty of imprisonment. (7) Even assuming such persons can still be regarded as exercising the right of peaceful demonstration, the wearing of facial coverings for demonstration under such circumstances is not at the core of such right. (8) Given the circumstances under which a section 17(3) order would be issued and the underlying public order significance for the POO regime to regulate and facilitate public processions and gatherings effectively, any non-compliance with such regulations by way of participating in an unauthorized assembly gives rise to a substantial risk of breach of the peace. This is particularly so in light of the propensity of such gatherings being hijacked by some radical protestors turning them into violent confrontations and the adoption of the black bloc tactics by such protestors in the current climate of public danger. (9) The wearing of facial coverings at unauthorized assemblies substantially impedes the effective law enforcement in terms of the identification and arrest of the radical and violent protestors who have crossed the line, which was the task of the police as highlighted in the judgment of Ribeiro PJ in HKSAR v Chow Nok Hang, supra. The inability of the police to pinpoint in a timely manner such radical and violent protestors and to segregate them from other demonstrators by arrests seriously impairs the power of the police to defuse potentially explosive situations and to exercise effective crowd control. The police became seriously handicapped in the performance of their duty to facilitate peaceful demonstration. (10) Such handicap also put the right of peaceful demonstration at serious risk because the Commissioner must take account of the practical difficulties stemming from mass facial coverings in crowd control and prevention of hijacking of lawful assembly or procession in deciding if objection should be made and the conditions to be imposed under sections 11 and 15 of the POO. At the same time, the timely and effective identification and segregation of violent protestors from the other peaceful demonstrators can avoid unnecessary police actions against the latter by virtue of mistaken identifications, thus facilitating the continuation of peaceful demonstrations or processions. (11) In this connection, the observations made by Poon JA (as the Chief Judge then was) in Secretary for Justice v Wong Chi Fung [2018] 2 HKLRD 699 at [118] are pertinent, in particular: “… For the general public, preserving public order helps create a safe and stable social environment to enable individuals to exercise their rights (including human rights of which the freedom of assembly and expression is one), express their views and pursue their goals. In fact, the above‑mentioned rights themselves will be lost in situation of anarchy if public order is not preserved. That is exactly the rationale underlying Article 17 of the Hong Kong Bill of Rights in only safeguarding peaceful assembly: the legal protection of the right of assembly is effective only in a society where public order is preserved …” (12) In light of the above analysis on the operation of the POO regime in respect of unauthorized assembly in conjunction with the common law principles as discussed at [180] ‑ [184], [188] ‑ [202] and [212] ‑ [215] above, there are sufficient safeguards to prevent arbitrariness in the exercise of discretion by the police and the courts in Hong Kong can provide adequate redress in the event of abuses. 239. In such context, SAS v France, supra, and Yaker v France, supra, (concerning legislation which prohibits the wearing of clothing that is designed to conceal the face in public places all the time) are of little relevance. As evidenced by the reasoning set out in those cases, the finding of disproportionality in the cases stems from the absolute ban instead of limiting it to situations where there is a general threat to public safety (see [139] in SAS v France and [8.7] in Yaker v France). These cases did not examine the matter in the context of public order and safety where there had been riots emerging repeatedly from mass demonstrations leading to the state of public danger which the PFCR is meant to tackle. 240. We are also satisfied that on a systemic level the prohibition under section 3(1)(b) of the PFCR strikes a fair balance between the societal benefits pursued by the restriction and the inroads made to the rights of the individual subject to the same. 241. We would therefore reverse the Judges’ holding with regard to the proportionality of section 3(1)(b). Accordingly, we shall set aside the declaration of unconstitutionality in respect of this subsection. F2.3 Sections 3(1)(c) and (d) 242. The position is different in relation to sections 3(1)(c) and (d) of the PFCR. These provisions prohibit the wearing of facial coverings at either a lawful public meeting that takes place under section 7(1) of the POO or a lawful public procession that takes place under section 13(1) of the POO. The holding of such meeting or procession would have been notified to the Commissioner and also not prohibited by the Commissioner. For public procession, the requirements of section 15 were complied with. One of the requirements is that good order and public safety of the procession is maintained. 243. Thus, so long as those meeting and procession proceed in accordance with sections 7(1) and 13(1), there cannot be any serious public order or safety issues which warrant additional restrictions being placed on the same by way of prohibition to wear facial coverings. As we have seen, when such meeting or procession were hijacked by protestors with violent or disorderly disposition, there is ample power on the part of the police under the POO regime to issue an order under section 17(3) including an order to stop and disperse. Disobedience to such an order would turn the meeting or procession into an unauthorized assembly. 244. On the other hand, if the meeting and procession remain peaceful and orderly, it is difficult to see the justification for imposing a restriction on the freedom of demonstration by way of prohibition of wearing facial coverings. 245. Mr Yu submitted that such prohibition is necessary because demonstrators wearing facial coverings would provide a shield to the radical violent protestors and facilitate the black bloc tactics which frustrate the effective policing when violent or criminal acts were committed. 246. However, as we have analysed above, a peaceful demonstration would have already degenerated into an unauthorized assembly or unlawful assembly before actual violence begins. For those fluid situations where such degeneration occurs rapidly, there is still sufficient powers under the POO regime to regulate the same in a proportionate manner. Thus, we have highlighted that there are cases where a lawful assembly can become an unauthorized one without a section 17(3) order when violent or other reprehensible conducts on the part of some demonstrators pose serious and imminent risk to public order and safety which requires immediate actions on the part of the police. For those scenarios, an offence under section 17A(2)(a) and (3) can be committed without an order made under section 17(3). 247. Even taking account of the propensity of mass demonstrations turned violent in the recent turmoil, we are not persuaded that it is necessary to extend the prohibitions under section 3(1) beyond the situations stipulated under subsections (a) and (b). 248. Thus, in respect of the prohibitions in sections 3(1)(c) and (d), we respectfully agree with the Judges that they cannot satisfy the proportionality test. F3. Section 5 249. To recap, section 5 of the PFCR confers power on police officer to require a person using facial covering in a public place to remove such covering to enable the officer to verify the identity of the person. If that person fails to comply with the request, the police officer can remove the covering. It further provides that the failure to comply with the request is an offence and liable to a maximum sentence of imprisonment for six months. 250. The Judges held that the provisions in section 5 engage freedom of the person and the right to liberty under BL28 and BOR5. Freedom of expression, freedom of movement and right to privacy were also relied upon and the Judges regarded that the proportionality analysis would be the same. Though they accepted that section 5 serves legitimate aims of law enforcement, investigation and prosecution and it is rationally connected with such aims, the Judges held that in light of the width of the measure (as explained at [185] of the Judgment), it exceeds what is reasonably necessary to achieve the aims even in the prevailing turbulent circumstances in Hong Kong. They also held that section 5 fails to strike a reasonable balance between the societal benefits derived from the measure and the inroads made to the protected rights. 251. By LKH-NoCA, LKH challenged the finding of the Judges that law enforcement, investigation and prosecution are legitimate aims. He also challenged the conclusion that section 5 is rationally connected with such aims. 252. The main argument of Mr Pun regarding the first challenge is that those aims were too broadly stated so that it could not afford a framework for evaluating the importance of such objectives. He also submitted that for an aim to be legitimate, a genuine need must be established. 253. With respect, we cannot accept these submissions. As demonstrated by the Judgment, the Judges were able to apply the proportionality analysis by reference to these legitimate aims. We do not see any difficulties in the evaluation on proportionality of the measures against these objectives. On the evidence, there is a genuine and pressing need to facilitate effective policing to counter the black bloc tactics. We also agree with the Judges that section 5 is rationally connected with these objectives for the reasons given at [183] and [184] of the Judgment. 254. The other points raised by Mr Pun had sufficiently been addressed by the Judges at [174] ‑ [179] of the Judgment. 255. We would dismiss the cross-appeal in these respects. 256. Coming back to the holding on reasonable necessity, Mr Yu submitted that the Judges erred in holding that section 5 is disproportionate when it involves minimal intrusion to an individual’s right but serves important functions of removing practical difficulties in identification and early intervention in times of public danger. 257. Counsel also submitted that section 5 of the PFCR should be construed together with section 54(1)(a) of the Police Force Ordinance (Cap 232) (“the PFO”) (which empowers a police officer to stop and demand proof of identity of a person acting in a suspicious manner in any street or other public place), section 49(1) of the POO (which empowers a police officer to require any person to produce proof of identity for inspection if he reasonably believes that it is necessary for prevention, detection or investigation of any offence) and section 17C(2) of the Immigration Ordinance (Cap 115) (“the IO”) (which empowers police officer to demand a person to produce proof of identity for inspection). 258. Applying the principle discussed in Medical Council of Hong Kong v Chow Siu Shek, supra, Mr Yu submitted that we should take all these statutory provisions together in construing the limits of the power under section 5. Alternatively, as a fallback position, Mr Yu submitted that the Court can declare that the power under section 5 can only be exercised in conjunction with these other statutory powers. 259. Mr Yu also relied on the decision of the European Commission in Reyntjens v Belgium Application No 16810/90 to support his argument that the restriction on personal liberty under section 5 is minimal. In that case, the European Commission held that a routine identity check did not violate the liberty of the person protected under article 5 and the right to respect for private life under article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms. 260. The decision in Reyntjens v Belgium, supra, was made in 1992. The Commission did not regard a check of identity card by the police as an interference in a person’s private life. The identity card carried information as to the bearer’s name, sex, date and place of birth, main address, and his spouse’s name. The Commission took the view (somewhat surprising, if we may say so, in light of the more up-dated jurisprudence) that such identity card did not contain information relating to private life. 261. In DPP v Avery [2002] 1 Cr App R 31, the Divisional Court held that the exercise of the powers conferred by section 60 of the Criminal Justice and Public Order Act 1994 (which provided a police constable upon authorisation being given by an inspector under certain conditions could require any person to remove any item which were worn for the purpose of concealing his identity and to seize such item) was an interference with the liberty of the subject (see [17] and [18] of the judgment). The court also held that the exercise of those powers did not involve the power of search, see [16] and [24]. 262. The interference was found to be justified for the reasons set out at [18]. An important consideration in that case was that the power under section 60 arose only in anticipation of violence and after a decision of a senior police officer was made to authorize the conferment of such power on the specific occasion. At the same time, Newman J also acknowledged at [17] that wearing of apparel to the head and face can be required by custom or religion and wearing of mask can be a potent means of demonstrating in a lawful manner. 263. The Judges in the present case contrasted that provision with section 5 under [185] ‑ [187] and footnote 60 of the Judgment. They, in our view quite rightly, took account of the width of the power under section 5 in assessing the proportionality of the same. 264. The modern European approach was discussed by the European Court of Human Rights in Gillan and Quinton v United Kingdom Application No 4158/05 (which were reiterated in the more recent case of Beghal v United Kingdom Application No 4755/16). Gillan and Quinton v United Kingdom, supra,concerned the stop and search power under section 44 of the Terrorism Act 2000. On the interference with the right to liberty of a person, the Strasbourg Court had these observations at [56] and [57] (omitting the footnotes): “56. The Court recalls that Article 5 § 1 is not concerned with mere restrictions on liberty of movement; such restrictions are governed by Article 2 of Protocol No. 4, which has not been ratified by the United Kingdom. In order to determine whether someone has been ‘deprived of his liberty’ within the meaning of Article 5, the starting point must be his concrete situation and account must be taken of a whole range of criteria such as the type, duration, effects and manner of implementation of the measure in question. The difference between deprivation of and restriction upon liberty is nonetheless merely one of degree or intensity, and not one of nature or substance. Although the process of classification into one or other of these categories sometimes proves to be no easy task in that some borderline cases are a matter of pure opinion, the Court cannot avoid making the selection upon which the applicability or inapplicability of Article 5 depends. 57. The Court observes that although the length of time during which each applicant was stopped and search did not in either case exceed 30 minutes, during this period the applicants were entirely deprived of any freedom of movement. They were obliged to remain where they were and submit to the search and if they had refused they would have been liable to arrest, detention at a police station and criminal charges. This element of coercion is indicative of a deprivation of liberty within the meaning of Article 5 § 1. In the event, however, the Court is not required finally to determine this question in the light of its findings below in connection with Article 8 of the Convention.” 265. On the right to respect for private life, the court discussed the relevant principles and approach at [61] ‑ [63] (omitting the footnotes): “61. As the Court has had previous occasion to remark, the concept of ‘private life’ is a broad term not susceptible to exhaustive definition. It covers the physical and psychological integrity of a person. The notion of personal autonomy is an important principle underlying the interpretation of its guarantees. The Article also protects a right to identity and personal development, and the right to establish relationships with other human beings and the outside world. It may include activities of a professional or business nature. There is, therefore, a zone of interaction of a person with others, even in a public context, which may fall within the scope of ‘private life’. There are a number of elements relevant to a consideration of whether a person’s private life is concerned in measures effected outside a person’s home or private premises. In this connection, a person’s reasonable expectations as to privacy may be a significant, though not necessarily conclusive, factor. In Foka, at [85], where the applicant was subjected to a forced search of her bag by border guards, the Court held that ‘any search effected by the authorities on a person interferes with his or her private life.’ 62. Turning to the facts of the present case, the Court notes that sections 44-47 of the 2000 Act permit a uniformed police officer to stop any person within the geographical area covered by the authorisation and physically search the person and anything carried by him or her. The police officer may request the individual to remove headgear, footwear, outer clothing and gloves. Paragraph 3.5 of the related Code of Practice further clarifies that the police officer may place his or her hand inside the searched person’s pockets, feel around and inside his or her collars, socks and shoes and search the person’s hair. The search takes place in public and failure to submit to it amounts to an offence punishable by imprisonment or a fine or both. In the domestic courts, although the House of Lords doubted whether Article 8 was applicable, since the intrusion did not reach a sufficient level of seriousness, the Metropolitan Police Commissioner conceded that the exercise of the power under section 44 amounted to an interference with the individual’s Article 8 rights and the Court of Appeal described it as, ‘an extremely wide power to intrude on the privacy of the members of the public’. 63. The Government argues that in certain circumstances a particularly intrusive search may amount to an interference with an individual’s Article 8 rights, as may a search which involves perusing an address book or diary or correspondence, but that a superficial search which does not involve the discovery of such items does not do so. The Court is unable to accept this view. Irrespective of whether in any particular case correspondence or diaries or other private documents are discovered and read or other intimate items are revealed in the search, the Court considers that the use of the coercive powers conferred by the legislation to require an individual to submit to a detailed search of his person, his clothing and his personal belongings amounts to a clear interference with the right to respect for private life. Although the search is undertaken in a public place, this does not mean that Article 8 is inapplicable. Indeed, in the Court’s view, the public nature of the search may, in certain cases, compound the seriousness of the interference because of an element of humiliation and embarrassment. Items such as bags, wallets, notebooks and diaries may, moreover, contain personal information which the owner may feel uncomfortable about having exposed to the view of his companions or the wider public.” 266. Coming back to section 5 of the PFCR, even though it does not involve a power of search, the exercise of the power would inevitably impose a temporary restriction on the liberty of the person who is subject to the request. Further, the section imposes a coercive sanction to back up a request for removal of facial coverings. Another facet of section 5 is the empowerment of a police officer to remove a facial covering worn by a person if that person fails to comply with a request for such removal. Though the extent of bodily contact for removal of facial coverings may not be as substantial as a detailed search of a person, it nonetheless authorizes bodily contacts which, from the point of view of a person subject to such treatment, is unwelcome and may even be offensive. Acts and conducts on the part of a person to deflect or resist such removal could be taken as obstruction to due execution of duties and thus bring serious consequences upon such person. 267. We are therefore unable to agree that the interference occasioned by an exercise of section 5 power on the liberty of the person and the right to privacy is minimal. 268. Subject to the situations addressed by sections 3(1)(a) and (b), it is not an offence to wear facial coverings in public place. As we have already held, wearing facial coverings during a peaceful and lawful demonstrations would not be an offence. Yet section 5 confers power to the police to make a request to remove facial coverings in an entirely uneventful situation. 269. As noted by the Judges at [181] of the Judgment, there are other statutory provisions in our statute books empowering police officers to demand proof of identity for inspection under specified circumstances. We alluded to these provisions at [257] above. As explained at [182], there are good public order and immigration control justifications for such powers. 270. In our view, these statutory powers are already sufficient to address the law enforcement objectives, particularly when sections 3(1)(a) and (b) of the PFCR are in place and they could be relied upon in conjunction with the exercise of the power under section 54(1)(a) of the PFO or section 49(1) of the POO. Insofar as necessary, these provisions should be read with section 40(1) of the Interpretation and General Clauses Ordinance (Cap 1) which states: “Where any Ordinance confers upon any person power to do or enforce the doing of any act or thing, all such powers shall be deemed to be also conferred as are reasonably necessary to enable the person to do or enforce the doing of the act or thing.” 271. In order to have meaningful inspection of a proof of identity under these provisions, the police officer must be able to compare the photograph on the identity document with the face of the subject person. Thus, if the person wears facial covering, he must remove the same to facilitate the inspection by the police officer. Failure to remove the facial covering under such circumstances is a failure comply with the demand and it would be an offence under section 49(1) of the POO. 272. Any challenges to such implied power should be laid to rest after this judgment. 273. In any event, there is no justification for such wide power as laid down in section 5 of the PFCR. In this connection we are in full agreement with the Judges’ observations at [189] of the Judgment. We cannot accept the submissions of Mr Yu that section 5 could be construed in a manner to confine its application to circumstances set out in section 54(1)(a) of the PFO or section 49(1) of the POO or section 17C(2) of the IO. There is simply nothing in section 5 itself to suggest that these provisions should be read together. The mere references to “prevent identification” under section 5(1) and verification of identity under section 5(2)(a) do not provide the basis for holding that section 5 should only be applicable in circumstances where section 54(1)(a) of the PFO or section 49(1) of the POO or section 17C(2) of the IO are applicable. 274. In Medical Council of Hong Kong v Chow Siu Shek, supra, Bokhary PJ referred to the following principle of construction at p156B: “It is well-established that the context in which a statute is to be interpreted includes other statutes in pari materia i.e. other statutes dealing with comparable matters.” 275. Even if we were to accept that section 54(1)(a) of the PFO or section 49(1) of the POO can be regarded as dealing with comparable matters, those statutory provisions have different scopes of operation. We cannot distil any common limitations on the exercise of the powers under these statutory provisions and transpose the same to confine the scope of section 5. 276. Bearing in mind the objective for section 17C(2) of the IO as explained by the Judges at [181(3)] of the Judgment, it is plain that it cannot be regarded as dealing with a comparable matter as the PFCR the genesis of which is the public danger brought about by the recent turmoil. In this connection, we are aware that in R v Fung Chi Wood [1991] 1 HKLR 654 Bewley J held that the power under section 17C could be used for purposes unrelated to immigration control. That case was apparently not cited to the Judges. However, that was a decision before the HKBORO came into effect on 8 June 1991. Further, in light of the modern approach to the construction of the scope of statutory power by reference to its legislative purpose as discussed recently in Chee Fei Ming v Director of Food and Environmental Hygiene, supra, it is doubtful if that decision could remain good law today. As there is no appeal against the holding of the Judges in this respect and no submission has been advanced in that light, we are not going to resolve finally the applicable scope of section 17C(2). Suffice to say that we would proceed on the basis that there is no challenge before us to the view of the Judges. 277. Another general principle of construction discussed by Bokhary PJ in Medical Council of Hong Kong v Chow Siu Shek, supra, can be found at p154B: “When the true position under a statute is to be ascertained by interpretation, it is necessary to read all of the relevant provisions together and in the context of the whole statute as a purposive unity in its appropriate legal and social setting.” 278. The obvious contextual background for section 5 is the other provisions in the PFCR itself. However, it is plain that the CEIC did not intend to confine the operation of section 5 to cases where an offence has been committed under section 3. Otherwise, section 5(1) would be drafted differently. And there is actually no need to have section 5 to cover situations where the person is arrested or stopped for enquiry in respect of suspected commission of an offence under section 3. Such need has already been provided for under section 54(2)(a) of the PFO which provides: “If a police officer finds any person in any street or other public place, or on board any vessel, or in any conveyance, at any hour of the day or night, whom he reasonably suspects of having committed or of being about to commit or of intending to commit any offence, it shall be lawful for the police officer to stop the person for the purpose of demanding that he produce proof of his identity for inspection by the police officer.” 279. As explained above, the power under section 54(2)(a) impliedly confers the power to demand the subject person to remove facial coverings for verification of identity. Thus, there is no need for a further power to be conferred by way of section 5 to cater for such situation. We do not see any need for this Court to apply a remedial interpretation to section 5 by reading down its scope of operation. 280. As regard the submission of Mr Yu that section 5 can facilitate early intervention against the background of public danger, for the reasons given at [261] ‑ [268] above, we do not find it proportionate to confer a wide power to the police to demand removal of facial coverings to verify the identity of a person in the absence of any ground for public order concern against the person in question. 281. Further, the conferment of such wide and unqualified power is against the concept of law providing proper safeguard against arbitrary interference of fundamental rights. The relevant principle was reiterated by the European Court of Human Rights in Beghal v United Kingdom Application No 4755/16 at [88]: “For domestic law to meet these requirements it must afford a measure of legal protection against arbitrary interferences by public authorities with the rights safeguarded by the Convention. In matters affecting fundamental rights it would be contrary to the rule of law, one of the basic principles of a democratic society enshrined in the Convention, for a legal discretion granted to the executive to be expressed in terms of an unfettered power. Consequently, the law must indicate with sufficient clarity the scope of any such discretion conferred on the competent authorities and the manner of its exercise (Rotaru v. Romania [GC], no. 28341/95, § 55, ECHR 2000-V; Hasan and Chaush v. Bulgaria [GC], no. 30985/96, § 4, ECHR 2000-XI; Maestri v. Italy [GC], no. 39748/98, § 30, ECHR 2004‑I; see also, amongst other examples, Gillan and Quinton v. the United Kingdom, no. 4158/05, § 77, ECHR 2010 (extracts)). The level of precision required of domestic legislation – which cannot in any case provide for every eventuality – depends to a considerable degree on the content of the instrument in question, the field it is designed to cover and the number and status of those to whom it is addressed (see, for example, Hashman and Harrup v. the United Kingdom [GC], no. 25594/94, § 31, ECHR 1999‑VIII; S. and Marper, cited above, § 96; Gillan and Quinton, cited above, § 77; and Ivashchenko v. Russia, no. 61064/10, § 73, 13 February 2018).” 282. For the above reasons, we would dismiss the appeal by the CEIC in respect of section 5 of the PFCR. G. OTHER GROUNDS 283. In the KWH‑NoCA and KWH-RN, they contend that the Judges were wrong in rejecting Grounds 2, 3 and 4. They are effectively seeking to advance the arguments made under these grounds again in these appeals. 284. In the LKH‑NoCA, he contends that the Judges were wrong to reject Ground 3 and to hold under Ground 5B that the PFCR serves legitimate aims and the measures thereunder are rationally connected to those aims. Effectively, he is seeking to reargue those submissions that have been rejected in the court below. 285. We will deal with them in turn as follows[52]. G1. Ground 2 286. Mr Chan’s submissions in support of this ground are premised fundamentally on the provisions under sections 3 and 5 of the HKBORO. It is therefore useful to set them out first. 287. Section 5 of the HKBORO (which incorporates and is identical to ICCPR4) provides: “(1) In time of public emergency which threatens the life of the nation and the existence of which is officially proclaimed, measures may be taken derogating from the Bill of Rights to the extent strictly required by the exigencies of the situation, but these measures shall be taken in accordance with law. (2) No measure shall be taken under subsection (1) that— (a) is inconsistent with any obligation under international law that applies to Hong Kong (other than an obligation under the International Covenant on Civil and Political Rights); (b) involves discrimination solely on the ground of race, colour, sex, language, religion or social origin; or (c) derogates from articles 2, 3, 4(1) and (2), 7, 12, 13 and 15.” (emphasis supplied) 288. Section 3 provides: “(1) All pre‑existing legislation that admits of a construction consistent with this Ordinance shall be given such a construction. (2) All pre‑existing legislation that does not admit of a construction consistent with this Ordinance is, to the extent of the inconsistency, repealed.” 289. Given these provisions, Mr Chan essentially submitted: (1) Section 5 of the HKBORO prohibits any derogation from the fundamental rights provided in the ICCPR save in the circumstances specified therein and save except for non‑derogable rights. The circumstances specified are detailed and elaborate[53]. (2) On the other hand, the CEIC can make any regulations of the widest scope and nature under the ERO under any occasion of emergency or public danger. The regulations so made can be of such measures that suspend or limit the protected rights under the BOR (and ICCPR). In other words, the regulations made by the CEIC under the ERO can derogate from the protected fundamental rights. (3) However, the occasion of emergency or public danger provided under the ERO are not defined and undisputedly could cover situations other than “public emergency” as provided under section 5 of the HKBORO. In the circumstances, the ERO permits or allows derogation from the protected fundamental rights other than in the circumstances as specified and in accordance with section 5 of the HKBORO (and ICCPR4). (4) In this respect, Mr Chan has further pointed out that section 2(4) of the ERO allows regulations to suspend or repeal existing laws[54], which must include the entire HKBORO or its section 5 specifically. In the premises, the ERO also permits or allows derogation from even non‑derogable rights. (5) The ERO is therefore inconsistent with the provisions in the HKBORO, and thus was already impliedly repealed under section 3(2) of the HKBORO before 1 July 1997. (6) Alternatively, even if the ERO was not repealed before 1 July 1997, it is in any event impliedly repealed or has become unlawful after 1 July 1997 as it is inconsistent with BL39 (which constitutionalised ICCPR as it is incorporated into the domestic law under the HKBORO). 290. Mr Chan further submitted that the Judges were therefore wrong to reject this ground thinking that KWH has somehow conflated the concepts of derogation from the BOR itself and restriction of non-absolute rights under and in compliance with the BOR. He emphasised that his above arguments do not involve any conflation of concepts. His fundamental premise is that the ERO itself permits or allows such derogation to be implemented. 291. With the greatest respect, we think the Judges were clearly right in rejecting this ground. We hope we could be forgiven for not dealing with every aspect of Mr Chan’s very comprehensive and detailed submissions, as we think the proper analysis and approach to this question is this. 292. First, as pointed out by Lam VP at the hearing, it is provided expressly at section 3(1) of the HKBORO that “[a]ll pre‑existing legislation that admits of a construction consistent with this Ordinance shall be given such a construction”. Hence, one must first seek to construe the ERO in a way to be consistent with the HKBORO. It is only when this is not possible that one should resort to section 3(2) to find that the ERO is repealed. 293. However, as rightly pointed out by the Judges at [108] of the Judgment, such a construction is not only permissible but a proper one (given section 3(1) of the HKBORO): the ERO should simply be read subject to section 5 of the HKBORO (which has been fairly accepted by Mr Yu to be the case both before the Judges as well as before this Court). 294. In other words, as explained by the Judges, the ERO should be construed as: (1) In times of a public emergency officially proclaimed and in accordance with the other requirements of section 5 of the HKBORO, measures may be adopted under the ERO which derogate from the BOR (even so, excepting the specified non‑derogable provisions and discrimination on the prohibited grounds). Subject to the conditions of section 5 of the HKBORO (including that the derogations are limited to those strictly required by the exigencies of the situation), this may have the effect of temporarily suspending the relevant human rights norms. (2) In other situations, measures adopted under the ERO may not derogate from the BOR, which means that if any such measure has the effect of restricting fundamental rights, then like any other restriction in normal times, it has to satisfy the dual requirements that the restriction is prescribed by law and meets the proportionality test: Leung Kwok Hung & Others v HKSAR, supra, at [16] - [17]. 295. Mr Chan however argued that such a construction is inappropriate and unworkable, since the court will have to read too much into the provisions of the ERO to meet the elaborate and detailed scheme and safeguards provided under section 5 of the HKBORO (and thus also ICCPR4) to permit derogation from the protected rights. For example, Mr Chan said in relation to the requirement of a proclamation of a “public emergency”, such a construction would further require to be read into the ERO details such as to how the proclamation is to be made, what procedures are to be followed, and how many days of notice should be given to the public, etc. He therefore said the proposed construction is not only unworkable, but would also create uncertainties. 296. We are unable to accept this submission. All that section 5 of the HKBORO (and ICCPR4) has provided for are those criteria that have been set out therein before a derogation from the protected rights is permitted. The ERO is only required to be read to be subject to those broad criteria to make it consistent with section 5. All the so-called details that Mr Chan has suggested are simply not provided for by section 5 (or ICCPR4). They are therefore not specific requirements or criteria prescribed by section 5 of the HKBORO that need to be read into the ERO to make it compatible. 297. This conveniently takes us to the next reason why we find that the Judges were correct in rejecting this ground. 298. As observed by the Judges, although the ERO gives the CEIC the potential power to enact regulations that may result in derogation from the protected rights if she finds it necessary to do so, it is plain from the provisions of the ERO that they do not by themselves provide for any derogation from the protected rights as submitted by Mr Chan. 299. In the premises, the fundamental basis for the systemic challenge made against the ERO to say it is incompatible with BOR5 is incorrect in the first place. 300. If in the circumstances where a regulation enacted by the CEIC under the ERO does have the effect of derogating from any of the protected fundamental rights, that regulation will have to be subject to the dual tests of “prescribed by law” and “proportionality” as provided under section 5 of the HKBOR[55]. This however does not support a systemic challenge against the ERO to say that it is incompatible with section 5 of the HKBOR. 301. This is where and why the Judges were rightly of the view that KWH’s contentions under Ground 2 conflate with the concepts of derogation from right and the restriction of non-absolute rights under and in compliance with the BOR. 302. The ERO is therefore not impliedly repealed before 1 July 1997 for being incompatible with section 5 of the HKBORO. 303. Mr Chan’s alternative contention that the ERO should in any event be repealed after 1 July 1997 (as it is inconsistent with BL39 which incorporates ICCPR4 through the HKBORO) is in all material aspects based on the same arguments considered above. For the same reasons, we will reject it. 304. The Judges were correct in rejecting Ground 2. We would therefore dismiss KWH’s ground of cross-appeal in this respect. G2. Ground 3 305. Under this ground, both Mr Chan and Mr Pun (for LKH) [56] submitted that section 2(1) of the ERO is unconstitutional as it confers practically unlimited power on the CEIC to make regulations that are capable of severely restricting fundamental rights, but the scope of the power and the manner of its exercise is so wide and undefined that it falls foul of the legal certainty test under the prescribed by law requirement. 306. Mr Chan’s submissions can be summarised as follows: (1) The section 2(1) power can be invoked on a most vague ground of a self proclaimed “public danger” (which is not defined in the ERO). In other words, whenever and however. (2) There is also no restriction on the scope of regulations to be made. It is contemplated that these regulations could impose restrictions on liberty of the persons, the right to a fair hearing, freedom of communication, right to private property, and conscription for services. (3) In the premises, it is not possible to reasonably foresee, even with proper legal advice, the limits or the possible consequences of the existence of these powers. There are therefore no independent safeguards against abuses or excesses. 307. Other than relying on Mr Chan’s submissions, Mr Pun further emphasised that the ERO falls foul of the prescribed by law requirement as: (1) Given the widest possible scope of regulations that the CEIC is empowered to make under it, section 2(1) of the ERO confers an “unfettered power” on the CEIC and constitutes “arbitrary interference” in Hong Kong people’s rights and freedom. (2) The unfettered nature of the power (and hence the arbitraries of the interference that would result from it) is underlined by the fact that the ERO does not set out any “guidance” on the way in which the CEIC exercises the power, and only provides for a “purely subjective and inherently vague and uncertain criterion” (ie, the undefined “public danger” ground consideration as a basis for the CEIC to invoke the power). 308. It can be seen from the above that KWH and LKH’s fundamental complaint under this ground is that section 2(1) of the ERO does not meet the prescribed by law requirement as it is uncertain in law as to the scope of the power conferred on the CEIC and the manner in which she should exercise that power. 309. The Judges rejected this ground for the main reasons set out at [112] - [115] of the Judgment as follows: “112. The argument of the applicants in both HCAL 2945 and HCAL 2949 is this. The ERO contemplates and enables the making of regulations which can severely curtail fundamental rights. Section 2(1) is, however, couched in wide terms and lacks any express limit or guidance on the exercise of the power by the CEIC in making regulations that may affect fundamental rights. As such, s 2(1) of the ERO violates the principle of legal certainty mandated by Art 39 of the Basic Law. What the argument focuses on is the certainty (or the lack of it) in the regulation-making power in the ERO, rather than that in respect of any regulations made under the ERO. 113. We do not accept this argument. Legal certainty is not a notion existing in the abstract and in a vacuum. Art 39 of the Basic Law provides that the provisions of the ICCPR as applied to Hong Kong shall remain in force, and states that those rights and freedoms shall not be restricted unless as prescribed by law. As such, the ‘prescribed by law’ requirement applies to the restraints on the rights and freedoms of the individual. It is the ‘norms’ which purport directly to restrict the citizen’s freedom that must be sufficiently precise to enable the citizen to conduct himself accordingly. This is how the requirement has been applied in the decisions of the Court of Final Appeal. Thus in Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381 and Mo Yuk Ping v HKSAR (2007) 10 HKCFAR 386, the requirement was applied to the common law offence of misconduct in public office and conspiracy to defraud respectively. In Leung Kwok Hung & Others v HKSAR (2005) 8 HKCFAR 229, it is the statutory scheme in the POO restricting the right of assembly and procession that was called into question by reference to the requirement of ‘prescribed by law’. In Hysan Development Co Ltd v Town Planning Board (2016) 19 HKCFAR 372, the point made was that property rights are to be protected by clear and accessible laws. In HKSAR v Fong Kwok Shan Christine (2017) 20 HKCFAR 425, the question was whether a provision in the administrative instructions issued by the President of the LegCo to regulate behaviour within the precincts of the LegCo’s chamber was sufficiently certain. See also Hong Kong Television Network Ltd v Chief Executive in Council [2016] 2 HKLRD 1005 (CA), §90. 114. In contrast, the ERO does not itself purport to limit any fundamental rights. It does not lay down any norms that curtail any right of an individual. Although regulations enacted under it may purport to do so, it seems to us that it is those regulations, if and when enacted, that have to meet the principle of legal certainty, not the enabling Ordinance in itself which has no direct effect on any individual right or freedom. If such regulations are themselves laws of general application, accessible to all residents, and sufficiently well defined, then they cannot be said to fall foul of the requirement of accessibility and foreseeability which is the essence of the principle. 115. The ERO, as the source of power for making regulations, cannot be attacked on its own under the ‘prescribed by law’ requirement. This is not to say that it can never be a matter of concern that executive authorities are given ill-defined powers to make laws that may restrict fundamental rights, but this seems to us to raise the analytically separate and different point in relation to delegation of legislative power, which we have dealt with under Ground 1 above. In addition, the laws thus made will themselves have to possess the quality of accessibility and to afford sufficient safeguards against arbitrary application by indicating with sufficient clarity the scope of any discretionary power conferred.” (emphasis supplied) 310. Mr Chan and Mr Pun both submitted that the Judges had erred in their reasons. 311. With respect to Mr Chan and Mr Pun, we see no substance in this ground. 312. Most recently in Chee Fei Ming v Director of Food and Environmental Hygiene, supra, after reviewing a long line of authorities, this Court explained at [38] - [50] and [52] - [58] the applicable principles under the prescribed by law requirement. 313. Relevant for the present purpose concerning a complaint of lack of sufficient clarity as to the scope of the authority’s statutory power and the manner of its exercise, the principles can be summarised as thus: (1) The requirement stems from BL39(2)[57] and BOR16 and 17. It entails two limbs: (a) the requirement as to the accessibility of the law, and (b) the requirement of foreseeability. (2) The second limb requires that “a norm must be formulated with sufficient precision to enable a citizen to regulate his conduct so that he is able, with legal advice if necessary, to foresee the consequences which a course of action will entail”. This requirement is to be assessed by examining if there is sufficient clarity to protect an individual against arbitrary interference of his rights and freedoms. (3) The crucial question in such context is whether there is sufficient clarity as to the scope of the authority’s power and the manner of which its exercise and whether the law provides adequate safeguards against abuse. If these tests are met, there would be legal protection against arbitrary interference by the authority with the subject freedoms and rights in question. (4) At the same time, under the prescribed by law requirement, absolute precision or certainty is not achieved or required. It only requires that the “core” of the norm should be sufficiently formulated, and “the mere existence of debatable issues surrounding the settled core does not make the norm legally uncertain”. (5) For the purpose of determining what the “law” is for the prescribed by law doctrine, the court should adopt a “holistic approach”. In assessing in a particular case whether foreseeability requirement is satisfied, the court can take into account not only the statutory provision in question, but also unwritten law, including the common law. Under the holistic approach, the court will also examine how the law is actually administered, including the effectiveness of judicial supervision through judicial review. 314. Having regard to these principles, the Judges were clearly correct in rejecting this ground. 315. As explained by the Judges, the ERO itself does not provide for any restriction or limitation of the protected fundamental rights. This is implicitly (if not expressly) acknowledged by Mr Chan in his above submissions[58] (see the italicised words at [306] above). In any event, this must be plain from the fact that the ERO itself cannot be enforced or does not impose any penalty. 316. In the premises, given that it does not by itself restrict or limit any fundamental rights, the Judges were right to conclude at [113] - [115] of the Judgment that the ERO is not subject to the prescribed by law scrutiny as a basis of a systemic challenge. Rather, it is the actual regulation that has been enacted, and if it has the effect of restricting or limiting fundamental rights, that has to meet the prescribed by law requirement. As observed by the Judges, legal certainty “is not a notion existing in the abstract and in a vacuum” and “it is the ‘norms’ which purport directly to restrict the citizen’s freedom that must be sufficiently precise to enable the citizen to conduct himself accordingly”. 317. In this respect, Mr Yu was also correct to point out that KWH is wrong to say that “The differences between [the Judges] and [KWH] is whether a source empowering statute itself is susceptible to such a challenge [for lack of legal certainty]”. The Judges have not held as a general proposition that “a source empowering statute” can never been so challenged. Reading [115] of the Judgment in its proper context, the Judges’ ruling is directed specifically at the ERO where they rightly held that it does not purport to limit fundamental rights or restrict any freedom. 318. Mr Pun however argued that the Judges’ reasoning is wrong as the ERO even as a power conferring statute engages the prescribed by law requirement under BL39(2). 319. First, counsel contended that there is no principle of law that a discretionary power itself is not open to challenge as being in violation of fundamental rights merely because such power has not been actually exercised whether against a particular applicant or the public in general. 320. This submission is misconceived. BL39(2) provides expressly that Hong Kong residents’ rights and freedoms cannot be restricted unless prescribed by law. Hence, it is only when the individuals’ rights and freedoms are or are sought to be restricted that the prescribed by law requirement needs to be met. But as explained above, the CEIC’s exercise of discretionary power under the ERO to make a regulation is not an exercise of power that will necessarily violate any fundamental right. It is only when there is a regulation that has indeed been enacted under the ERO which provides for the restriction of fundamental rights that an individual’s relevant fundamental rights or freedoms are or are sought to be restricted. In such a case, the regulation itself has to meet the prescribed by law requirement and that would not be dependent upon whether or not the power under the regulation has in fact been exercised or not. 321. Second, Mr Pun cited three authorities to support his above contention. They are: Charles v Philips and Sealey (1967) 10 WIR 423, Herbert v Phillips and Sealey (1967) 10 WIR 435 and AG v Reynolds [1980] AC 637. 322. These authorities are distinguishable and do not help him. 323. In Charles, the Governor of St Christopher, Nevis and Anguilla made the Emergency Powers Regulations 1967 (“the Regulations”) pursuant to the Leeward Islands (Emergency Powers) Order in Council 1959 (“the Order in Council”). Charles was detained pursuant to the Regulation 3. He challenged the lawfulness of the Regulation 3. 324. Glasgow J refused the application. The Court of Appeal of West Indies Associated States allowed his appeal. However, the issue raised in the challenge that the court was concerned with is whether Regulation 3 was consistent with sections 3 and 14 of the Constitution itself. This is made clear by Lewis CJ (with whom other members of the court agreed) at p430A-B as follows: “The crucial question in this case is whether, having regard to ss 3 and 14 of the Constitution, the Governor was empowered to make reg 3 of the Emergency Powers Regulations 1967 and to order the detention of [Charles] thereunder. This calls for a close comparison of [the Order in Council] with the relevant provisions of the Constitution.” 325. The Court of Appeal held that the Regulations were invalid as (a) they were not in conformity with the Constitution, and (b) it was impossible to construe them to be in conformity with the Constitution even by way of modification, adaptation, qualification or exception. Thus, the case was not concerned with the doctrine of prescribed by law, but rather with a conflict between the empowering Order in Council and the Constitution. This cannot be an authority to support Mr Pun’s proposition that in relation to a prescribed by law analysis, the court should examine the ERO which by itself does not seek to limit or restrict any rights and freedoms. 326. Herbert was delivered immediately after Charles and was decided in the same way. As acknowledged by Mr Pun, its factual and legal background are in substance the same as in Charles. For the same reason above, this authority does not further Mr Pun’s submission. 327. Reynolds concerns another challenge by the plaintiff there (who was also arrested under Regulation 3) against the Attorney-General seeking damages for false imprisonment and compensation for unlawful detention under section 3 of the Constitution. The High Court gave judgment in favour of the plaintiff. On appeal by the Attorney-General and cross-appeal by the plaintiff as to the amount of damages, the Court of Appeal held that (as in Charles and Herbert) Regulation 3 was not in conformity with the Constitution, and therefore the Regulations were void and the plaintiff’s detention was unlawful. It dismissed the Attorney‑General’s appeal and increased the damages awarded to the plaintiff. The Attorney-General appealed to the Privy Council. 328. The Privy Council dismissed the appeal on the primary basis that on the facts of the case, there was an irresistible presumption that no reasonable grounds existed to detain the plaintiff pursuant to Regulation 3. The detention was therefore unlawful. However, relevant for the present purpose, the Privy Council indeed overruled Charles and Herbert in part and held that the Regulations could be interpreted (by way of modification, adaptation, qualification or exception) to be in conformity with the Constitution and thus the Governor did have the power to enact the Regulations under the Constitution. 329. Despite this, Mr Pun relied on this authority only to purportedly show that the Privy Council did agree in part with Charles and Herbert that, save with the remedial construction, the regulation-making power under section 3 of the Order in Council was on the face of it “not in conformity with” the Constitution[59]. Even for this limited purpose, for the same reason we have explained above in relation to Charles and Herbert, this authority again does not take Mr Pun’s submission any further. 330. Given that the ERO itself does not seek to limit fundamental rights, the question of whether it meets the prescribed by law requirement simply does not arise. Mr Chan and Mr Pun’s principal submissions about the width or unlimited scope of the ERO or lack of safeguards are therefore irrelevant under this context. 331. In the premises, KWH and LKH’s challenge against the ERO under this ground is misconceived. 332. But in any event, for the reasons we have given above under Grounds 1, 5A and B and the principles on the prescribed by law requirement we have highlighted above, the ERO cannot be said to have conferred “unfettered and unlimited” power on the CEIC and there are “no independent safeguards against abuses or excesses”. We will explain why. 333. As explained in our discussion under Ground 1 above, given the true nature of emergency regulations and the ground of public danger, very wide powers have to be given to the CEIC to address occasions of emergency or public danger which cannot be exhaustively defined in advance, and the situations which the ERO is intended to tackle with must be varied and unpredictable. It is therefore necessary for section 2(1) of the ERO to have a wide scope. 334. In this respect, a general enactment does not necessarily mean that it falls foul of the legal certainty test under the prescribed by law requirement. It has been repeatedly stated that the prescribed by law requirement does not require absolute precision or certainty. It only requires that the “core” of the norm should be sufficiently clearly formulated. 335. For this, it is illuminating to remind ourselves again the judgment of Justice Gonthier in the Supreme Court of Canada in R v Nova Scotia Pharmaceutical Society [1992] 2 SCR 606 to highlight the relationship between the scope of precision required and the need for general enactment in the modern world[60]: (1) At pp638 - 640, the learned judge said: “Legal rules only provide a framework, a guide as to how one may behave, but certainty is only reached in instant cases, where law is actualized by a competent authority. In the meanwhile, conduct is guided by approximation. The process of approximation sometimes results in quite a narrow set of options, sometimes in a broader one. Legal dispositions therefore delineate a risk zone, and cannot hope to do more, unless they are directed at individual instances. By setting out the boundaries of permissible and non-permissible conduct, these norms give rise to legal debate. They bear substance, and they allow for a discussion as to their actualization. They therefore limit enforcement discretion by introducing boundaries, and they also sufficiently delineate an area of risk to allow for substantive notice to citizens. Indeed no higher requirement as to certainty can be imposed on law in our modern State. Sematic arguments, based on perception of language as an unequivocal medium, are unrealistic. Language is not the exact tool some may think it is. It cannot be argued that an enactment can and must provide enough guidance to predict the legal consequences of any given course of conduct in advance. All it can do is enunciate some boundaries, which create an area of risk. But it is inherent to our legal system that some conduct will fall along the boundaries of the area of risk; no definite prediction can then be made. Guidance, not direction, of conduct is a more realistic objective… A vague provision does not provide an adequate basis for legal debate, that is for reaching a conclusion as to its meaning by reasoned analysis applying legal criteria. It does not sufficiently delineate any area of risk, and thus can provide neither fair notice to the citizen nor a limitation of enforcement discretion. Such a provision is not intelligible … and therefore it fails to give sufficient indications that could fuel a legal debate. It offers no grasp to the judiciary…” (2) At pp641 - 643, he further observed: “… Often the State attempts to realize a series of social objectives, some of which must be balanced against one another, and which sometimes conflict with the interests of individuals. The modern State, while still acting as an enforcer, assumes more and more of an arbitration role. This arbitration must be done according to law, but often it reaches such a level of complexity that the corresponding enactment will be framed in relatively general terms. In my opinion the generality of these terms may entail a greater role for the judiciary … … One must be wary of using the doctrine of vagueness to prevent or impede State action in furtherance of valid social objectives, by requiring the law to achieve a degree of precision to which the subject-matter does not lend itself. A delicate balance must be maintained between societal interests and individual rights… What becomes more problematic is not so much general terms conferring broad discretion, but terms failing to give direction as to how to exercise this discretion, so that this exercise may be controlled. Once more, an unpermissibly vague law will not provide a sufficient basis for legal debate; it will not give a sufficient indication as to how decisions must be reached, such as factors to be considered or determinative elements. In giving unfettered discretion, it will deprive the judiciary of means of controlling the exercise of this discretion…” 336. Further, and importantly, the exercise of power under the ERO and the emergency regulations is subject to negative vetting by the legislature and judicial supervision by way of judicial review. Any eventual restriction on fundamental rights must also meet the proportionality test and the prescribed by law requirement. 337. Given the above, under a holistic analysis, the exercise of the power granted under section 2(1) of the ERO is sufficiently formulated under a “core” of the norm which is governed and guided by the “law” prescribed by legislative negative vetting, the common law and judicial scrutiny, considered against the above background and context of the ERO. 338. In other words, when the CEIC seeks to exercise her power pursuant to section 2(1) of the ERO to enact a regulation under which certain rights and freedoms would be restricted, she must exercise it in a manner that conforms with what the “law” has prescribed for to render such a restriction to be lawful, and that proper exercise of power will be supervised and checked by judicial supervision and legislative scrutiny under negative vetting as we have explained under Ground 1 above. This constitutes sufficient safeguards in the law against arbitrary interference of freedoms and rights. 339. For all the above reasons, the Judges were correct in rejecting Ground 3, and KWH and LKH fail under this ground of their cross-appeal. G3. Ground 4 340. Under paragraphs 1(2) and 3 of KWH-RN, KWH asks the court to uphold the Judgment also on the principle of legality ground. This is raised in support of both Ground 1 (to challenge the ERO) and Ground 4 (to challenge the validity of the PFCR). 341. Insofar as the principle of legality is relied on in additional support of Ground 1, we have already dealt with it above. 342. Insofar as the principle is relied on in support of Ground 4, Mr Chan’s submissions are in essence these[61]. 343. Under the principle of legality as a principle of construction, if a statute does not expressly or by necessary implication override or restrict fundamental rights, it will not be construed as doing so[62]. In this respect, necessary implication is said to be “a matter of express language and logic not interpretation”[63]. 344. Applying this principle, Mr Chan contended that: (1) Section 2(1) of the ERO (even read together with the opening sentence of section 2(2)[64]) is only a generally worded provision. It therefore only confers a general power but is not to be taken to authorise the CEIC to enact regulations which will interfere with or adversely affect the legal rights of citizens in the absence of clear words. In the premises, on a proper construction, the examples listed under sections 2(2)(a) - (n) should and could only be construed as general words and not words (whether expressly or by necessary implication) permitting abrogation from or interfering with fundamental rights. (2) Alternatively, other than in those areas analogous to those specifically referred to under sections 2(2)(a) - (n), in the absence of clear words to the contrary, section 2(1) of the ERO does not confer an unfettered power on the CEIC to make regulations that interfere with fundamental human rights other than those expressed or necessarily implied from the examples in sections 2(2)(a) - (n). In this respect, it can only be necessarily implied from these specified examples[65] that restriction can be imposed only on these fundamental rights: (i) freedom of expression restricted to reception and broadcast of communication (under section 2(2)(a)); (ii) freedom of liberty, fair trial, and freedom of movement (under sections 2(2)(b), (c), (d) and (n)); (iii) property rights and privacy of the home (in the sense as provided for by BL29 but does not include private life as provided for by BOR14) (under sections 2(2)(f), (h) and (k)); and (iv) freedom of occupation (under sections 2(2)(e) and (l)). (3) As a result, the PFCR are ultra vires the ERO because, either: (a) the PFCR adversely affects or interferes with fundamental rights by section 3 (in restricting freedom of expression and freedom of assembly), and section 5 (in restricting right to privacy); or alternatively, (b) the fundamental rights that the PFCR adversely affects or interferes with are not covered by section 2(2)(a) - (n) of the ERO. 345. We are not persuaded by these submissions. 346. Under the principle of legality, whether or not the general wording of section 2(1) of the ERO (read with the opening sentence of section 2(2)) expressly or by necessary implication gives the CEIC a wide power to enact regulations that may impose restrictions on fundamental rights and freedoms is a matter of proper construction. The authorities do not suggest as a general principle that general wording can never be so interpreted. 347. It is now well established that the court adopts purposive construction in interpreting a statutory provision, and in construing statutory provisions, the court does not merely look at the relevant words. It construes the relevant words having regard to their context and purpose. The context of the relevant statutory provision should be taken in its widest sense and will of course include the other provisions of the statute. It may also be relevant in any given case to look at the history of the relevant provision. See: Town Planning Board v Town Planning Appeal Board (2017) 20 HKCFAR 196 at [29] per Ma CJ. 348. In our views, the general wording of section 2(1) and the opening sentence of section 2(2), when interpreted in its proper context, expressly or by necessary implication provides for the making of regulations imposing restrictions on rights and freedoms, including but not limited to the specific instances set out in sections 2(1)(a) - (n). 349. As examined and analysed under Ground 1 above, the ERO was enacted by the legislature to provide the CEIC with a wide power to enact regulations to implement measures to deal with occasions of emergency and public danger. These occasions by their own nature are wide ranging, varied and could not be exhaustively envisaged or defined at the time of the enactment of the ERO. In this context, the wide and general wording used by the legislature is therefore intended and catered by the legislature for the purpose of vesting in the CEIC all the necessary and flexible power to enact all necessary regulations to deal with those wide ranging, unforeseen and unpredictable occasions as and when they occur. 350. At the same time, as submitted by Mr Yu, it is also clear from the ERO when read as a whole that the legislature did have the imposition of restrictions on rights and freedoms in mind when enacting the ERO. Section 2(2) provides that, without prejudice to the generality of section 2(1), regulations may provide for the specific matters in sections 2(2)(a) - (n), which plainly allow the imposition of restrictions on rights and freedoms. This is reinforced by sections 3(1) and (2), which provide that (without prejudice to the powers conferred by section 2) regulations made may provide for the punishment of any offence with such penalties and sanctions. 351. In the premises, when these are properly construed against the above background and purpose, it is plain as a matter of logic that the use of the general wording in sections 2(1) and (2) was objectively intended by the legislature to give the CEIC a wide power to make regulations, which the legislature also envisaged that might impose restrictions on rights and freedoms, including but not limited to the specific instances in sections 2(2)(a) - (n). 352. For these reasons, we reject KWH’s submissions and dismiss Ground 4. H. DISPOSITIONS 353. We allow the respondents’ appeal under Ground 1 and partially allow their appeal under Ground 5A, but dismiss the appeal under Ground 5B. In the premises, we set aside: (1) The Judges’ declarations that (a) the ERO, insofar as it empowers the CEIC to make regulations on any occasion of public danger, is incompatible with the BL, and (b) the PFCR made pursuant to the ERO on an occasion of public danger is accordingly invalid and of no effect. (2) The Judges’ declaration that section 3(1)(b) of the PFCR is inconsistent with BL27 and BOR14, 16, 17 and is therefore null, void and of no effect. 354. We dismiss the KWH-NoCA and KWH-RN, as well as the LKH-NoCA. 355. In sum, we uphold the constitutionality of the ERO insofar as it empowers the CEIC to make emergency regulations on any occasion of public danger. In respect of the PFCR, there is no challenge against section 3(1)(a) relating to unlawful assembly. We uphold the constitutionality of section 3(1)(b) relating to unauthorized assembly. We however hold that sections 3(1)(c) and (d), relating to public meeting and public procession respectively, and section 5 on police powers in relation to facial covering, are all unconstitutional. 356. We will invite parties’ written submissions on costs in relation to these appeals and the hearing below. The respondents shall lodge and serve their submissions (not more than five pages) within seven days from today and the applicants shall lodge and serve their submissions (not more than five pages) seven days thereafter. Unless otherwise directed, we will determine the costs on paper. 357. Lastly, we thank counsel for their assistance. Mr Benjamin Yu SC, Mr Jenkin Suen SC, Mr Jimmy Ma and Mr Mike Lui, instructed by the Department of Justice, for the respondents in CACV 541/2019, CACV 542/2019 and CACV 583/2019 Mr Hectar Pun SC, Mr Lee Siu Him and Mr Anson Wong Yu Yat, instructed by JCC Cheung & Co, assigned by the Director of Legal Aid, and Mr Jasper Wong (on a pro bono basis), instructed by JCC Cheung & Co., for the applicant in CACV 541/2019 Ms Gladys Li SC, Mr Johannes Chan SC (Hon), Mr Earl Deng, Mr Jeffrey Tam, Mr Geoffrey Yeung and Ms Allison Wong, instructed by Ho Tse Wai & Partners, for the applicants in CACV 542/2019 and CACV 583/2019 [1] Respectively under CACV 541/2019 (on appeal from HCAL 2949/2019) and under CACV 542/2019 (on appeal from HCAL 2945/2019). [2] The undisputed background leading to the enactment of the PFCR is set out in detail in the unchallenged evidence filed by the Government. See the Affirmation of Cheung Tin Lok at [3] - [33], the Affidavit of Chui Shih Yen, Joceline at [6] ‑ [15] and [26] ‑ [30] and the Affidavit of Dr Tsui, Pui Wan Ephraem at [8] - [17]. It has been succinctly set out by the Judges at [3] ‑ [9] of the Judgment. [3] “Black-bloc” tactics is where the protestors would often appear in groups and wear black clothing with little or not distinguishable feature, and cover the whole or a substantial part of their faces with sunglasses, goggles, masks, or respirators etc. See the Affirmation of Cheung Tin Lok at [8] ‑ [9]. [4] See, in particular, the Affirmation of Cheung Tin Lok at [20] - [24] and [31]. [5] See the Affidavit of Dr Tsui, Pui Wan Ephraem at [17]. [6] The word “anti-social” refers to acting against larger social norms which, within the group, can be their own emerging group norm. It implies that the person is not really losing his self in the group, but is just following the group norm. [7] Moreover: (a) the use of inflammable liquid bombs has become more frequent and extensive, and even more so since late September 2019. On 29 September and 1 October 2019, the number of inflammable liquid bombs hurled by the protestors were respectively around 100 and over 100; (b) on 1 October 2019, a police officer was injured by protestors throwing corrosive liquid at him, causing a third degree burn; (c) on the same date, some police officers were seen viciously attacked by large groups of protestors by a range of objects and lethal weapons, and a few of them whose lives were under imminent threat had to defend themselves with firearms; (d) as at 4 October 2019, a total of 2,135 individuals have been arrested for taking part in public order events of an unlawful or criminal nature, or being involved in other unlawful or criminal activities. See the unchallenged evidence in the Affirmation of Cheung Tin Lok at [4] - [6], and the Affidavit of Chui Shih Yen, Joceline at [26] - [28]. [8] See the Affirmation of Cheung Tin Lok at [5] - [6] on the statistics and descriptions showing the significant increase and extensive use of inflammable liquid bombs by the protestors, attacks on police officers and individuals who held different views with the protestors, and the growing degree of violence and vandalism. [9] See [18] of the Decision. [10] See the relevant Press Release. [11] The current situation was described in more detail in the CE’s speech given in Chinese. See the Chinese version of the Press Release. [12] The Chinese speech explained more about the aim of making the PFCR. See the Chinese version of the Press Release. [13] Section 2 contains the definitions while section 6 provides for the time in which prosecution may be brought. [14] That is, the Public Order Ordinance (“the POO”). [15] This means $25,000: see section 113B of and Schedule 8 to the Criminal Procedure Ordinance (Cap 221) (“the CPO”). [16] “Facial covering” is defined in section 2 to mean a mask or any other article of any kind (including paint) that covers all or part of a person’s face. [17] This has the same meaning as in section 18 of the POO. [18] This has the same meaning as in section 17A(2) of the POO. [19] As meeting of no more than 50 persons, meeting in private premises with no more than 500 persons, and certain meetings in school do not have to be notified for the purpose of the POO, they therefore fall outside section 3(1)(c). [20] Public processions of no more than 30 persons and public processions not on a public highway or thoroughfare or in a public park, which do not have to be notified for the purpose of the POO, fall outside section 3(1)(d). [21] This means $10,000: see section 113B of and Schedule 8 to the CPO. [22] International Covenant on Civil and Political Rights. [23] See [13] and [37] of the Judgment. [24] As the ICCPR through the BOR is constitutionally enshrined under BL39. [25] Since section 5 of the HKBORO and ICCPR4 are of identical terms, the Judges therefore deals with this ground by reference to section 5 of the HKBORO only, which they say the analysis and reasons apply equally to the argument based on ICCPR4. See [104] of the Judgment. [26] The 4 steps are: (1) does the measure pursue a legitimate aim; (2) if so, is it rationally connected with advancing that aim; (3) whether the measure is no more than reasonably necessary for that purpose; and (4) whether a reasonable balance has been struck between the societal benefits promoted and the inroads made into the protected rights, asking in particular whether pursuit of societal interest results in an unacceptably harsh burden on the individual. [27] BOR17 and BL27. [28] BOR16 and BL27. [29] BOR14. [30] The legitimate aims being (a) deterrence and elimination of the emboldening effect for those who may otherwise, with the advantage of facial covering, break the law, and (b) facilitation of law enforcement, investigation and prosecution. See [130] of the Judgment. [31] See [152] - [157] of the Judgment. [32] Having concluded that these provisions do not meet step 3, the Judges do not find it necessary to consider step 4. However, they have expressed the view that if it is necessary to do so, they would conclude, for the same reasons, that the provisions have failed to satisfy step 4. [33] See the transcript of the proceedings of the LegCo dated 26 August 1936. [34] See, for example, (a) in respect of the GIC: section 62 of the Employment Ordinance (Cap 57), section 31 of the Import and Export Ordinance (Cap 60), section 25 of the Fire Services Ordinance (Cap 95), section 42 of the New Territories Ordinance (Cap 97), section 59 of the Immigration Ordinance (Cap 115), section 14(1) of the Town Planning Ordinance (Cap 131), section 33(1) of the Medical Registration Ordinance (Cap 161), section 7 of the Registration of Persons Ordinance (Cap 177), section 45 of the Police Force Ordinance (Cap 232), section 22 of the Customs and Excise Service Ordinance (Cap 342), section 41 of the Building Management Ordinance (Cap 344); and (b) in respect of the various Secretaries: section 14(2) of the Town Planning Ordinance (Cap 131) (Secretary for Development), section 72 of the Mental Health Ordinance (Cap 136) and section 33(3A) of the Medical Registration Ordinance (Cap 161) (the Secretary for Food and Health). [35] See for example, section 5 of the Official Languages Ordinance (Cap 5), section 69 of the Evidence Ordinance (Cap 8), section 10 of the Lands Tribunal Ordinance (Cap 17), section 45 of the Labour Tribunal Ordinance (Cap 25), section 117 of the Insurance Ordinance (Cap 41), section 15 of the Telecommunications Ordinance (Cap 106), section 101I of the Banking Ordinance (Cap 155), section 72 of the Legal Practitioners Ordinance (Cap 159), section 8 of the Domestic and Cohabitation Relationships Violence Ordinance (Cap 189), section 32 of the Matrimonial Proceedings and Property Ordinance (Cap 192), section 10 of the Partition Ordinance (Cap 352), section 44 of the Control of Obscene and Indecent Articles Ordinance (Cap 390). [36] See for example, in respect of the CEIC, section 8 of the Prevention and Control of Disease Ordinance (Cap 599) which came into force on 14 July 2008; sections 208 and 273 of the Companies Ordinance (Cap 622) which came into force on 3 March 2014; in respect of the Financial Secretary, section 909 of the Companies Ordinance; in respect of the Secretary for Food and Health, section 7 of the Prevention and Control of Disease Ordinance; in respect of the Chief Justice, sections 233 and 269 of the Securities and Futures Ordinance (Cap 571), which came into force on 1 April 2003, section 37ZJ of the Financial Reporting Council Ordinance (Cap 588), which came into force on 1 December 2006, section 76 of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap 615) which came into force on 8 July 2011. [37] Those non-derogable rights are set out in articles 2, 3, 4(1) and (2), 7, 12, 13, and 15 of the BOR. [38] It is not the respondents’ case that such measures include legislative measures such as emergency regulation. In other words, the measures envisaged under BL56(2) are executive or administrative measures only. [39] See BL62(2). [40] See BL60(1). [41] We observe by way of judicial notice that in tackling the current Covid-19 pandemic, the Government has invoked sections 7 and 8 of the Prevention and Control of Disease Ordinance (Cap 599) to make emergency regulations. If that Ordinance did not exist, it would appear that the Government would need to invoke the ERO: see [65(4)] above. [42] [88] of the Judgment. [43] [89] of the Judgment. [44] [90] of the Judgment. [45] [91] of the Judgment. [46] [92] of the Judgment. [47] [93] of the Judgment. [48] Nor is there any for emergency. [49] In the course of oral submissions, we invited the parties to assist us on the meaning of “public danger” for the purpose of the ERO. On reflection, we need not dwell on this aspect as it is not necessary to interpret the phrase for present purpose. The only point that we wish to make is that a definition is certainly achievable by means of statutory interpretation. [50] In the present case, apart from the LegCo Brief relating to the PFCR dated October 2019, the CE, the Secretary for Justice and the Secretary for Security explained the Government’s decision and the operation of the PFCR at a press conference on 4 October 2019; the responsible Government officials also attended and answered questions at open meetings of the LegCo Subcommittee on Prohibition on Face Covering Regulation held on 22 and 28 October, 5, 9, 12 and 18 November 2019. They have all been adduced as evidence before the court. [51] For the meaning of the principle of legality as advanced by KWH, see the court’s discussion at Section G3 below for Ground 4. [52] LKH’s contentions under Ground 5B have been addressed above at [251] - [255]. [53] That is, derogation from the rights protected under the ICCPR can only be made when there is a “public emergency”, which has to be one that “threatens the life of nation” and its “existence”, and that the public emergency has to be “official proclaimed”. [54] It may not be entirely correct to say that the existing legislations which are regarded to be inconsistent with a regulation enacted to be “repealed”. Under section 2(4), any such inconsistent provision of an enactment will only be rendered to have “no effect” when the concerned regulation made under the ERO remains in force. [55] As provided in section 5(1) of the HKBORO, the measures to derogate from the rights “shall be taken in accordance with the law”. [56] LKH also seeks to cross appeal the Judges’ rejection of Ground 3. See LKH-NoCA, at [4]. [57] BL39(2) provides: “The rights and freedoms enjoyed by Hong Kong residents shall not be restricted unless prescribed by law ...” [58] See KWH’s skeleton submissions on the cross appeal dated 16 December 2019 at [33]. [59] AG v Reynolds, supra at 655A-B. [60] These are cited in Chee Fei Ming v Director of Food and Environmental Hygiene, supra, at [56] - [57]. [61] These are in substance a rerun of the arguments made before the Judges. As mentioned above, the Judges do not find it necessary to deal with these arguments as they find them to be inconsistent with the arguments raised under Ground 1, which they have found in favour of KWH. [62] See: R v Home Secretary Ex p Simms, supra, at p131 per Lord Hoffmann; A v Commissioner of ICAC (2012) 15 HKCFAR 362 at [24] - [29] perRibeiro PJ; HM Treasury v Ahmed [2010] 2 AC 534 at [45] - [46] per Lord Hope, at [112] per Lord Walker. [63] See: R (Morgan Grenfell Ltd) v Special Commissioner [2003] 1 AC 563, 616 at [45] perLord Hobhouse. [64] Which provides “Without prejudice to the generality of the provisions of [section 2(1)]”. [65] With the exception of sections 2(2)(g) and (i) which are wide empowering provisions and thus could not be construed to necessarily imply enabling the enacting of regulations that restrict or interfere with fundamental rights. |
Mr Justice Ribeiro PJ: 1. I agree with the judgment of Mr Justice Bokhary NPJ. Mr Justice Fok PJ: 2. I agree with the judgment of Mr Justice Bokhary NPJ. Mr Justice Cheung PJ: 3. I agree with the judgment of Mr Justice Bokhary NPJ. Mr Justice Bokhary NPJ: 4. This is an appeal by the Commissioner of Inland Revenue (“the Commissioner”) from a decision of the Court of Appeal (Macrae VP, Yuen and Kwan JJA). They granted him leave to appeal so that he may seek from us an unqualified affirmative answer to a question of law, he having failed to obtain such an answer from them. Question on leave to appeal was granted 5. In the order granting such leave, the question is formulated thus. It begins by postulating the situation “[w]here a contract of employment is terminated by the employer, and the employer agrees at termination to pay to or confer on the employee (1) payment or benefit to eliminate or settle any threatened claim by the employee for, and the payment or benefit is paid or conferred in lieu of, a payment or benefit which if made had the contract of employment not been terminated would be chargeable to salaries tax; [and] (2) a benefit being the entitlement to exercise a right to acquire shares contingently conferred on the taxpayer as the holder of an office in or an employee of the employer”. And it then asks: “is the payment or benefit, or any gain from the exercise of any such benefit, so paid or conferred at termination chargeable to salaries tax under the Inland Revenue Ordinance (Cap 112)?” 6. But are the facts really as postulated in that question? Let us see. Sum D received and Share Option Gain made 7. Immediately prior to 20 July 2008 the respondent Mr John Poon (“the Taxpayer”) was in employment in Hong Kong as the Group Chief Financial Officer and an executive director of a company (“the Employer”) incorporated in Bermuda and listed on the Hong Kong Stock Exchange. On that date the Taxpayer’s employment by the Employer was terminated pursuant to a “Separation Agreement” under which the Taxpayer received certain sums and benefits from the Employer in respect of all claims and rights of actions. 8. One of those sums was a sum of €500,000 paid under clause 4.1.4 of the Separation Agreement “in lieu of a discretionary bonus” for the financial year ended 30 June 2008. This sum of €500,000 has hitherto been - and will in this judgment continue to be - called “Sum D”. 9. As to benefits, clause 5 of the Separation Agreement provided that, despite the cessation of his employment, the Taxpayer was entitled to exercise his stock options set out in Annexure 2 of that agreement. He exercised those options by a number of tranches (which have hitherto been - and will in this judgment continue to be - identified by reference to letters of the alphabet). On 19 August 2008 the Taxpayer subscribed for 360,000 shares in the Employer at $24.20 per share (under “Tranche A”) and 720,000 shares in the Employer at $42.58 per share (under “Tranches B and C”). Those 1,080,000 shares were allotted to him on the following day. Their closing prices on 19th and 20th of that month were $73.15 and $76.50 respectively. The notional gain thus derived has been - and will in this judgment continue to be - referred to as “the Share Option Gain”. Challenge to assessment to salaries tax of that sum and that gain 10. In the 2008/2009 year of assessment, the total on which the Taxpayer was assessed to salaries tax for 2008/2009 included (i) the €500,000 which forms Sum D and (ii) the Share Option Gain which gain was calculated at $43,250,400. He appealed to the Board of Review against their inclusion. The issues in that appeal were these. (1) Is Sum D taxable? (2) Is the Share Option Gain taxable? (3) If the Share Option Gain is taxable, is the date for its computation 19 August 2008 when the share options were exercised (“the Exercise Date”) or 20 August 2008 when the shares were allotted (“the Allotment Date”)? 11. The Commissioner contended that both Sum D and the Share Option Gain are taxable and that computation should be as at the Allotment Date. Disagreeing, the Taxpayer contended that neither Sum D nor the Share Option Gain is taxable but that if the latter is taxable then computation should be as at the Exercise Date. Succeeded on appeal to the Court of Appeal 12. Dismissing the Taxpayer’s appeal, the Board of Review, agreeing with the Commissioner, held that both Sum D and the Share Option Gain are taxable and that computation should be as at the Allotment Date. The Taxpayer then appealed against the Board of Review’s decision. Agreeing with that decision, the Court of First Instance (Anthony Chan J) dismissed the Taxpayer’s appeal, whereupon the Taxpayer appealed against the Court of First Instance’s judgment. The Court of Appeal (by Yuen JA’s judgment with which the other members of the panel agreed) allowed the Taxpayer’s appeal, holding that neither Sum D nor the Share Option Gain is taxable. Relevant statutory provisions 13. Under section 8(1) of the Inland Revenue Ordinance (“the Ordinance”), “income arising in or derived from Hong Kong” from various specified sources is chargeable to salaries tax. One of those sources, being the one specified in item (a) of that subsection, is “any office or employment of profit”. The expression “income from any office or employment” is defined by section 9 of the Ordinance to include various things including those specified in items (a) and (d) of that subsection. Item (a) specifies “any wages, salary, leave pay, fee, commission, bonus, gratuity, perquisite, or allowance, whether derived from the employer or others”. And item (d) specifies “any gain realized by the exercise of… a right to acquire shares or stock in a corporation obtained by a person as the holder of an office in or an employee of that… corporation”. Fuchs analysis 14. As relevant to what we have to decide in the present case, what we held in Fuchs v Commissioner of Inland Revenue (2011) 14 HKCFAR 74 is as follows. Income chargeable to salaries tax under section 8(1) of the Ordinance is not confined to income earned in the course of employment. It includes payments made in return for acting as or being an employee. In other words, it includes rewards for past services. It also includes payments made by way of inducement to enter into employment and provide future services. If a payment, viewed as a matter of substance and not merely of form and without being blinded by some formulae which the parties may have used, is found to be derived from a taxpayer’s employment in the foregoing sense, it is chargeable to salaries tax. That analysis provides guidance on the operation of the relevant statutory words without supplanting or even modifying those words. Payments which are for something else do not come within the analysis, and are not chargeable to salaries tax. All of that appears at paragraphs 17 and 18 of the judgment which was given by Mr Justice Ribeiro PJ and agreed with by all the other members of the panel. Fuchs’s case itself 15. Before going further into the facts of the present case and applying the Fuchs analysis to them, let us examine how that analysis operated in the factual circumstances of Fuchs’s case itself. Mr Fuchs entered the employ of a German bank in 1976. After working for it in Germany and then in Singapore, he was seconded to its Hong Kong branch in July 2003. On 18 November 2003 he entered into a contract of employment to work for the bank at that branch for a three-year period commencing on 1 January 2004 as its Managing Director and CEO Asia. Within that three-year period, the following things happened. In November 2005 the bank was taken over by an Italian banking group. As part of the re-organization resulting from the takeover, it was decided that Mr Fuchs’s employment with the bank would be terminated. There were negotiations over the terms of such termination. The terms agreed upon were set out in an agreement dated 17 October 2005. It was provided in this agreement that Mr Fuchs’s employment was to end by 31 December 2005. That date, it will be observed, would be the last day of the second year of the three-year period for which he was employed. It was also agreed that the bank would pay him “a one-time compensation for the loss of his position due to the termination of the employment relationship for operational reasons” in the total sum of $18,276,667. 16. A breakdown of this total sum into three component sums was provided in the agreement. The first component sum was of $3,120,000. It was equivalent to Mr Fuchs’s salary for the remaining year of the three-year period for which he was employed. The second component sum was of $6,240,000 expressed to represent “two annual salaries for the duration of service with” the bank. The third component sum was of $8,916,667. It was expressed to represent “the average amount of the bonuses paid in the 3 previous years”. 17. Mr Fuchs contended that none of the total sum was taxable. The revenue accepted that the first component sum was not taxable. But it maintained that the second and third component sums were chargeable to salaries tax. Mr Fuchs’s employment contract provided for termination by either party without cause upon expiry of the initial term or termination at any time by the bank for any of a number of specified causes. And it provided that if the bank terminated or purported to terminate Mr Fuchs’s employment on any other grounds, it would pay him as agreed compensation or liquidated damages two annual salaries and an average amount of the bonuses paid in the three previous years of his employment with the bank. Those two annual salaries and that average sum are, it will be noticed, precisely what the second and third component sums respectively represent. So the second and third component sums were paid in satisfaction of rights which had accrued to Mr Fuchs under his contract of employment. That meant that they were derived from his employment and were chargeable to salaries tax. We so held. Both held by the Court of Appeal to be for something else 18. In the present case, on the issue of whether Sum D and the Taxpayer’s stock options entitlement under clause 5 of the Separation Agreement were for something within the Fuchs analysis or were for something else, the Court of Appeal held that both were for something else, so that neither Sum D nor the Share Option Gain was chargeable to salaries tax. That conclusion is now attacked by the Commissioner while the Taxpayer defends it. A closer look at Sum D 19. Sum D consists of, it will be remembered, €500,000 said to be in lieu of a discretionary bonus for the financial year ended 30 June 2008. Under the heading “The true nature of Sum D”, the Board of Review, found the following facts. The Taxpayer’s employment with the Employer was under a service agreement (“the Service Agreement”). Clause 4.3 of the Service Agreement provided that in addition to his salary the Taxpayer “will be eligible to participate in [an annual bonus scheme] on such terms and at such level as [the Employer’s board of directors] may from time to time determine”. The financial year of the Employer was from 1 July to 30 June. After the Employer’s auditors had prepared its audited accounts, the Employer’s executives would look at the audited results and make suggestions to a remuneration committee, probably in August each year. This committee would then make a recommendation further up to the Employer’s board of directors. 20. In his witness statement, the Taxpayer, whom the Board of Review found to be a “truthful witness”, said that the figure of €500,000 which Sum D represented was “arbitrarily arrived at by negotiations”. What negotiations were these? The Board of Review said that “[o]ne may say” that what the Taxpayer received under the Separation Agreement was “consideration to make [him] go away quietly.” The Taxpayer also described Sum D as “a figure, arbitrarily arrived at by negotiations, intended to eliminate any possible claim and lawsuit I might advance against the company for depriving me of the opportunity to be considered for discretionary bonus.” 21. Like the Taxpayer, his solicitor was found by the Board of Review to be a “truthful witness”. From the evidence of these two witnesses the following picture emerges. The Taxpayer had expected to succeed the then Chairman of the Employer’s board of directors. In the afternoon on Friday 18 July 2008, the Chairman informed him that the Employer was preparing to terminate his employment immediately and remove him from the offices which he was holding. He was taken aback. His mood was combative. And he refused to go quietly. Instead he proposed to challenge the plan to remove him from the board. This was to have been done by bringing the matter before the shareholders, he believing that he would have had their support. His remaining on the board, indeed even any delay in his departure from it, was contrary to the wishes of the Chairman and the majority of the other directors. He also disputed the validity of the restraint of trade provisions in the Service Agreement. And he was prepared to take his claims to court. This would have attracted media interest and consequential market reaction. The relationship between the Taxpayer and the Employer was acrimonious. 22. There was a weekend of negotiations involving lawyers on both sides. These negotiations resulted in the Separation Agreement which was entered into on Sunday 20 July 2008. 23. The Employer told the revenue: (i) that the Taxpayer was not awarded any bonus for the financial year ended 30 June 2008; (ii) that Sum D was an “entirely arbitrary amount mutually agreed by [the Taxpayer] and [the Chairman]”; and (iii) that it was paid “to eliminate any claim for unpaid bonus”. And a closer look at the stock options entitlement 24. That closer look at Sum D having been taken, it is now time to take a closer look at the other thing which the Taxpayer received under the Separation Agreement, namely the stock options entitlement thereunder. 25. In 2001 the Employer adopted a written share option scheme (“the Share Option Scheme”). By three letters dated 26 November 2003, 27 November 2004 and 7 February 2007 respectively (which have hitherto been referred to as - and will in this judgment continue to be referred to as - “the Grant Letters”), the Employer offered the Taxpayer options to subscribe for its shares subject to the terms of that scheme. He accepted those offers by signing those letters. 26. Under the 2003 Grant Letter, the subscription price was $24.20 per share. A total of 1,800,000 shares was provided for. And the vesting dates, each in respect of 360,000 shares, were 26 November of 2004, 2005, 2006, 2007 and 2008 respectively. The 360,000 shares at $24.20 per share which the Taxpayer subscribed for and was allotted under Tranche A were those for which the vesting date under this Grant Letter was 26 November 2008. 27. We come now to the 2004 Grant Letter. The subscription price thereunder was $42.58 per share. A total of 1,800,000 shares was provided for. And the vesting dates, each in respect of 360,000 shares, were 27 November of 2005, 2006, 2007, 2008 and 2009 respectively. Of the total of 720,000 shares at $42.58 per share which the Taxpayer subscribed for and was allotted under Tranches B and C, 360,000 shares were those for which the vesting date under this Grant Letter was 27 November 2008 and 360,000 shares were those for which the vesting date thereunder was 27 November 2009. 28. Finally we come to the 2007 Grant Letter. The subscription price thereunder was $83.00 per share. A total of 800,000 shares was provided for. And the vesting dates, each in respect of 160,000 shares, were 7 February of 2008, 2009, 2010, 2011 and 2012 respectively. By a tranche (which has hitherto been identified by - and will in this judgment continue to be identified by - the letter “D”), the Taxpayer subscribed for and was allotted 160,000 shares at $83.00 per share, they being the shares for which the vesting date under this Grant Letter was 7 February 2008. 29. As at the date of the Separation Agreement, the stock option entitlements in respect of the shares subscribed for and allotted under Tranches A, B and C had not yet vested, but the stock options entitlement to which Tranche D relates had vested. Nothing under Tranche D forms any part of the Stock Option Gain. 30. The 2003 and 2004 Grant Letters each contained a term and condition by which this was said to the Taxpayer: “Unless otherwise agreed by the Board in its absolute discretion (and approved by independent non-executive directors of the Company) the Option will only be granted to you in your capacity as Group Chief Financial Officer in the Group (‘the Position’) and may lapse if you cease to be in the Position”. As to the use there of the words “may” in the expression “may lapse”, Yuen JA made two observations. The first is that the expression was used to “cater for the possibility of acceleration”. And the second is that “[i]t was only as a result of the Employer’s decision to accelerate the vesting dates to the Separation Date that the Taxpayer was able to take the benefit of [Tranches A, B and C]”. Although nothing under Tranche D forms any part of the Stock Option Gain, it should be said for the sake of completeness that the 2007 Grant Letter contained a term and condition similar to the one in the 2003 and 2004 Grant Letters set out above. 31. There is a provision in the Grant Letters under which, in the event of the Taxpayer’s employment being terminated and salary being paid in lieu of notice, the Employer’s board may in its absolute discretion accelerate the vesting period by allowing the Taxpayer to exercise part or all of any unvested option that would have vested during the notice period. 32. In a written question posed on 21 January 2011 by the revenue to the Employer, two sets of fact were referred to. The first was that “the vesting dates of the 1,080,000 share options set out in Annexure 2 of the Separation Agreement were accelerated from 26 November 2008, 27 November 2008 or 27 November 2009”. And the second was that “[t]he first two dates were within 6 months from 20 July 2008 whilst the latter date was beyond 6 months from 20 July 2008 (6 months being the notice period prescribed in the Service Agreement)”. The question then continued thus: “In this connection, advise with documentary support (if any): (a) Why the vesting dates of the share options were allowed to be accelerated. (b) The basis on which the 1,080,000 share options were determined. (c) The reasons and justifications for allowing [the Taxpayer] to exercise the share options within the accelerated vesting period.” 33. The Employer’s answers were dated 18 March 2011. On point (a), the Employer’s answer was: “[The Employer] agreed to allow [the Taxpayer] to exercise the share options immediately on the signing of the Separation Agreement as part of the terms of the cessation of [his] employment.” The Employer’s answer on point (b) was “The number of share options with accelerated vesting was an entirely arbitrary number. No specific basis was adopted in determining such number.” And the Employer’s answer on point (c) was: “[The Employer] allowed an acceleration of vesting of the share options so with a view to settling all outstanding matters upon the cessation of [the Taxpayer’s] employment.” 34. From the Employer’s answers, it will be noticed that the settlement did not differentiate between, on the one hand, the dates which were within the notice period and, on the other hand, the date which was beyond that period. Nub of the Court of Appeal’s reasoning 35. The nub of the reasoning by which Yuen JA concluded that Sum D was not chargeable to salaries tax is to be found in paragraph 34.3 of her judgment. At the end of that paragraph, she said that Sum D “was not income ‘from’ the Taxpayer’s employment, but a payment he obtained from the challenges he posed to the Employer which led to negotiations culminating in the Separation Agreement. It was the antithesis to a reward for his services under the contract of employment.” 36. As for the nub of the reasoning by which Yuen JA concluded that the Stock Option Gain was not chargeable to salaries tax, it is to be found in paragraph 36 of her judgment. In that paragraph she said this: “[T]he acceleration of vesting leading to the Stock Option Gain was also not a benefit given for the purpose of rewarding the Taxpayer for services past[,] present or future, but for another reason, viz. it was consideration for him to drop his proposed two-pronged course of action, and to agree to present a united front with the Employer (both internally and to the public) on the reasons for his departure (as set out in the annexes to the Separation Agreement), amongst other additional covenants set out in that Agreement.” Reason why the Court of Appeal granted leave to appeal to us 37. The Court of Appeal’s formal order granting the Commissioner leave to appeal to us says that such leave was granted on the ground that the question which he put forward is of great general or public importance. But the reason which the Court of Appeal gave for granting such leave was only that it may be helpful for us to follow up our decision in Fuchs’s case (where the payment was made under the provisions of the contract of employment) with a decision on the facts of the present case (where the payment was not so made). Commissioner’s arguments 38. Let us now turn to the Commissioner’s arguments in the present appeal. He begins by saying that one must focus on the words of the relevant statutory provisions and that judicial pronouncements do not replace, although they may clarify or explain, such words. That is so. But it does not provide any basis for criticizing the approach taken by the Court of Appeal. They merely applied the Fuchs analysis which clarifies and explains, but in no way operates to replace, the relevant statutory words. 39. It will be remembered that clause 4.1.4 of the Separation Agreement speaks of Sum D as being paid “in lieu of a discretionary bonus”. The Commissioner stresses the words “in lieu”. But as has already been pointed out, questions of taxability or otherwise turn on substance rather than mere form, and in answering them the courts will not be blinded by some formulae which the parties may have used. The Commissioner contends that Sum D was a reward for past services. But was it? 40. Under paragraph 4.1 of the Separation Agreement, the Employer agreed, without admission of liability, to pay the Taxpayer five sums as compensation in respect of possible claims of the type referred to as “Settlement and Waiver” in clause 6 of that agreement. Those five sums are: (i) €500,000 in lieu of notice; (ii) $129,533 statutory long service pay; (iii) €30,137 in lieu of 11 days’ accrued but unused annual leave; (iv) Sum D; and (v) €1,500,000 in consideration of covenants given by the Taxpayer under clause 10 of that agreement, including a covenant not to challenge the restraint of trade clauses in the Service Agreement. Clearly the first three sums were rewards for past services while the fifth sum was not a reward for past services. 41. As has already been mentioned, the Board of Review found as a fact that Sum D was part of what was paid to the Taxpayer to make him “go away quietly”. That is clearly so. On the evidence which the Board of Review found to be truthful, the Chairman and the other directors wanted the Taxpayer to leave the board without delay. Unless he could be persuaded to leave, he might have been able not merely to delay his departure from the board but even to stave it off altogether. And in this connection, even his efforts, let alone his success, would have generated publicity and market reaction of the kind which the Employer wished to avoid. So would have the claims which he was prepared to take to court. 42. The Commissioner contends that in paying the Taxpayer Sum D the Employer was, rather than denying his right to be considered for a discretionary bonus and the efforts that earned him that right, recognising them. This contention runs counter to the established facts which were, as has just been noted, that Sum D was part of what the Employer paid to make the Taxpayer go quietly. And, having been so paid, he did go quietly. There is simply no evidence, let alone any finding, that Sum D was paid to reward the Taxpayer for past services. On the established facts, Sum D was indeed, as Yuen JA said, “the antithesis to a reward”. 43. Now for the taxability or otherwise of the Share Option Gain. 44. The Commissioner contends that the Share Option Gain is “a gain realized by the exercise of… a right to acquire shares or stock in a corporation obtained by a person as the holder of an office in or as an employee of that… corporation” within the meaning of item (d) of section 9(1) of the Inland Revenue Ordinance. 45. With a view to making good that contention, the Commissioner has put forward the following arguments. The answer to the question of whether or not the Share Option Gain is taxable cannot be affected by the fact that it was only because of the acceleration provided for by clause 5 of the Separation Agreement that the Taxpayer was able to exercise the right to acquire the shares. It is clear that the right to acquire shares was obtained by the Taxpayer as an employee. The contingency i.e. the vesting only concerns the exercise, but not the obtaining, of the right to acquire shares as an employee. The acceleration provided by clause 5 of the Separation Agreement did not grant the Taxpayer any right to acquire shares. It only provided that he might exercise the right to acquire shares which he had already obtained as an employee. The only benefit it granted to him was acceleration. It did not grant him any right to acquire shares. 46. It is apparent from clause 1.1 of the Share Option Scheme, the Commissioner says, that the analysis contained in this argument of his is how the parties objectively understood the options exercised under Tranches A, B and C (“the Relevant Options”) i.e. that the vesting only defined when the Relevant Options could be exercised. 47. The Commissioner points to these definitions contained in clause 1.1 of the Share Option Scheme. “Option - a right to subscribe for Shares granted pursuant to this Scheme, including both Vested Option and Unvested Option”. “Unvested Option - an Option that is not exerceisable [sic] pursuant to the terms of the 2001 Share Option Scheme and the terms on which the Option is granted”. “Vested Option - an Option that is exerciseable [sic] pursuant to the terms of the 2001 Share Option Scheme and the terms on which the Option is granted”. “Vesting Period - such period of time, as may be determined by the Board in its absolute discretion and set out in the terms of the grant of the Option, during which the right to exercise the Option in respect of all or some of the Shares to which the Option relates will vest subject to and in accordance with the terms and conditions of the grant of the Option.” 48. Reverting to the Commissioner’s arguments, they continue as follows. It is immaterial that the Relevant Options were contingent at the time when they were granted in the sense that the Taxpayer’s right to exercise them was contingent on vesting. The language of section 9(1)(d) of the Inland Revenue Ordinance does not preclude it from applying to contingent rights to acquire shares. There is no reason why it should be so precluded, since its purpose is to identify whether a gain has the requisite connection to the employee’s employment. 49. The Commissioner’s arguments then proceed to pose the example of an option to purchase shares say five years later (i.e. contingent on the satisfaction of the five-year period), and continues thus. There can be no doubt that when that period elapses, the employee does not receive a new option. He merely exercises the option which he had obtained five years before as an employee. Likewise, on a purposive interpretation of section 9(1)(d), if one were to ask what should be the relevant event to analyse in order to decide whether or not the option has the requisite connection to the employee’s employment, the clear answer is that one should look at the grant of the option (with the contingency), and not at the satisfaction of the contingency. The only difference between the present case (at least in regard to Tranches A and B) and that example is the complexities of the contingencies, but the nature of the contingencies should not make a difference to the legislation’s application. Further, no difference arises from a variation of the contingencies (as in regard to Tranche C). 50. Finally, the Commissioner’s arguments proceed to deal with what he says the position would nevertheless be if, contrary to what he has been arguing up to this point, the Court of Appeal were correct to conclude that the Taxpayer obtained the right to acquire shares only upon acceleration of the vesting of the Relevant Options. Even then, the Commissioner argues, the Share Option Gain would still have been realised from the exercise of a right to acquire shares obtained by the Taxpayer as an employee. The Commissioner argues that given that the Taxpayer obtained a right to acquire shares, from the exercise of which he made the Share Option Gain, the only question would be whether he obtained that right as an employee even though he only obtained the same under the Separation Agreement. And the Commissioner argues that the answer would be in the affirmative for the following reasons. 51. That the stated objective for which the Employer accelerated the Relevant Options was the settlement of all outstanding matters upon the cessation of the Taxpayer’s employment is not determinative. It is necessary to look further to see why the Taxpayer obtained such a right under the Separation Agreement, and to decide whether he obtained it as an employee or otherwise. 52. It was to address the various actions which the Taxpayer threatened that the Employer agreed to, among other things, let him keep and benefit from the Unvested Option which the Taxpayer obtained as an employee. Even on the assumption that the right to acquire shares was only obtained under the Separation Agreement, the Employer did not grant the right from nowhere. All it did was to complete the final step (namely vesting) of a process which the Taxpayer was allowed to access as an employee. Thus the obtaining of the right to acquire shares was as an employee, and the Share Option Gain falls within section 9(1)(d). 53. The present case cannot be treated in the same way as a situation in which the Taxpayer never had even a contingent entitlement to any share options, and had managed to negotiate the share options purely upon termination, out of nothing. It was only because he had already been granted something, namely the Unvested Option, as an employee that the Taxpayer was in a position to demand the acceleration of the Relevant Options as part of the Separation Agreement. Such acceleration could therefore only have been, and certainly was sufficiently substantially, “from” the Taxpayer’s employment and received by him as an employee. He was able to demand and be given something vis-à-vis the Relevant Options because he was granted the Relevant Options as an employee for the employment services which he had given or was to give. This is confirmed by the evidence from the Taxpayer’s solicitor who said that in exchange for the Taxpayer going quietly and agreeing to various ongoing obligations, such as non-disparagement and not challenging the restraint of trade clauses, the Employer was prepared to “make concessions on matters such as compensating [the Taxpayer] for ... the loss of share options that had not vested”. So the right to acquire shares, even if obtained only by the Taxpayer under the Separation Agreement, was obtained by him as an employee. 54. Pausing in this recital of the Commissioner’s arguments, it is to be noted that the Taxpayer’s solicitor did indeed say what he says that she said. But her use of the expression “such as” is to be noticed. So is the fact that clause 6 of the Separation Agreement referred to full and final settlement of “all claims and rights of action (whether under statute, common law or otherwise)”. As to claims and rights of action under statute, there was the possibility of a remedy available to the Taxpayer under the Employment Ordinance (Cap 57) if there was no valid reason for his termination. 55. Pointing to what Yuen JA said in paragraph 32.2 of her judgment, the Commissioner says that the reliance which the Court of Appeal placed on the decision of the House of Lords in Hunter v Dewhurst (1932) 16 TC 605 was “misplaced”. But what Yuen JA said in paragraph 32.2 of her judgment is no more or less than this: “Indeed the present case is similar to the payment in Hunter v Dewhurst where the sum in question was paid for the [employer] ‘to obtain a release from its contingent liability’. That sum was held by the House of Lords to be not chargeable to salaries tax.” There is no inaccuracy in that statement of what happened in Hunter v Dewhurst. And Yuen JA’s view that what the Taxpayer received is similar to the payment to Commander Dewhurst and likewise not taxable was reached by applying the Fuchs analysis to her appreciation of the facts of the present case. It was not reached on any misapplication of Hunter v Dewhurst. 56. From what Lord Woolf said in Mairs v Haughey [1994] 1 AC 303, the Commissioner seeks to extract what he calls a “substitution test”. What does the Commissioner say is that “test”? He says (taking it from how he puts it in paragraph 56 of his written case) that it is that “[t]he payment of a sum in true substitution of another is an acknowledgment and takes the place of, and has the same nature as, the latter.” The use of the word “true” to qualify the word “substitution” is appropriate and telling. It alerts one to the necessity of asking in each case what is and what is not truly a substitution. In any event, it is necessary to look at this statement by Lord Woolf (at p 319D): “It is inevitable that if a payment is made in substitution for a payment which might, subject to a contingency, have been payable that the nature of the payment which is made in lieu will be affected by the nature of the payment which might otherwise have been made. There will usually be no legitimate reason for treating the two payments in a different way.” So even if there is such a substitution, there may be a legitimate reason for treating the two payments differently. Both were considered in Fuchs’s case 57. The Commissioner points to Chadwick LJ’s remark in EMI Group Electronics Ltd v Coldicott [2000] 1 WLR 540 at p 556B that the decision in Hunter v Dewhurst was, as it seemed to him, difficult to reconcile with the substitution test. As to that, it is to be mentioned that the EMI case was looked at by us in Fuchs’s case. More importantly, it is to be stressed that both Hunter v Dewhurst and Mairs v Haughey were considered in Fuchs’s case, and we did not regard them to be inconsistent with each other. As was noted in Fuchs’s case at paragraph 16(d), Lord Woolf stressed in Mairs v Haughey that each case ultimately involves applying the statutory language to the facts. What actually happened in Mairs v Haughey was this. Upon the privatisation of a shipyard, the taxpayer received a payment which had two elements. One element was compensation for abrogation of his rights under a pre-existing redundancy scheme. Such compensation was held to be not taxable. The other element was compensation for the taxpayer accepting a new contract with the privatised owners. Such compensation was held to be taxable. Sum D was not from the Taxpayer’s employment 58. Was Sum D from the Taxpayer’s employment? The question is to be answered by looking at substance. As a matter of form, it was described in clause 4.1.4 of the Separation Agreement as being “in lieu of a discretionary bonus” for the financial year ended 30 June 2008. But was it, as a matter of substance, made in substitution, in the Mairs v Haughey sense, for a discretionary bonus which the Taxpayer might have received under the Service Agreement? The Commissioner says that Sum D could not be called a “discretionary bonus” because the bonus decision process had not been completed. Actually that process had not even begun. 59. And of course the process was directed to matters of substance. In that regard, Yuen JA said this (in paragraph 30 of her judgment): “There was no evidence that the Group’s results for that financial year had been considered for the purpose of deciding whether a bonus should be awarded to any of its staff. Nor was there evidence that the Taxpayer’s performance during that financial year had been considered for the purpose of deciding whether a bonus should be awarded to him. There was no evidence that the quantum of Sum D was decided even on a ‘guesstimate’ of what he might have received if a bonus were to be awarded to him.” (Emphasis in the original.) 60. Where bonuses are concerned, an employer’s results and an employee’s performance are both matters of substance. As a matter of substance, Sum D, which was in an arbitrary amount, was of a wholly different nature from any discretionary bonus under the Service Agreement. There is a legitimate reason, indeed a compelling reason, for treating the two differently. 61. There is no - nor could there possibly be any - suggestion that Sum D was paid to induce the Taxpayer to provide future services. Was it paid to reward him for past services? Plainly not. It was paid for something else, namely to make him go away quietly. It was, as Yuen JA said, the “antithesis” to a reward for past services. 62. All of the Commissioner’s arguments on Sum D were presented with skill, but none of them are capable of prevailing. As the Court of Appeal correctly held, Sum D is not taxable. Nor was the Share Option Gain 63. What about the Share Option Gain? There is no - nor could there possibly be any - suggestion that the acceleration of vesting leading to the Share Option Gain was given to induce the Taxpayer to provide future services. The issue is whether that acceleration was given to reward him for past services or was given for something else. 64. Lord Atkin said in Hunter v Dewhurst at p 645 that “a sum of money paid to obtain a release from a contingent liability under a contract of employment cannot be said to be received ‘under’ the contract of employment, is not remuneration for services rendered or to be rendered under the contract of employment, and is not received ‘from’ the contract of employment.” The Commissioner is not unaware of the difficulty in which that statement places him in the present case, and has questioned its correctness. But in doing so he is confronted by an obstacle consisting of that statement having been cited without question in Fuchs’s case at paragraph 21(a). 65. In any event, the Commissioner would still be in difficulty even if one were to say the opposite of what Lord Atkin said, saying instead that a sum of money paid to obtain a release from a contingent liability under a contract of employment can be said to be received “under” the contract of employment and is received “from” the contract of employment. This is because the Employer was not under any liability to accelerate any vesting and the Taxpayer had no right to any acceleration of vesting. 66. Here it is worth saying a word about Commissioner of Inland Revenue v Elliott [2007] 1 HKLRD 297. That case involved an incentive compensation plan (“the ICP”) consisting of units which would yield an income stream. Mr Elliott’s remuneration package included the immediate allotment to him of 5 million units with a promise that further units would be credited to him depending on the progress of certain projects. Less than five months into his employment, Mr Elliott was asked to resign. A termination agreement was entered into. Under that agreement, Mr Elloitt was paid US$ 11 million in consideration of the cancellation of his participation in the ICP scheme. The revenue accepted that such part of this sum as was attributable to the abrogation of Mr Elliott’s contingent right to be credited with ICP units in the future was not taxable. But the revenue maintained that the existing units had been allotted to Mr Elliott as an inducement to take up the employment so that such part of the US$ 11 million as was paid in substitution for the income that he was entitled to under the existing units was income from his employment. That was accepted by the Board of Review and the Court of First Instance. But it was rejected by the Court of Appeal on the basis that on a correct understanding of the ICP scheme, the rights under the existing units were contingent on Mr Elliott remaining in the employment for at least five years and were not enforceable after cessation of the employment. 67. In Fuchs’s case we did not question the correctness of the Court of Appeal’s decision in Elliott’s case. We distinguished it on the basis that while Mr Elliott could not have sued for those rights under his contract of service, what Mr Fuchs received were sums for which he could have sued under his contract of service. In that regard, the Taxpayer’s position was like Mr Elliott’s rather than Mr Fuchs. 68. The following approach was adopted in some of the cases. Sometimes what an employee received was in satisfaction of his rights under his contract of service and is therefore taxable. At other times what an employee received was in abrogation of his rights under his contract of service and is therefore not taxable. Elliott’s case provides an example of payments falling on the non-taxability side of the line. Fuchs’s case, on the other hand, provides an example of payments falling on the taxability side of the line. The view which I take of Elliott’s case now is, I would underline, exactly the same as the view taken of it in Fuchs’s case. 69. Hunter v Dewhurst involved situations on either side of the line. The payment to Commander Dewhurst was made to obtain a release from a contingent liability to him under his contract of employment. So it was not “from” that contract, and was not taxable. The payments to two other directors of the same company were in accordance with its articles of compensation for loss of office. They were not made to abrogate any rights under their contracts of employment. So they were from their contracts of employment, and were taxable. 70. Mairs v Haughey, too, included, as we have already seen, sums on either side of the line. 71. Henley v Murray (1950) 31 TC 351 and Dale v de Soissons [1950] 2 All ER 460 are cases decided by the Court of Appeal in England at about the same time. They illustrate payments falling on different sides of the line. The payment in Henley v Murray fell on the non-taxability side of the line. That was because it was not provided for in the contract of service, and was consideration paid to the employee for the total abrogation of that contract. On the other hand, the payment in Dale v de Soissons fell on the taxability side of the line. That was because the employee surrendered no rights, and got exactly what he was entitled to under his contract of service. 72. In Comptroller-General of Inland Revenue v Knight [1973] AC 428, which was decided by the Privy Council, the payment to the employee who was made redundant fell on the non-taxability side of the line because it was made to compensate him for the abrogation of his contract of service. 73. In addition to the statements of principle cited above, it is of course possible to cite other statements to similar effect. But the statements already cited provide sufficient understanding of the principles to be applied. Likewise, it is of course possible to give further examples of payments falling on either side of the taxability/non-taxability line. But the examples already given provide sufficient illustration of the correct approach. 74. Coming back now to the circumstances of the present case, it is to be borne in mind that the acceleration in question was not acceleration of the time when the Taxpayer would receive something which he would receive, albeit later, even without any acceleration. It was acceleration without which he would never have received that thing at all. On the evidence and the facts found, it is plain that the acceleration of vesting leading to the Share Option Gain was not given to reward the Taxpayer for past services. It was, on the evidence and the facts found, plainly given for something else, being part of what was given to make him go away quietly. In so far as it may be appropriate to approach the present case by reference to abrogation, it is to be observed that the Separation Agreement abrogated whatever rights the Taxpayer may have had under his contract of employment and that he acquiesced in such abrogation in return for what was given to him to make him go away quietly. That applies equally to Sum D and to what led to the Stock Option Gain. 75. Counsel for the Commissioner said that making the Taxpayer go away quietly was merely the Employer’s motive for giving the Taxpayer Sum D and for giving him what led to the Stock Option Gain. “Purpose” rather than “motive” is the appropriate word here. In any event, whatever word one uses, it would go to the question under the Fuchs analysis of whether those things were given to the Taxpayer to reward him for past services or for something else. The Court of Appeal were entitled to conclude that they were given for something else. That conclusion - as we have seen and is worth repeating - does not rest only on that matter of purpose but rests also on the nature of each of those two things. 76. Like his arguments on Sum D, the Commissioner’s arguments on the Stock Option Gain were presented with skill but are incapable of prevailing. Just as the Court of Appeal were correct to hold that Sum D is not taxable, so were they correct to hold that the Stock Option Gain is not taxable. A last minute suggestion 77. At the very end of the hearing before us, when counsel for the Commissioner was addressing us in reply, it was suggested on the Commissioner’s behalf that the Court of Appeal had not identified any error of law on the part of the Board of Review or the Court of First Instance such as would justify intervention by the Court of Appeal. That was the first time that any such suggestion was raised. No such suggestion is covered by the basis on which the Commissioner obtained leave to appeal to us. Nor does any suggestion appear in the Commissioner’s written case. 78. In any event, quite simply, the Court of Appeal’s decision proceeds on an approach to the law different from that applied by the Board of Review and the Court of First Instance. The Court of Appeal was entitled to entertain the appeal. They themselves proceeded on a correct appreciation of the law. And there is nothing to warrant interference by us with the result which they reached by applying the law to the facts. Answer to question on which leave to appeal was granted 79. As for the question on which leave to appeal to us was granted to the Commissioner by the Court of Appeal, the answer to it cannot be more than as follows. Whether such a payment or the gain derived from such a benefit is chargeable to salaries tax depends on whether it is caught by the words of section 8(1) of the Inland Revenue Ordinance. Guidance on how to decide that is to be found in Fuchs’s case. That case illustrates an instance of chargeability. The present case illustrates an instance of non-chargeability. 80. That answer satisfies the reason which the Court of Appeal gave for granting the Commissioner leave to appeal to us. As noted above, the Court of Appeal said that they granted such leave because they took the view that it may be helpful for us to follow up our decision in Fuchs’s case (where the payment was paid under the provisions of the contract) with a decision on the facts of the present case (where the payment was not so paid). Result 81. For the foregoing reasons, with an expression of thanks to counsel on both sides, I would dismiss this appeal with an order nisi awarding costs, to be taxed if not agreed, here and below to the Taxpayer, such order to become absolute unless within 21 days of today the Commissioner lodges with the Court and serves on the Taxpayer written submissions seeking some other order as to costs, the Taxpayer to file written submissions in opposition within 21 days of such service (if any). Lord Neuberger of Abbotsbury NPJ: 82. I agree with the judgment of Mr Justice Bokhary NPJ. Mr Justice Ribeiro PJ: 83. The Court unanimously dismisses the appeal and makes orders referred to by Mr Justice Bokhary NPJ at paragraph 81 above. Mr Stewart Wong SC and Mr Julian Lam, instructed by the Department of Justice, for the Appellant Mr Adrian Huggins SC, instructed by King & Wood Mallesons, for the Respondent |
Chief Justice Ma: 1. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Ribeiro PJ: 2. This appeal raises issues concerning the principles applicable where a party seeks leave to resist enforcement of a New York Convention arbitration award out of time. 3. The eight respondent companies, members of a Malaysian media group conveniently referred to as “Astro”, were the claimants in the arbitration. The 1st to 5th, 7th and 8th respondents are subsidiaries of the 6th respondent, a substantial company listed on the Kuala Lumpur Stock Exchange. 4. The appellant (“First Media”) is a substantial company listed on the Indonesian Stock Exchange and part of an Indonesian conglomerate referred to as “Lippo”. It was a respondent in the arbitration and Astro seeks to enforce an award against it in a sum exceeding US$130 million. First Media seeks leave to resist enforcement out of time on the basis that the award was made without jurisdiction. A. The underlying dispute and the arbitration 5. By a Subscription and Shareholders’ Agreement (“the SSA”) dated 11 March 2005, Lippo companies including First Media entered into a joint venture with companies in Astro (originally consisting of the 3rd to 5th respondents and then, by novation, the 1st and 2nd respondents) for the provision of multimedia and television services in Indonesia. The joint venture vehicle was to be “Direct Vision” which was the 3rd respondent in the arbitration. 6. The arbitration agreement is contained in the SSA and provides for arbitration through the Singapore International Arbitration Centre (“SIAC”), applying Singapore law. However, the 6th, 7th and 8th respondents were never parties to the SSA. They have been referred to throughout as “the Additional Parties”. 7. The joint venture failed because certain conditions precedent were not fulfilled. However, in the meantime, Direct Vision had pressed ahead with the commercial launch of its pay satellite television service in Indonesia and between about December 2005 and October 2008, the Additional Parties had been providing Direct Vision with substantial funds and services. The breakdown of the joint venture led Lippo to commence court proceedings against Astro in Indonesia, alleging that Astro was obliged to continue the funding and support services under an oral joint venture contract. Astro’s riposte was to commence the arbitration against Lippo, including First Media, at SIAC by notice dated 6 October 2008, seeking an anti-suit injunction to restrain the Indonesian proceedings and advancing monetary claims, inter alia, by way of restitution and quantum meruit. 8. Astro applied to join the Additional Parties (who had the main monetary claims) to the arbitration relying on rule 24(b) of the 2007 SIAC Rules.[1] Such joinder was unsuccessfully resisted by Lippo before the arbitral tribunal.[2] By its Award on Preliminary Issues dated 7 May 2009, the tribunal ruled that on the true construction of rule 24(b), it had power to join persons, such as the Additional Parties, who were not already parties to the agreement to refer the dispute to arbitration.[3] Lippo could have, but did not, challenge that award in the Singapore Court which had supervisory jurisdiction. 9. The arbitration then proceeded on the merits, with the tribunal rendering four additional awards, including an Interim Final Award dated 16 February 2010 in favour of Astro in a sum exceeding US$130 million. Lippo again did not seek to challenge the validity of those awards in the Singapore Court. B. Astro’s enforcement of the awards 10. Astro then proceeded to seek enforcement of the awards, principally against First Media, in various jurisdictions including Singapore and Hong Kong. 11. In Singapore, Astro was initially granted leave to enforce the awards but First Media succeeded on its appeal to the Singapore Court of Appeal which held, by a judgment dated 31 October 2013 (“the SCA Judgment”),[4] that rule 24(b) did not empower the tribunal to order joinder of the Additional Parties since they were not parties to the SSA. The tribunal therefore lacked jurisdiction to make the awards in favour of the Additional Parties and the Singapore enforcement orders in their favour were set aside. 12. On 3 August and 9 September 2010, at about the same time as the enforcement proceedings were commenced in Singapore, Astro obtained orders from Saunders J granting them leave to enforce the tribunal’s awards in Hong Kong against the Lippo parties pursuant to section 2GG[5] of the Arbitration Ordinance.[6] 13. In accordance with Order 73 r 10(6),[7] Lippo had 14 days after service of those orders to apply to set them aside. Believing that they did not have any assets in Hong Kong, Lippo made no such application and, on 9 December 2010, Saunders J entered judgment against them in terms of the awards. 14. However, on 22 July 2011, Astro obtained a garnishee order nisi attaching a debt of US$44 million due from AcrossAsia Limited (“AAL”) to First Media. AAL is a Cayman Islands company listed on the Growth Enterprise Market of the Stock Exchange of Hong Kong and holds 55.1% of the issued shares, and thus a controlling interest, in First Media. The debt arose out of an agreement dated 30 June 2011 whereby First Media granted a loan facility of US$44 million to AAL. When, on 5 August 2011, the garnishee order nisi was served on First Media, AAL filed an affirmation opposing the grant of an order absolute and, on 18 January 2012, First Media took out the summons applying for an extension of time to apply to set aside the Hong Kong enforcement orders and judgment. That summons is at the centre of the present appeal. 15. The SCA Judgment was then pending and, at Astro’s instigation, First Media’s application was stayed to await the Singapore Court of Appeal’s decision. Astro also obtained judgment, dated 31 October 2013,[8] from Deputy High Court Judge Mayo (who took a dim view of what he found to be collusive conduct between First Media and AAL) directing that the garnishee order be made absolute. 16. The SCA Judgment was coincidentally also published on 31 October 2013 and appeals were lodged against Deputy High Court Judge Mayo’s decision by both AAL and First Media. In the light of the SCA Judgment, Mimmie Chan J[9] unconditionally stayed execution of the garnishee order absolute pending determination of First Media’s setting aside application. The Court of Appeal refused Astro leave to appeal against Her Ladyship’s unconditional order[10] and Chow J therefore proceeded to deal substantively with First Media’s summons for leave to make a setting aside application. C. Chow J’s judgment[11] 17. It is common ground that the awards in question are Convention awards.[12] The law’s policy is to aid enforcement of such awards, section 42 making them enforceable, with leave, in the same way as a judgment of the Court. Grounds for refusing (and hence for setting aside) enforcement[13] are strictly limited. Section 44(1) provides that enforcement of a Convention award “shall not be refused except in the cases mentioned in this section”. Accordingly, to succeed in its setting aside application, First Media has to bring itself within one of the cases listed in section 44(2)[14] or section 44(3)[15] (and also persuade the Court that its application should be allowed to proceed although well out of time). 18. Since First Media contends that the awards were made without jurisdiction, the exception which is principally relevant is contained in section 44(2)(b): “Enforcement of a Convention award may be refused if the person against whom it is invoked proves ... (b) that the arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the award was made ...”[16] 19. Chow J upheld the enforcement orders and judgment, rejecting First Media’s application for leave to apply out of time to set them aside on the section 44(2)(b) ground. C.1 The effect of the SCA Judgment 20. His Lordship so decided even though he held that the SCA Judgment had conclusively established that the arbitral tribunal did not have power to join the Additional Parties to the arbitration, that being a matter governed by Singapore law.[17] It follows, so the Singapore Court of Appeal held,[18] that there was no arbitration agreement in existence and thus no valid agreement on which to found the awards. That conclusion, as Lord Collins of Mapesbury JSC pointed out, is in accordance with consistent international practice: “Although article V(1)(a) [of the New York Convention] (and section 103(2)(b) [of the Arbitration Act 1996]) deals expressly only with the case where the arbitration agreement is not valid, the consistent international practice shows that there is no doubt that it also covers the case where a party claims that the agreement is not binding on it because that party was never a party to the arbitration agreement.”[19] 21. Moreover, Chow J held that since the Singapore Court of Appeal was undoubtedly a court of competent jurisdiction which had determined an identical issue between the parties on the merits in a final and conclusive judgment, the SCA Judgment raised an issue estoppel per rem judicatam preventing Astro from denying the absence of a valid arbitration agreement.[20] 22. It follows that if leave had been granted, First Media would have brought itself within section 44(2)(b) as a ground for refusing enforcement. Chow J’s refusal of leave is therefore, as the Judge himself acknowledged, somewhat surprising. He noted that, when refusing Astro leave to appeal against Mimmie Chan J’s grant of an unconditional stay of execution of the garnishee order absolute, the Court of Appeal had commented obiter that it would: “... indeed be remarkable if, despite the Singapore Court of Appeal judgment on the invalidity of arbitration awards, Astro will still be able to enforce a judgment here based on the same arbitration awards that were made without jurisdiction.”[21] 23. Chow J, however, did not consider the SCA Judgment definitive since, he reasoned, questions of enforcement are governed by Hong Kong law, being the law of the forum in which enforcement is sought;[22] our law makes enforcement mandatory unless the case falls within section 44(2) or (3);[23] and refusal of enforcement abroad is not a ground for resisting enforcement of the award in Hong Kong.[24] His Lordship proceeded to refuse leave on two grounds. C.2 The good faith principle 24. First, his Lordship decided that First Media was precluded from relying on section 44(2)(b) on the ground that it was in breach of a duty of good faith. 25. Chow J’s starting-point was that the word “may” in section 44(2) – “Enforcement of a Convention award may be refused” – makes it clear that the Court has a residual discretion to order or uphold an order for enforcement even though the person resisting that order comes within one of the section 44(2) exceptions. 26. The existence of such a residual discretion is supported by the authority of this Court in Hebei Import & Export Corp v Polytek Engineering Co Ltd,[25] where Sir Anthony Mason NPJ endorsed the decision of Kaplan J in China Nanhai Oil Joint Service Corp Shenzhen Branch v Gee Tai Holdings Co Ltd,[26] to that effect. 27. Chow J also relied on those two authorities as establishing that the discretion may be exercised in favour of enforcement where the resisting party (although within a section 44(2) exception) has acted in breach of his duty of good faith, drawing parallels between those two cases and the present. 28. In China Nanhai, having participated in the arbitration and having lost on the merits, the defendant sought to oppose enforcement on the section 44(2)(e) ground, ie, that “the composition of the arbitral authority ... was not in accordance with the agreement of the parties”. It complained that whereas the arbitration agreement provided for arbitration before a CIETAC[27] panel in Beijing, at the plaintiff’s behest, a Shenzhen CIETAC panel had assumed jurisdiction. Kaplan J held that while technically the Shenzhen tribunal lacked jurisdiction, the residual discretion in favour of enforcement ought to be exercised because there was: “... a duty of good faith which in the circumstances of this case required the Defendant to bring to the notice of the full tribunal or the CIETAC Commission in Beijing its objections to the formation of this particular arbitral tribunal. Its failure to do so and its obvious policy of keeping this point up its sleeve to be pulled out only if the arbitration was lost, is not one that I find consistent with the obligation of good faith nor with any notions of justice and fair play.”[28] 29. However, his Lordship regarded the arbitration as one which the parties had in substance agreed to: “The parties agreed on a CIETAC Arbitration under CIETAC Rules. They got it. CIETAC, Shenzhen, is a sub-commission of CIETAC in Beijing. The Defendants participated in the arbitration and have raised no other grounds whatsoever which go to the procedure of the arbitration or the substance of the award. Had they won, they would not have complained. ... I am quite satisfied that the Defendants got what they agreed in their contract in the sense that they got an arbitration conducted by 3 Chinese arbitrators under CIETAC Rules. To exercise my discretion against enforcement on the facts of this case would be a travesty of justice. Had I thought that the Defendants' rights had been violated in any material way, I would, of course, have taken a different view.”[29] 30. The Hebei case involved a CIETAC arbitration regarding the allegedly sub-standard performance of certain equipment supplied under a contract. The complaint was that, without notice to the respondent, an inspection had been conducted by experts appointed by the arbitral tribunal accompanied by the chief arbitrator at the end user’s factory, where technicians who had installed the equipment communicated with the chief arbitrator in the respondent’s absence. Enforcement of the award was resisted on the section 44(2)(c) ground, namely, that the resisting party had been “unable to present his case” and on the section 44(3) ground that enforcement in such circumstances would be contrary to public policy. However, when the respondent discovered that the inspection had occurred it did not raise the matter with the tribunal but continued to participate in the arbitration. It was held that: “The respondent's conduct amounted to a breach of the principle that a party to an arbitration who wishes to rely on a non-compliance with the rules governing an arbitration shall do so promptly and shall not proceed with the arbitration as if there had been compliance, keeping the point up his sleeve for later use.”[30] 31. Chow J considered that the principles established by China Nanhai and Hebei were applicable on the facts of the present case: “In my view, what was considered to be so objectionable in China Nanhai Oil Joint Service Corporation Shenzhen Branch and Hebei Import & Export Corp v Polyteck Engineering Co Ltd was the idea that a party to an arbitration, while being fully aware of an objection (whether in relation to the jurisdiction of the tribunal or the procedure or conduct in the course of the arbitration), should be permitted to keep the objection in reserve, participate fully in the arbitration and raise the objection in the enforcing court only after an award had been made against him by the tribunal. This is effectively what happened in the present case. First Media was fully aware of its right to challenge the Tribunal’s ruling on jurisdiction before the Singapore High Court under article 16(3) of the Model Law, but chose not to do so. It seems clear that what First Media decided to do was to defend the claim on the merits in the hope that it would succeed before the Tribunal, and keep the jurisdictional point in reserve to be deployed in the enforcement court only when it suited its interests to do so.”[31] 32. His Lordship arrived at this conclusion notwithstanding that he: (a) accepted that a party is not obliged to exhaust its remedies by challenging the validity of an award in the courts of the arbitral seat, having a choice between the “active remedy” of making such a challenge and a “passive remedy” of resisting enforcement in the jurisdiction where enforcement is sought;[32] (b) acknowledged that First Media had objected to and expressly reserved its position concerning the tribunal’s jurisdiction both before and after the Award on Preliminary Issues[33] so that it could not be said to have kept the objection “up its sleeve”; and, (c) recognised that the SCA Judgment had conclusively established that the tribunal lacked jurisdiction in respect of the Additional Parties, bringing First Media within section 44(2)(b) and that “it would take a very strong case to permit enforcement of an arbitral award in circumstances where it was made by an arbitral tribunal without jurisdiction”.[34] C.3 Refusal of an extension of time 33. Secondly, Chow J held that even if he had decided not to exercise his residual discretion under section 44(2) in favour of enforcement, he would have refused to extend time for First Media to make its application for leave.[35] 34. The time limit is the limit of 14 days after service of the orders in question, laid down by Order 73 r 10(6).[36] It expired on 1 November 2010 so that First Media’s summons for a time extension, issued on 18 January 2012, was 14 months out of time. The Court’s power to grant an extension is contained in Order 3 r 5 which materially states: “(1) The Court may, on such terms as it thinks just, by order extend or abridge the period within which a person is required or authorized by these rules, or by any judgment, order or direction, to do any act in any proceedings. (2) The Court may extend any such period as is referred to in paragraph (1) although the application for extension is not made until after the expiration of that period.” 35. After having considered authorities on how the discretion should be approached, in particular The Decurion[37] and Terna Bahrain Holding Company WLL v Al Shamsi[38](to which I shall return), Chow J based his refusal of an extension on three factors[39] namely: (a) the fact that the delay of 14 months, viewed in the light of the 14 day limit prescribed by Order 73 r 10(6) was very substantial;[40] (b) the fact that First Media’s delay was a deliberate decision not to take action within the time limit because it thought that it had no assets here, thus taking a “calculated risk”;[41] and, (c) the fact that the awards had not been set aside in Singapore and thus were “still valid and create legally binding obligations on First Media to satisfy them”, so that refusing an extension of time “merely means that Astro is permitted to obtain satisfaction of a legally binding debt due and owing by First Media to Astro”.[42] 36. His Lordship refused an extension even though he accepted “that Astro has not suffered any substantial prejudice (other than costs which can be compensated) as a result of First Media’s delay of 14 months”.[43] D. The Court of Appeal’s judgment[44] D.1 Good faith and the residual discretion 37. The Court of Appeal overturned the Judge’s decision based on the good faith principle. 38. Kwan JA considered the conclusive judgment of the Singapore Court of Appeal (which she referred to as the supervisory court) as to the invalidity of the arbitration agreement “a very strong policy consideration” in the Hong Kong courts for section 44(2) purposes.[45] 39. The Judge had found it objectionable (relying on China Nanhai and Hebei) that First Media, while “fully aware of its right to challenge the Tribunal’s ruling on jurisdiction before the Singapore High Court” chose not to do so, but “decided ... to defend the claim on the merits in the hope that it would succeed before the Tribunal … [keeping] the jurisdictional point in reserve to be deployed in the enforcement court”,[46] but her Ladyship pointed out that First Media was fully entitled under Singapore law to follow that course. The SCA Judgment had held that a challenge to the tribunal’s preliminary ruling was not a “one-shot remedy” and did not affect the availability of defences at the enforcement stage.[47] It had also found that First Media had not waived its rights, but had disputed the tribunal’s jurisdiction and then proceeded with the arbitration reserving its position.[48] Chow J was thus held by the Court of Appeal to have fallen into error “in not giving proper recognition to the findings in the SCA Judgment.”[49] 40. The SCA Judgment is undoubtedly of central importance because it conclusively determined, as a matter governed by Singapore law, that there was no valid arbitration agreement between First Media and the Additional Parties and raised an issue estoppel to that effect. The Singapore Court of Appeal was, however, acting as an enforcement court and not invalidating the awards in its supervisory capacity. The proposition that First Media’s adoption of a passive remedy was in accordance with Singapore law is, with respect, not to the point since the availability of enforcement in Hong Kong is governed by the law of this forum. The true issue was whether, as a matter of Hong Kong law, Chow J was right to find that First Media was in breach of its duty of good faith so as to justify precluding it from relying on section 44(2)(b). Many of the points made by the Court of Appeal as to the consequences of the SCA Judgment are, however, equally relevant to the position under Hong Kong law. 41. In any event, Kwan JA’s rejection of the Judge’s application of the good faith principle is soundly based on her Ladyship’s finding that, when exercising his discretion, Chow J failed to take sufficient account of “the fundamental defect that the Awards were sought to be enforced against the Additional Parties who were wrongly joined by the Tribunal into the Arbitration and the Awards were made without jurisdiction”.[50] 42. It is clear that the absence of a valid arbitration agreement between the parties is a fundamentally important factor militating against discretionary enforcement. Thus, referring to equivalent provisions, Rix LJ stated in the English Court of Appeal in Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan as follows:[51] “... There is no express provision however as to what is to happen if a defence is proven, but the strong inference is that a proven defence is a defence. It is possible to see that a defence allowed under Convention or statute may nevertheless no longer be open because of an estoppel (Professor van den Berg's view, see The New York Arbitration Convention 1958, at p 265), or that a minor and prejudicially irrelevant error, albeit within the Convention or statutory language, might not succeed as a defence (as in the China Agribusiness case [1998] 2 Lloyd's Rep 76). But it is difficult to think that anything as fundamental as the absence of consent or some substantial and material unfairness in the arbitral proceedings could leave it open to a court to ignore the proven defence and instead decide in favour of enforcement.” 43. And in the UK Supreme Court in the same case, Lord Collins of Mapesbury JSC pointed out that “... article V[52] safeguards fundamental rights including the right of a party which has not agreed to arbitration to object to the jurisdiction of the tribunal”.[53] He acknowledged that because of the word “may”: “The court before which recognition or enforcement is sought has a discretion to recognise or enforce even if the party resisting recognition or enforcement has proved that there was no valid arbitration agreement.”[54] However, his Lordship emphasised the limits of that discretion, observing that “it is not easy to see how that could apply to a case where a party had not acceded to an arbitration agreement.”[55] 44. In the light of such authority, at paragraph 59 of its judgment the Court of Appeal, in my view correctly, held as follows: “The judge had misdirected himself and failed to take into account the fundamental defect that the Awards were sought to be enforced against the Additional Parties who were wrongly joined by the Tribunal into the Arbitration and the Awards were made without jurisdiction when he exercised his discretion under section 44(2) whether to refuse enforcement. Had he taken this into account, he could only have exercised his discretion to refuse enforcement.” D.2 Extension of time 45. Given the forceful statement in paragraph 59, one might have expected the Court of Appeal to allow the appeal and grant First Media leave to make its setting aside application. However, instead, it upheld Chow J’s refusal of a time extension and dismissed the appeal. 46. The Court of Appeal declined to interfere with Chow J’s exercise of discretion and endorsed his reliance on the three factors mentioned above, namely, (i) the length of the delay, (ii) the fact that a deliberate decision was taken not to apply to set aside within the time prescribed and (iii) the fact that the awards had not been set aside at the seat of the arbitration. 47. The Court rejected First Media’s argument that factor (iii) was an irrelevant matter erroneously taken into account and also disagreed with the submission that the Judge’s exercise of discretion, guided largely by the decision of Popplewell J in Terna Bahrain Holding Company WLL v Al Shamsi,[56] was inappropriate and plainly wrong. 48. The Appeal Committee granted leave to appeal to this Court on both the question of law and the “or otherwise” bases.[57] The questions of law are formulated as follows: (1) What is the proper test for determining whether an extension of time should be granted for the purposes of an application to resist enforcement of an arbitral award under the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the New York Convention”)? (“Question 1”) (2) In determining whether to extend time for the purposes of an application to resist enforcement of an arbitral award under the New York Convention, is the fact that the award has not been set aside by the courts of the seat of arbitration a relevant factor? (“Question 2”) E. This appeal 49. As those questions indicate, the issue before this Court concerns the refusal of a time extension. Although the good faith ground is no longer advanced by Astro, aspects of why that ground was rejected provide a context relevant to considering the refusal to extend time in the Courts below. E.1 Appellate review of discretion 50. The grant or refusal of a time extension is of course discretionary and the principles as to when an appellate court may interfere with a discretionary decision are conveniently summarised by Yuen JA in the Court of Appeal in Tai Fook Futures v Cheung Moon Hoi Jeff[58] as follows: “It is well-established law that an appellate court should not interfere with the exercise of a judge’s discretion unless it is satisfied that the judge has erred in law or in principle, or if she has taken into account some matter which she should not have taken into account, or has left out of account some matter which she should have taken into account, or if the decision was so plainly wrong that it must have been reached by a faulty assessment of the weights of the different factors which have to be taken into account ...” 51. Mr Toby Landau QC[59] submits that (i) as presaged in Question 1, the Judge and the Court of Appeal erred in principle in applying the wrong test when exercising the discretion; (ii) that, as anticipated in Question 2, they erroneously took into account an irrelevant factor, namely, the fact that the award has not been set aside by the Court at the seat; and (iii) that looked at overall, the refusal was plainly wrong, being perverse and disproportionate in its consequences. 52. Mr David Joseph QC[60] seeks to uphold the Court of Appeal’s decision as one made within the proper bounds of its discretion and seeks to rely on a line of cases concerning applications for relief from sanctions under CPR r 3.9(1) of the English Civil Procedure Rules, not previously explored. E.2 The appropriate test 53. It has often been emphasised that the discretion to extend time conferred by Order 3 r 5 is broad and unrestricted, designed to enable justice to be done between the parties. Thus, in Kwan Lee Construction Co Ltd v Elevator Parts Engineering Co Ltd,[61] Litton VP in the Court of Appeal, stated: “The court's jurisdiction to extend time, as conferred by O 3 r 5, is as broad as it can come and, in the exercise of that discretion, the court would, generally speaking, have some regard to what might ultimately be in issue.” 54. In Costellow v Somerset County Council,[62]dealing with the equivalent provision in England and Wales, Sir Thomas Bingham MR noted that the discretion involves the intersection of two principles. The first promotes the enforcement of time limits for the expeditious dispatch of litigation in the public interest and the second recognises that a plaintiff should not ordinarily be denied adjudication of his claim on the merits because of a procedural default “unless the default causes prejudice to his opponent for which an award of costs cannot compensate”. His Lordship noted that the second principle “is reflected in the general discretion to extend time conferred by Ord 3, r 5, a discretion to be exercised in accordance with the requirements of justice in the particular case.” 55. The approach advocated on First Media’s behalf as formulated by the Court of Appeal in The Decurion,[63] is in line with the foregoing authorities. Citing Costellow, Cheung JA acknowledged the intersecting principles and stated: “It is clear that the applicable principle in deciding whether time should be extended is to look at all relevant matters and consider the overall justice of the case. A rigid mechanistic approach is not appropriate...”[64] 56. Although Chow J and the Court of Appeal cited The Decurion, it is clear that they laid primary emphasis on Terna Bahrain Holding Company WLL v Al Shamsi,[65] quoting extensively from the judgment of Popplewell J.[66] In Terna Bahrain,the respondent in a London arbitration sought an extension of time to challenge the validity of the award under sections 67 and 68 of the Arbitration Act 1996 on the footing that the award had been made on a basis not advanced by the claimant so that the award was vitiated by serious irregularity and lack of jurisdiction. 57. The focus of Mr Landau QC’s criticism is on the passages in Popplewell J’s judgment in which, having cited certain authorities for the applicable principles, his Lordship stated: “(1) Section 70(3) of the Act requires challenges to an award under sections 67 and 68 to be brought within 28 days. This relatively short period of time reflects the principle of speedy finality which underpins the Act, and which is enshrined in section 1(a). The party seeking an extension must therefore show that the interests of justice require an exceptional departure from the timetable laid down by the Act. Any significant delay beyond 28 days is to be regarded as inimical to the policy of the Act. (2) The relevant factors are: (i) the length of the delay; (ii) whether the party who permitted the time limit to expire and subsequently delayed was acting reasonably in the circumstances in doing so; (iii) whether the respondent to the application or the arbitrator caused or contributed to the delay; (iv) whether the respondent to the application would by reason of the delay suffer irremediable prejudice in addition to the mere loss of time if the application were permitted to proceed; (v) whether the arbitration has continued during the period of delay and, if so, what impact on the progress of the arbitration, or the costs incurred in respect of the arbitration, the determination of the application by the court might now have; (vi) the strength of the application; (vii) whether in the broadest sense it would be unfair to the applicant for him to be denied the opportunity of having the application determined. (3) Factors (i), (ii), and (iii) are the primary factors.”[67] 58. Popplewell J added four observations: (i) that “the length of delay must be judged against the yardstick of 28 days provided for in the Act. Therefore a delay measured even in days is significant; a delay measured in many weeks or in months is substantial;”[68] (ii) that reasons given for the delay had to be supported by evidence;[69] (iii) that in the light of CPR r 3.9(1) which identifies an intentional failure as a separate factor, an intentional failure to comply militates against a finding that the applicant acted reasonably;[70] and (iv) that since the Court will not normally conduct a substantial investigation into the merits, they are of secondary significance: “Unless the challenge can be seen to be either strong or intrinsically weak on a brief perusal of the grounds, this will not be a factor which is treated as of weight in either direction on the application for an extension of time. If it can readily be seen to be either strong or weak, that is a relevant factor; but it is not a primary factor, because the court is only able to form a provisional view of the merits, a view which might not be confirmed by a full investigation of the challenge, with the benefit of the argument which would take place at the hearing of the application itself if an extension of time were granted.”[71] 59. The elaborately structured approach to discretion in Terna Bahrain is qualitatively different from the broad, unrestricted approach espoused in cases like The Decurion. 60. Popplewell J’s reference to CPR r 3.9(1)[72] is instructive since that is a provision addressing applications for relief from a sanction imposed for failure to comply with any rule, practice direction or court order. Those are situations in which, as one might expect, a substantial burden is placed on an applicant seeking relief from an applicable sanction, and where features such as intentional non-compliance with the rule or order weigh heavily against relief. Given this perspective, it is unsurprising that Popplewell J’s focus was not so much on finding a balance between intersecting policy principles but on the enforcement of procedural orders which have triggered sanctions against the applicant. Thus, his Lordship requires the party seeking an extension to “show that the interests of justice require an exceptional departure from the timetable laid down by the Act”, treating the grant of an extension as “exceptional”. 61. His Lordship’s treatment of the merits is also important. In paragraph (3) cited above, he states that items (i), (ii) and (iii) “are the primary factors”. These comprise the length of delay; the reasonableness of allowing the time limit to expire and whether the other side or the arbitrator contributed to the delay. The strength of the application and fairness to the applicant are only mentioned at the end of the list as items (vi) and (vii) and are thus treated as secondary considerations. As indicated in Popplewell J’s fourth observation, this is because his Lordship’s view was that an investigation of the merits is not generally undertaken so that the court is only able to form a provisional rather than a concluded view of the merits. 62. The Terna Bahrain approach of promoting the importance of certain factors and according to others (including the merits) a secondary status is plainly inconsistent with the The Decurion approach of looking at all relevant matters and considering the overall justice of the case, eschewing a rigid, mechanistic methodology. The downgrading of the merits as a factor is particularly inapt in a case like the present, where the tribunal’s lack of jurisdiction has been conclusively shown. 63. Mr Landau QC convincingly submits that the Judge faithfully applied the approach of Popplewell J set out in the passages cited above, focussing especially on items (i) and (ii) of the listed principles.[73] While it is true, as Mr Joseph QC points out, that Popplewell J did refer to cases where the merits “may be a powerful factor in favour of the grant of an extension” where “the court can determine that the challenge will succeed”,[74] Chow J did not give any weight to, or even mention in this context, the conclusively established merits. 64. It follows, in my judgment, that the test in Terna Bahrain was inappropriately applied in the present case. It led to a failure to accord proper weight to the established lack of a valid arbitration agreement which, if recognised, would have wholly undermined the central arguments made on Astro’s behalf. Thus, much emphasis was laid on section 2AA(1) which states that the object of the Arbitration Ordinance is “to facilitate the fair and speedy resolution of disputes by arbitration without unnecessary expense”. This led the Court of Appeal to state as follows: “As rightly submitted by Mr Joseph, a more disciplined approach is called for in the arbitration context, with its emphasis on speedy finality and the short statutory time limits. It is accordingly in an ‘entirely different territory’ from applications for extensions of time for compliance with interlocutory orders or rules applying during the currency of a case (Soinco Saci v Novokuznetsk Aluminium Plant [1998] 2 Lloyd’s Rep 337 at 338, per Waller LJ).”[75] 65. The policy favouring speedy finality in resolving an arbitration is necessarily premised on a valid arbitration agreement between the parties which is absent in the present case. The trite proposition that binding arbitrations must rest on a consensual basis is reflected in section 2AA itself which, in subsection (2)(a) states: “(2) This Ordinance is based on the principles that- (a) subject to the observance of such safeguards as are necessary in the public interest, the parties to a dispute should be free to agree how the dispute should be resolved...” 66. Soinco Saci v Novokuznetsk Aluminium Plant,[76] cited by the Court of Appeal, is not a case where a valid arbitration agreement was lacking. The challenge to enforcement was there based on the argument (held to be unsustainable) that it would be contrary to public policy to enforce the award. In any event, Waller LJ’s approach differed significantly from that of Terna Bahrain in that the strength of the applicant’s case was given equal prominence with other discretionary factors comprising the extent of and excuse for the delay, and the degree of prejudice to the respondent. 67. Terna Bahrain involved an active remedy challenge to the validity of the award, launched before the Court with supervisory jurisdiction in London. There is force in Mr Landau QC’s submission that, unlike challenges in an enforcement forum other than the seat, such a challenge involves invoking the procedural rules contractually agreed upon by the parties, and may justify a stricter approach to procedural time limits. 68. For the foregoing reasons, I conclude that in adopting the Terna Bahrain approach, the Courts below erred in principle, leading them to downgrade the fundamentally important absence of a valid arbitration agreement between First Media and the Additional Parties. They thereby failed to take proper account of a relevant matter, justifying this Court’s interference with their exercise of discretion. 69. Before leaving this part of the discussion, I note that Mr Joseph QC sought to rely on a line of English authority on the application of CPR r 3.9(1) culminating in Denton v TH White Ltd.[77] That rule provides: “On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need— (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders.” 70. It is a procedural rule which makes no mention of the substantive merits, setting out an approach to applications for relief from sanctions imposed for non-compliance with rules or orders. I do not accept Mr Joseph QC’s submission that First Media’s application “is as a matter of substance analogous to” such applications for relief. Thus, Denton was a consolidated appeal before the English Court of Appeal involving three cases which, respectively, concerned (i) service of witness statements outside time limits set at a case management conference, carrying the automatic sanction of prohibiting the proposed witness from being called; (ii) failing to comply in time with a pre-trial checklist setting a deadline for payment of court fees with an unless order for automatically striking out the claim in default; and (iii) filing a costs budget form 45 minutes late, carrying the automatic sanction of restricting the applicable cost budget. It is obvious that these situations are miles away from the circumstances under discussion. There is no question of the discretion exercised in such cases being overshadowed by a lack of jurisdiction to make the awards upon which the challenged orders are based. 71. Even at a purely procedural level, cases in the Denton line (in which the parties’ substantive rights do not feature) sit uncomfortably with the procedural regime in this jurisdiction. Order 1A r 2(2) provides that: “In giving effect to the underlying objectives of these rules, the Court shall always recognize that the primary aim in exercising the powers of the Court is to secure the just resolution of disputes in accordance with the substantive rights of the parties.” This Court in Wing Fai Construction Co Ltd v Yip Kwong Robert, reiterated the importance of the primary aim of securing the just resolution of disputes in accordance with the parties’ substantive rights, stressing that compliance with the rules is not an end in itself[78] and that a mechanistic approach is to be eschewed.[79] The overriding objective in the English CPR r 1.1 emphasises procedural fairness and economy rather than the parties’ substantive rights. E.3 Deliberate failure to set aside the awards at the arbitral seat 72. The third discretionary factor relied on for refusing a time extension by Chow J and upheld by the Court of Appeal involved the fact that the awards had not been set aside in Singapore and thus were “still valid and create legally binding obligations on First Media to satisfy them”.[80] This is closely linked to Chow J’s second factor, which is that First Media’s delay involved a deliberate decision not to take action to set aside the orders and judgment within time. 73. First Media’s submission, based principally on the “choice of remedies” doctrine, is that, in giving weight to those two factors, the Courts below erred in principle and took account of irrelevant factors. 74. In Paklito Investment Ltd v Klockner East Asia Ltd,[81] Kaplan J referred to the choice of remedies doctrine as follows: “It is clear to me that a party faced with a Convention award against him has two options. Firstly, he can apply to the courts of the country where the award was made to seek the setting aside of the award. If the award is set aside then this becomes a ground in itself for opposing enforcement under the Convention. Secondly, the unsuccessful party can decide to take no steps to set aside the award but wait until enforcement is sought and attempt to establish a Convention ground of opposition.” 75. Those options are mirrored in section 44(2) itself. Thus, where a party opts to set aside the award in the courts of the seat and succeeds in doing so, it acquires a defence against enforcement under section 44(2)(f) which covers cases where the award has been set aside by a competent authority of the country in which, or under the law of which, it was made. The other option is to resist enforcement on other grounds, including section 44(2)(b), without having taken steps to set aside the awards in the supervisory court. They are options which are independently available. 76. As Lord Collins of Mapesbury pointed out in Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan:[82] “There is nothing in the Convention which imposes an obligation on a party seeking to resist an award on the ground of the non-existence of an arbitration agreement to challenge the award before the courts of the seat.” 77. In the Hebei case,[83]Sir Anthony Mason NPJ points out that even where the supervisory court has held that the awards are valid, it would be open to the Hong Kong court in the enforcement forum to refuse enforcement, for example, on the ground of a differing Hong Kong public policy: “The Convention distinguishes between proceedings to set aside an award in the court of supervisory jurisdiction (arts VI and VI(e)) and proceedings in the court of enforcement (art VI). Proceedings to set aside are governed by the law under which the award was made or the law of the place where it was made, while proceedings in the court of enforcement are governed by the law of that forum. The Convention, in providing that enforcement of an award may be resisted on certain specified grounds, recognises that, although an award may be valid by the law of the place where it is made, its making may be attended by such a grave departure from basic concepts of justice as applied by the court of enforcement that the award should not be enforced. It follows, in my view, that it would be inconsistent with the principles on which the Convention is based to hold that the refusal by a court of supervisory jurisdiction to set aside an award debars an unsuccessful applicant from resisting enforcement of the award in the court of enforcement.” 78. Section 44(2) is therefore consonant with the choice of remedies principle and enables the party concerned to resist enforcement in Hong Kong without having challenged the awards in the supervisory court. It follows that the decisions of the Courts below to treat the fact that the awards have not been set aside in Singapore as a major factor in refusing a time extension come into conflict with the choice of remedies principle. 79. Moreover, since the doctrine admits of (and indeed presupposes) a choice being made between an active or passive remedy, to hold it against First Media that it made a deliberate choice in favour of a passive remedy also conflicts with the choice of remedies principle. 80. Respecting that principle, Chow J’s second and third factors should not have been taken into account and, in embracing them, the discretionary exercise in the Courts below miscarried. 81. The decision not to embark upon a setting aside application within the 14 day time limit (which Mr Joseph QC submitted was incumbent on First Media) when there were then no assets in Hong Kong was entirely reasonable, particularly where the tribunal’s jurisdiction had been challenged and the right to bring further challenges was expressly reserved. 82. Mr Joseph QC sought to submit that the continued existence of the Singapore awards is a relevant discretionary factor to be taken into account because, as he puts it, they constitute “documents of title” creating legally binding debts which Astro is entitled to enforce.[84] The Court of Appeal sought to buttress that proposition by reference to section 42(2), stating: “... unless an award is set aside, it is treated as binding for all purposes between the parties as between whom it is made, see section 42(2) of the Ordinance.”[85] 83. In my view, section 42(2) does not assist. It relevantly provides: “Any Convention award which would be enforceable under this Part shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set off or otherwise in any legal proceedings in Hong Kong...” 84. The binding quality of the award therefore depends on whether it would be enforceable under the Ordinance. Such enforceability is of course the very issue between the parties and section 42(2) does not help to resolve it. To argue, as Mr Joseph QC does, that the awards are relevant because they create enforceable debts begs the very question of their enforceability. F. Proper exercise of the discretion 85. For the foregoing reasons, this Court is entitled and bound to set aside the decisions below and to exercise the discretion under Order 3 r 5 afresh, looking at all relevant matters and considering the overall justice of the case. 86. Having discarded two of the three factors given weight by Chow J and the Court of Appeal, one is left only with the factor of the 14 month delay as a possible basis for refusing an extension. Viewed against the 14 day limit prescribed by Order 73 r 10(6), that period is obviously substantial. However, as Chow J accepted, “Astro has not suffered any substantial prejudice (other than costs which can be compensated) as a result of First Media’s delay of 14 months”.[86] Moreover, it is clear that Astro did not feel the need to press on urgently with the litigation since it was on Astro’s application that the hearing of First Media’s summons was stayed to await the Singapore Court of Appeal’s decision, involving a delay of some 20 months. 87. There must be balanced against the 14 month delay, the fundamentally important absence of a valid arbitration agreement between First Media and the Additional Parties, so that those parties were wrongly joined and the tribunal’s awards were made in their favour without jurisdiction. Thus if an extension of time is granted, the section 44(2)(b) defence against enforcement will clearly be available, there being no basis for precluding its operation. To refuse an extension would be to deny First Media a hearing where its application has decisively strong merits and would involve penalising it for a delay which caused Astro no uncompensable prejudice to the extent of permitting enforcement of an award for US$130 million. That would self-evidently be wholly disproportionate. 88. In my view, the Court’s discretion can only properly be exercised by setting aside the decisions below and granting the appellant an extension of time. Mr Joseph QC submitted that if the Court were minded to grant such an extension, it should do so only on terms that First Media makes full payment in satisfaction of all outstanding costs orders. That submission cannot be accepted. It was advanced without prior notice to the other side; without identifying what, if any, costs orders have been left unpaid; without considering whether any such orders may be subject to appeal; and without taking into account any available set-offs. G. Disposal of this appeal 89. I would accordingly allow the appeal and grant the appellant an extension of time to apply to set aside the orders granting leave to enforce the awards and the judgment entered on the strength of those orders. 90. My answer to Question 1 is that the proper test involves looking at all relevant matters and considering the overall justice of the case, eschewing a rigid mechanistic approach, as indicated in The Decurion. And my answer to Question 2 is “No” except in cases where section 44(2)(f) is relied on. It is unnecessary to consider the “or otherwise” ground. 91. I would make an order nisi that the respondents pay to the appellant the costs of the appeals in this Court and in the Court of Appeal. Since it was necessary for the appellant to apply to Chow J for an extension of time, it must bear to some degree the costs of seeking the Court’s indulgence. But since it has succeeded in showing that his Lordship’s exercise of discretion miscarried on both grounds relied on when refusing them an extension, I would set aside his order as to costs and make an order nisi that the appellant pay half of the respondents’ costs before Chow J. 92. If a different order on costs is sought, written submissions should be lodged with the Registrar and served on the other parties within four weeks of the handing down of this judgment with liberty to the other parties to serve written submissions in reply within four weeks thereafter. If no submissions are lodged or served within the initial four-week period, the orders nisi shall stand as orders absolute without further direction. Mr Justice Tang PJ: 93. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Fok PJ: 94. I agree with the judgment of Mr Justice Ribeiro PJ. Lord Reed NPJ: 95. I agree with the judgment of Mr Justice Ribeiro PJ. Chief Justice Ma: 96. The Court unanimously allows the appeal, sets aside the orders of the Courts below and directs that time for the appellant to file its application for leave to set aside the orders granting the respondents leave to enforce the awards and to enter judgment thereon be extended for three months from the date of the handing down of this judgment. The Court also makes the orders as to costs set out in paragraphs 91 and 92 above. Mr Toby Landau, QC, Mr Mark Strachan SC and Mr Jeffery Chau, instructed by Cordells Rompotis, for the Appellant Mr David Joseph QC, Mr Bernard Man SC and Mr Justin Ho, instructed by Clifford Chance, for the Respondents [1] Rule 24(b): “In addition and not in derogation of the powers conferred by any applicable law of the arbitration, the Tribunal shall have the power to:... (b) allow other parties to be joined in the arbitration with their express consent, and make a single final award determining all disputes among the parties to the arbitration”. [2] Comprising Sir Gordon Langley, Sir Simon Tuckey and Stewart C Boyd CBE QC. [3] Award on Preliminary Issues, §97. [4] PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV and others and another appeal [2013] SGCA 57, Sundaresh Menon CJ giving the judgment of the Court. [5] Section 2GG: “(1) An award, order or direction made or given in or in relation to arbitration proceedings by an arbitral tribunal is enforceable in the same way as a judgment, order or direction of the Court that has the same effect, but only with the leave of the Court or a judge of the Court. If that leave is given, the Court or judge may enter judgment in terms of the award, order or direction. (2) Notwithstanding anything in this Ordinance, this section applies to an award, order or direction made or given whether in or outside Hong Kong.” The awards being Convention awards, under section 42, they are enforceable in the same manner as under section 2GG. [6] References to sections in this judgment are (unless otherwise indicated) to provisions of the Arbitration Ordinance (Cap 341) applicable by virtue of transitional provisions in Schedule 3 para 1 of the Arbitration Ordinance (Cap 609) which has since replaced Cap 341. [7] Rules of the High Court (Cap 4A). O 73 r 10(6): “Within 14 days after service of the order ... the debtor may apply to set aside the order and the settlement agreement or award shall not be enforced until after the expiration of that period or, if the debtor applies within that period to set aside the order, until after the application is finally disposed of.” [8] HCCT 45/2010 (31 October 2013). [9] HCCT 45/2010 (24 January 2014). [10] Cheung and Barma JJA, HCMP 835/2014 (25 June 2014). [11] HCCT 45/2010 (17 February 2015). [12] Awards “made in pursuance of an arbitration agreement in a State or territory, other than China or any part thereof, which is a party to the New York Convention”, ie, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted by the United Nations Conference on International Commercial Arbitration on 10 June 1958 the text of which is set out in the Third Schedule of the Ordinance: see section 2. Singapore acceded to the Convention on 21 August 1986. [13] Reflecting Article V of the New York Convention. [14] Section 44(2): “Enforcement of a Convention award may be refused if the person against whom it is invoked proves – (a) that a party to the arbitration agreement was (under the law applicable to him) under some incapacity; or (b) that the arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the award was made; or (c) that he was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or (d) subject to subsection (4), that the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration; or (e) that the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, with the law of the country where the arbitration took place; or (f) that the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made.” [15] Section 44(3): “Enforcement of a Convention award may also be refused if the award is in respect of a matter which is not capable of settlement by arbitration, or if it would be contrary to public policy to enforce the award.” [16] It is also arguable that the exception set out in section 44(2)(d) is relevant. The focus of the argument has, however, been on section 44(2)(b). [17] Judgment §95, citing Guangzhou Green‑Enhan Bio‑Engineering Co Ltd v Green Power Health Products International Co Ltd [2004] 4 HKC 163. [18] SCA Judgment §§152-158, §162-164. The applicable Singapore provisions, namely, Article 36(1)(a)(i) and (iii) of the Model Law given statutory effect by section 3(1) of the International Arbitration Act (Cap 143A, 2002 Rev Ed) are directly comparable to those governing the present appeal. [19] Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2011] 1 AC 763 at 828, §77. [20] Judgment §96, citing First Laser Ltd v Fujian Enterprises (Holdings) Co Ltd (2012) 15 HKCFAR 569, at paragraphs 43 to 49 per Lord Collins of Mapesbury NPJ; and The Sennar (No 2) [1985] 1 WLR 490, at 493F‑494A per Lord Diplock and at 499A‑C per Lord Brandon. [21] Cheung and Barma JJA, HCMP 835/2014 (25 June 2014), at §13. [22] Judgment §73(5), citing Hebei Import & Export Corp v Polytek Engineering Co Ltd (1999) 2 HKCFAR 111 at 136D-E. [23] Judgment §73(3). [24] Judgment §73(4), citing Société Nationale D’Operations Petrolieres de la Côte d’Ivoire Holding v Keen Lloyd Resources Ltd [2004] 3 HKC 452, at §14 per Burrell J. [25] (1999) 2 HKCFAR 111 at 138. [26] [1995] 2 HKLR 215 at 217. [27] China International Economic and Trade Arbitration Commission. [28] [1995] 2 HKLR 215 at 225. [29] Ibid at 226. [30] (1999) 2 HKCFAR 111 at 137, citing China Nanhai Oil Joint Service Corp Shenzhen Branch v Gee Tai Holdings Co Ltd [1995] 2 HKLR 215. [31] Judgment §91. [32] Judgment §§82-86. [33] Judgment §67 and §89. [34] Judgment §92. [35] Judgment §131. [36] Set out in Section B of this judgment. [37] [2012] 1 HKLRD 1063. [38] [2013] 1 Lloyd’s Rep 86. [39] Judgment §131. [40] Judgment §129(1). [41] Judgment §129(2). [42] Judgment §129. [43] Judgment §130. [44] Kwan JA and Lok J, CACV 272/2015 (5 December 2016), Kwan JA writing for the Court. [45] Court of Appeal §§44 and 47, citing Gao Haiyan v Keeneye Holdings [2012] 1 HKLRD 627 at §§65 to 69 and Minmetals Germany GmbH v Ferco Steel Ltd [1999] CLC 647 at 661. [46] Judgment §91. [47] SCA Judgment §§100-123, 125-132. [48] SCA Judgment §§205-219, 222-224. [49] Court of Appeal §47. [50] Court of Appeal §59. [51] [2011] 1 AC 763 at §89. [52] Reflected in our section 44(2). [53] Ibid at 836, §102. [54] Ibid at 843, §126. [55] Ibid at 844, §127. [56] [2013] 1 Lloyd’s Rep 86. [57] Ribeiro, Tang and Fok PJJ, FAMV 20/2017 (18 August 2017). [58] Yuen JA and Kwan J, CACV 103/2005, at §15 (23 October 2006). [59] Appearing for the appellant with Mr Mark Strachan SC and Mr Jeffrey Chau. [60] Appearing for the respondents with Mr Bernard Man SC and Mr Justin Ho. [61] [1997] HKLRD 965 at 973. [62] [1993] 1 WLR 256 at 263-264. [63] [2012] 1 HKLRD 1063. [64] Ibid at §11. [65] [2013] 1 Lloyd’s Rep 86. [66] Judgment §§127-128 and Court of Appeal §76. [67] At §27. [68] At §28. [69] At §29. [70] At §30. [71] At §31. [72] Set out in Section E.2 of this judgment. [73] Judgment §129. [74] Terna Bahrain at §33, an approach reiterated by Popplewell J in Michael Jonathan Christopher Oldham v QBE Insurance (Europe) Ltd [2017] EWHC 3045 (Comm). [75] Court of Appeal §81. [76] [1998] 2 Lloyd’s Rep 337. [77] [2014] 1 WLR 3926. [78] (2011) 14 HKCFAR 935 at §34. [79] Ibid at §80. [80] Judgment §129. [81] [1993] 2 HKLR 39 at 48-49. [82] [2011] 1 AC 763 at 837, §103. [83] (1999) 2 HKCFAR 111 at 136. [84] Respondents’ written submissions §§76-77. [85] Court of Appeal §86. [86] Judgment §130. |
Chief Justice Ma : 1. I agree with the judgment of Lord Millett NPJ. Mr Justice Ribeiro PJ : 2. I agree with the judgment of Lord Millett NPJ. Mr Justice Tang PJ : 3. I am in full and respectful agreement with the judgment of Lord Millett NPJ which I have read in draft. There is nothing I can usefully add. Mr Justice Litton NPJ : 4. I agree with the judgment of Lord Millett NPJ. Lord Millett NPJ : 5. The question for decision in this appeal is whether the introduction of new accounting standards in Hong Kong in 1998 had the effect of making unrealised increases in the value of the Respondent’s trading stock held at the end of its accounting period chargeable for the first time as taxable profits. 6. The appeal is brought by the Commissioner of Inland Revenue (“the Commissioner”) from a judgment dated 19 June 2012 of the Court of Appeal (Cheung, Hartmann and Fok JJA) dismissing its appeal from a judgment of To J dated 28 June 2011. By his judgment To J had held that the introduction of the new accounting standards did not have the effect for which the Commissioner contended and allowed the Respondent’s appeal from assessments to profits tax in each of the three years from 2003/04 to 2005/06. The facts 7. The facts which are agreed are set out at length in the judgments below and it is not necessary to repeat them. They may be shortly stated as follows. 8. The Respondent is a private company incorporated in Hong Kong. Its principal business consists of trading in marketable securities quoted in Hong Kong. Prior to the introduction of new accounting standards for 1999 and subsequent years, its trading stock like that of other traders and in accordance with the conventional practice was shown in its financial statements at the lower of cost and net realisable value. This had the effect that unrealised increases in the value of its trading stock during the accounting period (in the Respondent’s case marketable securities held for sale) were not reflected in its profit and loss accounts or tax computations. Following the introduction of new accounting standards in 1998, however, the Respondent duly recorded in its profit and loss accounts not only profits and losses which it had realised by the sale or disposal of trading stock during the accounting period but also changes in the value of unrealised trading stock held at the end of the period. 9. There is no dispute that the Respondent’s financial statements for the relevant accounting periods were prepared in accordance with the prevailing albeit new accounting practice in Hong Kong. The Respondent accepts (and its auditors reported) that its financial statements were prepared in accordance with accounting principles generally accepted in Hong Kong and showed a true and fair view of its affairs and of its profits and losses for the relevant accounting periods. But it contends that its profit and loss accounts need to be adjusted for tax purposes by excluding unrealised profits from its tax computations since they are not assessable to profits tax. Accordingly in computing its assessable profits and allowable losses for tax purposes for each of the years from 2003/2004 to 2005/2006, the Respondent excluded unrealised profits (ie increases in value of its unrealised trading stock during the accounting period) but continued to claim to deduct unrealised losses which it described in its profit and loss accounts as provision for the diminution in value of listed investments held at the end of the accounting period. 10. The Commissioner considered that the unrealised gains and losses arising from revaluing the trading stock held at the end of the year should be included in the profits tax assessment for the year of assessment in which the unrealised gains were credited and unrealised losses were debited in the Respondent’s financial statements. Accordingly, he assessed the Respondent to profits tax on the basis of the realised and unrealised losses for the years of assessment 1999/2000 to 2002/03 and profits for the years of assessment 2003/04 to 2005/06. The difference between the amount of the profits tax assessed on this basis over the period and that calculated by the Respondent is of the order of $250 million. 11. The new accounting standards in accordance with which the Respondent’s financial statements were prepared are applicable only to persons who carry on the business of trading in marketable securities, whether listed or not, and while mandatory in other cases are optional in the case of small and medium sized businesses. As the Court of Appeal observed, the surprising effect of the Commissioner’s contentions is that, without any statutory support in the taxing statute, taxpayers who carry on the business of trading in securities are taxable on their unrealised profits while those who carry on other businesses are not; and unlike larger businesses carrying on the same trade small and medium sized businesses may choose whether or not to be taxed on their unrealised profits. In my judgment, as will shortly appear, this is not merely surprising; it is also contrary to the express charging provisions for profits tax in Hong Kong. The statutory provisions 12. Section 14(1) of the Inland Revenue Ordinance, Cap 112 (“the Ordinance”), imposes a charge to profits tax “… for each year of assessment … on every person carrying on a trade, profession or business in Hong Kong in respect of his assessable profits arising in or derived from Hong Kong for that year from such trade, profession or business … as ascertained in accordance with this Part.” (emphasis added) Section 2 defines “assessable profits” to mean: “… the profits in respect of which a person is chargeable to tax for the basis period for any year of assessment, calculated in accordance with the provisions of Part 4” Section 18B(1) provides that, for the relevant years of assessment “the assessable profits for any year of assessment … from any trade, profession or business carried on in Hong Kong shall be computed on the full amount of the profits therefrom arising in or derived from Hong Kong during the year of assessment.” (my emphasis) 13. The question for decision, therefore, is whether for the purpose of profits tax unrealised increases in the value of trading stock held at the end of the accounting period as a result of the revaluation should be included in the computation of “the full amount of the profits … arising in or derived from Hong Kong during the year[s] of assessment”. As the Courts below observed, this raises a matter of statutory construction[1], not accounting practice. The question is one of law: what does the statute mean by the words “the full amount of the profits therefrom during the year of assessment”? Whatever these words mean, the fact that they apply to “every person” means that in the absence of some statutory provision to the contrary they mean the same for every taxpayer to which the Ordinance applies whatever the nature or size of his business. Moreover, the word “therefrom” (meaning from any trade, profession or business) suggests that the profit must derive from some trade, professional or business activity and not merely be the result of a revaluation of assets held for the purpose of the trade, profession or business. The Commissioner’s case 14. At the heart of the Commissioner’s case lay three propositions. First, the word “profits” is not defined in the Ordinance, and in the natural and ordinary meaning of the word unrealised profits are nonetheless profits. Secondly, the amount of the profits during the year of assessment is primarily a question of fact. And thirdly, the amount of any profits or losses during the year of assessment must be ascertained by reference to ordinary principles of commercial accounting unless these are contrary to an express statutory provision in the Ordinance. These principles are not static but so long as they remain current and generally accepted they provide the surest guide to the question that the legislation requires to be answered[2]. Profits 15. While it is true, as the Commissioner submitted, that the amount of any profits is a question of fact, what constitutes “profits” within the meaning of the Ordinance and whether any disputed amount represents an assessable profit are questions of law. 16. The word “profits” is an ordinary English word and as such is capable of a broad variety of meanings. In these circumstances its meaning in any particular case depends on the context in which it is used. It has been consistently held in a series of cases dealing with the prohibition against the payment of dividends by companies except out of profits that the concept of profits in the context of company law is sufficiently broad to embrace unrealised profits[3]. The question in the present case is raised in a very different context; whether for the purpose of profits tax the word “profits” in s 14(1) of the Ordinance includes unrealised profits. 17. In seeking to persuade us to answer this question in his favour the Commissioner has relied heavily on the judgment of Fletcher Moulton LJ in Re Spanish Prospecting Co Ltd[4] where he said[5]: “The word ‘profits’ has in my opinion a well-defined legal meaning, and this meaning coincides with the fundamental conception of profits in general parlance …. ‘Profits’ implies a comparison between the state of a business at two specific dates usually separated by an interval of a year. The fundamental meaning is the amount of gain made by the business during the year. This can only be ascertained by a comparison of the assets of the business at the two dates. For practical purposes these assets in calculating profits must be valued …. Even if the assets were identical at the two periods it would by no means follow that there had been neither gain nor loss, because the market value – the value in exchange – of these assets might have altered greatly in the meanwhile.”(emphasis added) 18. In my judgment the Commissioner’s reliance on that case is misplaced, since the context in which the word “profits” was used was completely different. What was in issue was the meaning of the word “profits” in a contract of employment where the employee’s salary was payable only out of the company’s profits. The decision has rightly been described as “altogether independent of any taxing statute”[6]. In The Naval Colliery Co Ltd v CIR[7] Lord Warrington of Clyffe distinguished it as “not in point” because “The learned Lord Justice was dealing not with a profit and loss account for the purpose of Income Tax but with a balance sheet intended to show the actual financial condition of a business at the end of a business year.” It has been repeatedly recognised in many different jurisdictions that when considering the meaning of the word “profits” in the Spanish Prospecting case Fletcher Moulton LJ was not dealing with its meaning in the context of taxation[8]; and that in that context the word has always been given a more restricted meaning. 19. In Read v The Commonwealth[9] the High Court of Australia was concerned with the meaning of the word “profits” in the context of social security payments. In the majority judgment Mason CJ, Deane and Gaudron JJ said[10] “In our opinion a mere increase in value of an asset does not amount to a capital profit. A profit connotes an actual gain and not a mere potential to achieve a gain. Until a gain is realised it is not ‘earned, derived or received’. A capital gain is realised when an item of capital which has increased in value is ventured, either in whole or in part, in a transaction which returns that increase in value.” The reference to “derived” is not without interest, since under s 14(1) of the Ordinance profits are assessable to profits tax only if they are “arising in or derived from Hong Kong”. While that particular requirement is specific to Hong Kong, the passage may be of wider application, since for more than a century the ordinary principles of commercial accounting have required the adoption of the accruals method of computing profits under which profits from the sale of trading stock are recognised not when the sale proceeds are received but when they are “earned” by the sale of stock. 20. The correctness of that decision in relation to Australian social security payments may be doubted, but not its correctness in relation to capital gains tax. As the High Court of Australia observed in FCT v Sun Alliance Investments[11] the case proceeded on the apparently erroneous assumption that the notion of capital profits in the social security legislation equated with the notion of capital gains for tax purposes. In the latter case, in a judgment delivered by the full court[12], the High Court of Australia rejected Fletcher Moulton LJ’s definition of the word “profits” as of universal application, even as a matter of ordinary usage. It said[13] “… the notion that a profit may be revealed or disclosed by a revaluation even where the composition of the assets held by a business does not change appears at odds with the focus, naturally attendant upon discussions of the ‘ordinary usage’ concept of income, on receipts coming into a taxpayer’s hands.” The cardinal principles 21. There are two cardinal principles of tax law: (i) the word “profits” connotes actual or realised and not potential or anticipated profits; and (ii) neither profits nor losses may be anticipated. The two principles overlap and are often interchangeable, for they both involve questions of timing; but they are not identical. The first is concerned with the subject-matter of the tax, uses the word “anticipated” in its secondary meaning of “expected” or “hoped for”, and excludes profits which have not been and may never be realised. The second is concerned with the allocation of profits to the correct accounting period, uses the word “anticipated” in its primary meaning of “brought forward”, and prevents profits being taxed prematurely. 22. It would be wearisome to cite all the numerous authorities in which these principles have been stated, but it is right to cite some of the more important if only in deference to the industry of counsel[14]. In Duple Motor Bodies Ltd v Inland Revenue Commissioners[15] Viscount Simonds said “… the Crown is not entitled to anticipate a profit which may or may not be made, as it might do if too high a value were put on stock-in-trade. …” In the same case Lord Reid said “… it is a cardinal principle that profit shall not be taxed until realised. If the market value fell before the article was sold the profit might never be realised.” Lord Reid, however, placed a gloss on the principle in relation to losses, for in the passage immediately following he said “But an exception seems to have been recognised for a very long time: if market value has already fallen before the date of valuation so that at that date the market value of the article is less than it cost the taxpayer, then the taxpayer can bring the article in at market value, and in this way anticipate the loss which he will probably incur when he comes to sell it. That is no doubt good conservative accountancy but it is quite illogical.” (emphasis added) 23. Lord Reid’s statement of the cardinal principle has been frequently cited with approval; see B S C Footwear Ltd v Ridgway per Lord Morris of Borth-y-Gest[16] and Willingale v International Commercial Bank per Lord Fraser[17], where Lord Keith[18] simply referred to “the rule that a profit may not be taxed until it is realised.” 24. In Willingale in the Court of Appeal [19] Stamp LJ had referred to “the income tax rule that you may not be taxed on an anticipated profit.” When that case reached the House of Lords[20] Lord Salmon explained the meaning of “realised”[21] “It is well settled by the authorities cited by my noble and learned friends that a profit may not be taxed until it is realised. This does not mean until it has been received in cash but it does mean until it has been ascertained and earned.” Under the prevailing accruals system of accounting, a profit is realised by sale of trading stock, not when the sale price is received, but when the amount of the sale price is credited to cash at bank or debtors. 25. In B S C Footwear Ltd v Ridgway[22] Lord Reid said[23]: “The application of the principles of commercial accounting is, however, subject to one well-established though non-statutory principle. Neither profit nor loss may be anticipated. A trader may have made such a good contract in year one that it is virtually certain to produce a large profit in year two. But he cannot be required to pay tax on that profit until it actually accrues. And conversely he may have made such an improvident contract in year one that he will certainly incur a loss in year two but he cannot use that loss to diminish his liability for tax in year one.” 26. In relation to profits the only doubt is whether the principle is truly non-statutory. In Gallagher v Jones[24] Sir Thomas Bingham MR said that the “general principle of income tax law that neither profit nor loss should be anticipated” which was not in doubt was “squarely based on the statutory provisions”[25]; while Nolan LJ suggested that it might equally be described as a restatement in a particular context of the statutory rule that tax should be charged on “full amount of the profits or gains of the year”[26]. But it does not matter, for whatever the source of the rule it is far too well established as a principle of law to be overturned except by clear and express statutory provision. It certainly cannot be overturned by the adoption of new standards of commercial accounting. But while it is true to say that neither profits nor losses may be anticipated, it is not true to say that the taxpayer may not use an unrealised loss to diminish his liability for tax. Losses 27. In Duple Motor Bodies Ltd v Inland Revenue Commissioners[27] Lord Reid had suggested that in relation to losses there was a long established though illogical exception to the cardinal principle that neither profits nor losses may be anticipated[28], in that the taxpayer could bring into his accounts at market value an article of trading stock which had fallen in value below cost and “in this way anticipate a future loss”. The words “in this way” show that the process which Lord Reid was describing is not strictly an exception to the principle that neither profits nor losses[29] may be anticipated; and for my part I do not consider that it is “quite illogical”. Strictly speaking there is no exception to the rule that losses may not be anticipated. If at the end of an accounting period the value of an item of trading stock is the same as or greater than cost but it is sold in the following accounting period for less than cost, the loss is realised in the later period and cannot be brought forward to the earlier. This is the case even if the loss is realised before the accounts are signed off, for post-balance sheet events are relevant and can be taken into account only if they affect the position as at the balance sheet date. 28. If the market value of an item of trading stock which cost $100 is $120 at the end of year one and the item is sold in year two for $80, the application of ordinary principles of taxation means that for tax purposes in year one there is neither profit (because the profit has not been realised) nor loss (because the loss may not be anticipated); but there will be a loss of $20 in year two. Under the new accounting standards, however, the taxpayer’s financial statements will show a profit of $20 in year one and a loss of $40 in year two. 29. But it does not follow that an unrealised loss cannot be used to reduce liability for profits tax. In a proper case this can be achieved by making provision in the profit and loss account for the diminution in the value of trading stock during the accounting period. At first sight this seems to be merely another way of anticipating unrealised losses; but it is not. The auditors will not normally allow such a provision to be made unless they are satisfied that the diminution in value is material and likely to be permanent. Moreover, if such a provision is made it can be challenged by the Commissioner. The need for such a rule can be seen by considering the case where the trading stock includes shares in a company has become insolvent and the shares worthless. The taxpayer may properly write off the value of the shares by making an appropriate provision when the company is put into liquidation without waiting for the company to be dissolved. 30. The difference between making a provision for a diminution in value, which has always been permitted in a proper case, and substituting market value for cost in accordance with the new accounting standards, which is obligatory in every case, can be seen by considering a very simple example. Suppose the value of an item of trading stock which cost $100 fluctuates between $95 and $105 during the accounting period and is worth (i) $102 or (ii) $98 at the end of the period. The application of the principles of taxation results in neither taxable profit nor allowable loss in either case (because the profit in (i) is unrealised and the loss in (ii) does not justify a provision). Under the new accounting standards, however, the financial statements will be required to show a profit of $2 in (i) and a loss of $2 in (ii). 31. If contrary to expectation a provision later proves to be unjustified it should be wholly or partially written back, thereby producing a so-called “profit” of the amount written back. Thus if the value of an item of trading stock which cost $100 falls to $50 in year one and the reduction in value seems to be permanent, the auditors may agree that a provision of $50 should be made against the value of the stock, producing a loss of $50 in that year. If the item is sold in year two for $80 the provision should be written down by $30, thereby increasing the profits by $30 in year two. If it is sold for $120 the provision should be wholly written off, increasing the profits in year two by $70. 32. It may become clear even without a sale that the market has risen sufficiently to show that the provision was unjustified, in which case the amount of the over-provision should be written off, thereby increasing the profits or reducing the losses appearing in the profit and loss account. This appears to be inconsistent with the principle that profits must be “earned” or derived from a transaction by which they are realised; but the writing back of an unjustified provision is not a “profit” in the ordinary meaning of the term but is merely the reversal of a previous understatement of profits. If the taxpayer fails to write back a provision which later proves to have been unjustified, the Commissioner can challenge the accounts. The role of the principles of commercial accounting 33. The Commissioner submitted that the amount of any profits or losses during the year of assessment must be ascertained by reference to the ordinary principles of commercial accounting unless these are contrary to an express statutory provision in the Ordinance, and relied on the decision of this Court in Commissioner of Inland Revenue v Secan Ltd[30] for this purpose. That is a misreading of my judgment in that case. After citing the celebrated passage in the judgment of Sir John Pennycuick VC in Odeon Associated Theatres Limited v Jones[31], in which he explained the relationship between accountancy evidence and the ascertainment of the taxpayer’s assessable profits, I said[32]: “Both profits and losses therefore must be ascertained in accordance with the ordinary principles of commercial accounting as modified to conform with the Ordinance. Where the taxpayer’s financial statements are correctly drawn in accordance with the ordinary principles of commercial accounting and in conformity with the Ordinance, no further modifications are required or permitted.” It should be noted that I said “in conformity with the Ordinance”, not “in conformity with an express provision of the Ordinance”. 34. It is a fundamental principle of the constitution of Hong Kong, as of England, Australia, the United States and other democratic societies, that the subject is to be taxed by the legislature and not by the courts, and that it is the responsibility of the courts to determine the meaning of legislation. This is not a responsibility which can be delegated to accountants, however eminent. This does not mean that the generally accepted principles of commercial accounting are irrelevant, but their assistance is limited. 35. In the present case the subject matter of the tax is “profit”, and the question what constitutes a taxable profit is a question of law. While the amount of that profit must be computed and ascertained in accordance with the ordinary principles of commercial accounting, these are always subject to the overriding requirement of conformity, not merely with the express words of the statute, but with the way in which they have been judicially interpreted. Even where the question is a question of computation, the court must “always have the last word”[33]. 36. In some of the earlier cases on which the Commissioner relied the courts have used language which might be taken to suggest that the ordinary principles of commercial accounting must prevail unless inconsistent with an express statutory provision in the taxing statute. But the passages in question need to be read in context. In Whimster v The Commissioners of Inland Revenue[34], for example, Lord Clyde said that the taxpayer’s profits must be ascertained in accordance with the ordinary principles of commercial accountancy “and in conformity with the rules of the Income Tax Act”. He observed that the rule that stock should be brought into the account at the lower of cost and net realisable value was derived from the ordinary principles of commercial accounting “although there is nothing about this in the taxing statutes”. In that case, however, the Court of Session rejected an attempt by the taxpayer to deduct future anticipated losses in ascertaining its profits for the accounting period because the taxpayer had failed to show that its accounts were drawn in accordance with ordinary commercial practice. The case, therefore, has no relevance when considering the circumstances which require accounts drawn in accordance with ordinary principles of commercial accounting to be modified for tax purposes. 37. In Sun Insurance Office v Clark[35] Viscount Haldane said that “Questions of law can only arise when (as was not the case here) some express statutory direction applies and excludes ordinary commercial practice, or where, by reason of its being impracticable to ascertain the facts sufficiently, some presumption has to be invoked to fill the gap.” But that was a case in which the amount of the profits had to be estimated and where Lord Loreburn LC observed[36] “There is no rule of law as to the proper way of making an estimate …. A rule of thumb may be very desirable, but cannot be substituted for the only rule of law that I know of, namely, that the true gains are to be ascertained as nearly as it can be done.” 38. In Southern Railway of Peru Ltd v Owen[37] Lord Radcliffe said that he “should view with dismay the assertion of legal theories as to the ascertainment of true annual profits which were in conflict with current accountancy practice and were not required by some special statutory provision of the Income Tax Acts.” In rejecting the Crown’s argument that a provision for contingent future liabilities was contrary to a supposed rule of law, however, Lord Radcliffe did not confine his remarks to the statute. He said “In my opinion, there is no such rule of law governing the ascertainment of annual profits. Where does it come from? Not from anything to be found in the Income Tax Act. … Not from any decided authority which is binding on your Lordships ….” In that case, moreover, the House of Lords overturned the finding of the Special Commissioners in favour of the taxpayer after hearing the evidence of its auditor and another independent accountant of distinction, and despite the auditor having testified that he would not have signed the balance sheet without qualification unless the disputed provision for contingent future liabilities had been made. The provision was disallowed not because it was inconsistent with an express statutory provision but because, in the words of Lord Radcliffe, the provision was “well on the wrong side of what was permissible”. 39. It is clear beyond argument that accounts drawn up in accordance with the ordinary principles of commercial accounting must nevertheless be adjusted for tax purposes if they do not conform to the underlying principles of taxation enunciated by the courts even if these are not expressly stated in the statute[38]. InWillingale v International Commercial Bank[39] Lord Fraser said that “… where ordinary commercial principles run counter to the principles of income tax they must yield to the latter when computing profits or gains for tax purposes.” (my emphasis) There are many other statements in the authorities to the same effect. 40. In particular, the principles of commercial accounting must give way to the core principles that profits are not taxable until they are realised and that profits must not be anticipated. In the passage cited above from his speech in B S C Footwear Ltd v Ridgway[40] Lord Reid stated in terms that “The application of the principles of commercial accountancy is, however, subject to one well-established though non-statutory principle. Neither profit nor loss may be anticipated.” In Willingale v International Commercial Bank[41]it was common ground that the taxpayer’s accounts were drawn up in accordance with the principles of commercial accountancy[42]. Yet they were held to be “not a proper basis for assessing [its] liability for corporation tax” because they contravened the rule that profits may not be anticipated (per Lord Fraser[43]) or that a profit may not be taxed until realised (per Lord Keith[44]). 41. Most of the cases in which the courts have considered the circumstances in which recourse may be had to the evidence of accountants were concerned with the allocation of profits, or more usually expenditure, to the correct period of account. In B S C Footwear Ltd v Ridgway[45] Lord Reid said[46] “In my view, there is a difference between a question whether a sum is or is not taxable at all, and a question as to the proper year to which an admitted profit should be allocated. To the former there can only be one answer. The latter may not be capable of a definite answer: one may say that one answer is preferable but that another is possible. Much will depend on proper accounting practice and that may alter in the course of time.” 42. There is also a difference between determining the amount of any profits, which is a matter of computation, and determining whether a given sum is or is not a taxable profit for the purpose of the Ordinance, which is a question of law. Most of the statements that primacy should be accorded to the ordinary principle of commercial accounting have been made with reference to the first question and not the second. Thus in Revenue and Customs Commissioners v William Grant & Sons Distillers Ltd[47] Lord Hope of Craighead said that “The golden rule is that the profits of a trading company must be computed in accordance with currently accepted accounting principles.” (my emphasis) 43. The question in that case was whether depreciation of unsold stock (which is a cost) could be carried forward and treated as part of the cost of future sales. In his speech Lord Hoffmann indicated that in Secan[48] I gave two contradictory answers to the question, for my statement that the Ordinance did not prohibit the capitalisation of interest suggested one answer and my analysis of the accounting treatment another. With respect to Lord Hoffmann I plainly used the expression “capitalisation of interest” in its normal meaning to describe the accounting treatment which I later explained in detail. As I explained, normally interest is an overhead like rent and deducted as an expense of the business as a whole in the year in which it is paid. When it is capitalised, however, it is treated as a cost of acquisition of an asset. This is similarly deducted in the year in which it is paid but is matched by a corresponding increase in the value of the asset, producing neither profit nor loss in that year but reducing the profit in the year in which the asset is sold by the amount of the increase in its cost. There are not two different systems of computation but a single system which has had the misfortune to be explained in different ways. Financial Statements 44. It must be borne in mind that the new accountancy standards are directed to the preparation of financial statements and not tax computations, and that the two serve different purposes. Financial statements are prepared in order to give investors, potential investors, financial advisers, and the financial markets generally a true and fair view of the state of affairs of the company and in particular its financial position and profitability. Those who read them are concerned not with the past but with the future, and in particular the future profitability of the company. The Ordinance, however, is directed to the past. The Commissioner is not concerned with the likelihood that the taxpayer will make profits in future but whether it made them in the past. 45. The courts have had frequent occasion to comment that while a taxpayer’s financial accounts, drawn in accordance with ordinary principles of commercial accountancy, may be appropriate for the purpose of showing its financial position they may not be appropriate for the assessment of tax[49]. Where they are not appropriate for this purpose, the taxpayer is entitled or may be required to adjust them for tax purposes: the cases show both situations. In Minister of National Revenue v Anaconda American Brass Ltd[50] Viscount Simonds, giving the opinion of the Privy Council, said “Their Lordships do not question that the Lifo method or some variant of it may be appropriate for the corporate purpose of a trading company. Business men and their accountant advisers must have in mind not only the fiscal year with which alone the Minister is concerned. It may well be prudent for them to carry in their books stock valued at a figure which represents neither market value nor its actual cost but the lower cost at which similar stock was bought long ago. A hidden reserve is thus created which may be of use in future years. But the Income Tax Act is not in the year 1947 concerned with the years 1948 or 1949: by that time the company may have gone out of existence and its assets been distributed … the evidence of expert witnesses, that the Lifo method is a generally acceptable, and in this case the most appropriate method of accountancy, is not conclusive of the question that the court has to decide. That may be found as a fact by the Exchequer Court and affirmed by the Supreme Court. The question remains whether it conforms to the prescription of the Income Tax Act. As already indicated, in their Lordships’ opinion it does not.” 46. In Willingale v International Commercial Bank, where the taxpayer’s financial statements were found to be drawn up in a way which anticipated future profits, Lord Fraser said that there were no doubt excellent commercial reasons for preparing the accounts in that way and borrowed the words of Walton J[51] that they “are much better economic indicators than corporation tax accounts would be as to whether a bank is or is not doing what it ought to be doing, that is to say, steadily making an economic profit for its shareholders.” Despite this he held that they were not a proper basis for assessing the bank’s liability to tax. 47. In the present case the taxpayer’s financial statements, prepared in accordance with the new accounting standards, showed a single figure for the profits whether realised or unrealised during the accounting period, followed by a breakdown between realised and unrealised profits. Before 1999 the profit and loss account would not have shown unrealised profits and the balance sheet would have shown stock in trade at the balance sheet date at cost, excluding any increase in its value during the preceding accounting period. But it is difficult to believe that the taxpayer would not have wanted in its own interest, or possibly have been obliged by its auditors, to advertise its success by providing in a note to the accounts the value of the stock still held at the end of the year. If so, then the change is merely a matter of presentation in which the contents of a note to the accounts have been elevated to the balance sheet. The new accounting standards 48. The new accounting standards have been adopted internationally by many different countries including the United Kingdom. Their purpose, eminently laudable, is to harmonise so far as possible the preparation of financial statements so that they may be understood by those who read them and who live in a global world. They are not intended, and cannot sensibly be thought to have been intended, to harmonise the tax liabilities of taxpayers carrying on businesses in countries with greatly different tax regimes. The international nature of the new accounting standards militates against their use for tax purposes. 49. As the Respondent observed in its printed case, the existence of mandatory international accounting standards for the preparation of financial statements provides surer evidence than was available in the past of the ordinary principles of commercial accounting, but they cannot take the place of the Ordinance as interpreted by the courts. 50. It is of some interest to note that the original view of the Inland Revenue in the United Kingdom was that financial statements prepared in accordance with the new accounting standards were not appropriate for the assessment of tax. It is understood that the Inland Revenue have changed their mind, possibly influenced by a government desperate to raise as much revenue as possible to fill a hole in the public finances. It remains to be seen whether their changed approach will be challenged. If it is, then these proceedings will no doubt be considered a dry run. Conclusion 51. In my judgment the taxpayer’s financial statements, prepared in accordance with mandatory international accounting standards, record both profits which the taxpayer has realised during the accounting period and which are assessable to tax and increases in the value of its trading stock during the period which represent unrealised profits and are not assessable to tax. In preparing its tax computations the taxpayer was entitled to remove the amounts of its unrealised profits as not chargeable to tax. 52. I would dismiss the appeal. Chief Justice Ma : 53. For the above reasons, the appeal is unanimously dismissed. As to costs, we made an order nisi that the respondent should have the costs of the appeal, such costs to be taxed if not agreed. If any party wishes to have a different order for costs, written submissions should be served on the other parties and lodged with the Court within fourteen days of the handing down of this judgment, with liberty on the other parties to lodge written submissions within fourteen days thereafter. In the absence of such written submissions, the order nisi will stand absolute at the expiry of the time limited for these submissions. Mr Michael Furness QC, Mr Eugene Fung SC and Mr Julian Lam, instructed by the Department of Justice, for the Appellant Mr David Goldberg QC and Mr Stewart Wong SC, instructed by Woo, Kwan, Lee & Lo, for the Respondent [1] All questions whether tax is payable or not are ultimately questions of statutory construction: see Collector of Stamp Revenue v Arrowtown Assets Ltd (2003) 6 HKCFAR 517 at §§35-36 per Ribeiro PJ and at §105 per Lord Millett NPJ. [2] See Revenue and Customs Commissioners v William Grant & Sons Distillers Ltd[2007] 1 WLR 1448 at p 1458 per Lord Hope of Craighead adopting the observation of Sir Thomas Bingham MR in Gallagher v Jones[1994] Ch 107. [3] See Commissioner of Taxation of the Commonwealth of Australia v Sun Alliance Investments Pty Ltd(In Liquidation) (2005) 225 CLR 448 at p 506 and the cases there cited. [4] [1911] 1 Ch 92 CA. [5] At pp 98-99. [6] See Dalgety v Commissioner of Taxes (1912) 31 NZLR 260 at p 262 per Williams J. [7] (1928) 12 TC 1017 at p 1052 per Lord Warrington of Clyffe. [8] In Re Income Tax Acts (No 2) [1930] VLR 233 at 238 per Irvine CJ; at 245 per Macfarlan J; and at 250 per Lowe J; Jebsen & Co v CIR(1949) HKLR 312 per Gibson CJ at 315-316; Quemont Mining Corp v Canada [1967] 2 Ex CR 169 at §118 per Cattanach J; Marra Developments Ltd v BW Rofe Pty Ltd [1977] 2 NSWLR 616 at 628-629 per Mahoney JA; FCT v Slater Holdings Ltd (1984) 156 CLR 447 at 460 per Gibbs CJ. [9] 1988 167 CLR 57. [10] At p 67. [11] [2005] CLR 288. [12] Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ. [13] At p 504. [14] Because of the difficulty in doing so no attempt has been made in the citation of authority which follows to allocate the dicta to a particular principle. [15] [1961] 1 WLR 739, 748, 751. [16] [1972] AC 544 at p 560. [17] [1978] AC 834 at p 843. [18] At p 852. [19] [1977] Ch 78 at p 85. [20] Supra note 17. [21] At p 841. [22] Supra note 16. [23] At p 552. [24] [1994] Ch 107 CA. [25] At p 135. [26] The corresponding words in the Ordinance are “the full amount of the profits … during the year of assessment”. [27] Supra note 15. [28] Paragraph 22 supra. [29] Paragraph 25 supra. [30] (2000) 3 HKCFAR 411. [31] 48 TC 257 at p 273. [32] At p 419. [33] Duple Motor Bodies Ltd v Inland Revenue Commissioners(note 15 supra) at p 753 per Lord Reid. [34] (1926) SC 20, 25. [35] [1912] AC 443, 455. [36] At p 454 [37] [1957] AC 334, 360. [38] See B S C Footwear Ltd v Ridgway(note 16 supra) at p 562 per Lord Guest. [39] Note 17 supra. [40] Note 23 supra. [41] Supra note 17. [42] See [1977] Ch At pp 97-8 per Sir John Pennycuick. [43] At p 847. [44] At p 852. [45] Supra note 16. [46] At p 555. [47] [2007] 1 WLR 1448, 1458. The decision has been strongly criticized as leading to the conclusion that the cost of unsold stock, unlike the cost of stock which is sold during the year, is not deductible in the year in which it is incurred, and it may be necessary in future for this court to decide whether it should be applied in this jurisdiction. [48] Note 30 supra. [49] See the observations of Lord Warrington of Clyffe in The Naval Colliery case cited in para 14 supra. [50] [1956] AC 85, 102. [51] [1976] 1 WLR 657,663. |
Mr Justice Ribeiro PJ: 1. I agree with the judgment of Mr Justice Stock NPJ. Mr Justice Tang PJ: 2. I agree with the judgment of Mr Justice Stock NPJ. Mr Justice Chan NPJ: 3. I agree with the judgment of Mr Justice Stock NPJ. Mr Justice Stock NPJ: Introduction 4. These are appeals against concurrent findings of fact. They arise from the determination by the District Court[1] of a preliminary issue in an application by the respondent husband for matrimonial ancillary relief. That issue was whether the beneficial interest in 20 million shares in a privately owned company was held by the petitioner wife or, on the other hand, by her father who was joined as intervener. 5. The shares were registered in the wife’s name but it was her contention and that of her father that she holds them on trust for him. The judge rejected that contention and declared that the shares are part of the wife’s assets and therefore available for distribution upon the ancillary relief application. 6. The judge’s decision was upheld by the Court of Appeal[2], whose judgment predated the repeal of section 22(1)(a) of the Court of Final Appeal Ordinance[3] so that, since the matter in dispute involves a claim to shares clearly quantifiable at a value in excess of $1 million, the appeals come to this Court pursuant to that “as of right” provision[4]. 7. The established practice is that this Court will not interfere with concurrent findings of fact other than in exceptional and rare circumstances, namely, where it is demonstrated that there has been a miscarriage of justice or violation of some principle of law or procedure, and: “That miscarriage of justice means such a departure from the rules which permeate all judicial procedure as to make that which happened not in the proper sense of the word judicial procedure at all. That the violation of some principle of law or procedure must be such an erroneous proposition of law that if that proposition be corrected the finding cannot stand: or it may be the neglect of some principle of law or procedure, whose application will have the same effect. The question whether there is evidence on which the courts could arrive at their finding is such a question of law.”[5] 8. The submission advanced by the petitioner (the wife) and her father is that in this case there are exceptional circumstances which warrant a review of the concurrent findings. Those circumstances are said to be inconsistent findings on the central issue; findings against the credibility of witnesses despite a failure to challenge that credibility; fundamental failures of analysis; and a failure by the first instance judge to provide adequate reasons. We are asked to reverse the declaration, failing which to order a retrial. 9. Most of the complaints can be addressed briefly and do not warrant other than summary disposal, for they do not lend themselves to reasonable argument justifying a full review. There was, however, one aspect of the judgment at first instance which, in my opinion, does warrant review; that is whether the judge at first instance explained what weight he gave to certain events said by the wife and her father to be cogent evidence in support their case and why, despite that evidence, he found against them. The evidence 10. The parties were married in 1999. They have one child. They lived together in properties provided rent-free by the company in question. The wife filed a petition for divorce on 11 October 2011 and a decree nisi was granted on 4 October 2012. 11. The wife was aged 46 years at the time of the trial of the preliminary issue. She has three siblings: her elder sister, Leung Wa Yi, who lives in Canada; Leung Cham Wah (Cham), also in his mid-40s; and Leung Kwun Wa (Kwun), the youngest, aged 40 years at the time of trial. 12. The father, aged 79 years at the time of trial, is a highly successful businessman. In 1977 he established Yee Fung Polyfoam Ltd (Yee Fung) and, subsequently, other companies including HK Sports Helmet Manufacturing Limited, leading manufacturers of crash helmets. 13. The wife commenced work at Yee Fung in about 1990 and continued to work there at all material times. Before he left for Canada in 1997, Cham worked there and Kwun still does. 14. The father invested most of the profits of these businesses in real estate and in March 1995 he acquired a shelf company, Nicegood Properties Limited (NPL), to hold the matrimonial homes of his family members and other properties. 15. In April 1995 the authorised share capital of NPL was increased to $66 million divided into 66 million ordinary shares of $1 each. The father became the registered shareholder of 40 million shares and Cham and Kwun were each allotted 13.2 million shares. 16. The father's case was that he told those of his children who held shares in NPL that they were not to deal in any way with them without his prior consent and that should they leave the family business, the shares were to be returned to him. It was well understood that the shares registered in the names of the two sons belonged to the father beneficially. No dividends were paid to them. He alone provided the working capital for NPL and was the sole authorised signatory of all NPL’s bank accounts. 17. In 1997, Cham went to live in Canada and on 15 December 1997 he transferred his 13.2 million shares to the father. The instrument of transfer and the bought and sold notes state that the transfer was made in consideration of the payment to Cham of $13.2 million. Stamp duty of $22,825 was paid for the transaction. However, the oral evidence was that no consideration was in fact paid. 18. On 11 November 2004, Kwun executed a declaration of trust by which he stated that he held the NPL shares as nominee for his father. The evidence of the father and of the wife was that this occurred because of a falling out between the father and Kwun and that the father wanted thereby to show his lack of trust in Kwun. The effect of the father's testimony was that whereas the trust arrangement had hitherto arisen by reason of oral communications, the relationship between himself and Kwun now required that it be spelt out in writing. In respect of this transaction, stamp duty of $19, 880 was paid. 19. Shortly thereafter, in early December 2004, the father asked the petitioner to replace Kwun as the nominee shareholder of those 13.2 million shares and to hold them on trust for him, the father. There followed, dated 8 December 2004, an instrument of transfer by Kwun to the wife of the 13.2 million shares and the consideration was therein stated to be nil with the words “change of nominee” inserted in manuscript. There is an official stamp on the document stating : “No Ad Valorem Duty payable.” 20. On the same day, the wife executed a declaration of trust stating that she held the shares as nominee for her father, the beneficial owner. The document states that no duty was chargeable. 21. About six weeks later, namely, on 18 January 2005, the wife transferred those shares back to her father, again by an instrument of transfer expressed to be for no consideration followed by the words: “ Being shares transfer back from Nominee to Beneficial Owner”. The document states that no ad valorem duty was payable. 22. According to her testimony, she returned the shares because her involvement in the dispute between her father and her brother had made her uncomfortable. The father’s evidence was that the request to execute a declaration of trust was, he thought, taken by her as a slight, an indication that her word that she held them on trust was not good enough. In those circumstances and since, at the time, the wife was the only one of his children upon whom he felt able to rely in respect of business and family matters, he thought it appropriate for her to hold shares for him but to do so, as had her brothers in the past, without requiring her to sign a declaration of trust. He also thought that transferring shares to her name would add to her authority and bargaining power with third parties such as estate agents and bankers. He told her and she agreed that “if she left the family business or upon my request, she had to return all things (including the shares of Nicegood) to me … .”[6] 23. Consequently, by an instrument of transfer dated 31 March 2005, 13.2 million shares were transferred by the father to the wife but, according to that instrument and the relevant bought and sold notes, that transfer was effected in consideration of the sum of $13.2 million; however, the oral testimony by the father, the wife and the father’s accountant was that no sum was in fact paid. Stamp duty of $15,249 was paid. 24. In December 2006, as a result of tax advice, the authorised share capital of NPL was increased by 60 million shares of $1 each, taking the total authorised share capital to $126 million. The funds were provided by the father, though from what source and whether by director’s loan to the company, the evidence did not disclose. His testimony was that since his relationship with Kwun had by then improved, he decided to restore Kwun to his status as a shareholder and allotted to him 20 million shares in NPL and, to achieve parity between Kwun and the wife, allotted 6.8 million shares to her. Still, according to this evidence, the arrangement remained – although nowhere recorded - that all NPL shares in the names of Kwun and the wife were held on trust for the father; neither was asked by him to sign a declaration of trust because a trust was sufficiently understood. 25. Amongst the matters which the father prayed in aid of his contention that he never intended to confer beneficial ownership of the shares upon Kwun and the wife were that he regarded NPL as his personal “piggybank”; that to donate shares to only some of his children would unfairly discriminate between his children, grandchildren and other family members; that he alone controlled NPL, its working capital and bank accounts; that no dividends were paid to Kwun or to the wife; that no consideration passed from Kwun or the wife for the shares[7]; that in 1997 Cham acceded to the father's request to return the shares in Cham’s name, conduct which sat squarely with the trust understanding; that, similarly, in 2004 Kwun acceded to the father's request to execute a declaration of trust and to assign his shares to the wife, a further instance of the understanding in action; that the share certificates held by the wife and Kwun were never signed; and that in the light of the divorce petition presented in October 2011 and the certain prospect of a claim for ancillary relief, he would never have permitted the subsequent purchase by NPL, in February and April 2012, of two properties for a total price of $208.8 million. 26. The wife’s testimony supported that of her father, as did the evidence of Kwun. There was other evidence that no money had changed hands upon any of the transfers of NPL shares between father and his children; and of the father's complete control of the affairs of NPL and the Yee Fung group. 27. The husband's evidence was that no one ever suggested in his presence that the siblings held NPL shares on trust for the father. His assumption was that, absent declarations of trust, the intention in transferring shares to the siblings who worked for the company was as a reward for having done so and an encouragement to continue. He speculated that the declarations of trust signed in late 2004 were triggered by the unusual tension between Kwun and his father and that the step by which Kwun’s shares were transferred to the wife upon her express declaration of trust was intended to send a message to Kwun that if he maintained his attitude of hostility to his father, his position would be supplanted by her. He asserted that the father was a generous man given to making gifts of blue-chip shares to the wife and providing substantial financial support to her and to him. The absence of pleadings 28. The order for joinder of the father as intervener was made[8] pursuant to a consent summons which sought an order that he be so joined “to seek a declaration in respect of shares in [NPL] held in the name of the petitioner in which he claims beneficial ownership”. [9] In accordance with the terms of that consent summons, a direction was given for the petitioner to serve copies of all pleadings and other relevant documents in the suit on the intervening party, which, in context, can only have meant the pleadings - such as the petition and cross petition - and documents hitherto filed in the matrimonial proceedings. 29. However, no direction was sought and none given for the filing of pleadings or for the discovery of documents in support of and directed to the preliminary issue. That omission was unfortunate and was understandably categorised by the Court of Appeal as contributing to confusion as to “what case was advanced by the husband in opposition to the father's claim, how the husband's case was conducted in the course of the trial, and the findings that should be made by the judge on the competing claims or contentions to resolve the dispute.”[10] In this regard, I endorse the practice commended by the Court of Appeal that in the context of matrimonial proceedings for ancillary relief, disputes between a spouse and a third party as to ownership of property should procedurally be approached as in standard claims for ownership of property: in other words, after a direction for trial of the dispute as a preliminary issue and the joinder of the claimant as intervener, by directions for the filing of pleadings on the preliminary issue and for witness statements and discovery relevant to that issue.[11] It does not however lie at the door of any party to the present proceedings now to complain about the procedural lacuna since the flawed directions were sought on the joint application of the parties and ordered by consent without anyone suggesting that appropriate directions be given for the preliminary issue. The first instance judgment 30. As to the law, the judge said: (1) that “[g]iven that the documents hold out the wife to be the legal and beneficial owner of the shares, shares apparently purchased by her for $13.2 million, it is for her and her father to prove on a balance of probabilities that the wife is the father’s trustee and that he remains the beneficial owner of the shares”[12]; and (2) that it was his function to discover what the father's intention was when he transferred the shares to the wife, in which context he cited several passages from Lavelle v Lavelle[13] “which”, he said, “succinctly [address] what is required of me in the circumstances”[14] : “[13] Where one person A transfers the legal title of property that he owns or purchases to another, B, without receipt of any consideration, the effect will depend on its intention. If he intends to transfer the beneficial interest in the property to B, the transaction will take effect as a gift and A will lose all interest in the property. If he intends to retain the beneficial interest for himself, A will take the legal interest but will hold the property in trust for [B] [15]. “[14] Normally there will be evidence of the intention with which the transfer is made. Where there is not, the law applies presumptions. Where there is no close relationship between A and B , there will be a presumption that A does not intend to part with the beneficial interest in the property and B will take the legal title under the resultant trust for A. Where, however, there is a close relationship between A and B, such as father and child, a presumption of advancement will apply. The implication will be that A intended to give the beneficial interest in the property to B and the transaction will take effect accordingly.” “[19] In these cases equity searches for the subjective intention of the transferor. It seems to me that it is not satisfactory to apply rigid rules of law to the evidence that is admissible to rebut the presumption of advancement.”[16] 31. Under the heading “ Conclusions”, the judge said that there was no doubt but that the father had been very generous towards the wife and her husband; that the father was a traditional patriarchal head of the family, who demanded obedience and loyalty, factors to which he, the judge, had paid great attention. He said that he noted, as well and with care, “the pattern of share transfers both on the basis of trusteeship and of apparent transfers of beneficial interests”[17], and had given careful consideration to “the fact that the father made purchases of valuable property after he knew of the pending divorce.”[18] 32. A key question in the case was what point there was, whether from the perspective of the father or from that of the siblings, in the siblings holding the shares as mere nominees. As to the father's explanation in this regard, most particularly in relation to the transfer of shares to the wife in March 2005, the judge found as follows: “I am bound to say that I have great difficulty in accepting the logic of the father's case that the motive in transferring the shares to the wife in this way was to provide her with ‘a psychological lift’ and in giving her more clout when dealing with third parties. As to the former I cannot really discern any ‘lift’ when the recipient of the shares was a mere nominee. As to added status, the fact of the matter is that status, if any, comes from the fact that she is a director but, even more importantly, that she is her father's daughter who overwhelmingly controls the group. No doubt when she speaks, she speaks for him so much so that she would need to consult with him before entering into any important transaction. This really betrays a certain contradiction; more standing with third parties in representing the company and yet, to the knowledge of the third parties called as witnesses, having to defer and consult her father before any final decision is to be taken. I do not believe this proferred motive for transferring the shares as nominee in this way can hold any water at all. I reject it as a reason.”[19] 33. He concluded as follows: “61. In the final analysis I am afraid to say that the truth of this matter is that this kind and generous father decided to reward his beloved daughter and Kwun, with whom he had happily become reconciled, with this very valuable interest in NPL. As to the point that he would not do so because this would favour some relatives over others, is not a matter that I find at all persuasive. The fact is that when the time comes, he still holds great wealth in his own hands, he will be able to do what is right for the remainder of them. The wife in this case is his right hand and he intended, I use the word advisedly, to transfer the shares to her outright, which is what he did. Had it been otherwise he would have created a specific instrument of trust as he had in the past. This must have been, I find this as a fact, a deliberate choice to bring about a transfer of the beneficial interest in the shares. 62. Now of course this has become very inconvenient because the husband is saying, and rightly so on my finding, that the shares, being the wife's must form part of the matrimonial estate which falls to be divided up between him and the wife in such proportion as the court considers correct and just. In order to avoid such a consequence, I regret to say that these usually honest and decent people have decided that they would give false evidence as to the basis of the transfer of these shares.” 34. He accordingly dismissed the father’s application for a declaration that the beneficial ownership of shares in NPL held in the name of the wife rested with him and ordered that the shareholdings stand as part of her beneficially owned assets available for distribution on the hearing of the ancillary relief application. 35. During the course of the hearing on the preliminary issue, the judge raised of his own motion the question whether the instrument of transfer of shares to the wife and the bought and sold notes constituted an estoppel as against the father and the wife. In his judgment, he said that: “Having found that the father's intention was to and did transfer the beneficial interest in the shares to the daughter is sufficient to dispose of the issue … I am therefore not required to decide whether an estoppel is available [to the husband] as an additional ground for succeeding in this matter.”[20] 36. He nonetheless addressed that issue “in deference to counsel’s researches and in case the matter needs to be considered in another court” and, without providing analysis, held that the father and the wife were indeed estopped “from denying the truth of the contents of the instrument of transfer and the bought and sold notes. So this must stand as a further ground for the dismissal of the Intervener’s summons.”[21] The Court of Appeal 37. In the Court of Appeal, it was contended on behalf of the father and the wife that the judgment at first instance was internally inconsistent in that the judge held that there had been a sale for value of the shares to the wife but, inconsistently, that the father had gifted the shares to her; that the documents purportedly recording a sale were erroneously treated by the judge as precluding the existence of a trust; that the judge failed to distinguish between the different circumstances in which the wife acquired the two parcels of shares (13.2 million in March 2005 and 6.8 million in December 2006); that he had ignored the evidence of a consistent pattern of trust arrangements between the father and three of his children, as demonstrated by the return of shares to the father by Cham in 1997 and Kwun in 2004; that the judge failed to appreciate the significance of the absence of signatures on the share certificates; that he failed to recognise the significance of the father’s investment in properties through NPL after he became aware of the institution of divorce proceedings; and that, contrary to the principle in Browne v Dunn[22], it had never been put to the father or the wife, or to other witnesses, in cross-examination of them on the husband’s behalf, that their accounts of an oral trust agreement were untrue. 38. It was conceded by the respondent before the Court of Appeal that the judge had erred in his finding of an estoppel but, in a careful and thorough judgment[23], that Court rejected the argument that that conclusion had infected the judge’s central findings. The Court was satisfied that the judgment evidenced a single uncontradicted finding by the judge that the father had made a gift of the two parcels of shares to the wife; that there were significant indicia which countered the assertion of a trust; and that the failure to put to the witnesses in terms that their evidence was not true was of no consequence since it must have been obvious to the parties and to the witnesses that the husband's case was a challenge to their assertions of a trust arrangement. 39. The Court was not persuaded that the judge had overlooked relevant evidence. The Court pointed to cogent factors against the wife’s case and that of her father: “78. … the transfer to the wife in March 2005 was made without a declaration of trust, and this came not long after declarations of trust were executed by Kwun in November 2004 and by the wife in December 2004. No plausible explanation was given by the wife why she should have been unwilling to be the express nominee of the father when she returned the shares to him in January 2005 but was happy to take on the status in April 2005 without a declaration of trust. When the father was pressed for an explanation why he executed documents stating that consideration was paid and received when the shares were transferred to the wife, when it was his case that no consideration was paid as it was a trust arrangement, he said the documents were just formalities and claimed he did not remember much and did not know the contents. The father admitted at that time, he understood what a declaration of trust was, that it was a simple way of setting out the true beneficial ownership as opposed to registered ownership. 79. As for transferring the shares to the wife as a nominee to provide motivation for the other children to join the family business and work hard, Mr Sussex asked rhetorically why would Cham come running back from Canada only to be made a mere nominee shareholder as he had already been before, on the father's case. That the father had wanted all along his children to carry on the family business was entirely consistent with the gift of the shares to them.” Further, the Court agreed, “there was no credible explanation why the wife’s shareholding was increased to 20 million in 2006 if it was a merely nominal shareholding for spiritual or psychological purposes.” [24] 40. The Court concluded that the trial judge was entitled to disbelieve the father and the wife, whose evidence he had heard and that there was no basis to impugn the finding of a gift.[25] Accordingly, the appeals were dismissed. Concurrent findings 41. These appeals challenge concurrent findings of fact. The established practice, to which I refer at the outset of this judgment[26], is that this Court will not interfere with concurrent findings of fact other than in exceptional and rare circumstances. The exceptional circumstances advanced on behalf of the father and wife are, in their combined effect, a repetition of the grounds of appeal canvassed before the Court of Appeal albeit, in the case of the father, with some difference of emphasis. I first address those which can be disposed of in short order. Inconsistent findings 42. This complaint is not maintained by Mr Burns SC for the father but is maintained by Mr Coleman SC for the wife. Mr Coleman’s suggestion is, first, that resolution of the preliminary issue required the judge to decide not only whether the wife held the beneficial interest in the shares but, if she did, whether it was by reason of gift or of purchase since the route by which that interest was hers would impact upon the degree to which, if at all, the value of those shares would enure to the benefit of the husband in his claim for ancillary relief. The contention is, with respect, not sound, for the preliminary issue defined by the father's summons and ordered to be tried, was whether he held the beneficial ownership of the shares, no more and no less. In the event, the point matters not since the question whether a gift or a purchase, if not a trust, was in reality destined to be addressed – as indeed it was - and, more particularly, it is clear to me, as it was to the Court of Appeal, that the first instance judgment does not yield any inconsistent finding. The judge decided, as is apparent in that part of his judgment entitled “Conclusions”, that in 2005 and in 2006, the father made a gift to the wife of the NPL shares in contention. The Browne v Dunn point[27] 43. It is true that there was an inconsistency in the husband’s case as canvassed in the District Court,although not, as just pointed out, in the judge's findings. The inconsistency was that in his affirmations, his case was that the shares were transferred to the wife by way of gift whereas at trial his case appeared to be that she had purchased them. Yet what was apparent throughout and must have been clear to the witnesses was that their suggestion of a trust was not accepted. The same complaint, when advanced to the trial judge, was dismissed by him with the comment that the entire curial contest had, to everyone's knowledge, concentrated upon the issue whether the father and the wife were telling the truth when they said that it had been agreed between them that she would hold the shares as trustee for the father. “Everybody knows,” he said “that their evidence is under the severest challenge.” A contrary contention is, in my opinion, not tenable. In the circumstances which prevailed at this trial – and such an issue is always case specific - a requirement to put to the witnesses in terms that they were not telling the truth would have been an insistence for form over substance. Judge’s reasoning: the arguments 44. Mr Burns asserts that the judge erred in respect of the burden of proof. The suggestion is that in the matrimonial proceedings it was for the husband to prove that the shares belonged beneficially to the wife whereas the judge held[28] that since the documents held out the wife to be legal and beneficial owner, it was for her and the father to prove that she was a trustee. 45. He further argues that whereas the judge was required to ascertain the father's subjective intention as at the time of transfers of shares to the wife in March 2005 and December 2006, the judge instead adopted an objective test in that he allowed the documents to distract him from evidence of the father's subjective intention. According to this argument, the documents were neutral in their effect since they purported to evidence sales for value whereas it was accepted that no sale had taken place, yet the documents on their face were inconsistent with a gift as well as with the creation of a trust. There was therefore no inference to be drawn from the documents and all that remained was the testimony of the father. It follows, it is said, that the judge’s approach was fundamentally flawed. 46. It is then contended that since it was the father’s case that his evidence of intention was supported by two key undisputed facts - that shares were twice returned to the father upon his request and that expensive properties were injected into NPL after presentation of the petition - it was incumbent upon the judge to explain what impact those facts had upon his reasoning, whereas all he said in his judgment was that he noted them.[29] This is said to demonstrate either a failure by the judge to understand the significance of the key evidence in support of the father’s case or a failure to provide adequate reasons for his decision; in either event, such a significant neglect as to warrant interference by this Court. 47. The argument concludes with the suggestion that if the father’s testimony was correctly rejected, there remained only the presumption of a resulting trust since the transfers of legal title were made without consideration; a presumption which could be rebutted by the presumption of advancement only if the latter presumption were available in the case of transfer of a legal interest by a parent to an adult independent child, a proposition which counsel categorised as debatable.[30] It was incumbent on the husband to rebut the presumption of a resulting trust but the judge erred in not approaching the issue on that basis. 48. Mr Coleman adopted and further developed these submissions. The burden of proof 49. It is unnecessary to decide upon whom the burden of proof lay and whether the judge erred in this regard. That is because the decision against the wife and the father on the preliminary issue did not rest upon a failure by them to discharge a burden of proof. It flowed from a finding of fact by the judge that the father intended by the transfers of shares to the wife to make a gift of them to her.[31] Subjective or objective approach 50. The judge’s task was to ascertain the subjective intention of the father when in March 2005 he transferred the shares to the wife and when in December 2006 he caused shares to be allotted to her; and the case proceeded on the footing that the intention was the same on both occasions. The judge expressly recognised subjective intention as the key question[32] and I am satisfied that that is the test which he in fact applied. I do not accept the argument that he adopted an objective test; neither do I accept the argument that he should have treated the documents as neutral in their evidential effect. 51. It is plain that what the judge did was to look primarily at the evidence presented to him of words and conduct contemporaneous with and proximate to the transfers in question in order to ascertain the subjective intention of the transferor at the time of the transfers. That evidence was of words allegedly passing between the father and the wife, and of conduct evidenced by the content and pattern of written declarations of trust and instruments of transfer. He concluded that the content of the documents and the stark contrast between them at a time when the father knew the effect of a trust declaration and had the benefit of legal and accounting advice, spoke volumes as to the father's intention in respect of the transfers in issue. At such a time, he chose on some occasions to cause such declarations to be made and on other occasions not to do so. He chose on some occasions instruments of transfer to bear the words "change of nominee" and "transfer back from nominee to beneficial owner" and on other occasions not. Absent a reasonable explanation for the choices he made in March 2005 and December 2006 not to seek written declarations of trust and not to refer to the wife as a nominee, and to pay duty on each such transaction, it was clearly open to the judge to reject the contention that on those occasions he intended the wife to hold the shares on trust. 52. The father and the wife said, however, that there was indeed a reasonable explanation for wanting her and her brothers to hold as mere nominees and, save in the unusual circumstances pertaining at the end of 2004, to do so without the need for documents to evidence that status. But the palpable implausibility of that explanation was soundly revealed by the judge and by the Court of Appeal as not according with the common sense of the matter; and the logic of their analyses is not susceptible to valid criticism. 53. There was no need in the circumstances for the judge to invoke the presumption of a resulting trust or to look to the presumption of advancement and he did not do so. The presumptions of resulting trust and advancement arise as a matter of default; in other words, where there is otherwise insufficient evidence of subjective intention. That is the point made in the passage cited by the judge from Lavelle that : “Normally there will be evidence of the intention with which the transfer is made. Where there is not, the law applies presumptions.”[33] and summarised thus, that: “Even where this [an express declaration of trust] is absent, the court aims to arrive at the parties' real intentions by considering direct evidence of the entire transaction. This requires an objective inference drawn from the parties’ words and conduct. As a result, the presumptions of resulting trust or of advancement are only relied upon as default rules where there is no sufficient evidence to displace them.”[34] Non-proximate conduct 54. In that it is said that the judge’s conclusion evidenced a reliance on conduct proximate to the transfers themselves to the wrongful exclusion of non-proximate conduct (the 1997 and 2004 returns of shares at the father’s request; and the 2012 property purchases), the answer is, first, that he did not ignore the earlier or later events or the suggested significance of them. He mentioned them as matters to which he had close regard[35] and expressly recognised the reliance placed on them[36]. Whether he revealed what he made of those events and why, despite those events, he rejected the contention of a trust arrangement is a matter which merits scrutiny and to which I will shortly turn. 55. A question canvassed in the course of argument before this Court was whether those earlier and later events were admissible as evidence of intention at the time of transfers. It seems to me that they were and that the issue was one of weight. In the context of a question whether evidence of conduct subsequent to the registration of shares in the names of children was admissible to rebut the presumption of advancement, it was held in Shephard v Cartwright[37] that whereas acts and declarations of the parties before or at the time of the transaction or so immediately after it as to render it a part of that transaction are admissible “either for or against the party who did the act or made the declaration.. . subsequent declarations are admissible as evidence only against the party who made them, not in his favour.”[38] The modern approach is less rigid in relation to evidence of subsequent conduct: “… it does not follow that subsequent conduct is necessarily irrelevant. Where the existence of an equitable interest depends upon a rebuttable presumption or inference of the transferor’s intention, evidence may be given of the subsequent conduct in order to rebut the presumption or inference which would otherwise be drawn.”[39] 56. As a matter of common experience, contemporaneous conduct is inherently more likely to be a reliable indicator of intention, to be given greater weight, than are words and conduct after the event, especially in the case of “ self serving statements or conduct of the transferor, who may long after the transaction be regretting earlier generosity.”[40] That rationale is not restricted to evidence in rebuttal of presumptions but embraces any evidence from which an inference of the transferor’s intention may properly be drawn. 57. The 1997 and 2004 transfers to the father by Cham and Kwun, respectively, predated the 2005 transfer and 2006 allocation to the wife; and were admissible in support of the father’s theme that shares in his children’s name were to be returned to him upon his request. So too in my judgment was the father’s 2012 injection of properties, even though subsequent to 2005 and 2006 events and, as to weight, such a substantial investment might justifiably be said not to be in the nature of a self serving afterthought. 58. That the judge treated the 1997 and 2004 transfers to the father and the 2012 purchases of property as admissible evidence as to intention is clear enough and it is also apparent that that evidence did not move him to accept the father’s and the wife’s central contention. What, however, has prevented a summary disposal of this application to review concurrent findings of fact, is the absence of an express explanation by the judge as to why that was so; why, in other words, that evidence did not persuade him to a different result. Adequacy of reasons 59. The question whether reasons provided in a judgment are adequate is always case and issue specific, and is a question which is to be approached with common sense [41]. It must, however, be made apparent to the parties, especially to the losing party, from the reasons which are provided, why the judge has arrived at his decision and : “ … if the appellate process is to work satisfactorily, the judgment must enable the appellate court to understand why the judge reached his decision. This does not mean that every factor which weighed with the judge in his appraisal of the evidence has to be identified and explained. But the issues the resolution of which were vital to the judge’s conclusion should be identified and the manner in which he resolved them explained. It is not possible to provide a template for this process.”[42] 60. The pattern of return of shares to the father, in so far as two occasions might be termed a pattern, as well as the injection of properties in 2012, were key planks of the case for the father and the wife and, in my judgment, it would have been preferable had the judge explained in terms how those events sat comfortably with his finding that, nonetheless, the father’s intention in March 2005 and December 2006 was to gift shares to his daughter. Yet the question is whether, despite the absence of a direct explanation, his reasoning in that regard is sufficiently apparent. 61. The weight of the evidence which constituted these key planks was expressly addressed by the Court of Appeal in the context of submissions that the judge had overlooked them. The Court said that not only had the judge taken them into account but that : “… just as [counsel for the father] had sought to persuade us by looking at the pattern of transfers and allotments in a particular light, equally if not more cogent reasons could be advanced showing that the transfer in dispute was not a trust arrangement.”[43] The Court thereupon tabulated compelling factors which, notwithstanding the pattern relied upon, sat ill with the notion of a transfer to the wife as trustee[44]. 62. It is sufficiently apparent from a sensible reading of the first instance judgment as a whole that the judge’s reasoning as to the significance of the two planks of evidence so much relied upon by the father and the wife, was the same as that subsequently articulated by the Court of Appeal; which is to say, that the account offered by the father and the wife made no sense either in practical terms or in the light of the documentary history preceding and accompanying the transfer in March 2005; and that, since no consideration was in fact paid, the only conclusion to which the evidence and the common sense of the matter drove him was that a gift had been intended. 63. These findings by the judge and the Court of Appeal do not sit at odds with the incidents upon which the appellants rely. They are consistent with a desire by the family’s patriarch to reward by gift those who worked with him but with a willingness on the part of the siblings, as a matter of filial rather than legal obligation, to convey beneficial ownership to him should unusual circumstances so indicate. 64. As for the suggested significance of the injection of property assets into NPL after filing of the petition, the weight of the point is highly doubtful since there was not a scintilla of evidence of the impact of those acquisitions on the value of NPL shares; and it is the shares, not the properties, which were liable to form part of the matrimonial assets. 65. In the event, I am persuaded that the complaint of inadequate reasons must fail. Fresh evidence 66. There was an application to this Court by the wife and father that, for the purpose of these appeals, they be permitted to adduce evidence of the purchase by Yee Fung of Mainland property in the names of several individuals and of a finding by a Mainland court in August 2015 that such of those properties as were conveyed into the name of the husband, were held by him on trust for Yee Fung. That finding was contrary to his contention prior to and in the Mainland proceedings that the four flats in his name were held by him beneficially. The proposed evidence, including the ruling, is said to exemplify the father’s practice of appointing family members and others to hold properties as nominees without formal declarations of trust. 67. We rejected the application. Issues of relevance aside, no adequate reason was advanced for the failure previously to adduce or to apply to adduce the evidence. The properties were purchased in 2006 and it was known by Yee Fung in mid-2014 that the husband disputed Yee Fung’s ownership claim. The hearing of the NPL dispute before the District Court took place in November 2012 and the hearing in the Court of Appeal took place in November 2014 without any reference in either forum to the Mainland property, in respect of which it would have been open to the father and the wife to apply to adduce evidence from persons, other than the husband, in whose names flats in the same district had been purchased at the same time. 68. The father’s explanation was that due to the insignificant value of the flats, he forgot about them during preparation for trial of the preliminary issue and was not reminded of them until May 2014 when, as a result of the termination of the employment by Yee Fung of one of the property holders, he was reminded of them by Yee Fung’s accounts department. Even then, he did not appreciate the relevance of the trust arrangements for those flats to the issue of beneficial ownership of the NPL shares. 69. The first condition for the reception of fresh evidence at the appellate stage is that the evidence could not have been obtained with reasonable diligence for use at the trial[45]. The appellants did not begin to meet that condition. Conclusion 70. For the reasons which I have provided, I would dismiss this appeals and make an order nisi that the costs of the appeals and of the applications to adduce fresh evidence be to the respondent, to be taxed if not agreed. Lord Collins of Mapesbury NPJ: 71. I agree with the judgment of Mr Justice Stock NPJ. Mr Justice Ribeiro PJ: 72. The Court unanimously dismisses the appeals and an order as to costs is made in the terms proposed in paragraph 70 above. Mr Russell Coleman SC and Mr Robin Egerton, instructed by Simon C W Yung & Co, for the Petitioner (Appellant in FACV 10/2015) Mr Charles Sussex SC, Mr Neal Clough and Mr Timothy Parker, instructed by T C Foo & Co, for the Respondent (Respondent in FACV 10/2015 and FACV 11/2015) Mr Ashley Burns SC, Ms Maggie Wong and Ms Tanie Toh, instructed by Li, Wong & Lam & W I Cheung, for the Intervener (Appellant in FACV 11/2015) [1] Deputy District Judge Carlson, FCMC 14018 of 2011, 4 March 2013. [2] Cheung, Yuen and Kwan JJA, CACV 151 of 2013 and CACV 152 of 2013, 4 December 2014. [3] The repeal took effect on 24 December 2014: section 7 Administration of Justice (Miscellaneous Provisions) Ordinance. [4] Leave was granted by the Court of Appeal on 23 April 2015. [5] Srimarti Bibhabati Devi v Kumar Narayan Roy [1946] AC 508 at 521-522, the test applied by this Court in Sky Heart Ltd v Lee Hysan Co td (1997-98) 1 HKCFAR 318; Wu Yee Pak v Un Fong Leung (2004) 7 HKCFAR 498; Chinachem Charitable Foundation Ltd v Chan Chun Chuen (2011) 14 HKCFAR 798; and Wealth Duke Ltd v Bank of China (Hong Kong) Ltd (2011) 14 HKCFAR 863. [6] The father’s affirmation dated 25 September 2012, para 21. [7] A contention described by the judge in the course of proceedings as incontrovertible. [8]Judge Melloy 25 September 2012. [9] Consent summons dated 13 September 2012. [10] Paras 30 and 31, per Kwan JA. [11] Court of Appeal judgment, para 30, citing with approval TL v ML & Ors [2006] 1 FCR 465 at [34] and [37]. [12] District Court judgment para 43. [13] [2004] 2 FCR 418. [14] Ibid para 55. [15] The report of the judgment says “A” but that must be a slip. [16] The emphasis is that supplied by Judge Carlson. [17] Judgment para 58. [18] Ibid para 59. [19] Ibid para 60. [20] Ibid para 66. [21] Ibid para 67. [22] (1894) 6 R 67 HL. See para 43 below, fn. 27. [23] Kwan JA, with whom the other members of the Court agreed. [24] Para 80. [25] Ibid paras 81 and 88. [26] Para 7 above. [27] See para 37 above. Put broadly, the principle in Browne v Dunn is that where a party intends to impeach the credibility of a witness on a material point, that party is bound to challenge the witness in cross-examination so as to give the witness an opportunity of making any explanation open to him; failure to do so may be taken as an acceptance of his evidence. But there are cases “in which [notice of the challenge] has been so distinctly and unmistakably given and the point upon which he is impeached, or is to be impeached, is so manifest, that it is not necessary to waste time in putting questions to him upon it”: Browne v Dunn (1894) 6 R 67 HL at 70-71. See also Markem Corp v Zipher Ltd [2005] R.P.C. 31 at [57] - [61]; and Phipson on Evidence, 18th ed., [12-12] and [12-35]. [28] See para 30(1) above. [29] See para 29 above. [30] The question whether the presumption of advancement applies to the case of a transfer without consideration by a parent to an adult independent child has been left open by the Court of Appeal : Suen Shu Tai v Tam Fung Tai [2014] 4 HKLRD 436 at [10.16] and by this Court upon appeal from that judgment: FACV No 9 of 2015, 5 November 2015. [31] See para 61 judgment; para 30 above: “ … he intended, I use the word advisedly, to transfer the shares to her outright, which is what he did. Had it been otherwise he would have created a specific instrument of trust as he had in the past. This must have been, I find this as a fact, a deliberate choice to bring about a transfer of the beneficial interest in the shares.” (emphasis added). [32] See his emphasis on para [19] of the judgment in Lavell, referred to at para 27(2) above. [33] Lavelle at [14]. See also Au Yuk Lin v Wong Wang Hin [2013] 4 HKLRD 373 at [18] to [19]; and Pettitt v Pettitt [1970] AC 777 at 811 and 813, passages referred to in Lavelle at [17]. [34] Snell’s Equity 33rd ed., at 25-11(a). [35] See para 31 above; paras 58 and 59 of the District Court judgment. [36] Judgment paras 15 and 47. [37] [1955] AC 431 at 445. [38] Citing Snell’s Principles of Equity (24th Ed. p 153). [39] Tribe v Tribe [1996] Ch 107 at 129 per Millett LJ, as he then was. See also Lavelle, above, at [17] to[19] and Snell’s Equity 33rd ed., 25-013. [40] Lavelle para [19]. [41] Oriental Daily Publisher Ltd v Commissioner for Television and Entertainment Licensing Authoriy (1997-98) 1 HKCFAR 279 at 290-291. [42] English v Emery Reimbold & Strick Ltd [2002] 1 WLR 2409 at [19]. See also as to the duty to give adequate reasons: Zhou Cui Hao v Ting Fung Yee 1999 3 HKC 635; Welltus v Fornton Knitting [2013] 5 HKC 105. [43]Court of Appeal judgment, para 77. [44] Ibid paras 78 to 80, repeated at para 39 above. [45] Ladd v Marshall [1954] 3 All ER 745 at 748. |
Chief Justice Ma: 1. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Ribeiro PJ: 2. Under section 122(1) of the Crimes Ordinance,[1] a person who indecently assaults another is guilty of an offence and is liable on conviction on indictment to imprisonment for 10 years. If there is consent to the relevant acts, such conduct, although “indecent”, generally does not constitute an assault so that the offence is not committed. However, section 122(2) provides: “A person under the age of 16 cannot in law give any consent which would prevent an act being an assault for the purposes of this section”. 3. The question which arises in this appeal is whether a person commits the offence if he engages in sexual conduct which is in fact consensual with a girl who is actually aged 13 when he honestly and reasonably believes her to be aged 16 or above.[2] A. The facts 4. In August 2014, the appellant, then a third year university student aged 22, visited an adult website on which the girl (referred to throughout as “PW1”) had posted an advertisement, describing herself as aged 17 and offering sexual services at listed prices. The appellant asked for, and received from her, a half-length photo of herself. They arranged to meet and went to a guest house where they showered together and the appellant ran his hands over her body. PW1 then performed oral sex on him. 5. The appellant testified that he thought that her photo was consistent with her being aged 17 and that he believed that this was borne out when they met, PW1 appearing to him to be relatively tall, with well-developed bodily features, and speaking in a mature manner. He said that he did not suspect that she was under 16. PW1 gave evidence that she would dress more maturely when meeting clients. B. The magistrate’s decision 6. The deputy magistrate, Mr Peter Hui Shiu-keung,[3] rejected the prosecution’s submission that the offence was one of absolute liability and held, following the House of Lords decision in R v K,[4]that where there is actual consent, an honest belief on the defendant’s part that the girl is aged 16 or more results in an acquittal. 7. He found that PW1 “really looked more mature than her actual age, and did not look like a 13-year old girl”[5] in the light “of her appearance, build and speaking tone”.[6] Taking account of PW1 having claimed to be 17 and her “deliberate attempt to appear to be mature when meeting her clients”, the magistrate found that there was “no apparent reason that [the appellant] should have any suspicions about the age PW1 claimed”[7] and concluded that the appellant should be acquitted since “the defence that the defendant honestly and reasonably believed that PW1 was aged 16 or above is not rebutted”[8]. The prosecution appealed by way of case stated. C. The Judge’s decision 8. The magistrate’s ruling was reversed by Deputy High Court Judge Stanley Chan.[9] He relied principally on the decisions of the Court of Appeal[10] and this Court[11] in HKSAR v So Wai Lun (involving unlawful sexual intercourse with a girl under 16)[12] and held that, as a matter of necessary implication, the legislative intent was that indecent assault should be an offence of absolute liability. The appellant therefore could not escape conviction on the basis of an honest and reasonable belief as to PW1’s age. I shall return to consider in greater detail the arguments which led his Lordship to that conclusion. D. Leave to appeal 9. The Appeal Committee[13] granted leave to appeal, certifying the following questions of law as being of the requisite importance, namely: (i) Whether an offence contrary to s 122 (1) & (2) of the Crimes Ordinance, Cap 200, taken together is an offence of absolute liability when the alleged victim is a person under 16 years of age. (ii) Whether an accused charged under s 122 (1) with indecently assaulting a person who was under 16 years of age can legally put forward a defence that the person in fact consented and the accused genuinely believed that he/she was 16 years of age or over. (iii) Whether in a prosecution under s 122 (1) where the alleged victim is a person under 16 years of age the prosecution is required to prove absence of genuine belief on the part of the accused that the person was 16 years of age or over. E. Determining the mental elements of a statutory offence 10. Those questions fall to be answered in the light of significant developments in this jurisdiction within the last decade as to how the mental elements of a statutory offence are to be determined and, in particular, as to when such an offence is to be treated as one of absolute liability. 11. The absolute liability approach to age-related sexual offences illustrated by nineteenth century English cases like R v Prince,[14] had previously held sway. Thus, in Prince, a statute made it an offence unlawfully to take an unmarried girl under the age of sixteen out of the possession and against the will of her father but was silent as to the defendant’s required mental state regarding her age. The defendant was convicted although the jury found that he “bonâ fide, and on reasonable grounds, believed that she was above sixteen, viz, eighteen years old.”[15] This was upheld by a Court consisting of 16 judges[16] with Bramwell B, who wrote one of the main judgments, commenting that to require proof of mens rea in respect of her age would mean “reading the statute with some strange words introduced; as thus: ‘Whosoever shall take any unmarried girl, being under the age of sixteen, and not believing her to be over the age of sixteen, out of the possession’, &c”[17]. Such a construction of the Act was rejected. 12. That approach was applied in Hong Kong, as is evident from cases decided by the Court of Appeal as late as in 1993 and 1997.[18] However, in HKSAR v So Wai Lun,[19] Ma CJHC (as the Chief Justice then was) observed that in the light of more modern decisions,[20] Prince had been “largely discredited and all but overruled by the House of Lords” and held that the abovementioned Court of Appeal decisions had to be regarded as of “extremely dubious” authority. 13. As Ma CJHC noted,[21] instead of demanding a justification for reading in a mens rea requirement, the modern starting-point is that mens rea is presumed to be an essential ingredient where the statute is silent on the mental element unless that presumption is displaced expressly or by necessary implication.[22] 14. The presumption of mens rea flows from recognition that it is a cardinal principle of our criminal law that mens rea, involving the intentional or knowing performance of prohibited conduct, is ordinarily an essential ingredient of guilt of a criminal offence. The law therefore assumes that in creating a statutory offence, the legislature does not intend to dispense with that basic principle unless the enactment does so expressly or by necessary implication. This has been said to reflect the principle of legality[23] or to be a principle of statutory interpretation whereby any ambiguity in a penal statute is resolved in favour of the accused.[24] 15. The major developments in this jurisdiction relate to cases where the presumption of mens rea is held to be dislodged. As this Court concluded in Hin Lin Yee v HKSAR,[25] it becomes necessary in such event to ask: “By what, if any, mental requirement is the supplanted requirement of mens rea to be replaced?” 16. The English approach (previously followed in Hong Kong) presents a stark choice between construing the statute as requiring full mens rea and construing it as imposing absolute liability.[26] This has led eminent judges to lament the absence of an option to establish liability on some intermediate basis, such as a construction requiring the accused to “convince the jury that on balance of probabilities he is innocent of any criminal intention”.[27] Such an option was, however, thought to have been excluded by Woolmington v Director of Public Prosecutions.[28] 17. After considering different approaches in Australia, Canada and New Zealand, this Court decided in 2010 to depart from the confining regime adopted in England and Wales. It was held in Hin Lin Yee v HKSAR,[29] that in appropriate cases, the law permits statutes to be construed as intending to displace the presumption of mens rea in favour of an intermediate basis of liability. Five possible bases of liability were recognised, ranging from full mens rea to absolute liability with three intermediate possibilities. 18. Hin Lin Yee was a case involving the relatively minor offence of selling a drug intended for use by man but unfit for that purpose[30] where the mental element in question related to the circumstance of the drug’s unfitness. In Kulemesin v HKSAR,[31] which involved the more serious offence of endangering the safety of others in a vessel or at sea,[32] the issue concerned the mental element regarding the consequence of endangerment. To accommodate more serious offences and to cater for mens rea as to the consequences of (in addition to the circumstances accompanying or surrounding) the prohibited act, the five possible bases of criminal liability formulated in Hin Lin Yee were slightly amended and re-formulated as follows: “... the five possible alternatives may be stated as follows...: (a) first, that the mens rea presumption persists and the prosecution must prove knowledge, intention or recklessness as to every element of the offence (‘the first alternative’); (b) second, that the prosecution need not set out to prove mens rea, but if there is evidence capable of raising a reasonable doubt that the defendant may have acted or omitted to act in the honest and reasonable belief that the circumstances or likely consequences of his conduct were such that, if true, liability would not attach, he must be acquitted unless the prosecution proves beyond reasonable doubt the absence of such exculpatory belief or that there were no reasonable grounds for such belief (‘the second alternative’); (c) third, that the presumption has been displaced so that the prosecution need not prove mens rea but that the accused has a good defence if he can prove on the balance of probabilities that he acted or omitted to act in the honest and reasonable belief that the circumstances or likely consequences of his conduct were such that, if true, he would not be guilty of the offence (‘the third alternative’); (d) fourth, that the presumption has been displaced and that the accused is confined to relying on the statutory defences expressly provided for, the existence of such defences being inconsistent with the second and third alternatives mentioned above (‘the fourth alternative’); and (e) fifth, that the presumption is displaced and the offence is one of absolute liability so that the prosecution succeeds if the prohibited act or omission is proved against the accused, regardless of his state of mind regarding the relevant elements of the offence in question (‘the fifth alternative’).”[33] 19. I shall refer to these reformulated alternatives as “the Kulemesin alternatives”. The Court held that all five alternatives should be considered as possible conclusions when construing statutory criminal offences – both serious and regulatory – which are silent or ambiguous as to the state of mind relevantly required.[34] 20. The view has been expressed[35] that “reasonableness of belief” should be rejected as a standard for criminal liability, since such liability is properly concerned with a subjective state of mind and ought not to be displaced by an objective standard akin to one involving negligence. 21. However, in incorporating “honest and reasonable belief” as part of the second and third Kulemesin alternatives, a different view was preferred. As Lord Reid pointed out in Sweet v Parsley,[36] the court’s choice is “much more difficult if there were no other way open than either mens rea in the full sense or an absolute offence; for there are many kinds of case where putting on the prosecutor the full burden of proving mens rea creates great difficulties and may lead to many unjust acquittals”; and it would often be much easier to infer that the legislature “must have meant that gross negligence should be the necessary mental element than to infer that [it] intended to create an absolute offence”. 22. I might add that objective standards are in any event applicable to an offence like indecent assault, in that the courts have interpreted “indecency” as “conduct that right-thinking people will consider an affront to the sexual modesty of a woman;”[37] or conduct “so offensive to contemporary standards of modesty and privacy as to be indecent;”[38] or conduct “which right-minded persons would clearly think was indecent”.[39] F. The presumption of mens rea 23. Applying the principles, the analysis should begin by considering how precisely the presumption of mens rea applies to sections 122(1) and 122(2) which provide as follows: (1) Subject to subsection (3),[40] a person who indecently assaults another person shall be guilty of an offence and shall be liable on conviction on indictment to imprisonment for 10 years. (2) A person under the age of 16 cannot in law give any consent which would prevent an act being an assault for the purposes of this section. F.1 The presumption and indecent assaults on persons aged 16 or over 24. As noted above, it is presumed that the prosecution must prove knowledge, intention or recklessness as to every actus reus element of a statutory offence. Where the actus reus ingredient is expressed negatively such as requiring the absence of consent, the presumption is that the prosecution must negative the existence of consent and negative any claimed belief by the defendant in its existence. 25. In indecent assault cases, leaving aside for the moment those involving persons under the age of 16, two main actus reus elements must be proved. First, the prosecution must prove an assault on the other person. For this purpose, “Any intentional touching of another person without the consent of that person and without lawful excuse” constitutes an assault.[41] It follows that where there is genuine consent freely and lawfully given, there is no assault and the offence is not committed.[42] If a potentially believable possibility that there was consent arises on the evidence, the prosecution has the onus of negativing such consent.[43] 26. The second actus reus element which the prosecution must prove is that the assault was “accompanied by circumstances of indecency towards the person alleged to have been assaulted”.[44] This requires proving that the conduct was indecent, applying (as we have seen) objective “right-thinking” standards as to what constitutes indecency. 27. The presumption of mens rea requires the prosecution to prove mens rea corresponding to those two actus reus elements. Thus, the defendant must be shown to have intended to commit an indecent assault on the other person. This means that the prosecution must prove that the defendant intended to lay hands on the victim (or otherwise assault her) without her consent.[45] If there is evidence giving rise to a reasonable doubt as to whether the defendant believed her to be consenting, the prosecution must negative that belief.[46] Insofar as the conduct is equivocal as to whether it is indecent, indecency can be proved by evidence of the defendant’s indecent purpose.[47] F.2 The presumption and indecent assaults on persons under the age of 16 28. Section 122(2) deprives persons under the age of 16 of the capacity to consent to an act which, if not consensual, would amount to an indecent assault. It operates to modify both the actus reus and mens rea requirements of the offence in relation to persons under 16. 29. Thus, as we have seen, for persons aged 16 or over, actual consent negatives the actus reus and an honest belief in the other person’s consent negatives the mens rea. However, by deeming persons under the age of 16 to be incapable of giving consent, section 122(2) makes an indecent act towards such a person as an assault even though the evidence clearly establishes that there was consent in fact. 30. In cases where the accused asserts that there was actual consent, he will naturally also be asserting that he honestly believed that the other person was consenting. If such a belief were capable of negativing the mens rea of the offence, the protective purpose of the age-related restriction on capacity to consent would be defeated. Section 122(2) thus necessarily implies that it does not avail the accused to establish that he honestly (and correctly) believed that the under-aged person was freely consenting to the acts in question. The effect of section 122(2) is, in other words, to eliminate consent as an ingredient from both the actus reus and mens rea of indecent assault. The presumption of mens rea therefore does not concern any element of consent in cases involving persons under the age of 16. 31. However, the defendant’s mental state regarding the other person’s age stands on a different footing. While in cases involving persons aged 16 or over, the victim’s age is not relevant,[48] the fact that the victim is under 16 is an essential ingredient of the offence as modified by section 122(2). Indecent assault becomes an offence which the defendant commits by doing an indecent act towards the victim, being a person under 16, with or without that person’s consent.[49] The age of the victim therefore forms part of the actus reus of the offence as modified by section 122(2) and thus engages the presumption of mens rea. 32. This accords with the analysis by Lord Hobhouse of Woodborough of section 14(2) of the United Kingdom’s Sexual Offences Act 1956 which is replicated by our section 122(2). His Lordship stated: “Section 14(2) provides a fact-based legal rule which, given the stated factual situation, qualifies the requirement that the indecent act be done without the actual consent of the other person. The additional fact is that the other person is under the age of 16 years. The result is that the actus reus becomes an indecent act done either without the consent of the other person or with or without the consent of the other person being a person under the age of 16 years. The prosecution must therefore prove as regards the actus reus either the fact of the absence of consent or the fact of an age of less than 16 years.”[50] 33. Having concluded that the presumption of mens rea is engaged regarding the alleged victim’s age, the questions which fall to be considered are whether that presumption is displaced and, if so, displaced by what. G. Is the presumption displaced? 34. As stated above, a statutory offence is presumed to require proof of mens rea unless the presumption is displaced expressly or by necessary implication.[51] Whether such displacement occurs is a matter of statutory construction requiring examination of the statutory language; the nature and subject-matter of the offence; the legislative purpose and any other matters indicative of the statutory intent.[52] 35. As pointed out in Hin Lin Yee,[53] the availability of intermediate bases of liability inevitably influences the approach to deciding whether a dislodging of the presumption is intended. A court may recoil from imposing absolute liability for a particular offence and so hold against displacement, while it may be prepared to hold that the presumption is supplanted in favour of the second or third Kulemesin alternative. The decision in R v K[54] that the offence of indecent assault requires proof of full mens rea, should be viewed in that context. With no intermediate option, it is not surprising that the House of Lords ruled in favour of requiring mens rea instead of absolute liability. 36. In the present case, sections 122(1) and 122(2) are silent as to the mental ingredient, if any, required regarding the other person’s age. It is a serious offence “in terms of penalty and social obloquy”, carrying a maximum sentence of ten years’ imprisonment on indictment which is a feature tending to favour non-displacement of the presumption of mens rea.[55] 37. However, given the manifest purpose of section 122(2) viewed in the light of the Hong Kong courts’ long-standing policy regarding age-related sexual offences, I am of the view that the presumption of mens rea is clearly displaced in respect of indecent assaults on persons under the age of 16 in this jurisdiction. 38. We have seen that the effect of section 122(2) is to deprive persons under that age of the capacity to consent to an indecent act and thus to transform the offence into one of significantly stricter liability. The manifest statutory intention is to confer special protection on a class of vulnerable persons who are potential objects of indecent acts. The long-standing approach of our courts has been to implement such protection by construing age-related sexual offences as requiring potential defendants to take care “to avoid what may be unlawful and steering well away from the line between legality and illegality”, holding that this “would add materially to the protection for young girls” provided for by the relevant statute.[56] Some of those decisions were arrived at before the development of intermediate bases of liability and led to conclusions in favour of absolute liability, indicating the force of that policy. The existence of intermediate options does not affect its continuing vitality. The statutory purpose would plainly be compromised if the presumption of mens rea is not dislodged in respect of the girl’s age and the prosecution were required to disprove, beyond reasonable doubt, any claim made by the defendant that he honestly believed that she was aged 16 or over. H. Displaced by what? H.1 Absolute liability 39. Absolute liability departs from basic common law principles of criminal responsibility which generally require some degree of knowledge or intention to accompany the prohibited conduct. As this Court recognised: “... it is in principle objectionable, especially where the offence is serious, that a person should be made criminally liable where he did not deliberately or recklessly engage in the prohibited conduct or where he was ignorant of circumstances making his conduct criminal or where he acted harbouring an honest and reasonable belief inconsistent with liability.”[57] 40. It is thus never lightly to be inferred that the legislature intended to create an offence of absolute liability since, as Lord Reid put it: “... someone could be convicted of it who by all reasonable and sensible standards is without fault.”[58] 41. Absolute liability is primarily imposed for what are essentially regulatory offences[59] rather than serious criminal offences, and then only where some useful purpose (such as encouraging preventive safety measures) may be served by the imposition of such liability.[60] As was made clear in Hin Lin Yee[61] and Kulemesin,[62] before concluding that an offence is one of absolute liability, it is necessary to consider whether the statutory purpose can sufficiently be met by construing it as laying down a less Draconian, intermediate form of liability. Absolute liability should only be resorted to if the answer is in the negative. 42. The main reason for the Judge deciding in favour of absolute liability was his application of the Court of Appeal’s judgment in HKSAR v So Wai Lun[63] where it was held that absolute liability was applicable to unlawful sexual intercourse with an under-aged girl contrary to section 124 of the Crimes Ordinance. That section provides: “Subject to subsection (2),[64] a man who has unlawful sexual intercourse with a girl under the age of 16 shall be guilty of an offence and shall be liable on conviction on indictment to imprisonment for 5 years.” 43. That decision is however clearly distinguishable. It was concerned with unlawful sexual intercourse and not indecent assault, and the Court of Appeal determined that absolute liability was imposed principally on the basis of the legislative history of the section 124 offence which differs significantly from that of section 122. 44. The Court of Appeal traced section 124 back to section 6 of the Women and Girls' Protection Ordinance enacted in 1890,[65] which provided as follows: “Any person who carnally knows or attempts to have carnal knowledge of any unmarried girl being of or above the age of twelve years and under the age of sixteen shall be guilty of a misdemeanour and on conviction thereof shall be liable to the punishment hereinafter mentioned. Provided that where both parties are Asiatics a girl shall not be deemed unmarried within the meaning of this ordinance if she is duly married according to the laws and customs of the native country of the girl. Provided also it shall be a sufficient defence to any charge under this section, if it shall be made to appear to the Court or jury before whom the charge shall be brought that the person so charged had reasonable cause to believe that the girl was of or above the age of sixteen years. Provided also that no prosecution shall be commenced for an offence under this section more than three months after the commission of the offence.”[66] (Italics supplied) 45. That section was replaced seven years later in 1897 by section 5 of the Protection of Women and Girls Ordinance[67] which deleted the italicised defence involving “reasonable cause to believe”,[68] leading the Court of Appeal in So Wai Lun to conclude that “the reasonable belief defence has been expressly rejected in Hong Kong”.[69] This was regarded as a decisive indication that the presumption of mens rea was supplanted: “For the above reasons, we are of the view that in relation to a charge under s 124 of the Crimes Ordinance of unlawful sexual intercourse with a girl under the age of 16, the belief of the defendant that the girl was 16 or more does not provide a defence. In other words, the offence is accordingly one of absolute liability in this respect.”[70] (Italics supplied) 46. As indicated above, So Wai Lun may be distinguished in two important respects. First, in the legislative history of indecent assault, there is no equivalent of an express “reasonable belief” defence later being abolished. Indecent assault is traceable back to the Offences Against the Person Ordinance 1865, section 46;[71] which was succeeded by the Protection of Women and Girls Ordinance 1897, section 7;[72] then, in 1978,[73] by what is essentially the present section 122 of the Crimes Ordinance. That provision was then amended in 1991[74] to increase the maximum penalty from five to ten years’ imprisonment. At no point was there any express reasonable belief defence, much less a later abandonment of such a defence. 47. Secondly, the Court of Appeal’s judgment in So Wai Lun was delivered before the recognition of intermediate bases of liability. Thus, as the italicised last sentence of the abovementioned citation indicates, once the Court of Appeal held that the presumption of mens rea was displaced, it concluded that the offence was “accordingly” one of absolute liability. It was a decision reflecting the stark choice then available between full mens rea and absolute liability. 48. If that case had been decided today, the Court would have proceeded to consider whether the statutory purpose of the offence could be sufficiently met by construing section 124 as laying down an intermediate mental requirement in place of full mens rea.[75] It seems entirely possible that a different conclusion would have been reached since the Court was much troubled by its having to decide in favour of absolute liability. This was because its decision logically meant that an offence under section 123,[76] punishable by life imprisonment, ought also to be construed as one of absolute liability: “The aspect that has taxed us most about this conclusion is that there is no doubt that s 124(1) involves a ‘truly criminal’ offence with serious consequences (a maximum of 5 years' imprisonment). Moreover, our conclusion on s 124 must equally apply to the s 123 offence of unlawful sexual intercourse with a girl below the age of 12. For this latter offence, the maximum penalty is life imprisonment. The provisions of ss 123 and 124 are virtually identical save that in respect of the latter, a statutory defence is available (s 124(2)). It seems at first startling that a crime that carries with it such severe penalties (in fact the severest in the case of s 123) should be one of absolute liability (not even strict liability as defined above). Yet, this remains the position in many common law jurisdictions and is a conclusion that is, given the matters already discussed as to the statutory construction and the legislative history, compelling.”[77] 49. It is true that in this Court, it was later acknowledged[78] that So Wai Lun had held a section 124 offence to be one of absolute liability, but the basis of the Court of Appeal’s decision was not subject to argument or scrutiny. It was merely assumed to be correct in its conclusion. 50. The question whether the Court of Appeal’s decision was right, in particular in treating the removal by the 1897 Ordinance of the reasonable belief defence introduced in 1890 as a decisive indication of legislative policy which carries down to the present, should be left open. If it is revisited in the future, it would no doubt be necessary to consider whether the 1890 offence may be said to be a different offence from that created by section 124[79] and also relevant to consider any changes to the general criminal law providing the context in which the two offences operate. 51. The relevance, if any, of R v Brown,[80] would also have to be considered. The United Kingdom Supreme Court there held that the offence of unlawful carnal knowledge of a girl under the age of 14 under the Criminal Law Amendment Acts (Northern Ireland) 1885-1923, section 4 is one of absolute liability in respect of the girl’s age. While its judgment may be thought to contain some echoes of the reasoning of the Court of Appeal in So Wai Lun, R v Brown is a case with markedly special features. Section 4 of the Northern Irish Act was held to be a specific response to the decision in R v Prince[81] having been enacted some 10 years after that decision, deliberately preserving absolute liability in relation to girls under the age of 13 (later raised to 14).[82] It also involved two directly overlapping provisions,[83] and, when a proviso allowing for a reasonable belief defence was eliminated from one of them (section 5), it was expressly enacted that reasonable cause to believe the girl was 17 or above “shall not be a defence” to a charge under that section.[84] Those features had a weighty bearing on the construction of section 4. 52. The Judge[85] also considered the doubling of the maximum sentence for indecent assault from five to ten years’ imprisonment in 1991 an indication that absolute liability was intended. However, the authorities generally hold that the more serious an offence is in terms of penalty and social obloquy, the more likely it is that the presumption of mens rea is sustained.[86] Hence the doubling of the maximum militates against, rather than in favour of, a construction favouring absolute liability. 53. For the aforesaid reasons and because, as indicated below, I do not consider absolute liability necessary to achieve the statutory purposes of section 122, I would reject the prosecution’s submission that the presumption of mens rea is displaced in favour of absolute liability regarding the girl’s age. H.2 The fourth Kulemesin alternative 54. Sections 122(3) and 122(4) state as follows: (3) A person is not, by virtue of subsection (2), guilty of indecently assaulting another person, if that person is, or believes on reasonable grounds that he or she is, married to that other person. (4) A woman who is a mentally incapacitated person cannot in law give any consent which would prevent an act being an assault for the purposes of this section, but a person is only to be treated as guilty of indecently assaulting a mentally incapacitated person by reason of that incapacity to consent, if that person knew or had reason to suspect her to be a mentally incapacitated person. 55. The Judge[87] furthermore held that because reasonable belief defences are provided for by subsections (3) and (4), defendants falling outside those subsections are not intended to have any defence and are subject to absolute liability. In other words, his Lordship held that the presumption of mens rea was displaced by the fourth Kulemesin alternative, subjecting the appellant to absolute liability when he fell outside those defences. 56. A similar argument was rejected by Lord Bingham of Cornhill in R v K[88] when construing section 14 of the Sexual Offences Act 1956 which is replicated in section 122 of the Crimes Ordinance.[89] His Lordship summarised the argument (which corresponds to the fourth Kulemesin alternative) thus: “... subsections (3) and (4) define circumstances in which a defendant's belief, knowledge or suspicion exonerate a defendant from liability for what would otherwise be an indecent assault; if it had been intended to exonerate a defendant who believed a complainant to be 16 or over, this ground of exoneration would have been expressed in subsection (2); the omission of such a provision makes plain that no such ground of exoneration was intended.”[90] 57. He commented that this submission would have had great force “[if] the provisions of section 14 were part of a single, coherent legislative scheme and were read without reference to any overriding presumption of statutory interpretation.” However, his Lordship pointed out that it was plainly “not part of a single, coherent legislative scheme” since the 1956 Act was a consolidation Act with its provisions derived from diverse sources, giving the Act a patchwork or “rag-bag” nature.[91] Lord Bingham therefore concluded (after examining the legislative history and decided cases) that: “... significance cannot be attached to the inclusion of grounds of exoneration in subsections (3) and (4) and the omission of such a ground from subsection (2), although subsections (3) and (4) do reflect parliamentary recognition that a defendant should not be criminally liable if he misapprehends a factual matter on which his criminal liability depends. There is nothing in the language of this statute which justifies, as a matter of necessary implication, the conclusion that Parliament must have intended to exclude this ingredient of mens rea in section 14 any more than in section 1.”[92] 58. His Lordship’s refutation of the argument is equally applicable to the submission made in connection with sections 122(3) and (4) which are an enactment of section 14 of the 1956 Act with its “rag-bag” pedigree. The legislative history of indecent assault and related offences in Hong Kong has no greater coherence. Thus, for instance, the maximum penalty of 10 years’ imprisonment for indecent assault (introduced in 1991) is twice that prescribed for unlawful sexual intercourse with a girl under 16 under section 124, the latter offence potentially being far more serious, involving a risk of unwanted pregnancy. 59. The fourth Kulemesin alternative is only adopted if the availability of the expressly enacted defences is inconsistent with the second and third alternatives also being available. No such inconsistency arises here. Subsections (3) and (4) provide defences in narrow and rare circumstances involving an honest and reasonable belief that one is married to the alleged victim; or the absence of any reason to suspect that the alleged victim is a mentally incapacitated person. The existence of such specialised defences is not inconsistent with having a defence based on belief that the victim was aged 16 or over, nor accordingly with construing section 122(2) as accommodating the second or third Kulemesin alternatives generally in cases falling outside subsections (3) and (4). H.3 The second or third Kulemesin alternatives 60. Having decided that the presumption of mens rea is dislodged and that neither absolute liability nor the fourth Kulemesin alternative are applicable, the choices devolve down to either the second or the third Kulemesin alternative as the appropriate mental requirement for an offence under section 122(2). 61. Both alternatives admit by way of defence, an honest and reasonable belief on the part of the accused that the circumstances or likely consequences of his conduct were such that, if true, he would not be guilty of the offence. The difference between them is that under the second alternative, the defendant bears only an evidential burden whereas the third alternative requires him to discharge a persuasive burden as to his belief. 62. In HKSAR v Lam Kwong Wai,[93] Sir Anthony Mason NPJ explains the difference as follows: “An evidential burden, unlike a persuasive burden, does not expose the defendant to the risk of conviction because he fails to prove some matter on which he bears an evidential onus. An evidential burden: ‘… requires only that the accused must adduce sufficient evidence to raise an issue before it has to be determined as one of the facts in the case. The prosecution does not need to lead any evidence about it, so the accused needs to do this if he wishes to put the point in issue. But if it is put in issue, the burden of proof remains with the prosecution. The accused need only raise a reasonable doubt about his guilt.’...[94] See also R v Lambert [2002] 2 AC 545 at p 588H, where his Lordship said: ‘What the accused must do is put evidence before the court which, if believed, could be taken by a reasonable jury to support his defence.’ A persuasive burden, on the other hand, requires a defendant to prove, on a balance of probabilities, an ultimate fact which is necessary to the determination of his guilt or innocence. The burden relates to an essential element of the offence. It reverses the burden of proof by transferring it from the prosecution to the defendant.[95] It may be either mandatory or discretionary in its operation. With a mandatory persuasive burden, it is possible for a conviction to be returned, even where the tribunal of fact entertains a doubt as to the defendant's guilt.[96]” 63. Under the second alternative, a defendant charged with indecent assault on an under-aged girl is required to put evidence before the court that he honestly and reasonably believed that she was 16 or over, leaving it to the prosecution, if it can, to negative that belief beyond reasonable doubt. And on the third alternative, the defendant must satisfy the court or jury on the balance of probabilities that he did honestly and reasonably believe that she was 16 or over. 64. The Court must determine which of those alternatives most closely reflects the statutory purpose of section 122. It is clear that such purpose is to treat girls (and boys) under the age of 16 as a vulnerable class in need of a high degree of protection against sexual exploitation. Hence, section 122(2) deems them incapable of giving consent to indecent conduct and holds the defendant guilty even though he can prove that consent was, to his knowledge, in fact given. As we have seen, in furtherance of that policy, the Hong Kong courts have construed age-related sexual offences as requiring potential defendants to take care “to avoid what may be unlawful and steering well away from the line between legality and illegality” to the extent of imposing absolute liability (when intermediate bases of liability had not yet been developed).[97] As Lord Kerr JSC put it in R v Brown,[98] it is a policy designed to “promote the objects of the statute by encouraging greater vigilance against sexual intercourse with girls under the age of [16].” 65. In my view, that purpose is achieved by construing section 122(2) in accordance with the third Kulemesin alternative, imposing a persuasive burden on the accused, in preference over the second alternative. 66. The second alternative provides greater protection than a requirement of full mens rea since guilt is established by the prosecution negativing either the accused’s alleged honest belief as to the victim’s age or the reasonableness of his alleged belief. [99] However, such protection does not appear to me to go far enough. Since the prosecution bears the burden of establishing the aforesaid negatives, an accused would still be acquitted if the court or jury thinks that it may well be the case that he did not honestly and reasonably believe she was of sufficient age, but that a reasonable doubt remains as to whether he did harbour such a belief. 67. The third alternative better reflects the statutory purpose. A man who says: “I honestly and reasonably believed the girl was old enough to consent” ought to be required to persuade the court or jury that he probably did in fact so believe, a matter which he is best placed to explain. It is a suitably demanding standard designed to encourage men to steer clear of indecent conduct with young girls who may fall within the protected class, placing them otherwise at peril of being unable to discharge the persuasive burden. 68. A reverse onus derogates from the constitutional right to be presumed innocent.[100] For such a derogation to be justified, it must pass the rationality and proportionality tests: the Court must be satisfied that the reverse onus has a rational connection with the pursuit of a legitimate aim and that it is no more than necessary for the achievement of that aim.[101] If those tests are met, the Court must be satisfied overall that adoption of a reverse onus strikes a reasonable balance between the societal benefits promoted and the inroads made into the constitutionally protected presumption of innocence and that it does not place an unacceptably harsh burden on the individual.[102] 69. In my view, construing section 122(2) as imposing a burden on the accused to prove on the balance of probabilities that he honestly and reasonably believed that the girl in question was aged 16 or more passes those tests. It is rationally connected with the legitimate aim of giving heightened protection to vulnerable under-aged girls and is no more than necessary to achieve such a level of protection. The inroad it makes into the presumption of innocence as the price of promoting necessary protection of a vulnerable class strikes a reasonable balance in the context of a fair trial for the accused. I. Conclusion 70. For the foregoing reasons, I conclude that the Judge was wrong to hold that section 122(2) imposes absolute liability where the victim is in fact under the age of 16. On its proper construction, the presumption has been displaced so that the prosecution does not need to prove mens rea as to the girl’s age, but the accused has a good defence if he can prove on the balance of probabilities that he honestly and reasonably believed that the girl was 16 or over. J. Disposal of the appeal 71. In acquitting the defendant, the magistrate stated: “It is my conclusion that the defence that the defendant honestly and reasonably believed that PW1 was aged 16 or above is not rebutted, and as the benefit of doubt -- reasonable doubt should go to the defendant, I find the defendant not guilty of the charge.”[103] 72. It is unclear whether the magistrate regarded the honest and reasonable belief referred to as a defence established by the accused or as an allegation which the prosecution failed to negative. Although Hin Lin Yee and Kulemesin were not cited, his statement effectively conflates the second and third Kulemesin alternatives. 73. If the magistrate held that the defendant discharged the persuasive burden and established a defence along the lines of the third alternative, his acquittal should be upheld as it would be in line with the conclusion reached in this judgment. If, however, the magistrate determined that the prosecution failed to negative the alleged honest and reasonable belief as to the girl’s age beyond reasonable doubt, the question of a possible re‑trial would arise since the defendant would not have been found to have established a reasonable belief defence on a balance of probabilities. 74. However, Ms Anna Y K Lai SC[104] accepted that the acquittal should be upheld on either reading of the Reasons for Verdict. The Court should therefore resolve the ambiguity by assuming that the accused was held to have successfully established a third alternative defence along the lines indicated in this judgment. Ms Lai SC also stated that in such event, she would not oppose an order for costs in the accused’s favour comprising his costs before the magistrate and his legal aid contributions in the Court of First Instance and in this Court. 75. I would accordingly allow the appeal, set aside the Judge’s decision and restore the defendant’s acquittal. I would also make the order as to costs referred to in the preceding paragraph. 76. My answers to the certified questions are as follows: (i) No. (ii) No. Actual consent is deemed irrelevant. The defence requires proof of an honest and reasonable belief that the girl was aged 16 or over. (iii) No. Mr Justice Tang PJ: 77. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Fok PJ: 78. I agree with the judgment of Mr Justice Ribeiro PJ. Lord Collins of Mapesbury NPJ: 79. I agree with the judgment of Mr Justice Ribeiro PJ. Chief Justice Ma: 80. The Court unanimously allows the appeal, sets aside the Judge’s decision, restores the defendant’s acquittal and awards the appellant costs comprising his costs before the magistrate and his legal aid contributions in the Court of First Instance and in this Court. Mr Gerard McCoy SC and Mr Wong Po Wing, instructed by Eli K.K. Tsui & Co., assigned by the Director of Legal Aid, for the Appellant Ms Anna Y K Lai SC, DDPP, Mr Ned Lai, SADPP and Ms Audrey Parwani, SPP of the Department of Justice, for the Respondent [1] Cap 200. [2] It is clear that indecent assault can be committed by a person and on a person of either gender: R v Hare [1934] 1 KB 354. As the present case concerns a man charged with the offence in respect of a woman or girl, for brevity, I will generally refer to the defendant as a male and the other person as a female. [3] KCCC 388/2015 (12 June 2015). [4] [2002] 1 AC 462. [5] Reasons for Verdict §16. [6] Ibid §18. [7] Ibid. [8] Ibid §19. [9] HCMA 620/2016 (31 July 2017). [10] [2005] 1 HKLRD 443. [11] (2006) 9 HKCFAR 530. [12] Contrary to section 124 of the Crimes Ordinance (Cap 200). [13] Ribeiro, Tang and Fok PJJ, FAMC 28/2017 (1 November 2017). [14] (1872-75) LR 2 CCR 154. [15] At 170. [16] With Brett J dissenting. [17] At 174. [18] R v Poon Ping Kwok [1993] 1 HKCLR 56 at 57, holding that Prince applies to unlawful sexual intercourse with an under-aged girl and to procuring a woman under 21 to have unlawful sexual intercourse; and R v Savage (No 3) [1997] 2 HKC 768 at 772, applying Prince in a case involving gross indecency with or towards a child under the age of 16. [19] [2005] 1 HKLRD 443 at §25. [20] Including the Privy Council’s decision in Gammon (HK) Ltd v Attorney General of Hong Kong [1985] AC 1. [21] HKSAR v So Wai Lun [2005] 1 HKLRD 443 at §12(2). [22] Sweet v Parsley [1970] AC 132 at 148 and 152; Gammon (HK) Ltd v Attorney General of Hong Kong [1985] AC 1 at 14; B (A minor) v DPP [2000] 2 AC 428 at 460; R v K [2002] 1 AC 462 at 471-472, 477. [23] B (A minor) v DPP [2000] 2 AC 428 per Lord Steyn at 470, citing Lord Hoffmann in R v Secretary of State for the Home Department, Ex parte Simms [2000] 2 AC 115 at 131: “Fundamental rights cannot be overridden by general or ambiguous words. This is because there is too great a risk that the full implications of their unqualified meaning may have passed unnoticed in the democratic process. In the absence of express language or necessary implication to the contrary, the courts therefore presume that even the most general words were intended to be subject to the basic rights of the individual.” See also R v K [2002] 1 AC 462 at 477. [24] Sweet v Parsley [1970] AC 132 at 149 and 165. It has however been stressed that the presumption of mens rea is not dependent on there being any ambiguity and operates to supplement the text: B (A minor) v DPP [2000] 2 AC 428 at 470; R v K [2002] 1 AC 462 at 477. [25] (2010) 13 HKCFAR 142 at §45. [26] Discussed in Hin Lin Yee v HKSAR (2010) 13 HKCFAR 142 at §§55-61. [27] Sweet v Parsley [1970] AC 132 per Lord Reid at 150. See also at 157 per Lord Pearce and at 163-164 per Lord Diplock. [28] [1935] AC 462, as discussed in Hin Lin Yee v HKSAR at §§56-59 and 108-111. [29] (2010) 13 HKCFAR 142. [30] In breach of section 54(1) of the Public Health and Municipal Services Ordinance (Cap 132) punishable on summary conviction by a maximum fine of $50,000 and imprisonment for 6 months. [31] (2013) 16 HKCFAR 195. [32] In contravention of s 72 of the Shipping and Port Control Ordinance (Cap 313) punishable on conviction on indictment by a fine of $200,000 and imprisonment for 4 years; and on summary conviction by a fine of $200,000 and imprisonment for 2 years. The Court also noted that conviction was likely to have serious professional ramifications for the mariners involved: Ibid §86. [33] (2013) 16 HKCFAR 195 at §83. [34] Ibid at §90. [35] For example by Lord Nicholls of Birkenhead in B (A minor) v DPP [2000] 2 AC 428 at 462. [36] [1970] AC 132 at 150. [37] R v Court [1989] AC 28 at 33-34. [38] Ibid at 42. [39] Ibid at 43. [40] Set out in Section H.2 below. [41] R v Court [1989] AC 28 at 41-42. [42] Ibid at 44;R v K [2002] 1 AC 462 at 468. [43] R v May [1912] 3 KB 572. [44] R v Court [1989] AC 28 at 42. As Lord Ackner held, it is not necessary to prove that the person assaulted was aware of the circumstances of indecency or apprehended indecency, and an indecent assault can clearly be committed by the touching of someone who is asleep or unconscious. [45] R v Kimber (1983) 77 Cr App R 225 at 229. [46] Ibid. [47] R v Court [1989] AC 28. [48] R v Hodgson [1973] QB 565. [49] A similar view was taken of the offence of buggery with a girl under 21 contrary to section 118D of the Crimes Ordinance in HKSAR v Yee Yiu Sam [2002] 3 HKC 21 at §41 (a sentencing case). [50] R v K [2002] 1 AC 462 at 478-479. His Lordship proceeded to hold that the presumption of mens rea applied and was not displaced, as discussed in Section G below. [51] Sweet v Parsley [1970] AC 132 at 148 and 152; Gammon (HK) Ltd v Attorney General of Hong Kong [1985] AC 1 at 14; B (A minor) v DPP [2000] 2 AC 428 at 460; R v K [2002] 1 AC 462 at 471-472, 477; Hin Lin Yee v HKSAR (2010) 13 HKCFAR 142 at §139. [52] Hin Lin Yee v HKSAR (2010) 13 HKCFAR 142 at §§140-143. In B (A minor) v DPP [2000] 2 AC 428 at 464: Lord Nicholls of Birkenhead explains displacement by necessary implication thus: “‘Necessary implication’ connotes an implication which is compellingly clear. Such an implication may be found in the language used, the nature of the offence, the mischief sought to be prevented and any other circumstances which may assist in determining what intention is properly to be attributed to Parliament when creating the offence.” [53] Hin Lin Yee v HKSAR (2010) 13 HKCFAR 142 at §45. See also Lord Reid in Sweet v Parsley [1970] AC 132 at 150. [54] [2002] 1 AC 462. [55] Hin Lin Yee v HKSAR (2010) 13 HKCFAR 142 at §141. [56] So Wai Lun v HKSAR (2006) 9 HKCFAR 530 at §39; Hin Lin Yee v HKSAR (2010) 13 HKCFAR 142 at §154; Kulemesin v HKSAR (2013) 16 HKCFAR 195 at §93. [57] Kulemesin v HKSAR (2013) 16 HKCFAR 195 at §92. [58] Sweet v Parsley [1970] AC 132 per Lord Reid at 153, and per Lord Diplock at 164. [59] Warner v Metropolitan Police Commissioner [1969] 2 AC 256 at 271-272; Sweet v Parsley [1970] AC 132 at 149 and156; Hin Lin Yee (2010) 13 HKCFAR 142 at §142; Kulemesin v HKSAR (2013) 16 HKCFAR 195 at §93. [60] Lim Chin Aik v The Queen [1963] AC 160 at 174; Sweet v Parsley [1970] AC 132 at 163; Hin Lin Yee v HKSAR (2010) 13 HKCFAR 142 at §158. [61] (2010) 13 HKCFAR 142 at §151. [62] (2013) 16 HKCFAR 195 at §93. [63] [2005] 1 HKLRD 443. [64] Section 124(2) lays down a defence as follows: “Where a marriage is invalid under section 27(2) of the Marriage Ordinance (Cap 181) by reason of the wife being under the age of 16, the invalidity shall not make the husband guilty of an offence under this section because he has sexual intercourse with her, if he believes her to be his wife and has reasonable cause for the belief.” [65] Ord No 11 of 1890. [66] Re-enacted in the Protection of Women and Girls Ordinance 1897 (Ord No 9 of 1897), section 5. [67] Ord No 4 of 1897. [68] HKSAR v So Wai Lun [2005] 1 HKLRD 443 at §31(5). [69] Ibid at §32(2). [70] Ibid at §37. [71] Ord No 4 of 1865. Section 46: “Whosoever shall be convicted of any indecent assault upon any female, or of any attempt to have carnal knowledge of any girl under 12 years of age, shall be liable, at the discretion of the Court, to be imprisoned for any term not exceeding two years, whether without hard labour.” [72] Ord No 4 of 1897. Section 7(1): ““Every person who commits an indecent assault upon any female shall be guilty of a misdemeanor.” 7(2): “It shall be no defence to a charge or indictment for an indecent assault upon a girl under the age of 16 years to prove that she consented to the act of indecency.” This was re-enacted unchanged in section 7 of the Protection of Women and Juveniles Ordinance (Ord 1/ 1951). [73] Ord No 1 of 1978. [74] Ord No 90 of 1991. [75] Hin Lin Yee v HKSAR (2010) 13 HKCFAR 142 at §151; Kulemesin v HKSAR (2013) 16 HKCFAR 195 at §93. [76] Section 123: “A man who has unlawful sexual intercourse with a girl under the age of 13 shall be guilty of an offence and shall be liable on conviction on indictment to imprisonment for life.” [77] HKSAR v So Wai Lun [2005] 1 HKLRD 443 at §38. [78] In So Wai Lun v HKSAR (2006) 9 HKCFAR 530 at §39; Hin Lin Yee v HKSAR (2010) 13 HKCFAR 142 at §102-103; Kulemesin v HKSAR (2013) 16 HKCFAR 195 at §93. [79] Bearing in mind that it applied to carnal knowledge of unmarried girls aged between 12 and 16; contained an exception where customary marriages between “Asiatics” were involved; had a three-month limitation period; and made offences punishable (under section 12) by a maximum of two years imprisonment (one year if tried by a single magistrate). Section 124 is set out in Section C above. [80] [2013] NILR 265. [81] (1872-75) LR 2 CCR 154. Mentioned in Section E above. [82] R v Brown [2013] NILR 265 at §32. [83] Section 4 concerning girls under 14, an offence punishable by life imprisonment, and section 5, a misdemeanour where the girls concerned were under the age of 17. [84] Ibid at §11. [85] Judgment §38. [86] B (A minor) v DPP [2000] 2 AC 428 at 464; HKSAR v So Wai Lun [2005] 1 HKLRD 443 at §16(3). [87] Judgment §38. [88] [2002] 1 AC 462. [89] Section 14 of the 1956 Act provides: “"(1) It is an offence, subject to the exception mentioned in subsection (3) of this section, for a person to make an indecent assault on a woman. (2) A girl under the age of 16 cannot in law give any consent which would prevent an act being an assault for the purposes of this section. (3) Where a marriage is invalid under section two of the Marriage Act 1949, or section one of the Age of Marriage Act 1929 (the wife being a girl under the age of 16), the invalidity does not make the husband guilty of any offence under this section by reason of her incapacity to consent while under that age, if he believes her to be his wife and has reasonable cause for the belief. (4) A woman who is a defective cannot in law give any consent which would prevent an act being an assault for the purposes of this section, but a person is only to be treated as guilty of an indecent assault on a defective by reason of that incapacity to consent, if that person knew or had reason to suspect her to be a defective." [90] [2002] 1 AC 462 at §3. [91] Ibid at §4. [92] Ibid at §21. [93] (2006) 9 HKCFAR 574 at §§26 and 27. [94] Citing R v DPP, ex p Kebilene & Others [2000] 2 AC 326 at pp 378H-379A, per Lord Hope of Craighead. [95] Citing R v DPP, ex p Kebilene [2000] 2 AC 326 at p 378H, per Lord Hope of Craighead. [96] Citing Emmerson and Ashworth, Human Rights and Criminal Justice (2001) para.9‑03. [97] So Wai Lun v HKSAR (2006) 9 HKCFAR 530 at §39; Hin Lin Yee v HKSAR (2010) 13 HKCFAR 142 at §154; Kulemesin v HKSAR (2013) 16 HKCFAR 195 at §93. [98] [2013] NILR 265 at §§19, 38-39. [99] Reflecting the Australian approach: CTM v The Queen (2008) 236 CLR 440 at §§8 and 27; as opposed to the English position requiring only that the mistaken belief be honest, without necessarily being reasonable: R v K [2002] 1 AC 462. [100] Basic Law Art 87; Bill of Rights Art 11(1). [101] HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574; HKSAR v Ng Po On (2008) 11 HKCFAR 91; Lee To Nei v HKSAR (2012) 15 HKCFAR 162. [102] Hysan Development Co Ltd v Town Planning Board (2016) 19 HKCFAR 372. [103] Reasons for Verdict §19 (in translation). [104] Appearing for the respondent with Mr Ned Lai and Ms Audrey Parwani. |
Chief Justice Ma: 1. This is the judgment of the Court to which each member has contributed. 2. In this appeal, it falls to the Court to consider the constitutionality of legislation which prevents persons who are not of Chinese nationality and who enter Hong Kong for employment as foreign domestic helpers from acquiring Hong Kong permanent resident status. A. The central provisions and the decisions below 3. Article 24(2)(4) of the Basic Law provides for the acquisition of permanent resident status by persons not of Chinese nationality as follows: Article 24(2)(4) “The permanent residents of the Hong Kong Special Administrative Region shall be ... Persons not of Chinese nationality who have entered Hong Kong with valid travel documents, have ordinarily resided in Hong Kong for a continuous period of not less than seven years and have taken Hong Kong as their place of permanent residence before or after the establishment of the Hong Kong Special Administrative Region.”[1] 4. Section 2(4)(a) of the Immigration Ordinance (“the Ordinance”),[2] stipulates that certain categories of persons are not to be treated as “ordinarily resident” in Hong Kong. They are therefore not eligible to acquire Hong Kong permanent resident status and ineligible for the right of abode: Section 2(4) For the purposes of this Ordinance, a person shall not be treated as ordinarily resident in Hong Kong- (a) during any period in which he remains in Hong Kong- (i) with or without the authority of the Director, after landing unlawfully; or (ii) in contravention of any condition of stay; or (iii) as a refugee under section 13A; or (iv) while detained in Hong Kong under section 13D; or (v) while employed as a contract worker, who is from outside Hong Kong, under a Government importation of labour scheme; or (vi) while employed as a domestic helper who is from outside Hong Kong; or (vii) as a member of a consular post within the meaning of the Consular Relations Ordinance; or (viii) as a member of the Hong Kong Garrison; or (ix) as a holder of a prescribed Central People's Government travel document; or (b) during any period, whether before or after the commencement of this Ordinance, of imprisonment or detention pursuant to the sentence or order of any court. 5. Thus, section 2(4)(a)(vi) disqualifies a person from outside who enters Hong Kong for employment as a foreign domestic helper (“FDH”) from building up, while so employed, the continuous seven year period of ordinary residence necessary for acquiring permanent resident status under Article 24(2)(4). This is the case however long such person’s actual period of residence in Hong Kong while so employed may be. It is the constitutionality of section 2(4)(a)(vi) that the appellants seek to challenge. The appellants contend that the restriction it imposes is inconsistent with Article 24(2)(4) and unconstitutional. 6. The appellants’ argument on unconstitutionality succeeded before Mr Justice Lam (as Lam JA then was),[3] although Mr Domingo’s case was remitted to the Registration of Persons Tribunal for an issue concerning an alleged estoppel to be dealt with. However, the Court of Appeal[4] upheld the constitutional validity of section 2(4)(a)(vi) and reversed Lam J’s judgment. B. The FDH scheme 7. Since the mid-1970s, with greater affluence and increasing numbers of households where both spouses go out to work, there has been a growing demand by Hong Kong families for domestic helpers. The local supply of such labour was scarce, so FDHs have been recruited from many countries including the Philippines, Indonesia, Nepal, India, Pakistan, Thailand and Sri Lanka to meet the demand. The number of such FDHs in Hong Kong grew from 881 in 1974, to 28,951 in 1986, to 70,335 in 1990, and stood at 285,681 on 31 December 2010. It is therefore plain that FDHs represent a highly valuable and indeed essential workforce. Many FDHs have had multiple renewals of their contracts with the same employer and have forged close personal ties with the families in which they work. 8. The terms on which FDHs are admitted to work and reside in Hong Kong are and have always been highly restrictive and subject to control by the Director of Immigration. The process of hiring a FDH begins with an application by the prospective employer to the Director for a visa for the prospective FDH. Before granting a visa, the Director satisfies himself of the applicant’s financial capacity and ability to provide suitable accommodation. He also satisfies himself that neither employer nor FDH has previously proved unsuitable by breaking relevant laws, and so forth. 9. The employer and the FDH are required to enter into a standard-form contract which cannot be varied without the prior consent of the Director except in respect of certain matters of detail and except insofar as wages higher than the prescribed minimum may be agreed. The visa issued to the FDH specifies that he or she is admitted for employment as a domestic helper with the named employer under the specified contract. 10. A central feature of the arrangement is that permission to remain in Hong Kong is tied to the duration of each contract. On completion of the standard two-year term, the FDH is required to return to his or her own country of origin. If the contract is terminated prematurely, the FDH is not allowed to change employers, save in exceptional circumstances. A FDH without a current contract is required to leave Hong Kong within his or her approved limit of stay or two weeks after termination of the contract, whichever is the earlier. 11. A FDH wishing to continue in employment must sign a fresh contract and apply for a visa to return to Hong Kong on the strength of that contract. However, he or she is first required to return to the country of origin for a prescribed period of vacation before coming back to Hong Kong. 12. A second important feature of the arrangement is that the FDH is subject to highly restrictive employment conditions. The FDH can only engage in domestic work and has to work and reside in the employer’s residence designated in the contract. He or she cannot work elsewhere or for another employer. The employer must provide the FDH with accommodation and food during the term of the employment and pay for repatriation upon termination of the contract. In the case of death, the FDH’s remains and personal property have to be returned to the place of origin at the employer’s expense. 13. It is made clear in various documents, including the Explanatory Notes attached to the standard-form contract, that FDHs are not admitted to Hong Kong for settlement but permitted to enter and remain for specific employment and for a limited period. FDHs are not allowed to bring their dependents to Hong Kong for residence here. 14. The evidence is that these restrictive arrangements reflect the Government’s policy of allowing FDHs to enter and reside in Hong Kong for the particular purpose of meeting the shortage of domestic helpers in the labour market. That is the basis of their permission to enter and why they are prohibited from taking any other employment while here. They are not admitted for settlement in Hong Kong and are expected to maintain genuine links in their home country which is why, at the end of their contract, they must return home before taking up any fresh contract and why they not allowed to bring their dependents to Hong Kong for residence. 15. In contrast to the restrictive arrangements mentioned above, certain other persons not of Chinese nationality may be granted general employment visas on entering Hong Kong. The differences in the conditions of stay applicable to the two categories of employment were highlighted in the evidence as follows: 16. A person permitted to enter on a general employment visa (and who falls outside the other restrictive categories listed in section 2(4)(a)) may be treated as ordinarily resident and may therefore be eligible for eventual qualification for permanent resident status under Article 24(2)(4). C. The parties 17. Ms Vallejos is a Philippine national and was born in the Philippines in 1952. She married another Philippine national in 1974 and they have five children, the youngest having been born in 1984. Her husband and four of her children remain in the Philippines while her eldest son lives in Ireland. She first came to Hong Kong to work as a domestic helper in August 1986 and has worked for the same employer since 2 February 1987 under a series of contracts. She returned to the Philippines when each contract expired and, on each occasion, her permission to return to Hong Kong as a FDH was renewed. 18. Mr Domingo is also a Philippine national born in the Philippines. He came to Hong Kong in 1985 to work as a domestic helper. Between 1987 and 2007, he worked for the same employer. In 1988, he married another domestic helper, Mrs Domingo, with whom he has had three children, all born in Hong Kong. On 14 November 2007, Mr Domingo was granted permission to remain in Hong Kong without any restriction on his employment, such date stated to be the starting date for calculating the length of his ordinary residence. He was, in other words, taken out of the category of FDH for section 2(4)(a)(vi) purposes and treated as ordinarily resident, eligible for eventual permanent resident status. Mr Domingo, however, claims that his entitlement to such status had already accrued and that he does not need to build up the qualifying period as from 14 November 2007, contending that section 2(4)(a)(vi) is inconsistent with Article 24(2)(4) and unconstitutional. The pending issue on estoppel relates to the effect of his accepting the aforesaid change of status stated to be effective only as from the 2007 date. 19. The Commissioner of Registration and the Registration of Persons Tribunal are named as the respective respondents in each case since the Commissioner refused each of the appellants verification of eligibility for a permanent identity card and since their appeals to the Tribunal were rejected. D. The parties’ respective cases 20. The parties differ as to the meaning of “ordinarily resided” in Article 24(2)(4) and as to the method of arriving at such meaning. The appellants’ argument is simple. Mr Michael Fordham QC, appearing on their behalf,[5] submits that the words “ordinarily resided in Hong Kong” found in Article 24(2)(4) have a well-established “natural and ordinary meaning” which is decisive. The words “ordinarily resided” in Article 24(2)(4) carry that meaning and apply to FDHs residing in Hong Kong so that they must be treated as ordinarily resident within the meaning of that Article. It follows that section 2(4)(a)(vi) is unconstitutional since it purports to exclude FDHs as a class from ever being treated as “ordinarily resident”. 21. Basing himself on Lord Scarman’s formulation in R v Barnet London Borough Council ex parte Shah,[6] (to which we shall return), Mr Fordham submits that a person is “ordinarily resident” in Hong Kong according to the “natural and ordinary meaning” of those words if, quite simply, he or she is in Hong Kong, “living lawfully, voluntarily and for a settled purpose, as part of the regular order of life for the time being”. FDHs, so the argument runs, come within this well-established interpretation just as much as do other persons who come to live in Hong Kong for business, education or employment purposes and who have, unlike FDHs, been treated as ordinarily resident here. The purported exclusion of FDHs by section 2(4)(a)(vi) is thus inconsistent with Article 24(2)(4) and unconstitutional. 22. Lord Pannick QC, appearing for the Commissioner,[7] advances two principal arguments in response. The first concerns the meaning of “ordinarily resided” in Article 24(2)(4). While he accepts Lord Scarman's formulation as a starting-point in construing those words, Lord Pannick does not accept that it is their sole meaning. In factually exceptional cases, he argues, the circumstances of the claimant’s residence in Hong Kong may be so out of the ordinary as to fall outside the concept of “ordinary residence” as generally understood and outside the appellants’ “natural and ordinary meaning”. He contends that the highly restrictive conditions applicable to FDHs place them in such an exceptional category so that excluding them from “ordinary residence” is consonant with Article 24(2)(4). 23. Lord Pannick’s second argument is that the Court should recognize that the Basic Law accords a margin of discretion to the legislature to define excepted or excluded classes of persons around the edges of the concept of “ordinary residence”. This, he says, is what the legislature has done in section 2(4)(a), continuing the role that it has traditionally played in helping to define, by identifying excluded classes, the concept of “ordinary residence” for the purpose of determining who is entitled to be treated as a Hong Kong permanent resident. He submits that the Basic Law should be taken to have adopted this approach as part of its promotion of continuity in the legal system after 1st July 1997. He argues that so long as the legislature respects and preserves a core meaning covered by Lord Scarman’s formulation and confines itself to exclusions around the margins of the “ordinary residence” concept, the Court should regard such enactments as consistent with Article 24(2)(4). 24. If and insofar as the Court may be in doubt as to the meaning of the concept as used in Article 24(2)(4), Lord Pannick submits that the Court should refer to extrinsic materials, including materials which came into existence after April 1990 when the Basic Law was promulgated, in aid of its interpretation of the Article. 25. Finally, if and insofar as the Court considers it necessary to consider the effect of the Interpretation adopted by the Standing Committee of the National People’s Congress on 26 June 1999,[8] Lord Pannick submits that the Court would be bound under Article 158(3) of the Basic Law to refer to the Standing Committee two proposed questions concerning the meaning and scope of an “interpretation” made under Article 158(1).[9] 26. We shall deal in the first place with the meaning of “ordinarily resided” in Article 24(2)(4) with a view to determining the compatibility or otherwise of section 2(4)(a)(vi) with that Article. E. The meaning of “ordinarily resided” in Article 24(2)(4) E.1 The importance of purpose and context 27. In much of the case-law in which the concept of “ordinary residence” is discussed, Lord Scarman's formulation has been adopted on the basis that it lays down “the natural and ordinary meaning” of those words and of cognate expressions such as “ordinarily resident”, “ordinarily resided” and so forth. In many instances, that formulation is likely to supply an appropriate meaning to be attributed to the term. The danger is, however, that describing it as “the natural and ordinary meaning” may be thought to suggest that any other meaning is “unnatural” or “extraordinary” and therefore inappropriate. But it would be an obvious error to think that “ordinary residence” can only have a single meaning whatever the factual and legal context. 28. This was recognized by Lord Scarman himself in Ex parte Shah in the very sentence containing his formulation: “Unless, therefore, it can be shown that the statutory framework or the legal context in which the words are used requires a different meaning, I unhesitatingly subscribe to the view that ‘ordinarily resident’ refers to a man's abode in a particular place or country which he has adopted voluntarily and for settled purposes as part of the regular order of his life for the time being, whether of short or of long duration.”[10] (Italics supplied) 29. And in Fateh Muhammad v Commissioner of Registration,[11] Mr Justice Bokhary PJ, writing for the Court, stated: “No single judicial pronouncement or combination of such pronouncements in regard to the meaning of the expression ‘ordinarily resident’ can be conclusive for the purposes of every context in which that expression appears.” E.2 The meaning of “ordinary residence” in various statutes 30. It should be noted that except for two cases decided by this Court,[12] all the authorities cited to us were cases involving the construction of “ordinary residence” or cognate expressions as they appear in various statutes and not in constitutional instruments. Moreover, many of those statutes did not concern permanent resident status or citizenship claims. Thus, the Court was presented with a survey of cases where statutory provisions concerning “ordinary residence” were relevant to tax liability,[13] eligibility for education grants,[14] eligibility to stand for a District Board election,[15] the court’s bankruptcy jurisdiction[16] and the court’s matrimonial jurisdiction.[17] The citation of such authority must obviously be approached with caution since, as one might expect, the approach to the meaning of the term “ordinary residence” in each case is conditioned by the content and legislative purpose of the statute in question, applied in differing factual contexts. 31. Two obvious illustrations may be found in the concept’s application for the purposes of determining the court’s bankruptcy and matrimonial jurisdictions. In Re Ip Pui Man Nina,[18] the respondent, a Hong Kong permanent resident who claimed to spend two-thirds of her time outside of Hong Kong, sought to challenge the court’s bankruptcy jurisdiction, relying on section 4(1) of the Bankruptcy Ordinance which excludes presentation of a petition unless (among other alternatives) the debtor “at any time in the period of 3 years ending with [the day the petition is presented] has been ordinarily resident, or has had a place of residence, in Hong Kong”. Such a requirement – of ordinary residence of unspecified duration at any time during the preceding three years – obviously has a far lower threshold than Article 24(2)(4)’s requirement of a continuous seven year period of ordinary residence and reflects a statutory purpose wholly different from the purposes underlying the questions facing this Court. Ms Ip’s challenge failed since the Court found that she had, during the earlier part of the three year period, been ordinarily resident in Hong Kong. 32. The court’s matrimonial jurisdiction is founded inter alia on habitual residence in Hong Kong throughout the period of three years[19] immediately preceding the date of the petition or application.[20] In this context, “habitual residence” is treated as interchangeable with “ordinarily resident”.[21] As Baroness Hale explained in Mark v Mark, the statutory purpose is to require the parties and their marriage to have a sufficiently close connection with the country to make it desirable that its courts should have jurisdiction to dissolve the marriage and thus to dissuade mere forum shoppers. The court approaches the concept of “habitual residence” in this connection considering the welfare and financial needs of the spouses and their children, and so forth[22] – self-evidently considerations different from those which arise when examining whether a person is ordinarily resident for the purposes of Article 24(2)(4). 33. Furthermore, even where the statute employs “ordinary residence” in a provision relevant to immigration control and permanent resident status, the precise context in which the issue as to the meaning of the concept arises may vary, so that any attempt to extrapolate from such decisions to the meaning of “ordinarily resided” in Article 24(2)(4) must be treated with caution. 34. This is illustrated by Cheung Cheong v Attorney General[23] and Director of Immigration v Ng Shun Loi.[24] In both of those cases, persons who had been residing lawfully in Hong Kong had their stay here interrupted when they were detained for long periods (five and ten years respectively) on the Mainland by the Mainland authorities. When they eventually returned to Hong Kong (after absences of about 16 and 23 years respectively) they sought to argue that they had acquired the status of “Chinese resident” under Hong Kong law and were therefore exempt from removal orders. Ex parte Shah was relied on, as it were at one remove, the argument being that since their stay on the Mainland was involuntary, they had not become ordinarily resident there and that their ordinary residence in Hong Kong ought therefore to be regarded as having continued throughout the periods of their absence. Their arguments were not accepted although a similar argument, relying on Ex parte Shah in this roundabout fashion, succeeded in Lau San Ching v Apollonia Liu[25]for the purpose of establishing the applicant’s eligibility to stand for election in District Board Elections, such eligibility requiring ten years ordinary residence immediately preceding nomination. 35. It is self-evident that although these are cases where Ex parte Shah was relied on in relation to establishing ordinary residence in Hong Kong, their factual context and the attempt to apply Ex parte Shah at one remove have little to do with the concerns of the present appeal. E.3 The tax cases on which Ex parte Shah was founded 36. An analysis of Ex parte Shah may usefully begin by examining the two 1928 tax cases in the House of Lords on which it was founded, namely Levene v Commissioners of Inland Revenue[26] and Inland Revenue Commissioners v Lysaght[27]. Revisiting those decisions, it has to be said that it is somewhat surprising that Lord Scarman treated them as establishing “the natural and ordinary meaning” of “ordinary residence” for general purposes since they were actually decisions addressing quite particular statutory provisions applied to peculiar factual situations. 37. In both cases, the legal issue was whether the persons concerned were entitled to exemption from income tax on war loan interest under section 46 of the Income Tax Act 1918,[28] as persons not ordinarily resident in the United Kingdom. The House of Lords were not engaged in considering the meaning of “ordinarily resident” in general, but only for the purposes of the Income Tax Acts, and their Lordships found guidance in a particular rule bearing on that expression. Thus, Viscount Cave LC pointed out in Levene[29] that in the case of British subjects (which the persons concerned were): “... regard must be had to r 3 of the General Rules applicable to all the schedules of the Income Tax Act, which provides that every British subject whose ordinary residence has been in the United Kingdom shall be assessed and charged to tax notwithstanding that at the time the assessment or charge is made he may have left the United Kingdom, if he has so left the United Kingdom for the purpose only of occasional residence abroad.” 38. In each of the two cases, the British subjects concerned had initially been ordinarily resident in the United Kingdom; had then left the country; but had thereafter returned to England on a regular basis. In the case of Mr Levene, after leaving the country, he lived in various hotels in Europe but returned to England in the summer, again living in hotels, for about five months each year to obtain medical advice, to visit relatives, to make arrangements for the care of his mentally afflicted brother, to take part in Jewish religious observances and to deal with his income tax affairs. Mr Lysaght had retired as an active director of his company and gone to live in the Irish Free State where he owned a large estate, thereafter returning to attend monthly board meetings, living in hotels and spending a total of between 48 and 101 days in England in any one year. 39. Holding that findings of fact by the Commissioners could not be interfered with unless they were unsupported by evidence or otherwise vitiated by an error of law, their Lordships concluded that the findings of ordinary residence on the abovementioned facts could not be disturbed. Thus, in Levene, Viscount Sumner stated (reflecting the language of rule 3): “...there was ample evidence before the commissioners to show that a man who left England to live abroad as he had been living here, and when warm weather came, returned to his native country and to his permanent associations, and in 1919 ‘left the United Kingdom for the purpose of occasional residence only.’” 40. It was in this context that their Lordships approached “ordinarily resident” as encompassing “the way in which a man’s life is usually ordered”;[30] or as connoting “residence in a place with some degree of continuity and apart from accidental or temporary absences”.[31] It was the ordered regularity of their returning to England that justified a finding of ordinary residence. Thus, Viscount Sumner described Mr Levene as “a bird of passage of almost mechanical regularity”, adding: “...Mr Levene continued to go to and fro during the years in question, leaving at the beginning of winter and coming back in summer, his home, thus remaining as before. He changed his sky but not his home. On this I see no error in law in saying of each year that his purpose in leaving the United Kingdom was occasional residence abroad only. The occasion was the approach of an English winter, and when with the promise of summer here that occasion passed away, back came Mr Levene to attend to the calls of interest, of friendship, and of piety.”[32] 41. Similarly in Lysaght, it was the regularity with which Mr Lysaght returned to England that his Lordship was referring to when Viscount Sumner stated: “I think the converse to ‘ordinarily’ is ‘extraordinarily’ and that part of the regular order of a man's life, adopted voluntarily and for settled purposes, is not ‘extraordinary.’ Having regard to the times and duration, the objects and the obligations of Mr Lysaght's visits to England, there was in my opinion evidence to support, and no rule of law to prevent, a finding that he was ordinarily resident, if he was resident in the United Kingdom at all. No authority was cited, which requires special consideration on this head.”[33] 42. We were also referred to the Canadian Supreme Court’s decision in Thomson v Minister of National Revenue,[34] which proceeded on strikingly similar lines. The legal issue was whether Mr Thomson was liable to tax under the Income War Tax Act, section 9(1) of which provided: “There shall be assessed, levied and paid upon the income during the preceding year of every person (a) residing or ordinarily resident in Canada during such year; or (b) who sojourns in Canada for a period or periods amounting to one hundred and eighty-three days during such year ...” 43. Mr Thomson was born in New Brunswick and had lived there until 1923, when he left and declared himself domiciled in Bermuda and built a house in North Carolina. He returned to New Brunswick for three consecutive summer seasons and then built a house there so his wife could be near her relatives in that Province. Since then he had spent an average of 150 days each year in Canada, leading him to argue that he was exempt from the tax because he was someone who was not residing or ordinarily resident in Canada, but had merely “sojourned” there for less than 183 days a year. 44. The Court was therefore not approaching the concept of “ordinarily resident” with a blank slate, but seeking to decide whether to characterise Mr Thomson as ordinarily resident as opposed to a mere sojourner. Not surprisingly, they held that he was no sojourner, Kerwin J stating:[35] “The family ties of his wife, if not of himself, the erection of a substantial house, the retention of the servants, together with all the surrounding circumstances, make it clear to me that his occupancy of the house and his activities in Canada comprised more than a mere temporary stay therein.” 45. Rand J, having cited the English tax cases mentioned above, stressed the importance of context in approaching the concepts of residence and ordinary residence, stating: “The gradation of degrees of time, object, intention, continuity and other relevant circumstances, shows, I think, that in common parlance ‘residing’ is not a term of invariable elements, all of which must be satisfied in each instance. It is quite impossible to give it a precise and inclusive definition. It is highly flexible, and its many shades of meaning vary not only in the contexts of different matters, but also in different aspects of the same matter. In one case it is satisfied by certain elements, in another by others, some common, some new. The expression ‘ordinarily resident’ carries a restricted signification, and although the first impression seems to be that of preponderance in time, the decisions on the English Act reject that view. It is held to mean residence in the course of the customary mode of life of the person concerned, and it is contrasted with special or occasional or casual residence. The general mode of life is, therefore, relevant to a question of its application.” 46. Their Honours were therefore, like the House of Lords, concerned with a set of facts involving departure from the country followed by regular return visits. The regularity of Mr Thomson’s return, together with his having set up a house for his wife in New Brunswick provided the basis for rejecting the “sojourning” submission. This was the context for Estey J holding that: “... one is ‘ordinarily resident’ in the place where in the settled routine of his life he regularly, normally or customarily lives. One ‘sojourns’ at a place where he unusually, casually or intermittently visits or stays. In the former the element of permanence; in the latter that of the temporary predominates. The difference cannot be stated in precise and definite terms, but each case must be determined after all of the relevant factors are taken into consideration, but the foregoing indicates in a general way the essential difference.” [36] 47. The question of ordinary residence therefore arose and was resolved in these tax cases in rather special circumstances. But Lord Scarman nevertheless drew heavily on those 1928 decisions, generalising from their specifics to the broad proposition that living in a particular country “for a settled purpose, as part of the regular order of life for the time being” was an essential feature of “ordinary residence”. 48. Leaving aside the detailed reasoning in those decisions, it is clear that a court’s orientation in construing a tax statute may be influenced by purposive considerations which are inapplicable in other contexts. Thus, the House of Lords was likely to have been anxious to avoid construing “ordinary residence” in a manner facilitating tax avoidance and for that reason gave the concept a wide meaning. That appears to be the view Rand J took of the English decisions. When commenting on Lysaght, his Honour stated: “...it must, I think, be said that the language of ‘plain men’ was stretched to the breaking point to encompass the facts that had been found by the Commissioners to be residence.”[37] Indeed, Viscount Cave LC had dissented in Lysaght, stressing the fact that Mr Lysaght had a permanent home in the Free Irish State and holding that the evidence did not support the Commissioners’ finding of ordinary residence. E.4 What Ex parte Shah decided 49. Whatever misgivings one may have as to the basis supplied by the tax cases for Lord Scarman’s formulation in Ex parte Shah, that formulation is frequently resorted to when the meaning of “ordinary residence” in a statutory provision is sought: a person is thus often treated as “ordinarily resident” if he is living here “lawfully, voluntarily and for a settled purpose, as part of the regular order of life for the time being”. As previously stated, in many cases that may well be an appropriate reflection of the statutory intent. 50. However, having recognized that the statutory (or constitutional) purpose and the factual context have an important bearing on the meaning of “ordinary residence” in any particular case, the essential question is whether Lord Scarman's formulation is decisive, as the appellants contend; or whether, as the Commissioner argues, it is but a starting-point. How complete is the formulation’s coverage? Are there purposes and contexts which are not adequately addressed by the formulation so that a given set of facts may satisfy all its elements but may nonetheless justify the conclusion that the person or class of persons involved are not “ordinarily resident”? If so, the question which is vital to the outcome of this appeal is whether the circumstances of FDHs as a class present one such factual context when the words “ordinarily resided” in Article 24(2)(4) come to be interpreted. 51. To begin to answer these questions, it is necessary first to examine what precisely Ex parte Shah decided. This is clearly revealed if one compares the approach of the Court of Appeal[38] with that of Lord Scarman for the House of Lords. 52. Ex parte Shah was a test case on whether foreign students studying in the United Kingdom were entitled to local authority education grants. The students in question claimed an entitlement under section 1(1) of the Education Act 1962 which imposed a duty on every local education authority: “... subject to and in accordance with regulations made under this Act, to bestow awards on persons who – (a) are ordinarily resident in the area of the authority, and (b) possess the requisite educational qualifications, in respect of their attendance at courses to which this section applies.” 53. A regulation made under the Act[39] provided that there was no duty to bestow an award: “... upon a person who has not been ordinarily resident, throughout the three years preceding the first year of the course in question, in the United Kingdom ...” 54. In the Court of Appeal, Lord Denning MR accepted that if what was traditionally regarded as the natural and ordinary meaning of the words “ordinarily resident” were to be applied, a person would be held to come within that concept if he or she was “habitually and normally resident here, apart from temporary or occasional absences of long or short duration”. He noted that on that test, all the relevant students would qualify for a mandatory award. However, his Lordship regarded the Immigration Act 1971 as having made a crucial difference, rendering the traditional interpretation of “ordinarily resident” inapplicable.[40] Lord Denning MR stated: “We must say what is the meaning of the words ‘ordinarily resident’ in the context of the situation brought about by the Immigration Act 1971. On this approach, it is my opinion that, whenever a boy comes from overseas on a student's visa, which is renewed every year, he is not to be regarded as ‘ordinarily resident’ here. He is allowed to enter on the terms that he or his parents or friends will pay all his fees and expenses whilst he is here, and that he will leave this country when his leave comes to an end. Such a boy is not ‘ordinarily resident’ here. No matter whether he goes home for holidays or not. No matter whether his parents are dead and he has no home to go to overseas. Suffice it that he has to leave at the end of his time, unless renewed.”[41] 55. In other words, Lord Denning MR considered the immigration status of the students created by the 1971 Act critical to deciding whether they were ordinarily resident and, since that status was not addressed if one simply applied the traditional “natural and ordinary meaning” of those words, his Lordship abandoned “natural and ordinary meaning” as an inadequate test of ordinary residence in the context and gave decisive weight to the claimants’ immigration status. 56. Eveleigh LJ adopted a similar approach. He stated that where a person seeks to claim a benefit from the state: “...it will be necessary to show that he has the right or permission to live here in the manner which has led to the conclusion that he is living as any ordinary member of the community may live. On this basis I approach the cases before the court, and with the immigration legislation in mind.”[42] 57. Referring to one of the students in question, his Lordship concluded: “Hamid Akbarali came here for education. He had no right or permission to live here for all general purposes. Whatever his desire, his permission only extended to living here for the purpose of education. Such a limited purpose could not entitle him to be classed as being ‘ordinarily resident.’”[43] 58. Templeman LJ also gave decisive weight to the immigration status of the relevant students: “An overseas student has no right to remain in the United Kingdom after he has ceased to be a student, and is not ordinarily resident in the United Kingdom because he is resident in this country for educational purposes only, and not for the purpose of making a home indistinguishable from the home of those who are residing in this country for all purposes.”[44] 59. The vital difference in Lord Scarman’s approach involved his Lordship’s decision that (except where presence in the country was unlawful) the immigration status of the students under the 1971 Immigration Act was irrelevant for the purposes of the Education Act. He restricted the test to whether, in the three years immediately preceding the start of the educational course in question, each student’s residence in the United Kingdom came within his Lordship’s formulation of the natural and ordinary meaning of “ordinarily resident” which we have set out above. 60. Lord Scarman framed the issues thus: “Two questions of statutory interpretation, therefore, arise. The first is: what is the natural and ordinary meaning of ‘ordinary residence in the United Kingdom’...? The second is: does the statute in the context of the relevant law against the background of which it was enacted, or in the circumstances of today, including in particular the impact of the Act of 1971, compel one to substitute a special, and, if so, what, meaning to the words ‘ordinarily resident in the United Kingdom’?”[45] 61. His short answer was as follows: “The natural and ordinary meaning of the words has been authoritatively determined in this House in two tax cases reported in 1928. To the second question my answer is ‘No.’ The Act of 1962 and the Regulations are to be construed by giving to the words ‘ordinarily resident in the United Kingdom’ their natural and ordinary meaning.”[46] 62. Lord Scarman answered “No” to the second question because his Lordship and the other members of the House of Lords did not agree with the courts below as to the policy of the Education Act. The lower courts had concluded that enactment of the 1971 Immigration Act had changed the context in which the condition of ordinary residence in the Education Act 1962 was to be applied. The House of Lords disagreed. Lord Scarman traced the legislative policy back to section 81 of the Education Act 1944 which required local education authorities: “...for the purpose of enabling pupils to take advantage without hardship to themselves or their parents of any educational facilities available to them ... (c) to grant scholarships ... and other allowances in respect of pupils over compulsory school age, including pupils undergoing training as teachers.” His Lordship stated: “The section set no limit, imposed no restrictions by way of nationality, origin, or sex. It was an integral part of an enlightened statute, the policy of which has governed educational provision ever since.”[47] 63. He pointed to the fact that immigration control measures had been introduced under the Commonwealth Immigrants Act 1962 and that the Education Act had been enacted in the same year, commenting: “It is inconceivable, and I refuse, therefore, to infer, that Parliament, in enacting the education statute, could have been unaware of the restrictions then being imposed for the first time on Commonwealth immigrants.”[48] 64. The natural and ordinary meaning test on Lord Scarman’s formulation was therefore firmly focussed on whether, in the three years preceding commencement of the relevant educational course, the student in question had lived in the United Kingdom “lawfully, voluntarily and for a settled purpose, as part of the regular order of life for the time being”, ignoring the conditions subject to which he had been admitted into the country. Lord Scarman stated: “Both courts ... agreed in attaching decisive importance to what the Divisional Court called ‘the immigration status’ of the students. ‘Immigration status,’ unless it be that of one who has no right to be here, in which event presence in the United Kingdom is unlawful, means no more than the terms of a person's leave to enter as stamped upon his passport. This may or may not be a guide to a person's intention in establishing a residence in this country: it certainly cannot be the decisive test, as in effect the courts below have treated it. Moreover, in the context with which these appeals are concerned, i.e. past residence, intention or expectations for the future are not critical: what matters is the course of living over the past three years.”[49] (Italics supplied) 65. His Lordship stated the applicable test as follows: “... local education authorities, when considering an application for a mandatory award, must ask themselves the question: has the applicant shown that he has habitually and normally resided in the United Kingdom from choice and for a settled purpose throughout the prescribed period, apart from temporary or occasional absences? ... The relevant period is not the future but one which has largely (or wholly) elapsed, namely that between the date of the commencement of his proposed course and the date of his arrival in the United Kingdom. The terms of an immigrant student's leave to enter and remain here may or may not throw light on the question: it will, however, be of little weight when put into the balance against the fact of continued residence over the prescribed period - unless the residence is itself a breach of the terms of his leave, in which event his residence, being unlawful, could not be ordinary.”[50] E.5 The limits of the decision in Ex parte Shah 66. So analysed, it becomes clear that the decision in Ex parte Shah is limited in at least two major respects. First, its scope or coverage is limited. Because of the view taken by the House of Lords of the legislative policy informing the relevant Education Act, their Lordships discounted as irrelevant any restrictive conditions affecting the students’ immigration status to their entitlement to a grant. On that basis, Lord Scarman fashioned as the “natural and ordinary meaning” of “ordinarily resident” a formulation which focuses solely on the students’ “course of living” over the three years immediately preceding the relevant educational programme, asking whether such course of living was lawful, voluntary and for a settled purpose, as part of their regular order of life for the time being. That may have made good sense in that context.[51] However, in another case, the Court might well consider it highly relevant to the meaning of the words “ordinary residence”, used in a different context and for different statutory or constitutional purposes, to give full or even decisive weight to immigration status. The present case may well be such an instance. 67. The second limitation of Lord Scarman’s formulation is that it leaves open questions regarding the qualitative aspects of a person’s residence in the country. A person may indeed be able to show that he or she had lived lawfully, voluntarily and for a settled purpose, as part of the regular order of life for the time being in the country over a given period of time, but questions are bound to arise in some cases as to whether qualitative aspects of all or part of that period of residence are of such a character as to render it other than “ordinary residence”. The qualitative aspects of FDHs’ residence in Hong Kong are obviously of potential relevance. 68. In the context of Article 24(2)(4), the Court has already had to deal with qualitative aspects of “ordinary residence” to which the “natural and ordinary meaning” approach provides no answer. Thus, after entering Hong Kong lawfully, voluntarily and for a settled purpose, and living here for a substantial period as part of the regular order of his life, a person may be convicted of a crime and sentenced to a period of imprisonment before the seven-year period required by Article 24(2)(4) has been achieved. Section 2(4)(b) of the Ordinance provides that “a person shall not be treated as ordinarily resident in Hong Kong … during any period … of imprisonment or detention pursuant to the sentence or order of any court”. The question arose as to whether that exclusion is consonant with the meaning of “ordinarily resident” in Article 24(2)(4) properly interpreted. 69. In Fateh Muhammed [52]the Court answered that question in the affirmative. Bokhary PJ, writing for the Court, regarded “serving a term of imprisonment, at least when it is not of trivial duration” as “something out of the ordinary”. He took as the object of the Court’s interpretation exercise, the need to determine whether the applicant had satisfied “a qualification prescribed by the Basic Law for attaining a valuable status and right, namely Hong Kong permanent resident status and the right of abode here” and held that “in such a context, there is a very strong case for saying that residence while serving a substantial term of imprisonment or detention in a training or detention centre is not ordinary residence”. The Court so held. As Ribeiro PJ pointed out in Prem Singh, it is the “qualitative aspect of time spent in prison that has led to such periods being excluded from the concept of ‘ordinary residence’ in successive statutory schemes and in the Basic Law.”[53] 70. The Ordinance also supplements Article 24(2)(4) by introducing what has been called the “immediacy condition”. Schedule 1, paragraph 1(4)(b) provides: “For the purposes of calculating the continuous period of 7 years in which a person has ordinarily resided in Hong Kong, the period is reckoned to include a continuous period of 7 years ... for a person under paragraph 2(d), before or after the establishment of the Hong Kong Special Administrative Region but immediately before the date when the person applies to the Director for the status of a permanent resident of the Hong Kong Special Administrative Region.” 71. Was the enactment of such a condition constitutional? No help on that question can be found in Lord Scarman’s “natural and ordinary meaning”. Indeed, he had no need to consider immediacy as a possible implication since regulation 13 expressly required the three year period of ordinary residence to precede the first year of the educational course in question. 72. Adopting a purposive approach to the interpretation of Article 24(2)(4), the Court in Fateh Muhammed affirmed the constitutionality of the immediacy requirement: “...unless its wording simply cannot support such a reading, a purposive construction of art.24(2)(4) drives the Court to say that the seven continuous years required by art.24(2)(4) must come immediately before the time when an application for Hong Kong permanent resident status is made in reliance on those seven continuous years. In my view, the wording of art.24(2)(4) supports such a reading. Such support is to be found generally in the tenor of the provision and particularly in the implicit link between the twin requirements of seven years' ordinary and continuous residence and of having taken Hong Kong as one's place of permanent residence. In my judgment, the seven continuous years required by art.24(2)(4) of the Basic Law must come immediately before the time when an application for Hong Kong permanent resident status is made in reliance on those seven continuous years.”[54] 73. Another supplement to or elaboration of Article 24(2)(4) held by the Court to be valid involves the establishment of a fair and reasonable statutory scheme for the proper verification of a person’s claim to right of abode.[55] 74. But a different legislative initiative was struck down as unconstitutional by the Court in Prem Singh.[56] The Ordinance purported to make it a condition that a person should not be subject to a limit of stay when declaring his intention to make Hong Kong his place of permanent residence in the course of applying for permanent resident status. The Court held that such a condition was incompatible with the language and structure of the permanence requirement as laid down in Article 24(2)(4) and was therefore unconstitutional. The decision does not address the meaning of “ordinary residence”. E.6 A general criticism of Lord Scarman’s approach 75. A more general criticism may, with respect, be made of Lord Scarman’s approach. Although as noted above,[57] his Lordship qualified his formulation by acknowledging the importance of context, it will be recalled that Lord Scarman framed the issues as follows: “Two questions of statutory interpretation, therefore, arise. The first is: what is the natural and ordinary meaning of ‘ordinary residence in the United Kingdom’...? The second is: does the statute in the context of the relevant law against the background of which it was enacted, or in the circumstances of today, including in particular the impact of the Act of 1971, compel one to substitute a special, and, if so, what, meaning to the words ‘ordinarily resident in the United Kingdom’?”[58] 76. Such an approach (adopted by Mr Fordham in the present case) relegates context and purpose into second place, to be consulted after a “natural and ordinary meaning” has been identified. It does not accord with more modern approaches to statutory (and constitutional) interpretation. It involves asserting that the words in question bear a certain “natural and ordinary meaning” and then placing the onus on anyone seeking to advance a different meaning to establish some ground which compels acceptance of that different meaning to be adopted as a “special” meaning in substitution for the “natural and ordinary meaning” previously identified. 77. The Hong Kong courts do not nowadays accept such an approach. As Sir Anthony Mason NPJ pointed out in HKSAR v Lam Kwong Wai:[59] “The modern approach to statutory interpretation insists that context and purpose be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity may be thought to arise (Medical Council of Hong Kong v Chow Siu Shek (2000) 3 HKCFAR 144 at 154B-C; K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 315 per Mason J (dissenting, but not on this point); CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384).” 78. Lord Scarman’s natural and ordinary meaning approach is particularly unhelpful when interpreting words which have some flexibility of meaning. If one approaches the words “ordinarily resident” without trying to assign to them a priori some “natural and ordinary meaning”, but recognizing that they take their meaning from their context, it immediately becomes clear – as illustrated by the various examples discussed in Sections E2 and E3 – that the expression “ordinary residence” is open-textured as a matter of language and inherently capable of assuming different meanings in different contexts. 79. The open-textured and flexible nature of that expression may be contrasted, for instance, with the word “born” used in two of the other categories of entitlement to permanent resident status in Article 24(2): “Chinese citizens born in Hong Kong...”;[60] and “Persons of Chinese nationality born outside Hong Kong of those residents listed in categories (1) and (2)”.[61] The central triggering requirement in each of those categories is the event of birth – a concept which is much more closed and which admits of much less flexibility than the requirement of a continuous seven year period of ordinary residence under Article 24(2)(4). This was indeed the conclusion that the Court reached in Director of Immigration v Chong Fung Yuen.[62] Incidentally, we should point out that we do not necessarily accept all that the Chief Judge stated in relation to Chong Fung Yuen in paragraphs 125 to 131 of the Court of Appeal’s judgment below.[63] E.7 The proper approach to interpreting “ordinarily resided” in Article 24(2)(4) 80. On the basis of the foregoing analysis, it is clear that the “natural and ordinary meaning” attributed by Mr Fordham to the words “ordinarily resident” in Article 24(2)(4) may serve as a starting-point but cannot be decisive. To be able to say of a person or class of persons that they live in Hong Kong “lawfully, voluntarily and for a settled purpose, as part of the regular order of life for the time being” may often justify the conclusion that they are ordinarily resident here, but that will not always be the case. 81. It is always necessary to examine the factual position of the person claiming to be ordinarily resident to see whether there are any special features affecting the nature and quality of his or her residence. If such features exist, one asks whether they result in that person’s residence being qualitatively so far-removed from what would traditionally be recognized as “ordinary residence” as to justify concluding that he or she is not “ordinarily resident”. This is necessarily a question of fact and degree and the outer boundaries of “ordinary residence” are incapable of precise definition. But the exercise is necessary since the meaning of “ordinary residence” in Article 24(2)(4) can only be considered in the factual context presented by the person claiming to come within the meaning of that concept. 82. In the present case, the Court must take as the factual context, the scheme whereby FDHs are allowed to enter and reside in Hong Kong subject to the highly restrictive conditions described in Section B above. Those are the facts that mark out FDHs as a class and characterise the nature and quality of their residence in Hong Kong while employed as such. Those facts must necessarily be at the centre of the Court’s deliberations when it considers whether it is congruent with the concept of “ordinary residence” as employed in Article 24(2)(4) to treat FDHs as a class as not ordinarily resident. 83. It is plainly within the intent of Article 24(2)(4) that the immigration status of persons claiming to come within that category must be taken into account in deciding whether they satisfy the seven-year ordinary residence requirement. This is indicated by the words of the Article itself. They define the category of non-Chinese nationals eligible for Hong Kong permanent resident status, as consisting of: “Persons not of Chinese nationality who have entered Hong Kong with valid travel documents, have ordinarily resided in Hong Kong for a continuous period of not less than seven years and have taken Hong Kong as their place of permanent residence ...” 84. Article 24(2)(4) is therefore addressing the situation of persons who need permission to enter Hong Kong and makes it a requirement that they enter with valid travel documents. The Article therefore commences defining eligibility for permanent resident status in this category by focussing on the point of entry into Hong Kong and laying down the requirement that entry has to be on the basis of a valid travel document. As is to be expected with a constitutional instrument, the Basic Law does not seek to define what does and does not constitute a valid travel document. It leaves it to the Director to determine, as a matter of immigration control, what travel documents to accept as valid for the purposes of entry. 85. Moreover, Article 24(2)(4) implicitly makes immigration control a constant feature in the process of building up eligibility when it stipulates a seven-year qualifying period. The drafters of the Basic Law would plainly not have assumed that a person entering Hong Kong would immediately be given permission to stay for seven or more years. One would naturally expect a person who does not have the right of abode to be allowed to enter subject to a limit in the duration of stay and subject to other conditions, such as whether taking up employment is allowed, etc, while in Hong Kong. It follows that it is implicit in Article 24(2)(4) that the continuous seven year period of ordinary residence can only be achieved subject to continuing immigration control. 86. It has rightly not been suggested that the imposition of such controls is in any way constitutionally objectionable. As was noted in Prem Singh,[64] the Director may undoubtedly exercise his discretions as to whether a non-Chinese person should be allowed to enter Hong Kong and whether permission to remain should be extended, such discretions having a bearing on the entry and seven-year requirements. This is consistent with Article 154(2) which allocates constitutional responsibility for immigration control on the HKSAR Government and provides: “The Government of the Hong Kong Special Administrative Region may apply immigration controls on entry into, stay in and departure from the Region by persons from foreign states and regions.” 87. In the exercise of this power, the Director may impose conditions on the entry of a person which will materially affect the quality of his residence in Hong Kong. F. Are FDHs entitled to be treated as ordinarily resident? 88. Adopting the aforesaid approach, it is clear that prominent distinguishing features have an important bearing on the nature and quality of the residence of FDHs as a class in Hong Kong. Those features have been described in Section B of this judgment. By way of summary, each time a FDH is given permission to enter, such permission is tied to employment solely as a domestic helper with a specific employer (in whose home the FDH is obliged to reside), under a specified contract and for the duration of that contract. The FDH is obliged to return to the country of origin at the end of the contract and is told from the outset that admission is not for the purposes of settlement and that dependents cannot be brought to reside in Hong Kong. 89. It is clear, in our view, that these distinguishing features result in the residence of FDHs in Hong Kong being qualitatively so far-removed from what would traditionally be recognized as “ordinary residence” as to justify concluding that they do not, as a class, come within the meaning of “ordinarily resident” as used in Article 24(2)(4). It follows that in providing that they should not be treated as ordinarily resident, section 2(4)(a)(vi) is consistent with Article 24(2)(4) and constitutionally valid. We accordingly dismiss the appeals. G. Matters which need not be addressed 90. Having arrived at the aforesaid conclusion, it is unnecessary to address Lord Pannick’s second argument which invites the Court to acknowledge a margin of discretion in the legislature to enact exclusionary categories. 91. Moreover, we have concluded that pursuant to the foregoing analysis, the meaning of “ordinarily resided” in Article 24(2)(4) interpreted in the light of its context and purpose is clear, plainly accommodating the exclusionary provisions of section 2(4)(a)(vi). There is accordingly no need and no legal basis for referring to any extrinsic materials in aid of interpreting that Article. H. Reference to the Standing Committee of the National People's Congress under Article 158(3) of the Basic Law H.1 The Commissioner’s request for a reference 92. Article 158 of the Basic Law states:- (1) “The power of interpretation of this Law shall be vested in the Standing Committee of the National People's Congress. (2) The Standing Committee of the National People's Congress shall authorize the courts of the Hong Kong Special Administrative Region to interpret on their own, in adjudicating cases, the provisions of this Law which are within the limits of the autonomy of the Region. (3) The courts of the Hong Kong Special Administrative Region may also interpret other provisions of this Law in adjudicating cases. However, if the courts of the Region, in adjudicating cases, need to interpret the provisions of this Law concerning affairs which are the responsibility of the Central People's Government, or concerning the relationship between the Central Authorities and the Region, and if such interpretation will affect the judgments on the cases, the courts of the Region shall, before making their final judgments which are not appealable, seek an interpretation of the relevant provisions from the Standing Committee of the National People's Congress through the Court of Final Appeal of the Region. When the Standing Committee makes an interpretation of the provisions concerned, the courts of the Region, in applying those provisions, shall follow the interpretation of the Standing Committee. However, judgments previously rendered shall not be affected. (4) The Standing Committee of the National People's Congress shall consult its Committee for the Basic Law of the Hong Kong Special Administrative Region before giving an interpretation of this Law.” We shall, in this judgment, refer to the Standing Committee of the National People’s Congress simply as the Standing Committee. 93. Following the decisions of this Court in Ng Ka Ling v Director of Immigration[65]and Chan Kam Nga v Director of Immigration[66], the State Council submitted a Motion to the Standing Committee requesting an interpretation of Articles 22(4) and 24(2)(3) of the Basic Law. The Motion was submitted after the Chief Executive of the HKSAR had provided a report to the Standing Committee. 94. An interpretation was made and this was adopted by the Standing Committee of the Ninth National People’s Congress at its Tenth Session on 26 June 1999. The interpretation, headed “The Interpretation by the Standing Committee of the National People’s Congress of Articles 22(4) and 24(2)(3) of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China” is annexed to this judgment. We shall refer to this as the 1999 Interpretation. 95. The Commissioner places considerable reliance on the 1999 Interpretation, focusing on the sentence in para 2[67]:- “The legislative intent as stated by this Interpretation, together with the legislative intent of all other categories of Article 24(2) of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, have been reflected in the “Opinions on the Implementation of Article 24(2) of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China” adopted at the Fourth Plenary Meeting of the Preparatory Committee for the Hong Kong Special Administrative Region of the National People’s Congress on 10 August 1996.” 96. The Commissioner relies on the Statement as part of his arguments on extrinsic materials. It was submitted that the Statement provided at least strong persuasive authority as to the legislative intent behind Article 24(2)(4) of the Basic Law. However, we have already held[68] that there is no need to resort to extrinsic materials for the purposes of construing Article 24(2)(4). 97. As an alternative argument based on the Statement, the Commissioner further submits that the effect of the Statement was that it may well be binding on the Hong Kong courts by reason of Article 158 of the Basic Law. We use the expression “may well be” because although Lord Pannick did not invite this Court actually to hold ourselves that this was the effect of the Statement for the purposes of Article 158, nevertheless it was his submission that this was arguably the position. And for that reason, the meaning of the concept of an “interpretation” under Article 158, and therefore the meaning and effect of the Statement itself, were matters which ought to be referred by this Court to the Standing Committee for an authoritative interpretation. Lord Pannick, however, stressed that a reference would only be necessary if the issue of the true interpretation of Article 24(2)(4) using the common law approach, were determined against him. 98. There were perhaps two reasons why the Commissioner did not at this stage invite the Court, in the absence of an authoritative interpretation by the Standing Committee, to hold that the Statement was actually binding for the purposes of Article 158 (rather than just being persuasive, this being the argument based on extrinsic materials):- (1) A recognition of the point forcefully made by Mr Fordham that on a plain reading of the 1999 Interpretation itself, it was apparent that the only provisions that were interpreted were Articles 22(4) and 24(2)(3) of the Basic Law, as its title indicated. There were also numerous references in the body of that document to an interpretation of only those specific provisions of the Basic Law. Lord Pannick accepted that the Statement was an “incidental” construction of other provisions in the Basic Law, namely, the other categories in Article 24(2). (2) In Director of Immigration v Chong Fung Yuen[69], it was accepted by the Director of Immigration that the Statement was not binding on the Court as an interpretation made under Article 158.[70] 99. Be that as it may, this Court was asked to seek an interpretation from the Standing Committee. The following questions were identified by the Commissioner:- “1. What is the meaning of an “interpretation” which the NPCSC has power to give under Article 158(1) of the Basic Law? 2. Whether the Statement in the 1999 Interpretation is or constitutes part of an “interpretation” within the meaning of Article 158(1), such that it is binding on and shall be applied by the courts of the HKSAR when deciding cases involving any one of the categories under Article 24(2) of the Basic Law (including Article 24(2)(4))?” Before addressing the request to refer these questions, we must first consider the jurisdiction of the Court under Article 158. H.2 The Court’s jurisdiction under Article 158 of the Basic Law 100. Article 158 is a specific provision governing the interpretation of the Basic Law. In this regard, only the Standing Committee and the Hong Kong courts are referred to. The Article sets out in clear terms the power of the Standing Committee to interpret provisions of the Basic Law and the effect of such interpretations. It also sets out the powers of interpretation of the Basic Law vested in the Hong Kong courts and makes provision for mandatory references by the Court of Final Appeal to the Standing Committee for authoritative interpretations of Basic Law provisions. 101. This Court has, on a number of previous occasions, discussed this Article, in particular in Ng Ka Ling v Director of Immigration[71], Lau Kong Yung v Director of Immigration[72], Director of Immigration v Chong Fong Yuen[73], Tam Nga Yin v Director of Immigration[74] and Democratic Republic of the Congo v FG Hemisphere Associates LLC (No. 1)[75]. It is clear from the way this Court has treated it that Article 158 sets out what is a constitutional jurisdiction of the Court in relation to interpretation and reference. 102. As Article 158(1) makes clear, the power of interpretation of the Basic Law rests with the Standing Committee. This is derived from the general power of the Standing Committee to interpret laws under Article 67(4) of the Constitution of the People’s Republic of China. In Lau Kong Yung, this Court stated the power to be in “general and unqualified terms”, unrestricted by the remainder of Article 158[76]. It is plenary in that it covers all articles in the Basic Law and may be exercised even in the absence of any legal proceedings.[77] 103. Only the courts of the HKSAR are also given the power to interpret the Basic Law, but the ambit of this power is precisely defined and is not as wide as the general power vested in the Standing Committee:- (1) Under Article 158(2), the Hong Kong courts are authorized (this is a constitutional authorization[78]) to interpret “on their own, in adjudicating cases, the provisions of [the Basic Law] which are within the limits of the autonomy of [the HKSAR]”. This limitation is, however, not critical because the first sentence of Article 158(3) makes it clear that the Hong Kong courts “may also interpret other provisions of [the Basic Law] in adjudicating cases”. It is therefore open to the Hong Kong courts to interpret all articles in the Basic Law. (2) The real limitations, however, imposed on the Hong Kong courts are two. (3) First, our courts can only become engaged in construing provisions of the Basic Law in the course of adjudicating cases. In other words, the role of our courts is to adjudicate and not give advisory opinions.[79] (4) Secondly, as Article 158(3) states, where, in adjudicating cases, the Hong Kong courts need to interpret Basic Law provisions “concerning affairs which are the responsibility of the Central People’s Government, or concerning the relationship between the Central Authorities and [the HKSAR]”[80], then the Hong Kong courts “shall, before making their final judgments which are not appealable, seek an interpretation of the relevant provisions from [the Standing Committee] through the Court of Final Appeal”. The seeking of an interpretation from the Standing Committee in these circumstances is mandatory[81] and it is the responsibility of the Court of Final Appeal.[82] It is part of the Court’s “constitutional jurisdiction”.[83] (5) Before the Court of Final Appeal can make a reference, it must be satisfied that two conditions (the “classification” and the “necessity” conditions) are fulfilled, both these conditions flowing from the language of Article 158(3) itself. They were described by Chief Justice Li in Ng Ka Ling in this way:- “As far as the Court of Final Appeal is concerned, it has a duty to make a reference to the Standing Committee if two conditions are satisfied: (1) First, the provisions of the Basic Law in question: (a) concern affairs which are the responsibility of the Central People’s Government; or (b) concern the relationship between the Central Authorities and the Region. That is, the excluded provisions. We shall refer to this as “the classification condition”. (2) Secondly, the Court of Final Appeal in adjudicating the case needs to interpret such provisions (that is the excluded provisions) and such interpretation will affect the judgment on the case. We shall refer to this as ‘the necessity condition.’ ”[84] (6) In looking at the classification condition, in determining whether a provision is an excluded provision, the Court will look at the character of the provision itself to see whether it concerns “affairs which are the responsibility of the Central People’s Government, or concerning the relationship between the Central Authorities and [the HKSAR]”. The Court will not look at the effect of the implementation of the provision in any given case in order to determine whether or not the provision is an excluded one: see Chong Fung Yuen[85] and Tam Nga Yin[86]. (7) Underlying any consideration by the Court whether or not to refer under Article 158 is the requirement of arguability. As was said by Chief Justice Li in Ng Ka Ling[87]:- “We are at the stage of considering whether the Court is obliged to make a reference under art.158. At this stage, the Court is concerned with what is arguable and not with deciding the question of interpretation. That is a matter for the Standing Committee if a reference has to be made and a matter for the Court if a reference does not have to be made. Of course, an argument which is plainly and obviously bad would not be arguable. If the Court decides at this stage, that the point is unarguable, that would be an end of the matter as far as a question of reference is concerned. If the Court decides that it is arguable, the Court would then consider whether the classification and necessity conditions are satisfied.” 104. The arguability factor is implicit in Article 158(3) to ensure integrity in the operation of a reference. Otherwise, there will be a risk of potential abuse; all sorts of fanciful arguments could then be made just to seek a reference to the Standing Committee. 105. The seeking of an interpretation by the Court of Final Appeal (or, in common parlance, making a reference to the Standing Committee[88]) is therefore a precisely defined duty under Article 158(3). It is mandatory in character: it is specifically limited in its application to the excluded provisions of the Basic Law and it applies only in the particular circumstances contemplated by that provision, that is, the conditions of classification, necessity and arguability. Then and only then the Court of Final Appeal must make a reference to the Standing Committee.[89] 106. Nor is there any basis for otherwise implying a general power in the Court of Final Appeal to seek an interpretation from the Standing Committee. This conclusion follows from: (a) the fact that that Court of Final Appeal exercises the power of final adjudication as an element in the exercise of judicial power;[90] (b) the responsibility of the courts of the HKSAR under Article 158(3) to adjudicate cases “on their own”, subject to the mandatory reference procedure under that article and to the application of Standing Committee interpretations under that article; and (c) the long established rule that a common law court cannot abdicate any part of its judicial function to any other body. 107. What is the effect of an interpretation made by the Standing Committee? Where an interpretation of a provision of the Basic Law is made by the Standing Committee under Article 158(1) pursuant to its plenary powers, it is of course binding on the courts.[91] Where the Standing Committee has made an interpretation after a judicial reference under Article 158(3), that paragraph states the consequence as follows:- “…When the Standing Committee makes an interpretation of the provisions concerned, the courts of the Region, in applying those provisions, shall follow the interpretation of the Standing Committee. However, judgments previously rendered shall not be affected.” It should be noted that upon an Article 158(3) reference, the interpretation of the relevant provision or provisions by the Standing Committee will bind all courts in Hong Kong.[92] It has the same binding effect as the exercise of the power of interpretation under Article 158(1). In short, the courts of Hong Kong are bound to follow an interpretation made by the Standing Committee whether under Article 158(1) or (3).[93] 108. With these principles in mind, we turn to the question of a reference in the present case. H.3 Determination of the Commissioner’s application for a reference 109. As stated earlier, Article 158 of the Basic Law sets out the constitutional jurisdiction of the Court in relation to both interpretation and reference.[94] In deciding whether or not to refer, the court must be satisfied that both the classification and necessity conditions are fulfilled (as well as the arguability aspect). This is for the Court to decide and for it alone to decide [95]. Lord Pannick confirmed that this was the position. 110. The classification condition is satisfied in the present case. Article 158 of the Basic Law is a provision that does concern the relationship between the Central Authorities and the HKSAR. There was no real dispute about this. 111. The necessity condition, however, is not. In the light of the conclusion this Court has reached on the issue of the true construction of Article 24(2)(4), a reference to the Standing Committee is simply unnecessary. As stated above, Lord Pannick addressed us on this basis[96]. In our view, it is plainly the right approach. 112. The necessity condition not being satisfied, it is not necessary to deal with the arguability factor either. Accordingly, the request for a reference must be rejected. I. Outcome 113. The Appeals are accordingly dismissed. Any submissions as to costs should be lodged in writing within 14 days of the date of this judgment and any replies within 14 days thereafter. Mr Michael Fordham QC, Ms Gladys Li SC, Mr PY Lo and Mr Benson Tsoi instructed by Barnes & Daly and assigned by the Legal Aid Department for the appellants Lord Pannick QC, Mr Anderson Chow SC and Ms Eva Sit instructed by the Department of Justice for the 1st respondent Annex THE INTERPRETATION BY THE STANDING COMMITTEE OF THE NATIONAL PEOPLE'S CONGRESS OF ARTICLES 22(4) AND 24(2)(3) OF THE BASIC LAW OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE'S REPUBLIC OF CHINA (Adopted by the Standing Committee of the Ninth National People's Congress at its Tenth Session on 26 June 1999) The Standing Committee of the Ninth National People's Congress examined at its Tenth session the "Motion Regarding the Request for an Interpretation of Articles 22(4) and 24(2)(3) of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China" submitted by the State Council. The motion of the State Council was submitted upon the report furnished by the Chief Executive of the Hong Kong Special Administrative Region under the relevant provisions of Articles 43 and 48(2) of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China. The issue raised in the Motion concerns the interpretation of the relevant provisions of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China by the Court of Final Appeal of the Hong Kong Special Administrative Region in its judgment dated 29 January 1999. Those relevant provisions concern affairs which are the responsibility of the Central People's Government and concern the relationship between the Central Authorities and the Hong Kong Special Administrative Region. Before making its judgment, the Court of Final Appeal had not sought an interpretation of the Standing Committee of the National People's Congress in compliance with the requirement of Article 158(3) of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China. Moreover, the interpretation of the Court of Final Appeal is not consistent with the legislative intent. Therefore, having consulted the Committee for the Basic Law of the Hong Kong Special Administrative Region under the Standing Committee of the National People's Congress, the Standing Committee of the National People's Congress has decided to make, under the provisions of Article 67(4) of the Constitution of the People's Republic of China and Article 158(1) of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China, an interpretation of the provisions of Articles 22(4) and 24(2)(3) of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China as follows: 1. The provisions of Article 22(4) of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China regarding "For entry into the Hong Kong Special Administrative Region, people from other parts of China must apply for approval" mean as follows: People from all provinces, autonomous regions, or municipalities directly under the Central Government, including those persons of Chinese nationality born outside Hong Kong of Hong Kong permanent residents, who wish to enter the Hong Kong Special Administrative Region for whatever reason, must apply to the relevant authorities of their residential districts for approval in accordance with the relevant national laws and administrative regulations, and must hold valid documents issued by the relevant authorities before they can enter the Hong Kong Special Administrative Region. It is unlawful for people from all provinces, autonomous regions, or municipalities directly under the Central Government, including persons of Chinese nationality born outside Hong Kong of Hong Kong permanent residents, to enter the Hong Kong Special Administrative Region without complying with the appropriate approval procedure prescribed by the relevant national laws and administrative regulations. 2. It is stipulated in the first three categories of Article 24(2) of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China that the "permanent residents of the Hong Kong Special Administrative Region shall be: (1) Chinese citizens born in Hong Kong before or after the establishment of the Hong Kong Special Administrative Region; (2) Chinese citizens who have ordinarily resided in Hong Kong for a continuous period of not less than seven years before or after the establishment of the Hong Kong Special Administrative Region; (3) Persons of Chinese nationality born outside Hong Kong of those residents listed in categories (1) and (2);". The provisions of category (3) regarding the "persons of Chinese nationality born outside Hong Kong of those residents listed in categories (1) and (2)" mean both parents of such persons, whether born before or after the establishment of the Hong Kong Special Administrative Region, or either of such parents must have fulfilled the condition prescribed by category (1) or (2) of Article 24(2) of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China at the time of their birth. The legislative intent as stated by this Interpretation, together with the legislative intent of all other categories of Article 24(2) of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China, have been reflected in the "Opinions on the Implementation of Article 24(2) of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China" adopted at the Fourth Plenary Meeting of the Preparatory Committee for the Hong Kong Special Administrative Region of the National People's Congress on 10 August 1996. As from the promulgation of this Interpretation, the courts of the Hong Kong Special Administrative Region, when referring to the relevant provisions of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China, shall adhere to this Interpretation. This Interpretation does not affect the right of abode in the Hong Kong Special Administrative Region which has been acquired under the judgment of the Court of Final Appeal on the relevant cases dated 29 January 1999 by the parties concerned in the relevant legal proceedings. Other than that, the question whether any other person fulfils the conditions prescribed by Article 24(2)(3) of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China shall be determined by reference to this Interpretation. [1] Article 24(2)(5) addresses the position of the children of persons coming within Article 24(2)(4). [2] Cap 115. [3] Vallejos Evangeline Banao v Commissioner of Registration HCAL 124/2010 (30 September 2011); Domingo Daniel L v Commissioner of Registration HCAL 128/2010 (3 November 2011). [4] Hon Cheung CJHC, Tang VP and Stock VP, Vallejos Evangeline Banao v Commissioner of Registration CACV 204/2011, (28 March 2012); Domingo Daniel L v Commissioner of Registration CACV 261/2011 (19 July 2012). [5] With Ms Gladys Li SC, Mr P Y Lo and Mr Benson Tsoi. [6] [1983] 2 AC 309. [7] With Mr Anderson Chow SC and Ms Eva Sit. [8] Annexed to this judgment. [9] See Section H. below. [10] R v Barnet London Borough Council ex parte Shah [1983] 2 AC 309 at 343. [11] (2001) 4 HKCFAR 278 at 283-284. [12] Fateh Muhammad v Commissioner of Registration (2001) 4 HKCFAR 278; and Prem Singh v Director of Immigration (2003) 6 HKCFAR 26. [13] Levene v Commissioners of Inland Revenue [1928] AC 217; Inland Revenue Commissioners v Lysaght [1928] AC 234; and Thomson v Minister of National Revenue [1946] SCR 209. [14] R v Barnet London Borough Council ex parte Shah [1983] 2 AC 309. [15] Lau San Ching v Apollonia Liu [1995] 5 HKPLR 23. [16] Re Ip Pui Man Nina [2011] 3 HKLRD 299. [17] Mark v Mark [2006] 1 AC 98. [18] [2011] 3 HKLRD 299. [19] One year in England and Wales under section 5(2) of the Domicile and Matrimonial Proceedings Act 1973. [20] Matrimonial Causes Ordinance, Cap 179, section 3. [21] Mark v Mark [2006] 1 AC 98, §33. [22] Ibid. [23] [1987] HKLR 356. [24] [1987] HKLR 798. [25] [1995] 5 HKPLR 23. [26] [1928] AC 217. [27] [1928] AC 234. [28] Section 46: “Where the Treasury have, before the commencement of this Act, issued or may thereafter issue any securities which they have power to issue for the purpose of raising any money or any loan with a condition that the interest thereon shall not be liable to tax or super tax so long as it is shown, in manner directed by the Treasury, that the securities are in the beneficial ownership of persons who are, not ordinarily resident in the United Kingdom, the interest of securities issued with such a condition shall be exempt accordingly.” [29] At 224. [30] Levene at 232 per Lord Warrington of Clyffe. [31] Levene at 225 per Viscount Cave LC. [32] Levene at 227. [33] Lysaght at 243-244. [34] [1946] SCR 209. [35] At 214. [36] At 231-232. [37] Thomson v Minister of National Revenue [1946] SCR 209 at 224. [38] The approach of the Divisional Court was the same as the Court of Appeal’s on this issue. [39] Local Education Authority Awards Regulations 1979, regulation 13. [40] [1982] QB 688 at 720. [41] At 721. [42] At 722-723. [43] At 723. [44] At 729. [45] [1983] 2 AC 309 at 340. [46] Ibid. [47] At 337. [48] Ibid. [49] At 348. [50] At 349. [51] Although the UK Parliament disagreed and amended the regulation to remove any duty on local authorities to provide an award if any part of the three-year period in question has “been wholly or mainly for the purposes of receiving full-time education”. See R v Hereford and Worcester County Council, ex p Wimbourne The Times, 12 November 1983. [52] (2001) 4 HKCFAR 278 at 283-284. [53] (2003) 6 HKCFAR 26 at §75. [54] (2001) 4 HKCFAR 278 at 285. [55] Ng Ka Ling v Director of Immigration (1999) 2 HKCFAR 4 at 36; Lau Kong Yung v Director of Immigration (1999) 2 HKCFAR 300 at 312; Prem Singh v Director of Immigration (2003) 6 HKCFAR 26 at §§56-57. [56] (2003) 6 HKCFAR 26. [57] Section E1. [58] [1983] 2 AC 309 at 340. [59] (2006) 9 HKCFAR 574 at §63. Reiterated by Li CJ in HKSAR v Cheung Kwun Yin (2009) 12 HKCFAR 568 at§§12-13. [60] Article 24(2)(1). [61] Article 24(2)(3). [62] (2001) 4 HKCFAR 211 at 231-233. [63] CACV 204/2011 (28 March 2012). [64] (2003) 6 HKCFAR 26 at §63. [65] (1999) 2 HKCFAR 4. [66] (1999) 2 HKCFAR 82. [67] This sentence was referred to by Lord Pannick in his submissions as “the Statement” – we are content to use the term in this judgment. [68] See section G above. [69] (2001) 4 HKCFAR 211. [70] This is recorded at 217J-218A. [71] (1999) 2 HKCFAR 4. [72] (1999) 2 HKCFAR 300. [73] (2001) 4 HKCFAR 211. [74] (2001) 4 HKCFAR 251. [75] (2011) 14 HKCFAR 95. [76] At 323C. [77] Lau Kong Yung at 324E-F per Chief Justice Li and 345E-F per Sir Anthony Mason. In his judgment, Chief Justice Li made reference to Hong Kong’s New Constitutional Order (Second Edition) by Professor Yashi Ghai at 198. Two Interpretations, in relation to, respectively, (a) Article 7 of Annex 1 and Article III of Annex II of the Basic Law; and (b) Article 53(2) of the Basic Law (adopted by the Standing Committee of the 10th National People’s Congress on 6 April 2004 and 27 April 2005), were given by the Standing Committee in the absence of any litigation. [78] Ng Ka Ling at 29G. [79] Ng Ka Ling at 30E. [80] These are referred to as the “excluded provisions”: see Ng Ka Ling at 30F-G. [81] This can be referred to as a “duty”: see Lau Kong Yung at 322H. [82] Ng Ka Ling at 30H-I. [83] Ng Ka Ling at 32C. [84] At 30I-31B. It is right to point out that in relation to the classification condition, the Court in Ng Ka Ling added a rider that the Court also had to ask “as a matter of substance” what was “predominantly” the provision in the Basic Law that was sought to be referred for an interpretation: at 33D. Following the 1999 Interpretation, in Lau Kong Yung, the Court said that it may be necessary to revisit the “classification and necessity conditions and the predominant test in an appropriate case”: at 324H-I. These issues however, do not arise in the present appeal. [85] At 229A-H. [86] At 257I-J. [87] At 32F-G. [88] In Lau Kong Yung, the term “judicial reference” is used: at 322H. [89] In saying this we recognize that the Court may arrive at its own interpretation of the relevant provisions in the Basic Law provided it does not arrive at a final view before reference: see Democratic Republic of the Congo v FG Hemisphere Associates LLC (No 1) (2011) 14 HKCFAR 95 at §§183, 223, 415. [90] Basic Law, Articles 2, 19(1) and 82. [91] Lau Kong Yung at 324D. [92] See the remarks of Sir Anthony Mason in Lau Kong Yung at 345H-346B. [93] Chong Fung Yuen at 223B. [94] See para 103 above. [95] Ng Ka Ling at 31C. [96] See para 97 above. |
Chief Justice Cheung: 1. At the conclusion of the hearing, we dismissed this appeal which raised a short point involving the priority of claims to the proceeds of sale of a property. These are my reasons. The facts 2. Tang Shung Ching Sabin[1] was the registered owner of the property known as Flat No. 1F, Ground Floor, Block 2, Lung Cheung Court, No. 29 Broadcast Drive, Kowloon together with a car parking space in the residential development[2]. The development had been constructed under a government housing scheme for civil servants. Tang purchased the Property and became its registered owner in 2004. Under the legal assignment by which he purchased the Property, the Property was assigned to him subject to certain “non-alienation” covenants, which prohibited him from assigning, mortgaging, charging or otherwise parting with possession of the Property or any interest therein, or entering into any agreement to do so, without the previous written consent of the Financial Secretary Incorporated[3]. Such consent would generally be granted only upon payment of a premium to the FSI. 3. To secure the performance of the non-alienation covenants, Tang gave a legal charge over the Property in favour of the FSI. The legal charge, like the assignment containing the non-alienation covenants, was registered in the Land Registry. 4. Over the years, Tang borrowed various loans from no less than five finance companies, including Winland Finance Limited[4] and Gain Hero Finance Limited[5], respectively the appellant and respondent in this appeal. 5. No doubt because of the prohibitions created by the non-alienation covenants, these loans could not be secured by any mortgage or charge over the Property, and means were adopted to obtain some form of security for the loans and have the loan agreements registered in the Land Registry. 6. In the case of Winland, this was sought to be done by means of an assignment of the balance of all future proceeds of sale of the Property receivable by Tang to Winland as security for the repayment of the loan. In clause 9 of the loan agreement dated 23 July 2014[6] whereby the loan of $2.2 million was advanced to Tang, the following was provided : “9.1 In consideration of the Facility advanced by the Lender under this Agreement and as security for repayment of all the indebtedness owed to the Lender by the Borrower, the Borrower as Beneficial Owner hereby assigns and agrees to assign to the Lender all his /her /their right and interest (“Assigned Rights”) to and in the balance of the consideration or purchase money for the sale of the Property more particularly described herein (after deduction and payment of any premium payable to the Government of Hong Kong Special Administrative Region the amount provided for removal of the restriction against alienation of the Property contained in clause 4 of the Assignment registered in the Land Registry by Memorial No.UB9403278 and any redemption money payable to the mortgagee /chargee under the existing Mortgage /Legal Charge of the Property) and any money whatsoever accrued or payable to the Borrower, in the Borrower's capacity as owner, vendor, assignor, transferor or mortgagor, from the purchaser, assignee, transferee or mortgagee of the Property or any other person(s) subject to the provisos contained in clauses 9.4 and 9.3 hereof ... 9.2 Upon full payment to the Lender of all the indebtedness owed by the Borrower to the Lender, the Lender shall at the request and cost of the Borrower reassign the Assigned Rights to the Borrower. 9.3 If, for whatsoever reason, the assignment of the Assigned Rights mentioned in clause 9.1 hereof does not have the effect as such, the agreement to assign made by the Borrower under the said clause 9.1 shall operate to assign the Assigned Rights and there shall deem to be an effective assignment of the Assigned Rights as soon as the Borrower is in the position to make such an assignment and the Borrower hereby covenants to the Lender that the Borrower shall from time to time at the request of the Lender execute all such documents and do all such acts as may be necessary to perfect to give effect to the said assignment. 9.4 The Borrower hereby IRREVOCABLY NOMINATED AND APPOINTS the Lender to be the Borrower's true and lawful attorney for the Borrower and in the Borrower's name or in the name of the Lender as such attorney at any time or times during the continuance of this Agreement to do perform transact and effectuate all or any of the following acts, deeds, matters and things:- (i) to receive the balance of the consideration or purchase money for the sale of the Property (after deduction and payment of any premium payable to the Government of the Hong Kong Special Administrative Region the amount provided for removal of the restriction against alienation of the Property contained in clause 4 of the Assignment registered in the Land Registry by Memorial No.UB9403278 and any redemption money payable to the mortgagee /chargee under the existing Mortgage /Legal Charge of the Property) and any money whatsoever accrued or payable to the Borrower … 9.5 The Borrower hereby covenants to the Lender that except with the written consent of the Lender, the Borrower shall not sell, charge, mortgage, dispose of or otherwise deal with the Property or any interest therein before the Borrower has fully settled all indebtedness under this Agreement. … 9.7 For the purpose of notifying the public of the Lender's right to receive the consideration or purchase money for the sale of the Property and other money as aforesaid, the parties hereto shall register this Agreement against the Property in the relevant Land Registry.” 7. As envisaged in clause 9.7, the parties managed to have their loan agreement registered in the Land Registry on 17 September 2014. 8. Relevantly, on 27 November 2014, Tang borrowed another sum of $1 million from Gain Hero. Under the loan agreement, Tang agreed not to sell or create or enter into any charge, lien or other encumbrance over the Property or otherwise dispose of the Property until full repayment. He also appointed Gain Hero as his attorney to “receive payment of the balance of purchase price” payable on completion of the sale of the Property. The parties also successfully procured the registration of the loan agreement in the Land Registry on 8 December 2014. 9. Tang defaulted in repayment of the loan due to Gain Hero. On 8 June 2015, Gain Hero obtained judgment against Tang for the sum of $1,130,684.93 together with interest and costs[7]. 10. On 29 June 2015, Gain Hero obtained a charging order nisi against the Property in enforcement of the judgment debt. On 4 August 2015, Gain Hero obtained a charging order absolute. Both the charging order nisi and charging order absolute were registered by Gain Hero in the Land Registry against the Property. 11. On 23 June 2016, Gain Hero commenced proceedings[8] for the sale of the Property in enforcement of the charging order. On 13 March 2017, the court made an order for the sale of the Property at a price of not less than $8 million, unless Tang should, within 28 days, redeem the Property by paying the outstanding judgment debt together with interest and costs – which Tang never did. The order directed that the proceeds of sale be distributed in the following order : “(a) for payment of premium (if any) to the Lands Department; (b) for discharge of all Government rent, taxes, rates and other outgoings due and affect the Property; (c) for payment to prior encumbrancer ranking immediately before the Charging Order, if any; (d) for payment of costs and expenses incurred incidental and in relation to the sale and discharge of all auctioneer’s remuneration and/or estate agent’s commission, not exceeding 1% of the selling price; (e) for payment of the legal costs of the sale of the Property, not exceeding HK$12,000.00 excluding disbursements and reimbursement to the Plaintiff for any fees paid to the Lands Department for the purpose of assessment of premium; (f) for payment of such amount due and owing under the Charging order as set out in paragraph 1 above; (g) for payment of the Plaintiff’s costs of the present proceedings as set out in paragraph 7 herein; and (h) any surplus be paid to the subsequent incumbrancer ranking immediately behind the Charging Order and if there is none, be paid to the Defendant.” 12. The order for sale was registered in the Land Registry on 29 March 2017. 13. On 31 August 2017, the Property was agreed to be sold to a purchaser for $10.08 million. 14. On 4 September 2017, Winland was informed of the intended sale of the Property pursuant to the court order. Winland, whose loan to Tang had also remained outstanding, maintained that the price of $10.08 million was below the market value of the Property. In any event, it also contended that it had priority over Gain Hero to the net proceeds of sale. The CFI decision 15. This eventually led to the commencement of two sets of proceedings between Winland and Gain Hero[9], raising a number of issues which were resolved by Deputy High Court Judge Keith Yeung SC (as he then was) in his decision dated 21 March 2019[10]. Of these issues, only one remained contentious in this appeal, namely the question of priority in relation to the net proceeds of sale of the Property after deduction of the amount required to discharge the encumbrance registered in favour of the FSI. However, it is noteworthy that one other issue decided by the deputy judge was that the assignment of proceeds of sale under clause 9 of the Winland loan agreement did not create any interest in or otherwise affect the Property, and was therefore not registrable in the Land Registry under the Land Registration Ordinance[11]. He therefore ordered the registration to be vacated[12]. From that particular decision, there was no appeal. 16. In relation to the question of priority, the deputy judge also held in favour of Gain Hero. He decided that the charging order obtained by Gain Hero was a charge on Tang’s beneficial interest in the Property itself. It was not simply a charge over the proceeds of sale of the Property. He held that Gain Hero’s interest thereunder had priority over any unregistrable interest which Winland had in any future sale proceeds of the Property under the Winland loan agreement[13]. The Court of Appeal judgment 17. On appeal[14], the Court of Appeal agreed with the deputy judge[15]. Giving the lead judgment of the court, Yuen JA referred to the submission on Winland’s behalf that its claim had priority “because [Gain Hero’s] interest under the Charging Order arose after [Winland’s] interest under the Assignment ... (bearing in mind the equitable nature of the interest created by the Charging Order)”[16] and explained : “27.2 I do not accept that submission as it ignores the difference in the class of assets. GH [Gain Hero]’s interest was in a different class (an interest in the Property given by statute) from that of WF [Winland]’s (an interest in future proceeds). 27.3 The enhanced status of a holder of a Charging Order is obvious. He can enforce it by sale, or by the appointment of a receiver to receive rents. And if he applies to court for sale of the land, the debtor can only redeem the land if he makes full repayment of the debt. The debtor cannot get any share of the proceeds for himself before the debt owed to the holder of the Charging Order is entirely satisfied. 28.1 It was argued on behalf of WF that the nature of the Charging Order is equitable. That is so, but that only refers to the nature of the interest. What is crucial is the class of the asset. To compare GH’s interest in the land with WF’s interest in the proceeds is not comparing like with like, for they are not within the same class of assets. Put another way, after GH obtained the Charging Order, WF could not enjoy any “equal equity” because WF’s security interest remained attached to the proceeds only. 28.2 Since Tang must defer to GH in his claim to proceeds, WF (as the assignee of Tang’s rights) cannot enjoy better rights than him. The judge was clearly right when he held that, like Tang, WF can only get its hands on what is left after GH has satisfied its loan.” Leave to appeal 18. By a notice of motion dated 24 May 2021, Winland sought leave to appeal on a question of law of great general or public importance: “What is the priority to the sale proceeds (“Proceeds”) of real property (“Property”) as between (i) an earlier assignee of the Proceeds pursuant to an equitable assignment of the same before the Property was sold and (ii) a judgment creditor who obtained a later charging order against the Property.” 19. By an order dated 9 August 2021, the Court of Appeal gave leave to appeal, and thus this appeal. Counsel’s arguments 20. Ms Audrey Eu SC[17], for Winland, essentially submitted that an assignment of future property takes effect in equity immediately upon the assignment provided the assignee has given value; whereas under section 20B(3) of the High Court Ordinance[18], a charging order has the effect of and is enforceable in the same manner as “an equitable charge created by the debtor by writing under his hand”. As opposed to a mortgage which gives the mortgagee an interest in the property in question, a charging order is simply a statutory security whereby the property is appropriated for the payment of the judgment debt, which is achieved by selling the property and using the proceeds to pay off the judgment debt under a court order for sale. In essence, a charging order, taking effect as an equitable charge, only operates to give the judgment creditor an interest in the proceeds of sale. Since the equitable assignment of the proceeds of sale under clause 9 of the Winland loan agreement was created prior to the charging order obtained by Gain Hero, the applicable priority rule should be that which governs competing priority between equitable interests, namely that the first-in-time prevails[19]. 21. A variation on the same theme was that Tang could not give to Gain Hero what he did not have (nemo dat quod non habet[20]). In other words, Gain Hero could not by its charging order get any more than whatever Tang could honestly give him. Its interest in the Property under the charging order was subject to every liability under which Tang held the Property. Gain Hero was not a subsequent bona fide mortgagee or purchaser for valuable consideration as it gave no fresh consideration in obtaining a charging order[21]. It therefore could not invoke the “equity’s darling” exception to the nemo dat rule. 22. Ms Eu contended that the Court of Appeal erred in effectively holding that, in law, there is a “class” exception to the “nemo dat” or “first-in-time prevails” principle[22]. She submitted that the dispute over priority in this case related to the proceeds, not the Property, and therefore there was no question of any different class of interest involved. 23. Gain Hero basically repeated its arguments below and supported the lower courts’ reasoning. Discussion 24. What was not in issue in this appeal was that an assignment of future property, including, as in the present case, the future proceeds of sale of a property (if and when sold), is more than a contract to assign the proceeds in future but takes effect in equity immediately upon the assignment provided the assignee has given value. When the subject matter comes into existence, the beneficial interest vests immediately in the assignee. Equity, treating that as done which ought to be done, fastens upon the property, and the contract to assign becomes in equity a completed assignment. The equitable ownership in the property passes automatically to the assignee, without any intermediate vesting of the beneficial interest in the assignor. Once the future property comes into existence and is acquired by the assignor, the rights of the assignee are deemed to “relate back” to the date of the assignment[23]. 25. Therefore, there was no dispute in the present appeal that the assignment of the balance of the sale proceeds of the Property (if and when sold) by Tang in favour of Winland was an equitable assignment of the future proceeds and took effect in equity immediately upon the making of the assignment. 26. However, what was also no longer in dispute after the CFI decision was that the assignment of the future proceeds did not create any interest in or otherwise affect the Property, so much so that the registration of the Winland loan agreement in the Land Registry against the Property was rightly vacated[24]. This is because only instruments in writing that affect land may be registered in the Land Registry under the Land Registration Ordinance: section 2(1)[25]. Instruments that do not affect land are simply not registrable. The provisions in sections 3(1) and (2)[26], which govern priority, are only applicable to instruments that are registrable under the Land Registration Ordinance – where the instruments are all so registered, section 3(1) determines priority; where a prior instrument that is registrable is not registered, section 3(2) applies to render it “absolutely null and void to all intents and purposes” as against “any subsequent bona fide purchaser or mortgagee for valuable consideration of the same [land]”. Where, however, an instrument does not affect land and is therefore not registrable, those provisions simply have no application[27]. 27. The significance of all this to the instant appeal lies in the fact that the assignment of the future proceeds of sale simply did not create an interest in or otherwise affect the Property. What Winland got under clause 9 of its loan agreement was merely an equitable chose in action in respect of the future proceeds but, importantly, it obtained no interest whatsoever in the Property itself – that is why the loan agreement was not registrable in the first place. 28. This is important because it means that so far as Tang’s beneficial interest in the Property was concerned, it was unencumbered by the assignment of the future proceeds in favour of Winland. So far as the Property was concerned, immediately before the making of the charging order, the only relevant encumbrance on the Property was the legal charge in favour of the FSI. 29. A charging order, on the other hand, is a creature of statute which affects land. Sections 20A(1) and (2) of the High Court Ordinance provide that “a charge may be imposed by a charging order” on an interest held by the debtor beneficially in land. Section 20B(3) goes on to provide that “a charge imposed by a charging order shall have the like effect and shall be enforceable in the same courts and in the same manner as an equitable charge created by the debtor by writing under his hand”. 30. Sections 20B(2) and (5) specifically provide for the registration and the vacating of the registration of a charging order in the Land Registry upon the making and discharge of a charging order respectively. 31. There can be no dispute that a charging order affects land and is registrable as such in the Land Registry[28]. It has like effect as an equitable charge, and is enforceable by a court order for sale of the land for the purpose of satisfying the outstanding judgment debt[29]. Contrary to what Ms Eu seemed to suggest at one stage during argument, a charging order does not simply affect the proceeds of sale of the land involved but also the land itself. In Yasaki International Co Ltd[30], Godfrey J (as he then was) rejected a similar argument : “Mr Yau then suggested, alternatively, that even if the assignment did not affect an interest in land, it was in no worse case than Yasaki’s charging order, which itself affected only the proceeds of sale of land. But I do not think this is correct. The effect of the charging order is prescribed by s20B(3) of the Supreme Court Ordinance (Cap 4). This provided that a charge imposed by a charging order shall have the like effect and shall be enforceable in the same courts and in the same manner as an equitable charge created by the debtor by writing under his hand. The charge so created would be a charge on the land itself, and not simply a charge over the proceeds of sale of that land.” 32. It is true that at common law, “a mortgage involves a transfer of legal or equitable ownership to the creditor, whereas an equitable charge does not”[31], and an equitable chargee “only gets a right to have the security [ie the charged property] made available by an order of the court”, but “gets no legal right of property, either absolute or special, or any legal right to possession” [32]. It is also true that an equitable charge only confers on the chargee “rights to apply to the court for an order for sale or for the appointment of a receiver [and thus to appropriate the rents and profits of the land], but no right to foreclosure (so as to make the property his own) or [to] take possession”[33]. Nonetheless, the availability of equitable remedies “has the effect of giving the chargee a proprietary interest by way of security in the property charged”[34], albeit that “the interest, though registrable against the chargor, remains inchoate and ineffectual until an order of the court is made”[35]. 33. It does not follow from the fact that the proprietary interest that an equitable chargee (and therefore a judgment creditor under a charging order) has in the charged property is “inchoate and ineffectual” until an order of the court is made for the sale of the property that an equitable charge or a charging order is no or little more than a mere charge over the proceeds of sale. It is one thing to be “inchoate and ineffectual” for the time being; it is another to say that it is not in existence at all as a proprietary interest in the property. Nor should one confuse the subject matter of the charge/security with its means of enforcement. Before the sale, an equitable charge or a charging order remains a proprietary interest in the property and is an encumbrance on it. 34. One consequence of this is that even if the chargee does not apply for a court order for sale to enforce the security, where the chargor/owner for whatever reason wants to sell the property, it can only be sold and a good title passed to the purchaser after or upon the discharge of the equitable charge or charging order as an encumbrance on the property, just like any other encumbrances on it. And where the proceeds of sale from the purchaser are the only source of money to pay off these encumbrances, the proceeds must first be so applied, which means that the chargee must be paid off first before any balance proceeds may be received by the chargor/owner or his assignee of the balance proceeds. 35. Analysed this way, Ms Eu’s attempt to downgrade a charging order to an equitable security over the proceeds of sale in order for her to apply the “first-in-time prevails” priority rule cannot be accepted. 36. In the present case, the charging order that Gain Hero obtained against Tang was directed at Tang’s beneficial interest in the Property. As explained, as at the time when the charging order was made, his interest in the Property was only subject to the legal charge in favour of FSI, but was otherwise unencumbered, as the earlier assignment of the future sale proceeds of the Property was not an assignment which created an interest in or otherwise affected the Property itself. This being the case, the charge created by the charging order, being a charge on the beneficial interest of Tang in the Property, was a charge over the Property subject only to the prior legal charge in favour of FSI but nothing else. It was not subject to the earlier assignment of the future sale proceeds. 37. Pausing here, it should be noted that the nemo dat maxim or the equitable principle of “first-in-time prevails” simply has no relevance to the legal analysis thus far. Tang’s beneficial interest in the Property was not in any way encumbered by the assignment of the future sale proceeds such that he could not pass an unencumbered proprietary interest (subject only to the legal charge) to Gain Hero under the charging order. Likewise, the subject matter of the earlier assignment of the future sale proceeds and the subsequent charging order over the Property being different, the equitable principle of “first-in-time prevails” simply has no application. 38. Moving on, when a charged property is sold pursuant to an order for sale, the property is of course converted into the proceeds of sale. Invariably, the order for sale would give directions for the distribution of the sale proceeds, which was what happened in the present case. Generally speaking, the court order should first provide for the discharge of all rent, taxes and rates and other outgoings due and affecting the property with the proceeds of sale, and then the discharge of all prior encumbrances on the property, that is, encumbrances which have priority over the charging order, as well as the costs and expenses of sale. The remaining proceeds will then be used to pay off the outstanding judgment debt and other monies covered by the charging order. If there is any surplus money, it will be used to repay the indebtedness of any other secured creditors whose securities on the property rank behind the charging order. If there is still any money left, it will go to the chargor/judgment debtor or his assignee of the proceeds[36]. Indeed, the order for sale in the present case gave similar directions for the distribution of the proceeds of sale. 39. As explained, the equitable assignment of the proceeds of sale under the Winland loan agreement did not give Winland any priority over Gain Hero’s charging order on the Property. Indeed, it did not give Winland any proprietary interest in the Property itself at all, and did not constitute an encumbrance on the Property. Winland’s entitlement to the proceeds of sale was derived from the judgment debtor/chargor (Tang)’s entitlement to the surplus proceeds, if any. It must therefore rank last. 40. In this regard, it should be noted that an assignment of the future proceeds of sale by an owner like Tang can only operate to assign the owner’s future entitlement to the proceeds of sale in favour of the assignee. The assignor cannot assign to the assignee what he is not entitled to receive by way of proceeds of sale upon the sale of the property. This is simply an application of the nemo dat maxim. Indeed, clause 9 of the Winland loan agreement in the present case only sought to assign to Winland Tang’s “right and interest … to and in the balance of the consideration or purchase money for the sale of the Property … in [his] capacity as owner, vendor …”, and did not purport to do otherwise. 41. All this means that in the present case, the proceeds of sale from the purchaser must, relevantly, go first towards discharging the outstanding judgment debt and other sums of money covered by the charging order, before any surplus can be released to Tang’s assignee to the proceeds of sale, that is, Winland. Analysed this way, in terms of “priority” to the proceeds, Gain Hero must rank before Winland. Disposition 42. For these reasons, the appeal was dismissed with costs. Mr Justice Ribeiro PJ: 43. I agree with the reasons for judgment of the Chief Justice. Mr Justice Bokhary NPJ: 44. I respectfully agree with the Chief Justice’s judgment, adding only my acknowledgment of the skill with which Ms Audrey Eu SC argued the equitable assignee’s case. No skill could overcome the difficulty that (i) the proceeds equitably assigned were those of a contemplated sale of real property free from encumbrances and that (ii) the charge imposed by the registrable and registered charging order obtained by the other side had become an encumbrance to be removed before arriving at any proceeds to which the equitable assignee could have recourse. Mr Justice Chan NPJ: 45. I agree with the reasons for judgment of the Chief Justice. Madam Justice McLachlin NPJ: 46. I agree with the reasons for judgment of the Chief Justice. Ms Audrey Eu SC, Mr Michael Yin and Mr Isaac Chan, instructed by Ho & Partners, for the plaintiff (appellant) Mr Jeevan Hingorani, Mr Lawrence Cheung and Ms Teresa Leung, instructed by HY Leung & Co LLP, for the defendant (respondent) [1] “Tang”. [2] “Property”. [3] “FSI”. [4] “Winland”. [5] “Gain Hero”. [6] “Winland loan agreement”. [7] HCA 465/2015. [8] HCMP 1608/2016. [9] HCMP 1980/2017 and HCMP 2671/2017. [10] [2019] HKCFI 771 (“CFI decision”). [11] Cap 128. [12] CFI decision, [38]-[55], [71]. [13] CFI decision, [67]. [14] CACV 186/2019. [15] [2021] HKCA 576, Lam VP, Yuen and Chu JJA, 27 April 2021 (“CA judgment”). [16] CA judgment, [27.1]. [17] Mr Michael Yin and Mr Isaac Chan with her. [18] Cap 4. [19] Snell’s Equity (34th ed), §4-002. [20] No one gives who possesses not. See Snell’s Equity, ibid. [21] Si Tou Choi Kam v Wealth Credit Ltd [2018] HKCA 250, [17]; Financial and Investment Services for Asia Ltd v Baik Wha International Trading Co Ltd [1985] HKLR 103, 110J-111G. [22] See CA judgment, [28.1]. [23] Secretary for Justice v Global Merchant Funding Ltd (2016) 19 HKCFAR 192, [37]-[39]; Tailby v Official Receiver (1888) 13 App Cas 523, 533; Hadlee v Commissioner of Inland Revenue [1991] 3 NZLR 517, 527‑528; In re Lind [1915] 2 Ch 345, 357, 363-366. [24] Re Yasaki International Co Ltd [1993] 1 HKC 349. [25] Si Tou Choi Kam, [13]. [26] Section 3 reads: “(1) Subject to this Ordinance, all such deeds, conveyances, and other instruments in writing, and judgments, made, executed, or obtained, and registered in pursuance hereof, shall have priority one over the other according to the priority of their respective dates of registration, which dates shall be determined in accordance with regulations made under this Ordinance. (2) All such deeds, conveyances, and other instruments in writing, and judgments, as last aforesaid, which are not registered shall, as against any subsequent bona fide purchaser or mortgagee for valuable consideration of the same parcels of ground, tenements, or premises, be absolutely null and void to all intents and purposes: Provided that nothing herein contained shall extend to bona fide leases at rack rent for any term not exceeding 3 years …” [27] This is very different from the type of situation, which is not the case here, where an interest in or affecting land is not created or evidenced by any instrument in writing but has arisen by operation of law, in which case there is no instrument to be registered under the Ordinance and the interest itself is often described as “not registrable”. Priority would be determined according to the normal rules under common law. Financial and Investment Services for Asia Ltd (unwritten equity arising from the discharge of a prior mortgage by a subsequent mortgagee) and Si Tou Choi Kam (resulting trust) are examples of this type of situation. [28] Re Yasaki International Co Ltd, 351H-I. [29] Order 50, rule 9A; Order 88, rule 5A, Rules of the High Court (Cap 4A). See generally Cousins on the Law of Mortgages (4th ed), §§19-01 to 19-11. [30] 351H-I. [31] In re Cosslett (Contractors) Ltd [1998] Ch 495, 508. [32] National Provincial and Union Bank of England v Charnley [1924] 1 KB 431, 450. [33] Carreras Rothmans Ltd v Freeman Mathews Treasure Ltd [1985] Ch 207, 227. [34] In re Charge Card Services Ltd [1987] Ch 150, 176. [35] Bland v Ingrams Estates Ltd [2001] Ch 767, [19]. [36] Section 54 of the Conveyancing and Property Ordinance (Cap 219) provides that upon the sale of the mortgaged land, the proceeds of sale shall be applied according to the following priority:- “(a) in discharge of all rent, taxes, rates and other outgoings due and affecting the mortgaged land; (b) unless the mortgaged land is sold subject to a prior incumbrance, in discharge of that prior incumbrance; (c) in payment of the receiver’s lawful remuneration, costs, charges and expenses and all lawful costs and expenses properly incurred in the sale or other dealing; (d) in payment of mortgage money, interest and costs due under the mortgage, and any residue shall be paid to the person who, immediately before any sale or other dealing, was entitled to the mortgaged land or authorized to give a receipt for the proceeds of the sale of that land.” “Mortgage” under the Ordinance is widely defined to mean “a security over land for securing money or money’s worth”: section 2. |
Chief Justice Ma: 1. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Ribeiro PJ: 2. This appeal is brought by the Employees Compensation Assistance Fund Board (“the Board”) raising two questions which are of great practical importance to its operations. The first is whether the courts have jurisdiction to make costs orders against the Board in certain proceedings to which it is a party. The second is whether the Board is empowered to enter into binding settlements regarding claims or potential claims for payments out of the Fund which it administers. A. The Board and the Fund 3. The Board was established in 1991 by the Employees Compensation Assistance Ordinance (“ECAO”)[1] to provide relief for employees and other eligible persons who are entitled to compensation under the Employees’ Compensation Ordinance[2] (“ECO”) or to common law damages in respect of employment-related injuries, but who are unable to make recovery against the employer or any insurer. 4. Payments to those eligible for relief are made out of a Fund established under the ECAO[3] which the Board holds upon trust to administer in accordance with the objects of the Ordinance.[4] The ECO[5] makes it compulsory for employers to take out insurance policies for indemnity against liability to their employees for injury or death by accident arising out of and in the course of their employment. Upon payment of each premium, a statutory levy is imposed[6] and more than half of the levies collected are distributed to the Board[7] for application pursuant to the ECAO.[8] The resources of the Fund derive largely from such insurance levies. 5. An employee who is injured at work may bring proceedings against the employer for compensation under the ECO or for damages at common law, or commonly, for both. The Board has a statutory contingent liability which is likely to become actual in cases where the employer has no substantial means and no insurance cover, whether or not the claim is contested. Upon becoming aware of such a case, the Board may wish to take steps to protect the interests of the Fund. This appeal examines what the Board can properly do to that end and what consequences may follow from the steps which it takes. In particular, where the Board decides to intervene in the proceedings between employee and employer, for instance, to ensure that the claim is not collusive or extravagant and is properly defended, the issue arises as to what the costs consequences of such intervention may be. Or if the Board thinks that seeking an early settlement of a potential claim against the Fund is in its best interests, the question arises as to whether the law permits it to contract a binding settlement. Answers to these questions are matters of statutory construction, as we shall see. B. The present claim and the decisions below 6. The plaintiff was an interior decoration worker who sustained injuries at work. The 2nd defendant had been engaged by the 1st defendant to do the construction work. The plaintiff alleged that the 2nd defendant was his employer but brought proceedings against the defendants for compensation under the ECO and for common law damages. The case was discontinued against the 1st defendant in 2015 when he settled the plaintiff’s claims by payment of $80,000. 7. That left the plaintiff’s claims, which included one for over $4.7 million damages, against the 2nd defendant who had no insurance cover and who acted in person throughout. In these circumstances, the Board obtained leave to be joined as 3rd defendant in the proceedings, stating that it wished to participate in the assessment of damages. It proceeded in 2016 to commission a medical report jointly with the plaintiff and to file an answer to the plaintiff’s statement of damages, putting forward a lower assessment. 8. The plaintiff obtained judgment against the 2nd defendant for $602,380 before Deputy District Judge Chow[9] in the ECO proceedings in September 2016. The common law action then came on for trial in May 2017 and at its commencement, the plaintiff and the Board agreed to settle his potential claim under the ECAO for $1.42 million.[10] The 2nd defendant was not party to this settlement and the trial proceeded against him before Deputy High Court Judge To, resulting in an award of damages in the sum of $2,110,927. Deducting the sums of $80,000 received from the 1st defendant and the ECO award of $602,380, the net amount of damages due to the plaintiff from the 2nd defendant was $1,428,547, which was marginally more than the settlement amount agreed with the Board. The Judge ordered the 2nd defendant to pay the plaintiff’s costs but refused the plaintiff’s application for costs against the Board as from the date of its joinder in the action, directing that there should be no order as to costs as between the plaintiff and the Board.[11] 9. The plaintiff sought and obtained leave from the Court of Appeal to appeal against the direction of no order as to costs. He sought to contend that the Judge should have adopted the approach in Kwan Kam Pui v Fung Man,[12] where Bharwaney J suggested certain “usual orders” that ought to be made against the Board in cases where it had intervened in proceedings which resulted in awards in favour of the plaintiff.[13] By a respondent’s notice, the Board sought to uphold the Judge’s order on the additional ground that the court lacked jurisdiction to make any costs orders against it. The plaintiff’s appeal was dismissed on the ground that there was a wide discretion as to costs and that there was no basis for interfering with the order made. 10. Regarding the challenge to jurisdiction, in Jiang Zhong v Yeung Chun Leung,[14] the Court of Appeal had held that the court does have jurisdiction to make costs orders against the Board where it is joined as a party. Although the Court of Appeal in the present case[15] said that it was unnecessary to determine the issue of jurisdiction, having dismissed the plaintiff’s appeal on the merits, it nevertheless endorsed the decision in Jiang Zhong, rejecting the Board’s submission that that decision was either obiter or plainly wrong. 11. Relying on section 29 of the ECAO,[16] the Court of Appeal also held that it was open to the Board to enter into a settlement agreement in relation to any issue in the proceedings, rejecting the Board’s submission to the contrary.[17] 12. The Board was unsuccessful before the Court of Appeal in its application for leave to appeal to this Court.[18] Leave was, however, granted by the Appeal Committee,[19] confined to the following questions of law: Question 1 Whether, upon proper construction of the provisions of the [ECAO], and in particular s.20B(3) thereof, the court has jurisdiction to order costs against the Board in common law damages claims to which the Board joins in pursuant to s.25A of the ECAO (“Joinder Cases”), and if so, whether there is a “usual order” or “starting point” on costs to be made or ordered in Joinder Cases where the Board (i) disputes liability and quantum, and (ii) disputes quantum only (See [Court of Appeal] Judgment §§14, 20, 32 and 34). Question 2 Whether, in view of the fact that a plaintiff is entitled under s.20B(l) of the ECAO to an amount of relief payment which “shall be the amount of damages for which the employer is liable to pay to the eligible person”, the Board, as a statutory body constituted under ECAO, has power to settle with a plaintiff on the quantum of relief payment payable by the Board before such amount of damages for which the employer is liable is known, i.e. before trial or assessment of damages, and if so: (a) Whether the trial judge was correct that should the quantum of damages assessed against the employer be higher than the agreed amount, the plaintiff cannot apply to the Board for relief payment in respect of the difference, and should the quantum of damages assessed against the employer be lower than the amount agreed between the plaintiff and the Board, the Board may have no authority to pay the plaintiff the higher amount that has been agreed (See §§40-41 of the [Court of Appeal] Judgment and §25 of the judgment of trial judge dated 23 June 2017). (b) Whether the Board has power under the ECAO to pay the agreed relief payment to the plaintiff in the absence of an application under s.20A of the ECAO (Cf. ss.28(1) and 30 of the ECAO in relation to compensation claims). (c) If not, what is the legal effect of such settlement between the plaintiff and the Board? C. Question 1 C.1 Jurisdiction and ECAO section 20B(3) 13. ECAO section 20B(3) states: “Notwithstanding the definitions of ‘compensation’ and ‘damages’, [20] for the purposes of determining the amount of a relief payment— (a) any interest payable on any amount; and (b) any costs, arising from proceedings in respect of any damages or compensation claim shall not be included.” 14. Ms Audrey Eu SC,[21] relies on this provision for the submission that, by excluding any costs from being part of the relief payment, it deprives the court of jurisdiction to award costs against the Board in all damages claims. 15. That submission cannot be accepted. Section 20B(3) must be construed in the context of sections 20A and 20B read together. Section 20A materially provides: (1) An eligible person who is unable to recover from an employer payment of an amount of damages for which the employer is liable may apply for a relief payment of that amount from the Fund. (2) For the purposes of this section, an employer is not to be regarded as liable for the payment of an amount of damages unless the amount is payable pursuant to a judgment or order of a court of competent jurisdiction in Hong Kong. (3) For the purpose of this section, an eligible person is not to be regarded as being unable to recover from an employer payment of an amount of damages for which the employer is liable unless the eligible person has taken such proceedings to recover payment of the amount— (a) from, wherever applicable— (i) the employer; and (ii) an insurer who has issued a policy of insurance— (A) which is in force in relation to the injured employee at the time of the accident concerned; and (B) indemnifying the employer in respect of such liability; and (b) as are reasonable in the circumstances, having regard to the likely cost of such proceedings, the resources available to the eligible person and the amount likely to be recovered from, wherever applicable, the employer and the insurer.” ... 16. Section 20A therefore lays down the conditions for claiming a relief payment arising out of an unsatisfied judgment for common law damages. Those conditions principally involve obtaining a judgment and having unsuccessfully taken reasonable proceedings to secure payment. Section 20B then goes on to prescribe the amount of the relief payment claimable, stating that it shall be the amount of damages which the employer is liable to pay, reduced by any ECO compensation paid or payable and by any amount of the damages already paid.[22] 17. It is in that context that section 20B(3) operates. Like sections 20B(1) and (2), that subsection is concerned with circumscribing the quantum of the relief payment. It specifies that the relief payment is not to include any sum of interest or costs awarded to the employee against the employer. It does not address or seek to limit the court’s power to order costs against the Board. 18. That this is the effect of section 20B(3) appears clearly in cases where the employee applies to the Board for a relief payment arising out of a damages award obtained in proceedings to which the Board was never a party. As we shall see, the ECAO caters both for such cases and for cases in which the Board was joined as a party to the action between employee and employer. Leaving the joinder cases aside for now, when section 20B(3) is applied where the Board played no part at all in the underlying proceedings, there is obviously no question of any costs order being made for or against the Board since it was not a party to any relevant proceedings. It merely receives an application for relief from an employee who has independently taken the case against the employer to judgment and failed to make recovery. In such cases, section 20B(3) clearly functions merely to limit the amount of the relief payment claimable by the employee. It has nothing to do with the court’s jurisdiction to make costs orders against the Board. C.2 Jurisdiction and cases where the Board is joined as a party 19. By section 25A,[23] the ECAO authorises the Board to apply in certain circumstances to be joined as a party to existing proceedings brought against the employer for compensation or damages: “If proceedings have been initiated to claim compensation or damages ..., the Board may apply to the court to be joined as a party to the proceedings as follows— (a) where no policy of insurance is known to be in force at the time of the accident to which the proceedings relate, the Board may apply to the court to join in the proceedings as a party in accordance with Order 15, rule 6 of the Rules of the High Court ... or Order 15, rule 6 of the Rules of the District Court ..., as the case may require, to take over the defence as if it were the employer in the proceedings if— (i) the employer cannot be identified or, if identified, cannot be found; (ii) the employer is insolvent; (iii) the employer is dead or has been dissolved, wound up or struck off the register; (iv) the employer, for any reason, cannot be served with the notice of proceedings; or (v) at any time when the employer fails to attend the hearing, leaving the claim uncontested; (b) where no policy of insurance is known to be in force at the time of the accident to which the proceedings relate and the employer is present at the proceedings, the Board may apply to the court to join in the proceedings as a party in accordance with Order 15, rule 6 of the Rules of the High Court ... or Order 15, rule 6 of the Rules of the District Court ..., as the case may require; (c) where the insurer concerned is insolvent, the Board may apply to the court to join in the proceedings as a party in accordance with Order 15, rule 6 of the Rules of the High Court ... or Order 15, rule 6 of the Rules of the District Court ..., as the case may require.” 20. Where the Board does become a party to the proceedings, the occasion may obviously arise for considering whether costs incurred in the conduct of those proceedings should be awarded whether in favour of or against the Board. 21. The ECAO distinguishes between the Board’s participation in claims for ECO compensation as against participation in actions for damages; and, as appears from section 25A, between situations where the defendant employer is or is not a participant in those proceedings. 22. Thus, ECAO section 25(2) authorises the employee to issue an ECO claim against the Board “as if it were the employer” where the employer is, for one of the specified reasons, unavailable for suit[24] and where there is no applicable insurance policy in force. The Board is thus evidently to be named as the defendant in such cases and section 25(4) provides that the rights and liabilities of the employer in respect of the compensation are vested in and transferred to the Board. 23. But there is no similar provision for an action for damages to be instituted against the Board. Only where proceedings have already been issued by an employee claiming damages (or ECO compensation) against the employer does section 25A enable the Board to apply to the Court in accordance with Order 15 rule 6 of the Rules of the High Court (“RHC”) to be joined as a party to those proceedings. As set out above, section 25A specifies three sets of circumstances in which there might be such joinder which are evidently aimed at permitting the Board’s intervention in two main situations. First, under section 25A(a), the purpose of the Board’s joinder is “to take over the defence as if it were the employer in the proceedings” in circumstances where the employer is effectively not present in, or not defending, the proceedings. Secondly, under paragraphs (b) and (c), while the employer is present, there is no insurance cover so that it is likely that recourse will be had to the Fund. 24. Unlike section 25 (dealing with ECO claims), section 25A(a) is not explicit about the consequences of joinder. It does not, for instance, expressly provide for the rights and liabilities of the employer to be vested in the Board in respect of the action for damages.[25] Nevertheless, in authorising the Board to take over the defence “as if it were the employer”, the legislature must have envisaged the Board being able actively to test, limit or resist the employee’s claim regarding liability and/or quantum to ensure that the Fund’s resources are properly applied. 25. The consequences of the Board joining the proceedings under section 25A(b) and (c) are even less explicitly spelt out. However, it is a compelling inference that the legislative intent was to enable the Board to be joined as a party to keep an eye on the proceedings in which the employer is still participating, given the Fund’s contingent liability to make relief payments tied to the level of judgments obtained by the employee. Whether, in such circumstances, the Board takes an active role defending against the employee’s claim will obviously depend on the circumstances. If the claim is being properly defended by the employer, the Board might be content essentially to maintain a watching brief and no costs consequences are likely to follow. On the other hand, if the claim is extravagant or collusive or if the employer is not mounting a proper defence, the Board may wish actively to participate in the proceedings to mount an effective defence,[26] in which case there may be consequences as to costs arising out of the conduct of the proceedings. 26. In Section C.1 above, I have concluded that ECAO section 20B(3) does not exclude the court’s jurisdiction to order costs for or against the Board. And in the foregoing discussion, the possible relevance of costs orders where the Board takes an active role in proceedings has been pointed out. But does the Court have power to make such orders as to costs? 27. The answer is plainly in the affirmative. Section 52A(1) of the High Court Ordinance[27] confers a general power on the court to make costs orders in all civil proceedings: “Subject to the provisions of rules of court, the costs of and incidental to all proceedings in the Court of Appeal in its civil jurisdiction and in the Court of First Instance, including the administration of estates and trusts, shall be in the discretion of the Court, and the Court shall have full power to determine by whom and to what extent the costs are to be paid.” 28. Since, pursuant to ECAO section 25A, the Board is made a party to the proceedings in accordance with RHC Order 15 rule 6, the power to order costs conferred by section 52A clearly extends to possible orders against the Board. Indeed, section 52A(2) enables costs to be ordered even against a non-party[28] so that, a fortiori, costs can be ordered against a person joined as a party under RHC Order 15 rule 6, whether or not judgment in the action is entered against such person. If the general power conferred by section 52A is to be excluded, one would expect this to be done by some clear provision. There is nothing in the ECAO to such effect. C.3 Jurisdiction and ECAO section 29 29. Moreover, ECAO section 29 offers a clear positive indication that costs may be ordered against the Board. It provides as follows: “(1) Notwithstanding any other law where, in proceedings to which the Board is a party under this Part, the Board makes a written offer to any other party in the proceedings which is expressed to be ‘without prejudice save as to costs’ and which relates to an issue in the proceedings, then in deciding the question of costs the court shall take into account any such offer which has been brought to its attention. (2) An offer made under subsection (1) shall not be communicated to the court until the question of costs falls to be decided.” 30. Thus, where the Board has intervened in an action, section 29 empowers it to make an offer to another party – who will, in the nature of things, generally be the plaintiff employee – placing that party at risk as to costs if the offer is not accepted. It is implicit that acceptance of the offer would save costs on both sides, being an offer to settle the claim or some time-consuming issue in the claim, so that a refusal of the offer, if followed by an outcome in which the plaintiff fails to improve upon what is on offer, may be seen as unreasonable and lead to adverse costs consequences. 31. The underlying premise of section 29 is therefore that costs are in play in the proceedings. In practice, the risk which the plaintiff faces is that the court, when it comes to take the offer into account, may deprive him or her of costs against the Board as from the time of the making of the offer. This necessarily implies potential liability of the Board for costs in connection with the continued conduct of the proceedings which section 29 empowers it to guard against. 32. Whilst it is conceivable that refusal of the offer might lead to costs being ordered against the plaintiff, this may in practice be unlikely, not only because of the injured employee’s probable impecuniosity, but also because the Board’s role in joining as a party is to monitor the proceedings to ensure that relief is appropriately granted, rather than to adopt an excessively adversarial stance against the injured employee. In the normal course, the costs of the Board’s participation in proceedings are treated as part of its operating expenses[29] and it will generally not seek to fund such participation by depriving injured employees of a significant portion of an appropriately quantified relief payment. 33. The court of course retains a wide discretion and, in exceptional cases, if the employee’s conduct viewed overall has been egregious, such as where the claim is fraudulent or seriously extravagant, it may result in an order for costs in the Board’s favour. Section 29 is nevertheless principally about depriving the plaintiff of litigation costs which he or she would otherwise have recovered as against the Board, clearly indicating the existence of jurisdiction to make such costs orders. 34. Ms Eu’s only response to section 29 was to argue that it somehow does not apply to cases in which the Board has applied to join as a party pursuant to ECAO section 25A. I have to say that I find that argument incomprehensible. Section 29 applies “where, in proceedings to which the Board is a party under this Part, the Board makes a written offer (etc)”. Where the Board is joined under section 25A, it is “a party under this Part”, that is, Part IV of the ECAO. It is unarguable that section 29 does not apply to such joinder cases and was rightly “firmly rejected” in the Court of Appeal.[30] 35. That jurisdiction to order such costs exists has been recognised by the Court of Appeal in Jiang Zhong v Yeung Chun Leung,[31] applying an analysis similar to that developed above. C.4 Discretion in ordering costs against the Board 36. In Kwan Kam Pui v Fung Man,[32] Bharwaney J considered how the discretion to order costs against the Board should be approached and decided that a “costs to follow the event” order should be usual, equating the Board with the employer vis-à-vis the employee. His Lordship put it thus: “In my judgment, the usual order should be made against the ECA Fund Board, as is made against an employer defending the proceedings against whom a judgment for damages has been obtained. Such usual order is to pay the entire costs of the action, not just costs from the date of the intervention by the ECA Fund Board, in cases in which the ECA Fund Board has intervened and disputed liability and quantum or has obtained an order to set aside interlocutory judgment for damages to be assessed in order to dispute liability and quantum. The taxation of such costs would ensure that any costs and expenses which were unreasonably incurred would not be allowed on the taxation. The costs of necessary steps taken to prosecute a claim to judgment ought to be recoverable in a case in which the ECA Fund Board intervenes to dispute liability, even though those steps were taken before its intervention. ... Where the ECA Fund Board intervenes in order to dispute the injured employee’s claim on quantum only, then the usual order ought to be the one made by Master Lung, as he then was, in Lau Tuen Ping v Law Wai Kwong & Anor,[33] namely, that the ECA Fund Board ought to pay the costs of the proceedings from the date of its joinder.”[34] 37. At first instance below, Deputy High Court Judge To expressed broad agreement with Bharwaney J although noting that his “usual orders” were merely a starting-point and not invariable.[35] Although he acknowledged that the Board was not like an ordinary litigant and played a “filtering role” to screen out unmeritorious or inappropriate claims,[36] he agreed that where the Board disputes liability it would generally be appropriate that costs should follow the event so that the Board should pay all the costs, including those incurred before the date of joinder, if the employee succeeds in his claim.[37] 38. However, where the Board intervened only on the issue of quantum, his Lordship held that the starting-point should be that the Board pays the employee’s costs from the date of joinder unless the claim was “outside the range of reasonable dispute”. This would prima facie arise “if the amount of damages claimed by the employee exceeds that awarded by the court by one-third” in which case the Board should not have to pay the employee’s costs.[38] He also held that that starting position might be modified in the light of untoward behaviour by either party in the conduct of the proceedings: “Where the Board only plays a filtering role, the proper starting point remains that the Board shall pay the employee’s costs, but the court may, in light of the attitudes of both parties to the proceedings and the difference between the amount of damages awarded by the court and the amount claimed by the employee, make such costs orders as it thinks fit. The factors to be considered by the court include: whether the Board has only assumed a filtering role or has assumed an antagonistic role, whether it has adopted an unnecessarily antagonistic attitude, wasted time, raised unnecessary, frivolous or technical issues, etc; whether the employee has inflated the claim, adduced false evidence, misled the court, misled the Board, made an act or omission which caused the Board to raise unnecessary issues. Where the amount claimed by the employee is outside the range of reasonable dispute, the proper starting point in considering costs is that both parties shall bear their own costs. In appropriate cases, the court may even order the employee to pay part or all of the Board’s costs.”[39] 39. In the present case, the plaintiff claimed $4,871,113.20 but was awarded only $2,110,927 so that the claim went “way beyond the range of reasonable difference”.[40] This resulted in Deputy High Court Judge To making no order as to costs so that each party was to bear its own costs.[41] 40. In the Court of Appeal, the plaintiff sought to argue that Deputy High Court Judge To was wrong not to apply Bharwaney J’s approach and thus not to direct, as a “usual order”, that the Board pay the employee’s costs as from the date of joinder, challenging the Judge’s use instead of the one-third measure.[42] 41. This was rejected by Kwan JA writing for the Court of Appeal. Her Ladyship regarded Bharwaney J’s “usual orders” as merely the starting-point in the exercise of discretion.[43] She held that Deputy High Court Judge To’s one-third measure was avowedly “at random” and not decisive,[44] his Lordship having in fact duly taken into account the conduct of the parties in accordance with RHC Order 62 rule 5(2), including: “(a) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; (b) the manner in which a party has pursued or defended his case or a particular allegation or issue; (c) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and (d) conduct before, as well as during, the proceedings.”[45] 42. Kwan JA concluded that the Judge’s exercise of discretion had not miscarried and that there was no ground for interfering with it.[46] 43. In my view, the court should not adopt as its starting-point the “costs following the event” criterion and should not equate the Board with an employer conducting adversarial proceedings against the employee. The Board is a statutory authority holding the Fund as a trustee and required to consider applications for payment or relief.[47] The Ordinance plainly requires the Board to be proactive in ensuring that the Fund’s resources are properly applied and not subject to abusive or unjustified claims. Thus section 25B requires potential claimants on the Fund to give the Board notice of proceedings instituted for compensation or damages. Section 25B(7) provides that on receiving notice, the Board “shall carry out such inquiries as it considers necessary to facilitate the proper carrying out of the functions of the Board in relation to the claim to which the notice relates”. As we have seen, section 25A enables the Board to apply for joinder as a defendant in the circumstances discussed in Section C.2 above. Where the employer is not present or not interested in defending, etc, joinder is to allow the Board “to take over the defence as if it were the employer in the proceedings”.[48] And where the employer is present but there is no insurance cover so that the Fund is likely to be drawn on, the Board is by necessary implication, authorised, if necessary, to do likewise.[49] 44. Thus, the Board is authorised and required to scrutinise and, if thought necessary, to intervene in order to test the validity of the plaintiff’s case whether on liability, quantum or both, in carrying out its statutory duties. Where an employee obtains an award of damages after such scrutiny or intervention it does not mean that the Board has “lost” the case so as to constitute “the event” justifying an award of costs against it. The “event” properly viewed, is the outcome of the plaintiff’s action against the employer (whether or not actually present) and not the process involving the Board’s intervention. 45. The Board’s role was properly recognised by the trial judge: “In participating in the proceedings, the Board’s function is neither to contest the employee’s claim in place of the employer nor to help save public funds, but is to ensure that employees in need can obtain such damages as they are entitled to. The Board has a duty to screen out unmeritorious or inappropriate claims to ensure (inter alia) that this assistance mechanism will not be abused, its recipients will not exaggerate their claims, and public funds will not be used for improper purposes. Therefore, unless it is necessary to contest false claims or suspected fraudulent claims, the Board should not adopt an antagonistic attitude in the proceedings. It should act as a filter and adopt an impartial attitude in the proceedings so as to assist the court in coming to a correct ruling.”[50] 46. In my view, such recognition dictates that where the Board has been joined as a party and properly carries out its “filtering” or monitoring functions, the appropriate starting-point should generally be no order as to costs, irrespective of whether the Board sought to test the case as to liability, quantum or both. 47. That is the starting-point and a different costs order might be warranted on particular facts. One naturally expects that, having intervened, the Board will behave in a responsible manner but if, in what will hopefully be a rare case, its conduct is unreasonable or misconceived or unjustifiably antagonistic, unnecessarily prolonging its intervention, or otherwise untoward, the court may, in the exercise of its discretion, consider ordering the Board to pay the plaintiff’s costs. Factors such as those referred to in RHC Order 62 rule 5(2) set out above would be relevant. Where such considerations may arise, ECAO section 29 offers are especially relevant and will be taken into account.[51] It must, however, always be kept in mind that the discretion to order costs is broad and to be flexibly exercised in the light of the specific circumstances. D. Question 2 48. The ECAO does not explicitly deal with the Board settling potential relief payment claims based on actions for damages. In contrast, section 28(1) expressly authorises settlement of potential ECO-based claims under section 16: “Where it appears to the Board that a person is or might be entitled to apply under section 16 for a payment from the Fund, the Board may, in the interests of the protection of the Fund, and on such terms as it sees fit, offer to pay from the Fund to or on behalf of that person an amount in satisfaction of such entitlement.” 49. Section 28 then goes on to prescribe the consequences where a person accepts[52] or rejects[53] the offer and, in a joinder case, authorises the Board to agree the costs without going to taxation. No equivalent section deals with settling cases based on damages claims. 50. Ms Eu relies on the inapplicability of section 28 to damages claims, making the point that prior to the 2002 amendments to the ECAO, the previous section 28 did apply to damages claims, but that power had been expressly removed by the amendment exercise. D.1 The desirability of the Board having power to settle potential claims 51. As a matter of policy, it is obviously desirable that the Board should have power to settle potential relief payment claims just as it has power to settle ECO-based compensation claims. If no such power exists, the misgivings expressed by Bharwaney J in Lau Yuk Hung v Tsang Kwong Ming,[54] and repeated in Kwan Kam Pui v Fung Man,[55] would have even greater force. His Lordship was concerned about: “... the current state of affairs ... under which injured persons, who are unable to recover payment from their employer are required, nevertheless, to prove their claim for common law damages in court, and incur the costs of proving their case in court, before they can claim payment from the [Board] but who, when they claim payment, after obtaining such judgment, are told that the [Board] is not liable to pay interest on the damages that had been awarded and, more surprisingly, that the [Board] is not liable to pay the costs incurred in proving their case in court and obtaining that judgment against the employer. It is a catch 22 situation: the injured employee cannot get payment from the [Board] unless he obtains a judgment from court but he would not be reimbursed for the costs incurred in obtaining that judgment. The net result is that any damages that are awarded are reduced by the amount of the costs incurred to obtain that judgment, which can run into a few hundred thousand dollars.” 52. He pointed out that in the Kwan case, the plaintiff’s taxed costs estimated at $500,000 would have to come out of the net recovery amount of HK$800,000, leaving the plaintiff with only $300,000, which was less than the amount of costs incurred in bringing the proceeding to a conclusion.[56] 53. An important object of the ECAO is obviously to grant financial relief to injured employees without the relief payments being eaten up by legal costs. The problem adverted to by Bharwaney J would be exacerbated if there was no power to settle. It would also mean that where the Board became a party, it would in effect have to remain for the entire proceedings, thereby increasing costs. The need to encourage early settlements to save legal costs was acknowledged at the meeting of the LegCo on 17 May 2001 both by a LegCo member and the government official proposing the legislation.[57] D.2 The issues bearing on the existence of a power to settle 54. Two related issues which principally bear on whether the Board has power to settle potential damages-based relief payment claims appear to me to be as follows: (a) The Board is in the position of a trustee and is not free to apply the Fund save in accordance with the terms of the ECAO. So, given the contrast between the way settlements of ECO-based compensation claims are dealt with by section 28 and the absence of express provision regarding claims based on common law actions, are there any provisions in the ECAO giving the Board power to settle and to disburse amounts from the Fund by way of settlement? (“the first issue”) (b) If there is a power to settle, can the Board contract a settlement without the amount to be paid out being determined by a judgment and assessment of damages against the employer as provided for by ECAO sections 20A and 20B? If so, how is the settlement amount to be determined? (“the second issue”) D.3 Settlement and section 29 55. The resolution of each of those issues depends on ECAO section 29 which has been set out in Section C.3 above. It provides that where the Board has intervened in an action, section 29 empowers it to make an offer to another party, generally the plaintiff employee, to settle any issue in the proceedings (which must include the ability to settle the entire claim), so that a refusal to settle, if proven to have been unreasonable (as by the plaintiff achieving only a lower award and relief payment), may lead to adverse costs consequences. 56. Section 29 is therefore a measure expressly aimed at cutting down legal costs. It is wholly aligned with the policy objective of encouraging settlements so that costs are reduced and erosion of relief payments minimised. In conferring on the Board a broad power to make such offers, section 29 expressly, or at least by necessary implication, empowers it to enter into settlement agreements with other parties to proceedings in which it has intervened. Such settlements are therefore intra vires the Board. So is any payment out to the eligible person of an agreed settlement amount[58] since ECAO section 8(d) materially provides that “[the] Board may pay from the Fund ... any ... sums ... permitted to be paid by the Board under this Ordinance.” The answer to the first issue raised above is therefore in the affirmative. 57. The deletion of a power previously in section 28 to settle is neither here nor there. It is section 29 that provides a legal basis for settlement. It is applicable in the context of section 25A, enacted in the 2002 amendments, expressly permitting the Board to be joined as a party to the proceedings. D.4 The quantum of a settlement offer 58. Given that the Board has power to settle claims, the second issue mentioned above poses the question whether there are any constraints as to the manner in which, and the amount for which, it may settle. This is reflected in Question 2 which asks whether any power to settle may be constrained (i) by the reference in section 20B(1) to the amount of relief payable being “the amount of damages for which the employer is liable to pay to the eligible person [subject to deductions]”; (ii) by such amount having to be determined at trial and on an assessment of damages; (iii) by the need for an application for relief under section 20A which requires the applicant to have secured judgment and to have taken reasonable proceedings to recover payment.[59] 59. It should at once be pointed out that if, although having power to settle, the Board is constrained not to make a settlement agreement unless and until quantum is determined at trial and after an assessment of damages, the important object of facilitating early settlements to avoid running up legal costs would be entirely defeated. The injured employee would be forced to navigate through the statutory machinery, toiling on until the bitter end to secure a judgment and an assessment of damages, incurring costs which would eat significantly into the settlement amount. 60. Section 29 provides the means to avoid such a counter-productive position. Its central premise is that the offer is made, and hence that the claim may be settled, before the proceedings reach the stage of trial and judgment. The possible “prejudice as to costs” only arises if the offer is rejected and the employee presses on with the case after the date of the offer. Section 29 makes no sense otherwise. Accordingly, if an offer to settle is accepted, it is necessarily implicit that a contractually binding agreement comes into being between the Board and the eligible person which disposes of that claim, making it no longer necessary to operate the statutory machinery set out in sections 20A, 20B and so forth. Settlement is, in other words, an alternative route to obtaining the relief provided by the ECAO and disposing of the employee’s claim or potential claim against the Fund. 61. How does the Board decide the amount at which it should settle? As with all settlements arrived at before the court’s award is made, this must depend on the parties’ assessment of the likely range of the award. If the settlement mechanism provided by section 29 is to work, the Board must have power to make an offer based on its assessment of what is a reasonable sum, arrived at in good faith on available information it considers sufficient. It is equipped by the ECAO to secure relevant information. As already noted, section 25B(7) requires the Board to “carry out such inquiries as it considers necessary to facilitate the proper carrying out of the functions of the Board in relation to the claim to which the notice relates”. Section 25B(8) gives it compulsory powers[60] to obtain any required information: “For the purpose of carrying out inquiries under this section, the Board may— (a) require the employer ... the employer’s insurer or any other employee of the employer to furnish such information or particulars relating to the claim; and (b) make such inquiries from any other person connected or associated with the claim, as the Board considers necessary. 62. How much information the Board acquires will differ from case to case and its adequacy may depend on the particular facts and the nature of the defendant’s allegations. If the Board has decided to intervene pursuant to section 25A, it will have ascertained that the defendant employer is uninsured and unlikely to be good for any judgment obtained. The Board may be in a good position, for the purposes of quantum, to assess the employee’s injuries by obtaining medical reports (often jointly with the employee, as happened in the present case). Documentary evidence might be available to throw light on certain liability issues, for instance, where the defendant denies being the employer or where the employee’s earnings are disputed. Evidence of how the accident happened might be available from witnesses bearing on issues of negligence, causation, contributory negligence and the like. In many cases, having made inquiries, one would expect the Board to feel equipped to propose a reasonable sum for settlement. 63. Of course, not every case will be a candidate for settlement. The Board may not feel that it has enough facts and may decide that the case should be left to go to trial and assessment. Or the employee may hold out for a sum which is regarded as extravagant, notwithstanding that a section 29 offer has been made by the Board. 64. The point, however, is that settlement, which is obviously valuable as a possible means of cutting legal costs and making the best use of the Fund’s resources is, on the true construction of the ECAO, an option open to the Board. Its functions, laid down by section 4, include administering the Fund in accordance with the objects of the Ordinance[61] and it has power to “do all such things as are expedient for or conducive to the attainment of the functions referred to in section 4 or which, in the opinion of the Board, are necessary to facilitate the proper carrying out of the functions of the Board”.[62] Once it is accepted that it is empowered by section 29 to settle claims in properly carrying out its functions, it is plainly intra vires the Board to enter into agreements to settle for sums based on its assessment of what is reasonable, arrived at in good faith on available evidence considered sufficient, having made due inquiries. D.5 The legal effect of a settlement agreement 65. Questions 2(a) and (c) address the legal effect of a settlement. In particular, they ask what the position is where the Board and the eligible person settle for a stated amount, where the case proceeds to judgment and where the award made against the employer is either higher or lower than the settlement amount. 66. Deputy High Court Judge To took the following view: “Should the quantum of damages assessed by me be higher than the agreed amount, the Plaintiff cannot apply to the Board for relief in respect of the difference. Should the quantum of damages assessed by me be lower than the agreed amount, the Board may also have no authority to pay the Plaintiff an amount higher than what has been agreed.”[63] [It seems likely that the last word should be “awarded” rather than “agreed”] 67. The Court of Appeal left open the question whether the Board has power to pay a settlement sum in excess of the eventual damages award.[64] But it accepted that there is nothing to prevent an eligible person from agreeing to accept a settlement amount that turns out to be less than the award against the employer.[65] 68. I pause to observe that it seems odd that an action against the employer should be pressed on to judgment, incurring legal costs, after the eligible person has settled the potential relief payment with the Board. Ex hypothesi, the Board has only applied to join in the proceedings under section 25A because there is no insurance cover and the employer is either effectively absent or presumptively not good for the award, exposing the Board to likely liability under the ECAO. So why would the plaintiff choose to pursue the employer after settling with the Board? 69. We were informed by Mr Raymond Leung SC[66] that in the present case, the settlement was apparently as to quantum, without agreeing liability. Why this course was taken was not explained but, as appears from the submissions of Ms Eu, it may have been due to a belief that it is necessary for the plaintiff to secure a judgment and to make a section 20A application to bring himself within section 20B(1) in order to qualify for payment of the settlement sum. That view appears to have been shared by the Court of Appeal who commented that “[the] plaintiff had to continue with the trial to obtain a judgment on liability against the 2nd defendant ...”[67] 70. In my view, such an approach is erroneous and is based on a failure to appreciate that a settlement is an alternative route to disposing of the claim which obviates the necessity to traverse the ECAO’s relief payment claim requirements. A settlement agreement between the Board and the plaintiff is a binding contract. Its terms are not subject to change and its binding quality not vitiated by any subsequent judgment obtained as between two different parties, the employee and the employer. Indeed, one would hope that a wasteful pursuit of the presumptively impecunious employer after settlement with the Board would be avoided. If the parties were not bound by the settlement and if the employee was subject to an asymmetrical rule whereby, depending on the level of the damages award against the employer, he might get less, but could not get more, than the settlement sum bargained for, there would be little incentive for the injured employee to settle. 71. I would accordingly give a negative answer to Question 2(a) and answer Question 2(c) as follows: The settlement amount agreed to by the plaintiff and the Board is contractually binding and not affected by the level of any subsequent judgment obtained against the employer. E. Conclusions 72. In relation to Question 1, my conclusions may be summarised as follows: (a) Section 20B(3) does not deprive the court of jurisdiction to order costs against the Board in relation to proceedings in which it has been joined as a party. (b) Power to make such costs orders is conferred by section 52A of the High Court Ordinance.[68] ECAO section 29 also recognises the existence of this power. (c) In exercising its discretion regarding a possible costs order against the Board, the principle that costs normally follow the event does not apply, given the Board’s statutory role. The starting-point should be that there is no order as to costs. However, the court has a wide discretion and may depart from this if the circumstances warrant a different order. 73. My conclusions regarding Question 2 are summarised as follows: (a) Section 29 authorises the Board to settle potential claims for relief payments in amounts it assesses to be reasonable, arriving at such assessments in good faith on available information considered sufficient after having made due inquiry. (b) Settlement is an alternative means for disposing of a claim and obtaining relief. The settlement agreement constitutes a binding contract and is not affected by any judgment which the employee may subsequently obtain against the employer. It should not generally be necessary to pursue that action after settling with the Board. F. Disposition 74. For the foregoing reasons, I would dismiss this appeal. Although such an outcome would normally entail making an order for costs against the Board, taking into account its special statutory role and accepting that there was a need for clarification of the legal position affecting the Board’s operations, I would, by way of order nisi, direct that there be no order as to costs so that the parties each bear their own costs. I understand that the respondent is on legal aid and I would direct that his costs be taxed in accordance with the Legal Aid Regulations. 75. I would direct that any submissions that the parties may wish to make as to costs be submitted in writing within 14 days of the date of this judgment and that, in default of such submissions, the order nisi stand as an order absolute. Mr Justice Fok PJ: 76. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Stock NPJ: 77. I agree with the judgment of Mr Justice Ribeiro PJ. Madam Justice McLachlin NPJ: 78. I agree with the judgment of Mr Justice Ribeiro PJ. Chief Justice Ma: 79. The Court unanimously dismisses this appeal and makes the orders as to costs referred to in paragraphs 74 and 75 above. Ms Audrey Eu SC and Mr Roger Phang, instructed by P.C. Woo & Co., for the 3rd Defendant (Appellant) Mr Raymond Leung SC and Mr Patrick Szeto, instructed by Kenneth Lam Solicitors, assigned by the Director of Legal Aid, for the Plaintiff (Respondent) [1] Cap 365. [2] Cap 282. [3] Section 7. [4] Section 4(a). [5] Part IV. [6] By the Employees’ Compensation Insurance Levies Ordinance (Cap 411), section 14. [7] Cap 411, Schedule 2. [8] ECAO section 4(a). [9] DCEC 2408/2014 (26 September 2016). [10] As the terms of the parties’ settlement were not placed before the Court, it is unclear what the terms agreed were. [11] Deputy High Court Judge To [2018] 3 HKLRD 897 (23 June 2017). [12] [2014] 6 HKC 361. [13] This decision is considered further in Section C.4 below. [14] [2018] 1 HKLRD 886. [15] Cheung and Kwan JJA, Au J [2019] 1 HKLRD 48 (23 November 2018). [16] Considered in Section C.3 below. [17] Court of Appeal §§41-43. [18] Cheung, Kwan and Au JJA [2019] HKCA 166 (15 February 2019). [19] Ma CJ, Fok PJ and Chan NPJ [2019] HKCFA 27 (25 July 2019). [20] Which are defined by reference to section 3 of the ECO and, unless excluded, would cover the payment of interest. [21] Appearing for the Board with Mr Roger Phang. [22] Section 20B(1): “Subject to section 20A(2) and subsection (3), the amount of a relief payment to an eligible person shall be the amount of damages for which the employer is liable to pay the eligible person after that amount is reduced by— (a) the amount, if any, of compensation which has been paid or is payable under the Employees’ Compensation Ordinance (Cap 282) in respect of the injured employee in relation to the accident concerned; and (b) the amount, if any, of those damages already paid by the employer.” [23] Introduced by the amendments to the ECAO in 2002. [24] Section 25(1)(a) : “…where the employer cannot be identified or, if identified, cannot be found; is insolvent; is dead or in the case of a company, has been dissolved, wound up or struck off the register; or for any reason, cannot be served with proceedings.” [25] Compare section 25(4). It has been held that an award of damages in such cases is made against the employer and not the Board: Tu Zhiqiang and Hap Sang Co (a firm) [2012] 1 HKLRD 1075 at §51; Kwan Kam Pui v Fung Man [2014] 6 HKC 361 at §34; Jiang Zhong v Yeung Chun Leung [2018] 1 HKLRD 886 at §3.11. [26] The aim, as explained in the Legislative Council (“LegCo”) Brief on the Employees Compensation Assistance (Amendment) Bill 2002 (5 February 2002) in support of the amendments introducing the joinder procedure, was mainly to give the Board some control regarding default judgments: “At present, the Ordinance does not explicitly empower the Board to defend claims in legal proceedings. This places the Board in a disadvantaged position because defaulting employers are usually absent in the legal proceedings leaving the claims undefended. It is proposed that where a proceeding has been initiated to make a claim in connection with a work-related accident, the Board may apply to the Court to be joined in the proceedings as a party and defend the claims.” (§17) [27] Cap 4. The equivalent in the District Court being section 53 of the District Court Ordinance (Cap 336). [28] Section 52A(2): “Without prejudice to the generality of subsection (1), the Court of Appeal or the Court of First Instance may, in accordance with rules of court, make an order awarding costs against a person who is not a party to the relevant proceedings, if the Court of Appeal or the Court of First Instance, as the case may be, is satisfied that it is in the interests of justice to do so. [29] As pointed out in the Minutes of the LegCo Meeting on 17 May 2001, §44. [30] Court of Appeal §43. [31] [2018] 1 HKLRD 886. [32] [2014] 6 HKC 361. [33] [2003] HKCU 412; HCPI 1221/2000 (15 April 2003). [34] [2014] 6 HKC 361 at §§66-67. [35] Judgment §§43 and 45. [36] Judgment §47. [37] Judgment §48. [38] Judgment §§51-52. [39] Judgment §52. [40] Judgment §55. [41] Judgment §§55-56. [42] Court of Appeal §§25-28. [43] Court of Appeal §32. [44] Court of Appeal §35. [45] Court of Appeal §33. [46] Court of Appeal §§34, 45 and 46. [47] ECAO section 4. [48] Section 25A(a). [49] Section 25A(b) and (c). [50] Judgment §47. [51] As further discussed in Section D.3 below. [52] Loss of the right to apply under section 16 in respect of that claim. [53] Relieving the Board of paying more than the eventual ECO award and of paying the costs of the person refusing, as from the date of the offer. [54] [2013] 2 HKLRD 614. [55] [2014] 6 HKC 361 at §1. [56] Ibid at §15. [57] The Minutes of the LegCo Meeting, §§45 and 47. [58] Properly quantified, as discussed in Section D.4 below. [59] Question 2 also addresses issues concerning the legal effect of any settlement made, discussed separately below. [60] Section 40(2) makes it an offence for any person, without reasonable excuse, to fail to comply with or respond to an inquiry made under section 25B(8). [61] ECAO section 4(a). The objects include “the protection of the entitlement of employees and others to compensation for employment-related injury [and] for the making of relief payment to eligible persons in relation to damages for employment-related injury” (Long Title). [62] ECAO section 5(1). [63] Judgment §25. [64] Court of Appeal footnote 24. [65] Court of Appeal §41. [66] Appearing for the respondent with Mr Patrick Szeto. [67] Court of Appeal §44. [68] Cap 4. |
Hon Poon CJHC (giving the judgment of the Court): 1. Article 21 of The Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (“NSL”) establishes a two-tier penalty regime for an offence falling thereunder by reference to its severity in these terms: “情節嚴重的，處五年以上十年以下有期徒刑；情節較輕的，處五年以下有期徒刑、拘役或者管制。” Its English translation, which is for information only,[1] reads: “If the circumstances of the offence committed by a person are of a serious nature, the person shall be sentenced to fixed-term imprisonment of not less than five years but not more than ten years; if the circumstances of the offence committed by a person are of a minor nature, the person shall be sentenced to fixed-term imprisonment of not more than five years, short-term detention or restriction.” For present purposes, we will refer to the tier for serious offences as “the Upper Tier” and that for minor offences as “the Lower Tier” respectively. 2. The NSL provisions on penalty in Parts 1 to 4, including NSL 21, are augmented by NSL 31 to NSL 35 in Part 5. NSL 33(1) provides for three disposals to adjust an otherwise appropriate penalty when any of the three conditions specified is established, as follows: “有以下情形的，對有關犯罪行為人、犯罪嫌疑人、被告人可以從輕、減輕處罰；犯罪較輕的，可以免除處罰： （一） 在犯罪過程中，自動放棄犯罪或者自動有效地防止犯罪結果發生的； （二） 自動投案，如實供述自己的罪行的； （三） 揭發他人犯罪行為，查證屬實，或者提供重要線索得以偵破其他案件的。” Its English translation reads: “A lighter penalty may be imposed, or the penalty may be reduced or, in the case of a minor offence, exempted, if an offender, criminal suspect, or defendant: (1) in the process of committing an offence, voluntarily discontinues the commission of the offence or voluntarily and effectively forestalls its consequences; (2) voluntarily surrenders himself or herself and gives a truthful account of the offence; or (3) reports on the offence committed by other person, which is verified to be true, or provides material information which assists in solving other criminal case.” 3. In this application for leave to appeal against sentence, it falls upon this Court to consider two principal questions. The first concerns the categorisation of the circumstances of the NSL 21 offence committed by the applicant as serious by Her Honour Judge Amanda Woodcock below (“the Judge”), which is a question of fact. The second question is one of law on the effect of the Upper Tier and NSL 33(1) in their application to sentencing of a serious NSL 21 offence. A. Proceedings below 4. Before the Judge below, the applicant pleaded guilty to a charge of incitement to secession, contrary to NSL 20 and NSL 21.[2] The particulars of the offence read: “[The applicant], between the 30th day of June, 2020 and the 24th day of September, 2020, both dates inclusive, in Hong Kong, together with other persons, incited other persons to organize, plan, commit or participate in acts, whether or not by force or threat of force, with a view to committing secession or undermining national unification, namely separating the Hong Kong Special Administrative Region from the People’s Republic of China or altering by unlawful means the legal status of the Hong Kong Special Administrative Region.” 5. For the purpose of his guilty plea, the applicant agreed to the Amended Summary of Facts.[3] The admitted facts as agreed may be outlined as follows. A1. Prosecution case as admitted A1.1 The Channel 6. The applicant committed incitement to secession via a Telegram channel (“the Channel”) first established on 14 December 2019 under the name “橙級裝備”.[4] Its name was changed on different occasions: (1) on 21 April 2020, to “得返一個來自香港的黑衣人”;[5] (2) on 30 April 2020, to “變返兩個半退休既冷氣勇武”;[6] (3) on 8 May 2020, to “兩個全力回歸既勇武派”[7] (4) on 22 May 2020, to “兩個勇武派的中共速龍小隊”;[8] (5) on 11 June 2020, to “暫時得返一個會覆機既勇武Admin”;[9] (6) on 3 August 2020, to “2個專叫港獨台獨反共反國安的年輕人”;[10] (7) on 28 August 2020, to “抗共港獨台 H.K.I.A.F.”.[11] 7. The applicant and another male surnamed Tsui were at all material times the administrators of the Channel. Initially, the identity of the administrators of the Channel were concealed but after a change of setting on 26 April 2020, viewers could see which administrator made which posts. Tsui and the applicant used the identity “Equipment for attack” admin and “Equipment for defense” admin respectively. In making posts, Tsui used “Yuri Orlov” with variations; and the applicant used “有為yy”[12]. Tsui and the applicant were also responsible for sale of “equipment for attack” and “equipment for defense” respectively. 8. As at 23 September 2020, a total of 1,040 persons joined and subscribed to the Channel. The link of the Channel was provided publicly under “Channel Info”, an introduction to the Channel on the Telegram platform. The applicant was identified as the commissioner for “defence-model”, whereas three other Telegram accounts were provided as commissioners for “attack-model”, “miscellaneous model” and “chatroom”. A1.2 Secessionist posts and content on the Channel 9. Against the context of widespread violent and unlawful events in Hong Kong since June 2019, available records of the posts made in the Channel began on 31 January 2020 at 1740 hours. The police preserved all the available records of the posts since then up to 23 September 2020, one day before the arrest of the applicant. A total of 1495 posts were so preserved and are set out in Annex B to the Amended Summary of Facts with the English translation in Annex C. The posts made it clear as to which administrator made which post on what day and at what time. Out of the 1495 posts, at least about 338 posts were made by and/or related to the applicant. During the offence period, namely, between 30 June 2020 (starting at 2358 hours, that is, right after the NSL was made applicable to the HKSAR[13]) and 23 September 2020 (the day before the applicant was arrested), there were a total of 357 posts. 10. Before the NSL was applied to the HKSAR, there were a large number of posts in various forms such as texts, photo images, videos and other graphical depictions which the administrators posted or re-posted from other Telegram channels. The posts were generally of a nature designed to incite violence and counsel disobedience to the law by providing and offering for sale weapons and equipment such as pepper sprays, extendable batons, respirators and other body gear to protestors against the police; and providing protestors with information of police operations as well as strategy and tactics against police action. In particular, there were posts which expressly or implicitly suggesting acts to be taken to change the regime or status of the HKSAR unlawfully. For example, there were messages containing the slogans “Liberate Hong Kong, Revolution of our times”, “Hong Kong independence, the only way out” and “Fight against totalitarianism”. 11. The Channel also, for 27 times, organized polls and/or shared polls made by other Telegram channels or groups to seek opinion of viewers of the Channel on matters such as what gear or equipment would be sold or purchased and other issues relating to the protests in Hong Kong since June 2019. 12. After the NSL applies to the HKSAR, during the offence period, the Channel continued to carry posts and re-posts of a seditious nature and inciting hatred against the Central Authorities, the People’s Republic of China, the HKSAR and the police. There were many posts relating to Hong Kong independence, anti-communism, a violent faction that is anti-communist, Hong Kong being a country and appeals to participants to train themselves up to fight for “this country”, and appeals to others to equip themselves with weapons for close quarter combat. The posts for sale of weaponry and equipment also continued. 13. In particular, as set out at [20] of the Amended Summary of Facts, there were many posts to incite other persons by means of the posts in the Channel to organize, plan, commit or participate in acts, whether or not by force or threat of force, with a view to committing secession or undermining national unification, namely separating the HKSAR from the PRC or altering by unlawful means the legal status of the HKSAR, in particular with contents containing “光復香港，時代革命”, advocating for the so-called independence of Hong Kong with the expression “香港獨立”, expressly or otherwise implicitly suggesting acts to be taken to unlawfully change the regime or status of the HKSAR. The applicant admitted that he personally made some of those posts. 14. Moreover, the Channel continued to organize, for 12 times, polls and/or share polls made by other Telegram channels or groups to seek opinion of viewers of the Channel with contents which were secessionist in nature. Responses ranging from 126 to 1,226 voters were received. 15. In sum, the applicant admitted the offence of incitement to secession as charged. A2. Mitigation 16. At the time of sentence, the applicant was aged 25 and had a clear record. He was single and lived with his mother. His father died when he was 15, which left a significant detrimental impact on him and his family. His mother took on the full responsibility of supporting him and his sister both emotionally and financially. He was a first-year student reading civil engineering at the Hong Kong Polytechnic University. 17. The applicant was diagnosed with Attention Deficit Hyperactivity Disorder (ADHD) in 2015 and had been receiving treatment since 2016. The defence stressed that his ADHD affected his DSE results but he did not give up. He motivated himself to study in his own time to repeat the examination and work at the same time to alleviate his mother’s financial burden. He was successful in his retake and was admitted to the HKPU in 2020. 18. According to the mitigation letters written by the applicant’s mother, a family friend, a volunteer who had regularly visited him since remand, his principal, vice principals and supervisor from school: (1) the applicant was a filial son and a kind-hearted young man who helped others and was determined to help himself despite his own difficulties; (2) he was a good student who actively participated in school life, voluntary work and extra-curricular activities as a squadron leader of the Air Cadets and vice president of the Student Association; (3) he was deeply affected by the social unrest in 2019 and concerned about the future of Hong Kong. 19. The defence emphasized that the applicant was remorseful. He himself wrote a letter accepting responsibility and explaining why he committed the offence. He pleaded guilty at the earliest opportunity and had been cooperating with the police. He now realized his wrongdoings and wanted only to better himself to contribute fruitfully to society once he had served his sentence. 20. In terms of seriousness of the offence, the defence submitted that it belonged to the minor category. It was stressed that the circulation of the Channel was likely to have been limited and not the same as appearing on television or publishing similar incitements in newspapers reaching large audiences; that those who logged into the Channel were others who already shared thoughts and sentiments similar to the administrators. They would not be those that would be influenced by the posts to commit acts of secession; and that the applicant lacked celebrity status, was not a well-known figure or public leader so that his messages would not have had much impact. A3. Reasons for sentence 21. The Judge delivered the Reasons for Sentence on 29 April 2022.[14] She first found that the present case was of serious nature for the purpose of NSL 21, warranting a sentence of not less than five years but not more than ten years as prescribed.[15] In so finding, she took into account the context in which the crime was committed. It was at a time when there was social unrest and heightened anti-government sentiment.[16] She emphasized the fact that social media had been used to perpetrate the offence.[17] The content of the posts was of a serious nature, leaving no doubt that the applicant condoned, promoted, advocated and incited others to commit secession or undermine national unification.[18] Amongst the rhetoric, the administrators of the Channel offered for sale weapons or items they described as either of an attacking or defending nature.[19] Finally, in a post on 23 July 2020, the Channel promoted the sale of bottles of hand sanitizer but also provided a means for participants to donate to the administrators for “fighting for Hong Kong independence by this channel”.[20] 22. The Judge adopted a starting point of five years and six months and reduced it by one-third to reflect the applicant’s timely plea.[21] However, before she became functus officio, the prosecution submitted that on a plain reading of NSL 21, the minimum of five years in the Upper Tier was meant to be mandatory so that while the Judge could still give the applicant a discount on account of his guilty plea, the ultimate sentence could not go below five years.[22] The prosecution cited R v Andrew James Jordan and others [2005] 2 Cr App R (S) 44 in support. Accepting that the prosecution appeared to be correct, the defence urged the Judge to re-consider the nature of the offence in light of the mandatory minimum sentence.[23] The Judge agreed with the prosecution’s reading of NSL 21 so that she must impose a minimum of five years’ imprisonment. She maintained her finding that the nature of the offence was serious and having regard to all the circumstances and mitigation, sentenced the applicant to five years’ imprisonment.[24] B. Grounds of Appeal 23. In the Amended Perfected Grounds of Appeal, a total of five grounds of appeal are raised.[25] The first two grounds attack the Judge’s categorization of the offence as serious: (1) The Judge erred in categorizing the circumstances of the offence as serious under NSL 21 by over-emphasizing or attaching too much weight to the factors adverse to the applicant and disregarding or not giving proper and sufficient weight to those favourable to him. (Ground 1) (2) Alternatively, even if the offence was serious, the Judge erred in adopting a manifestly excessive starting point because of her mistaken treatments of the factors as aforesaid. (Ground 2) They call for a closer examination of the facts. 24. The next two grounds complain of the Judge’s failure to give the customary one-third discount in full: (1) The Judge erred in her interpretation of NSL 21 regarding the permissible final sentence by not taking into account NSL 33(1) whereby fulfilment of one of the prescribed circumstances may “reduce” even a minimum sentence; and by not taking into account or giving sufficient weight to the relevant mitigating factors including the guilty plea. (Ground 3) (2) Further, the Judge failed to give sufficient reduction with reference to NSL 33(1)(2) as the circumstances concerning the applicant came very close, if not identical to the scenario provided thereunder; and the relevant mitigating factors including the guilty plea. (Ground 4) They entail a construction exercise to ascertain the legislative intention of the Upper Tier and NSL 33(1) in their application to sentencing of a serious NSL 21 offence. 25. The last ground wraps up the applicant’s case by asserting that because of Grounds 1 to 4, individually or cumulatively, the sentence is wrong in principle or manifestly excessive. It does not add much in terms of substance or analysis and stands or falls with the other Grounds. C. Grounds 1 and 2 26. In light of how Mr Edwin Choy, SC,[26] for the applicant, argued Grounds 1 and 2, it is convenient to deal with them together. C1. The general approach to categorization 27. In HKSAR v Ma Chun Man [2022] HKCA 1151, which was handed down after the time of sentence in the present case, this Court laid down the general approach to the categorization of an offence of incitement to secession under NSL 21 thus: (1) Since the legislative intent of the NSL is to seek convergence, compatibility and complementarity with local laws, in the absence of any NSL provision on how to classify cases of incitement to secession, the local sentencing principles apply. See [67]. (2) According to local sentencing principles, the sentencing of an offence is informed by its gravamen. As a pre-emptive offence, the gravamen of the offence of incitement under NSL 21 is (a) to prevent inciting (which includes enticing or encouraging) another person to commit the crimes of secession; and (b) to allow the law to intervene and prevent at the earliest stage the commission of the crimes of secession by those incited. Its purpose is to fully safeguard the immense public interest in national security, territorial integrity, the constitutional foundation and the legal status of the HKSAR, and to ensure that any crime of secession will be thwarted and punished timely and effectively. See [73]. (3) Whether a case of incitement to secession is serious or minor depends on all the circumstances. Drawing on the common law offence of incitement, which is similar in nature, the court will focus primarily on the offender’s conduct, as well as the consequences, risks and other possible effects that his conduct might entail. The court will take into account, non-exhaustively: (a) the context in which the offence was committed; (b) the modus operandi; (c) the frequency, duration and persistency of the incitement; (d) the scale of the incitement; (e) whether there was premeditation; (f) whether the offence involved violence or threat of violence; (g) whether the offender acted in concert with others; (h) the persons or groups being targeted and the potential influence on them; (i) whether anyone had been incited into committing secession or any other offence; or how imminent or serious such threat or risk was; (j) the actual or potential influence that the offender may generally have on society or a particular sector thereof. See [73] – [75]. (4) Finally, the court has to carefully consider the facts, identify all the relevant factors, and give due weight to them individually and collectively in the overall circumstances in categorizing the case as serious or minor. See [76]. C2. Categorization of the present case 28. Applying the above approach to the present case, we first consider the context of the offence. 29. The applicant committed the offence between 30 June and 24 September 2020. As noted in Ma Chun Man, at [78] and accepted by the applicant, although the scale and severity of unlawful and violent assemblies at that time was less serious than before the NSL was applied to Hong Kong, Hong Kong was still facing considerable threats and risks to national security and public disorder. Viewed against that context, the threats and risks to national security by the applicant’s incitement was more than latent as submitted by Mr Choy. They were real and must be given due weight in the overall assessment of the seriousness of his conduct. 30. Mr Choy compared the facts of the present case with those in Divin and McGinlay v HM Advocate [2013] JC 259 and Attorney General v Tse Chung [1967] HKLR 452 and submitted that the timing of the commission of the offence by the applicant was far from being the worst of its kind. 31. In Divin, the appellants pleaded guilty to an offence of using social networking sites to incite others to riot and were sentenced to 3 years and 3 months’ and 3 years’ imprisonment respectively. The context of the offence was that of extensive and very recent rioting and looting in a number of cities and towns in England which had been widely reported by the media in Scotland. Although such criminal conduct had not been spread to Scotland, concerns existed that it might. Against that background, the High Court of Judiciary at [20] held that the appellants’ culpability was high and despite their young age, a sentence of detention was the only appropriate disposal for each of them. 32. In Tse Chung, the appellant was convicted of unlawful assembly during the 1967 riots in Hong Kong and was sentenced to 12 months’ imprisonment. At the time of the offence, he stood at the forefront with a crowd of people in violent and noisy confrontation with the police. The appellant appealed against sentence on the grounds that the magistrate must have imposed sentence for reasons other than those he actually expressed and that he should not have taken judicial notice of the then disturbed state of Hong Kong. That was roundly rejected by the court at p 458. 33. In our view, the seriousness of a particular offence has to be gauged by its actual circumstances, which by nature, must vary from case to case. With so many variables involved, there are limits to the extent to which comparisons with the detail of other cases can assist the sentencing court in determining the seriousness of the offence and the appropriate sentence before it: see Divin, at [28]. If the facts or contexts are comparable, then those cases may provide some assistance. If not, the utility of such comparison is minimal. Here, we do not find the comparison with Divin or Tse Chung helpful because the facts and contexts were so different. Ma Chun Man is more useful because it also involves an NSL 21 offence and the time of the offence, namely, between August and November 2020, is comparable. Further, it does not assist the assessment to ask if the context of the present offence is or is not the worst of its kind. The more relevant question is whether the context, together with the other features, in the overall assessment of the circumstances justifies the categorization of the offence as a serious one. 34. Next, as is now well-established, the use of social media for committing incitement is an aggravating feature: 律政司司長訴庚家駒[2020] HKCA 1019, at [28]. The aggravation lies in the extreme effectiveness of social media in providing platforms or means to individuals with the ease and ability to communicate or disseminate messages or content to a vast audience instantly without physical contact or geographical constraints, thereby amplifying the effects of the incitement and increases exponentially the threats and risks it poses to national security. As the English Court of Appeal relevantly explained in R v Blackshaw [2012] 1 WLR 1126, in connection with the common law offence of incitement to serious public disorder,[27] at [73]: “We are unimpressed with the suggestion that in each case the defendant did no more than make the appropriate entry in his Facebook. Neither went from door to door looking for friends or like-minded people to join up with him in the riot. All that is true. But modern technology has done away with the need for such direct personal communication. It can all be done through Facebook or other social media. In other words, the abuse of modern technology for criminal purposes extends to and includes incitement of very many people by a single step. Indeed it is a sinister feature of these cases that modern technology almost certainly assisted rioters in other places to organize the rapid movement and congregation of disorderly groups in new and unpoliced areas.”[28] 35. As is agreed, Telegram is a widely used social media platform allowing users to set up private or public channels to publish posts. Public channels are operated by its owners, administrators or authorized persons. Other users can join and subscribe to public channels to view and receive posts as part of the messaging function of Telegram. Users can also view the posts in a public channel without joining it by searching for and accessing the channels with name, link and/or ID of the channel. The Channel used by the applicant was a public channel on Telegram and all Telegram users could access the posts there as aforesaid. And there were 1,040 users who joined and subscribed the Channel, which is not negligible. Using the Channel to commit the offence is clearly an aggravation. 36. Mr Choy took no issue at the judicial abhorrence against the commission of incitement by using social media. However, he argued that there remains a wide spectrum of culpability. Adopting a broad-brush approach would not be able to differentiate different degrees of culpability. The court should consider how the social media was used, to what extent it was used and its actual effectiveness. Thus in Ma Chun Man, the applicant effectively used different social media together with traditional means to achieve the maximum secession effects, including Facebook, Telegram, videos available online, incitements at big shopping malls as well as outside Government Headquarters and police station, interactive journalistic interviews and pre-made propaganda materials for distribution. In stark contrast, the applicant here only administered with another person a single Telegram channel containing posts and photos, the contents of which, he accepted, were objectively far from harmless. 37. By comparison, the modus operandi adopted in Ma Chun Man might be more serious. But the use of the Channel in the manner as it was in the present case remains an aggravation. That must weigh heavily in the court’s assessment of the seriousness of the offence. 38. Moreover, there are other aggravating features: (1) The applicant defiantly denounced the authority of the NSL on the Channel. For example, on 4 July 2020, he published a post in which he said that he would regard the NSL as “a piece of waste paper”.[29] (2) Secessionist posts and videos were published right after the NSL was applied to Hong Kong on 30 June 2020[30] and on 1 July 2020, the establishment day of the HKSAR,[31] both of which were then sensitive dates with clear risks of provoking secessionist and other unlawful acts: see Ma Chun Man, at [83(1)]. Mr Choy submitted that those were the only sensitive dates over a time span of nearly three months, in stark contrast to the much greater number of sensitive dates identified in Ma Chun Man. Strictly in terms of figures, Mr Choy is right. But the risks involved in the present case were still high. (3) There were a total of 357 posts published on the Channel with 8 directly by the applicant himself. Mr Choy submitted that the Judge had failed to consider the limited number of posts (8) made by or related to the applicant. However, as submitted by Mr Anthony Chau, Deputy Director of Public Prosecutions,[32] the applicant pleaded guilty and admitted to have committed the offence with others, that is, jointly as administrators of the Channel. All secessionist and other unlawful content in the Channel were attributable to him, even if they were published by others. The 8 posts published by him in fact only aggravated his criminality by way of direct conduct. (4) The Channel, for 12 times, organized polls and/or shared polls made by other Telegram channels or groups to seek opinion of viewers of the Channel with contents which were secessionist in nature and received responses ranging from 126 to 1,226 voters. Arousing public attention and discussion in the guise of polls by making use of secession materials with a view to advocating secession is clearly an aggravation. (5) The applicant acted in concert with others, including Tsui. According to how the Channel was administered, there was plainly a degree of division of labour between them, although as submitted by Mr Choy it did not appear to involve a high degree of sophistication or scale. (6) As noted by the Judge, during the offence period, the Channel carried posts for sale of weaponry and gear, advocating violence and targeting the sovereignty over the HKSAR by China. Advocating the use of violence is undoubtedly a very serious aggravating factor: Ma Chun Man, at [75(6)]. (7) As further pointed out by the Judge, the Channel was used to appeal to participants for donations to the administrators, including the applicant, “for fighting for Hong Kong independence”. Seeking to raise funds for the secessionist cause is clearly an aggravation. (8) The Channel targeted the general public and its 1,000 plus subscribers. Further, by advertising for sale of weapons and gear, the Channel clearly aimed at people including protestors who were inclined to resorting to violence, thereby posing a greater risk to national security and public disorder. 39. The overall circumstances of the offence well justify the Judge’s categorization. Mr Choy’s complaint that she erred in attaching too much weight to those factors adverse to the applicant cannot stand. 40. Mr Choy further submitted that although it might not be a mitigating factor, the fact that no persons were shown to have been incited adds nothing to aggravate the offence. As the applicant was not a social celebrity, his actual or potential influence on others would be much lesser than otherwise. Even taken at their highest, those factors favourable to the applicant do not in our view detract from the seriousness of his offence. Mr Choy’s complaint that the Judge erred in not giving sufficient weight to them is not substantiated either. 41. Having carefully evaluated the circumstances of the present offence, we find that they were of a serious nature within the meaning of NSL 21. The Judge was correct in her categorization, albeit her reasoning was not as full as this judgment, which is understandable because at the time she did not have the guidance from Ma Chun Man. Ground 1 accordingly fails. C3. Starting point 42. After stating that she stood corrected and agreed that NSL 21 did impose a mandatory minimum of five years and maintaining her categorization of the offence as serious, the Judge did not say anything further about starting points. Understood in context, and agreed by the parties, it means that she stood by the five years and six months starting point. In so doing, she must have found that the applicant’s culpability falls near the lower end of the category. We agree with her finding. The starting point adopted by the Judge is within the reasonable bounds that a sentencing court may impose for a serious offence sitting in that end. There is no basis for this Court to disturb it as being manifestly excessive. Ground 2 therefore also fails. D. Core issues arising from Grounds 3 and 4 43. We now come to Grounds 3 and 4. They give rise to two core issues. 44. The first core issue is: whether it is the legislative intention of the Upper Tier in prescribing the range of penalty for serious NSL 21 offences to lay down a range of starting points between the maximum of ten years and the minimum of five years, as the applicant contended? Or whether it is to set five years as a mandatory minimum, as the respondent contended? We will refer to this as the 1st Core Issue. 45. If the Upper Tier is intended to be a range of starting points, subject to the next core issue on the effect of NSL 33(1), the sentencing court should be able to adjust the penalty to below five years after giving appropriate discount to applicable mitigating circumstances including a guilty plea. If the Upper Tier mandates five years as the minimum, the court must faithfully apply it. Subject to the next core issue, whatever discount the court may give for the mitigating circumstances including a guilty plea, it cannot take the ultimate sentence below it. 46. The second core issue is: whether, as the respondent contended but disputed by the applicant, the legislative intention is that the three conditions specified in NSL 33(1) are exhaustive so that in their absence, the court cannot adjust the penalty of a serious NSL 21 offence lower than the minimum of five years in the Upper Tier on account of other mitigating circumstances including a guilty plea? We will call this the 2nd Core Issue. 47. Once the Core Issues are resolved, Grounds 3 and 4 can be disposed of shortly. E. Construction of NSL 21 and NSL 33(1) 48. NSL 21 and NSL 33(1) and their English translations have already been set out at [1] and [2] above. In construing them, we adopt the contextual and purposive approach as the Court of Final Appeal did in HKSAR v Lai Chee Ying (2021) 24 HKCFAR 33; and HKSAR v Ng Hau Yi Sidney (2021) 24 HKCFAR 417: see also Tong Ying Kit v Secretary for Justice [2021] 3 HKLRD 350 at [31] – [34]. E1. Context of NSL 21 and NSL 33(1) 49. First and foremost, NSL 21 and NSL 33(1) must be examined in the light of the context and purpose of the NSL as a whole, taking into account the constitutional basis upon which the NSL is applied in the HKSAR: Lai Chee Ying, at [8]. Given the special status of the NSL as a national law applied under article 18 of the Basic Law in the HKSAR, and the express reference to the Decision of the National People’s Congress on Establishing and Improving the Legal System and Enforcement Mechanisms for Safeguarding National Security in the Hong Kong Special Administrative Region (28 May 2020) in NSL 1, regard may properly be had to the legislative materials of the NSL to ascertain the context and purpose of the NSL as a whole: Lai Chee Ying, at [11]. 50. In Lai Chee Ying, the Court of Final Appeal in Part B summarised the legislative history of the NSL. In so doing, the Court canvassed the legislative materials of the NSL in some detail against the background of prominent national security risks in the HKSAR, as seen in the serious, prolonged disturbances to public order, the alarming breakdown of law and order and escalating violence, the wholesale challenges to the governments of the PRC and the HKSAR, and the rampant acts and activities threatening national security including those advocating “Hong Kong independence”. As observed by the Court of Final Appeal: (1) Against that background, the Central Authorities found the absence of national security legislation pursuant to article 23 of the Basic Law[33] since 1 July 1997 unacceptable. (2) The Central Authorities therefore decided to enact the NSL at the national level to “establish and improve the legal system and enforcement mechanisms for the HKSAR to safeguard national security, and to change its long-term ‘defenceless’ condition in the field of national security”. The need to improve the HKSAR’s system and to address the institutional deficiencies in relation to safeguarding national security was further stressed as one of the working principles for drafting the NSL. (3) The basic principles underlying the NSL were stated to be: (a) First, “resolutely safeguarding national security”; (b) Secondly, “upholding and enhancing the ‘One Country, Two Systems regime’”; (c) Thirdly, adhering to “administering Hong Kong in accordance with the law” and resolutely upholding “the constitutional order in the HKSAR as established by the Constitution and the Hong Kong Basic Law”; (d) Fourthly, resolutely opposing external interference; and (e) Fifthly, “fully safeguarding the legitimate rights and interests of Hong Kong residents”. 51. These basic principles are contained and reflected in NSL 1 which expressly stipulates the purpose of the NSL in these terms: “This Law is enacted, in accordance with the Constitution of the People’s Republic of China, the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, and the Decision of the National People’s Congress on Establishing and Improving the Legal System and Enforcement Mechanisms for Safeguarding National Security in the Hong Kong Special Administrative Region, for the purpose of: - ensuring the resolute, full and faithful implementation of the policy of One Country, Two Systems under which the people of Hong Kong administer Hong Kong with a high degree of autonomy; - safeguarding national security; - preventing, suppressing and imposing punishment for the offences of secession, subversion, organisation and perpetration of terrorist activities, and collusion with a foreign country or with external elements to endanger national security in relation to the Hong Kong Special Administrative Region; - maintaining prosperity and stability of the Hong Kong Special Administrative Region; and - protecting the lawful rights and interests of the residents of the Hong Kong Special Administrative Region.” The immediate point to note for present purpose is that as an integral component of safeguarding national security, preventing, suppressing and imposing punishment for the NSL offences is distinctly stated as a primary purpose of the NSL (“Primary Purpose”), highlighting its immense importance in the overall scheme of the NSL. 52. Moreover, very relevantly, the NSL lays particular emphasis on the Primary Purpose, requiring strict and full application of the NSL and local laws to prevent, suppress and impose punishment for offences endangering national security when referring to criminal proceedings and penal sanctions. Thus, NSL 3(3) requires the executive authorities, legislature and judiciary of the HKSAR, in discharging their duty to safeguard national security to:[34] “effectively prevent, suppress and impose punishment for any act or activity endangering national security in accordance with this Law and other relevant laws.” Specifically, NSL 8 directs the law enforcement and judicial authorities of the HKSAR, in order to safeguard national security effectively, to fully enforce this Law and the laws in force of the Region:[35] “concerning the prevention of, suppression of, and imposition of punishment for acts and activities endangering national security.” Further, NSL 42(1) requires the law enforcement and judicial authorities, in applying local laws concerning matters such as detention and time limit, to handle cases concerning offence endangering national security in a fair and timely manner so as to:[36] “effectively prevent, suppress and impose punishment for such offence.” 53. It must be emphasised that the imperative in NSL 3(3), NSL 8 and NSL 42(1) on strict and full application of laws to further the Primary Purpose (“the Imperative”) covers not only the NSL but also local laws. As will be elaborated, the Imperative materially impacts on how local sentencing laws are to apply in the framework of NSL 21 and NSL 33(1). 54. While the NSL is tailor-made to cater for the national security risks in the HKSAR, it is by no means intended to be the one and only code of laws to safeguard national security in the Region. For NSL 7 directs the HKSAR to enact BL 23 legislation as soon as possible and to refine relevant laws to protect national security. That article recognizes that the NSL provides an incomplete framework of laws designed to protect national security: Ng Hau Yi Sidney, at [18]. Moreover, after considering NSL 3, NSL 7, NSL 8 and NSL 42, the Court of Final Appeal said at [24]: “Viewed purposively, the intent of the NSL is plainly for national security to be safeguarded by the complementary application of the laws which it creates together with the existing laws of the HKSAR, such as those contained in Part II of the Crimes Ordinance[37].” 55. Arising from the above context of the NSL as a whole are four instructive propositions. 56. First, in the wake of the grave and indeed unprecedented national security risks in the HKSAR and in the absence of BL 23 legislation, the NSL was enacted to partially fill the legal lacuna for safeguarding national security in the Region. The remaining gap after enactment of the NSL is to be filled by (1) the application of relevant existing laws; (2) the refinement of such laws; and (3) the enactment of BL 23 legislation. Pending (2) and (3), the laws available to protect national security are the NSL and relevant existing laws, such as those in Part II of the Crimes Ordinance. Local sentencing laws must therefore operate in tandem with the NSL to achieve the aim of safeguarding national security, giving priority to NSL provisions in case of inconsistency:[38] Ma Chun Man, at [66]. 57. Second, applying the Imperative to the penalty regimes in the NSL, priority should be given to the penological considerations of deterrence, retribution, denunciation and incapacitation, that is, putting out of the power of the offender to commit further offences (“the Penological Considerations”). It follows that the construction of NSL 21 must give full effect to the Penological Considerations. 58. Third, the court may take into account applicable mitigating circumstances to balance against the rigour of the Penological Considerations in arriving at a proportionate sentence. In the context of the NSL, because of the Imperative, not all mitigating circumstances are applicable. Only those which do not compromise the Primary Purpose are permissible. This informs the construction of NSL 33(1). 59. Fourth, the Imperative also governs the application of local sentencing laws to the sentencing of the NSL offences. To achieve convergence, compatibility and complementarity with NSL 21, local sentencing laws on mitigation can apply only if they do not prejudice the effect of the Penological Considerations. To achieve the same result with NSL 33(1), local sentencing laws on mitigation can only apply if they do not compromise the Primary Purpose. E2. Construing NSL 21 and NSL 33(1) 60. When construed with the above considerations in mind, the legislative intention and effect of NSL 21 is clear. 61. For minor offences, the Lower Tier stipulates three penalty options: (1) fixed-term imprisonment; (2) short-term detention; and (3) restriction. For fixed-term imprisonment, the maximum is five years. Insofar as imprisonment is concerned, the Lower Tier sets a range of starting points with five years as the maximum, leaving it to the court to determine what term is appropriate in the particular circumstances of the case. In so doing, the Lower Tier operates in very much the same way as most local statutory penalty regimes do. 62. For serious offences, the Upper Tier stipulates only one penalty option, that is, fixed-term imprisonment. It also sets a maximum of ten years and a minimum of five years. By specifying such a scope of penalty, unwarranted divergence in the assessment of punishment by different courts is avoided. This reflects broadly the notion of fairness in the context of criminal justice that generally there should be a substantial degree of consistency in the punishment of offences with comparable severity. Further, the choice of imprisonment as the only penalty option and the range of penalty in the Upper Tier reflect the drafters’ judgment with respect to the gravity of serious NSL 21 offences and how to give full effect to the Penological Considerations to further the Primary Purpose in sentencing serious NSL 21 offences. 63. Thus viewed purposively, the minimum of five years in the Upper Tier is mandatory. It follows that subject to the effect of NSL 33(1), whatever discount the court may give on account of mitigation, the ultimate sentence imposed cannot go below the minimum of five years. 64. Turning to NSL 33(1), its legislative intention and effect is equally clear. 65. To recap, the three disposals in NSL 33(1) are 從輕處罰, 減輕處罰and免除處罰. 66. The English translations for 從輕處罰 and 減輕處罰, that is, “a lighter penalty may be imposed” and “the penalty may be reduced”, appear to be synonymous. However, in Chinese, which is the official version, their natural and ordinary meanings are quite different. 67. According to 現代汉語規范詞典,第三版 (Xiandai Hanyu Guifan Cidian, the 3rd Edition), at p 222, 從輕 means “在法律或條例規定的範圍內給予較輕的（刑罰或處罰）”, which may be translated as “give a lighter punishment or penalty within the range stipulated by the law or regulations”. And at p 641, 減輕means “數量減少；程度降低”, which may be translated as “quantum reduced; level lowered”. When applied to sentencing, 減輕處罰means reducing or lowering the penalty below the range of penalties stipulated by the law. That is distinct from 從輕處罰and is a more lenient option of adjusting the penalty. Both parties agree that 從輕處罰 and 減輕處罰 bear the above meanings. 68. The three disposals accordingly follow their sliding degree of leniency in their order of appearance in NSL 33(1): (1) 從輕處罰, imposing a lighter penalty, that is, imposing a lighter penalty within the applicable tier as prescribed by the relevant NSL provisions; (2) 減輕處罰, reducing the penalty, that is, reducing the penalty from the applicable tier to a lower tier, which is more lenient; and (3) 免除處罰, that is, exempting the penalty, which is most lenient. As to which disposal the court may adopt, it must depend on the actual circumstances of the case before it. Since 免除處罰 does not arise in the present case, we will just focus on the other two.[39] 69. Whether 從輕處罰 (to impose a lighter penalty) or 減輕處罰 (to reduce a penalty) depends necessarily on the weight to be attached to the available mitigating circumstances. Put differently, it is the weight of the mitigation that determines if the court should or 減輕處罰. Although 從輕處罰 and 減輕處罰define the permissible extent of discount, they essentially involve the same qualitative assessment in which the court evaluates and weighs all the available mitigating factors. The weight so accorded by the court must vary from case to case and there is always a spectrum. In sentencing an NSL 21 offence, if the court decides to從輕處罰, it may impose a lighter penalty within either of the Upper Tier or Lower Tier. For serious offences, whatever discount the court may give, the ultimate sentence cannot go below the mandatory minimum of five years in the Upper Tier. In contrast, if the court decides to減輕處罰, it may reduce the penalty from the Upper Tier to the Lower Tier. 70. In enabling the court to 從輕處罰 (imposing a lighter penalty) or 減輕處罰 (reducing a penalty), not only does NSL 33(1) not compromise the Primary Purpose but it is in fact conducive to achieving it, because each of the specified conditions is broadly consistent with such purpose: (1) NSL 33(1)(1) encourages an offender to desist from completing the NSL offence and to take active advance steps to prevent the offence from taking its toll on the victims and society. They are largely in line with the objective of prevention and suppression of NSL offences. (2) NSL 33(1)(2) encourages an offender to so conduct himself to enable the law enforcement agencies to devote more time and resources on investigating and prosecuting other NSL offences. This is largely consistent with the objective of preventing and suppressing NSL offences. (3) NSL 33(1)(3) encourages the offender to inform on other criminals. It is a powerful weapon in the hands of the law enforcement in the fight against NSL offences, serving the aim of prevention, detection and prosecution of such offences. See Z v HKSAR (2007) 10 HKCFAR 183, per Li CJ at [10]. 71. Moreover, among all forms of mitigation, the specification of the three conditions, without more, is intentional. It reflects the drafters’ judgment that they are the only relevant mitigating factors in the context of national security which may allow the court to not only 從輕處罰 (imposing a lighter penalty) but also減輕處罰 (reducing a penalty), as the case may be, without prejudicing the Penological Considerations or compromising the Primary Purpose. The legislative intention is plainly that, as specified conditions in the NSL, they are exhaustive in that sense. 72. However, it is also the legislative intention that local sentencing laws on mitigation are to operate in tandem with the NSL, provided that they do not prejudice the Penological Considerations or compromise the Primary Purpose. So, as rightly accepted by Mr Chau, other mitigating factors not specified in NSL 33(1) but recognised under the common law, such as guilty pleas, can operate in full for the court to consider 從輕處罰, that is, imposing a lighter sentence within the respective range of the Lower and Upper Tier. It is because whatever the discount those mitigating factors may afford, the ultimate sentence stays within the range of either Tier, which still accords with the drafters’ judgment with respect to the gravity of and the Penological Considerations for NSL 21 offences. As such, they do not compromise the Primary Purpose. 73. Those other mitigating factors, however, cannot apply to 減輕處罰, that is, to reduce the sentence below the minimum of five years in the Upper Tier. It is because if they were to apply to discount the sentence below five years, it would contradict the drafters’ judgment with respect to the gravity of serious NSL 21 offences and prejudice the Penological Considerations for such offences, thereby compromising the Primary Purpose in that regard. As such, they are not compatible with either NSL 21 or NSL 33(1). 74. In contending that the Upper Tier only prescribes a range of starting points, Mr Choy referred to some other legislations which adopt the language similar to “shall be sentenced” used in the English translation of the Upper Tier, such as sections 36(2) and (2A) of the Road Traffic Ordinance,[40] and section 51A of the English Firearms Act 1968. He argued that although mandatory language has been used in those legislations, the legislative intention is to set a range of starting points as opposed to a mandatory minimum. 75. Sections 36(2) and (2A) of the Road Traffic Ordinance provide for disqualification periods for conviction of the offence of dangerous driving causing death. Section 36(2) stipulates: “If a court or magistrate convicts a person of an offence under subsection (1), the court or magistrate shall order that the person be disqualified in accordance with subsection (2A) or (2B) unless the court or magistrate for special reasons orders that the person be disqualified for a shorter period or that the person not be disqualified.” Under subsection (2A), the disqualification is, in the case of a first conviction, for a period of not less than 5 years and in the case of a second or subsequent conviction, for a period of not less than 10 years. 76. In HKSAR v Wong Mun Ming [2016] 1 HKLRD 1057, on which Mr Choy relied, the Court of Appeal at [30]-[32] held that the effect of those provisions is to lay down a starting point and it is one from which the judge may depart upon being satisfied of the existence of “special reasons” as defined in the Ordinance. Although it was not so expressed, it is clear that the Court arrived at that conclusion as a matter of construction. 77. In our view, the context and purpose of the Road Traffic Ordinance is entirely different from the NSL. The construction for sections 36(2) and (2A) is irrelevant to the construction of NSL 21. 78. As will be elaborated at [86] below, section 51A of the Firearms Act 1968 involves an entirely different legislative scheme. Its construction is irrelevant, which means that Mr Choy’s reliance on it is also misplaced. 79. Next, Mr Choy argued that NSL 33(1) fortifies his construction of the Upper Tier. Had the five years been a mandatory minimum, it would be unnecessary to provide in NSL 33(1) that the sentence could be reduced in the specifying circumstances. However, Mr Choy’s argument missed the fundamental point that NSL 33(1) exists, among others, for the very purpose of enabling the rigour of the mandatory minimum to be mitigated without compromising the Penological Considerations in furtherance of the Primary Purpose in sentencing serious NSL 21 offences. 80. Mr Choy then argued that NSL 21 operates very much like guideline judgments set by the Court of Appeal in offences of trafficking in dangerous drugs. 81. Most local statutory regimes set the maximum penalty without specifying a minimum, leaving the court to mete out appropriate sentences in different cases. In exercise of its sentencing jurisdiction, the Court of Appeal has handed down guideline judgments, stating tiered-ranges of sentences which reflect gradations in severity to assist the lower courts in sentencing serious offences, such as child pornography;[41] theft or fraud involving a breach of trust;[42] and trafficking in dangerous drugs.[43] Consistency in punishment and treatment is the primary consideration of issuing guideline judgments, which is a fundamental aspect of any rational and fair system of criminal justice: see HKSAR v Godson Ugochukwu Okoro [2019] 2 HKLRD 451, at [81]-[82]. The ranges of sentences effectively set the ranges of starting points for the court to adopt in individual cases. Depending on the circumstances, the ultimate sentence may stay within the applicable range or fall below the minimum of the range. Thus understood, guideline judgments are premised on and operate within sentencing regimes which set the maximum without a minimum. They do not inform the construction of the Upper Tier, a wholly different penalty regime. 82. In sum, Mr Choy’s submissions failed to take account of the context and purpose of the NSL as a whole sufficiently. His construction of the Upper Tier is unsustainable. 83. Turning to NSL 33(1), Mr Choy argued that the drafters of the NSL were fully aware of local sentencing laws when drafting it. It cannot be accidental that the drafters do not univocally state the three specified conditions to be exhaustive. The plain meaning of the language makes it clear that they are not meant to be exhaustive in allowing the court to 減輕處罰, that is, to reduce the penalty of a serious NSL 21 offence. With respect, Mr Choy also failed to construe NSL 33(1) in the context of the NSL as a whole. He also failed to sufficiently recognize that in their application to sentencing such offences, local sentencing laws on mitigation must operate in tandem with NSL 21 and NSL 33(1) in the manner as explained above. His submissions likewise cannot stand. 84. For completeness, we only need to deal with two points taken by Mr Chau in support of his arguments on the construction of NSL 21 and NSL 33(1). 85. First, as he did before the Judge, Mr Chau relied on Jordan. 86. In Jordan, the appellants pleaded guilty to offences of possession of firearms and prohibited firearms under the Firearms Act 1968. Section 51A of the Act provides that: “The court shall impose an appropriate custodial sentence (or order for detention) for a term of at least the required minimum (with or without fine) unless the court is of the opinion that there are exceptional circumstances relating to the offence or to the offender which justifies not doing so.” One of the issues on appeal was whether the court could give discount on guilty pleas which would lower the sentence beyond the mandatory minimum despite section 51A. The English Court of Appeal approached it by ascertaining the legislative intent of the Parliament in enacting section 51A. Noting that the section was plain and unambiguous on its face; that the Parliament was plainly aware of the statutory provisions on how guilty pleas should be regarded in sentencing; and that the absence from section 51A of any reference to those provisions was plainly deliberate, the Court rejected the contention that the Parliament could not have intended to prevent the reduction of a sentence following a guilty plea. They further held that the rigour of section 51A was mitigated by the possibility of exceptional circumstances being found, but they did not regard a guilty plea as an exceptional circumstance. Thus analysed, Jordan, which involves a wholly different legislative scheme, does not assist the construction exercise at hand. 87. Second, Mr Chau sought to rely on the substantive Mainland sentencing law, making reference to a book entitled刑法条文理解适用与司法实务全书,根据刑法修正案1~10编定,第一卷,第四章,第一節刑罚的具体运用.[44] He submitted that since there is a need for convergence between the NSL and local laws, the Mainland sentencing law on the meanings of terms used in the NSL will help the construction exercise. 88. As to that, there was some very brief discussion between the bench and Mr Chau. Unfortunately, Mr Chau failed to properly articulate the basis for his reliance on the Mainland sentencing law, which required clarification. In the process, certain remarks were made by the Court which we now recast to better express our meaning, as follows. Given the special status of the NSL as a national law applied to the HKSAR, regard may properly be had to the relevant Mainland law in aid of its construction. For as pointed out by the Court of Final Appeal in Lai Chee Ying, at [18], according to the Explanation on the “Draft Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region” addressed to the 19th Session of the 13th Standing Committee of the National People’s Congress by the Responsible Official of the Legislative Affairs Commission under the Standing Committee of the National People’s Congress (18 June 2020), one of the working principles for drafting the NSL was: “… accommodating the differences between Mainland China and the HKSAR, and striving to address the convergence, compatibility and complementarity between this Law, and the relevant national laws and local laws of the HKSAR.” (Emphasis supplied) Accordingly, the relevant Mainland law may in principle inform the construction of the NSL or a particular NSL provision. As to which particular Mainland law is relevant for the construction exercise, how and to what extent it is relevant, and how to make reference to it must depend on the actual circumstances of the case before the court. 89. As mentioned at the hearing, for the purpose of the present case, the need to refer to or consult the substantial Mainland sentencing law for the construction of NSL 21 or NSL 33(1) does not arise. So we will just leave the materials relied on by Mr Chau, the status of which has not been properly established by him, as they are. E3. Answers to the Core Issues 90. For these reasons, the answer to the 1st Core Issue is that on a proper construction, the legislative intention of NSL 21 in prescribing the range of penalty for serious offences in the Upper Tier is to lay down a mandatory minimum of five years. 91. The answer to the 2nd Core Issue is that NSL 33(1) is, on a proper construction, exhaustive in enabling the court to 減輕處罰, that is to reduce the sentence for a serious NSL 21 offence below the mandatory minimum of five years in the Upper Tier as appropriate. Other mitigating circumstances recognised under local laws including guilty pleas are not applicable for such purpose. F. Grounds 3 to 5 92. In light of the answers on the Core Issues, both Grounds 3 and 4 fail to the extent as discussed above. As to the remainder, none of the complaints is established either. 93. In respect of Ground 3, Mr Choy submitted that on a proper construction of NSL 21 and NSL 33(1), the minimum term can and should be “reduced” such that a starting point can be adjusted downward for individual justice if one of the prescribed circumstances is satisfied. However, the proper approach to sentencing under NSL 21 is for the court to firstly categorize the offence as either serious or minor; and then to determine the penalty within the applicable tier. The adjusting of an otherwise appropriate sentence, if warranted, would take place at the second step. The practical effect of Mr Choy’s submission is to ask the court to go back to the first step and re-categorize a serious case as a minor one. That is wrong in principle. 94. In respect of Ground 4, Mr Choy submitted that the circumstances of the applicant came very close, if not identical to the scenario specified in NSL 33(1)(2) although he did not voluntarily surrender himself. Thus he should be entitled to avail himself of NSL 33(1)(2). However, the language of NSL 33(1)(2) is plain and unambiguous. Voluntary surrender takes place before any appearance of the offender before the court. It would be too far-fetching to suggest that it covers the making of a plea by him at trial. 95. As said, Ground 5 adds nothing to the applicant’s case. It falls together with Grounds 1 to 4. G. Dispositions 96. For the above reasons, the Judge was correct in her categorization of the offence committed by the applicant as serious. Although she erred in relying on Jordan, her conclusion as to the construction of NSL 21 was correct. Further, on a proper construction of NSL 33(1), the applicant’s timely guilty plea could not apply to adjust the ultimate sentence below the minimum of five years in the Upper Tier. 97. In consequence, we uphold the sentence of five years’ imprisonment that the Judge imposed on the applicant and dismiss his application for leave to appeal against sentence. Mr Edwin Choy SC and Mr Kevin Tang, instructed by Wan Yeung Hau & Co., assigned by the Director of Legal Aid, and Mr Jonathan Lin, instructed by Wan Yeung Hau & Co., for the applicant Mr Anthony Chau, DDPP and Mr Ivan Cheung, ADPP (Ag), of the Department of Justice, for the respondent [1] See G.N. (E.) 72 of 2020. [2] This was Charge 3. The other two charges that the applicant faced and pleaded not guilty to were possession of arms without a licence and possession of offensive weapons with intent, contrary to sections 13(1) and (2) of the Firearms and Ammunition Ordinance, Cap 238 and section 17 of the Summary Offences Ordinance, Cap 228 respectively. Pursuant to the parties’ agreement, those two charges were left on the court file and are not to be dealt with unless with leave of the court. [3] Appeal Bundle, at pp 5-43. [4] Its English translation is: “Orange Gear”. [5] Its English translation is: “The Only Remaining Black Clad from Hong Kong”. [6] Its English translation is: “Changed Back to Two Semi-retired Members of the Air-con Valiant”. [7] Its English translation is: “Two valiant members back in full force”. [8] Its English translation is: “Two Valiants’ CPC Elite Team Raptors”. [9] Its English translation is: “only one valiant warrior giving reply at the moment Admin”. [10] Its English translation is: “2 youths who are anti-communism and anti-national security, and are determined to shout Hong Kong independence and Taiwan independence”. [11] The English translation is “Channel of Anti-Communism and Hong Kong Independence”. [12] Its English translation is: “Promising yy”. [13] The NSL applies to the HKSAR from 11 pm on 30 June 2020: see The Promulgation of National Law 2020 made by the Chief Executive. [14] [2022] HKDC 384. [15] Reasons for Sentence, at [42]. [16] Reasons for Sentence, at [41]. [17] Reasons for Sentence, at [34] – [37]. [18] Reasons for Sentence, at [38]. [19] Reasons for Sentence, at [39]. [20] Reasons for Sentence, at [40]. [21] Reasons for Sentence, at [47]. [22] See the transcripts of the hearing on 29 April 2022, Appeal Bundle, at p 83R-T. [23] Reasons for Sentence, at [50]. [24] Reasons for Sentence, at [51]-[54]. [25] The applicant’s application to amend the Perfected Grounds of Appeal was prompted by the Court’s directions dated 20 September 2022 for further written submissions on the construction of NSL 21 and NSL 33. It was not opposed by the respondent and we allowed it at the hearing on 13 October 2022. The amendments are those italicized in Grounds 3 and 4. [26] Leading Mr Kevin Tang and Mr Jonathan Lin. Both Mr Choy and Mr Tang appeared below. [27] Which, as observed in Ma Chun Man, at [72], is similar in nature to an offence of incitement under NSL 21. [28] For the powerful use of social media, see also HKSAR v Chan Yau Hei (2014) 17 HKCFAR 110, at [89]. [29] Annex B, S/N 1167, published at 1744 hours. [30] Annex B, S/N 1138 and 1139 at 2258 and 2358 hours. [31] Annex B, S/N 1140 to S/N 1143 between 2242 and 2348 hours. [32] Together with Mr Ivan Cheung, Assistant Director of Public Prosecutions (Ag). [33] BL 23 provides: “The [HKSAR] shall enact laws on its own to prohibit any act of treason, secession, sedition, subversion against the Central People’s Government, or theft of state secrets, to prohibit foreign political organizations or bodies from conducting political activities in the Region, and to prohibit political organizations or bodies of the Region from establishing ties with foreign political organizations or bodies.” [34] NSL 3(3) provides: “香港特別行政區行政機關、立法機關、司法機關應當依據本法和其他有關法律規定有效防範、制止和懲治危害國家安全的行為和活動。” [35] NSL 8 provides: “香港特别行政區執法、司法機關應當切實執行本法和香港特別行政區現行法律有關防範、制止和懲治危害國家安全行為和活動的規定，有效維護國家安全。” [36] NSL 42(1) provides: “香港特別行政區執法、司法機關在適用香港特別行政區現行法律有關羈押、審理期限等方面的規定時，應當確保危害國家安全犯罪案件公正、及時辦理，有效防範、制止和懲治危害國家安全犯罪。” [37] Cap 200. [38] Pursuant to NSL 62, which provides: “This Law shall prevail where provisions of the local laws of the [HKSAR] are inconsistent with this Law.” [39] How is 免除處罰 understood and applied when read together with local sentencing laws has to await another occasion. [40] Cap 374. [41] Secretary for Justice v Man Kwong Choi [2008] 5 HKLRD 519. [42] HKSAR v Cheung Mee-kiu [2006] 4 HKLRD 776; HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017. [43] Attorney General v Tuen Shui-ming & Another [1995] 2 HKC 798 (cannabis); R v Lau Tak-ming & Others [1990] 2 HKLR 370 and HKSAR v Abdallah Anwar Abbas [2009] 2 HKLRD 437 (cocaine and heroin); Secretary for Justice v Hii Siew-cheng [2009] 1 HKLRD 1 (ecstasy and ketamine); HKSAR v Ko Wai-shing [2021] 5 HKLRD 724 (GHB and GB); Attorney General v Ching Kwok-hung [1991] 2 HKLR 125 (ice); Attorney General v Chan Chi-man [1987] HKLR 221 (methaqualone and diazepam); R v Lau Yiu-nam [1986] HKLR 964 (opium). [44] Unofficial translation of the title is “The Complete Book on the Understanding, Application and Judicial Practice of the Criminal Law Provisions, prepared according to Amendments 1~10 of the Criminal Law, Volume 1”, Chapter IV: The Special Application of Penalties, Section 1: Sentencing. |
Mr Justice Fok PJ : 1. After hearing counsel for the appellants, the Court did not call on counsel for the respondent and dismissed the appeal with costs, indicating that it would hand down its reasons for doing so in due course. These are the Court’s reasons. 2. The sole issue in this appeal relates to the ownership of 13 parking spaces in an industrial building in Tsuen Wan called Gold King Industrial Building (“the building”).[1] The appellants are the first owners of the building (“the First Owners”) and their agent, Tai Fat Development (Holding) Co Ltd (“Tai Fat”), and the respondent is the Incorporated Owners of the building (“IOs”). The appellants claimed that the 13 parking spaces are reserved for the separate use and ownership of the First Owners and their successors-in-title whereas the IOs contended that the car parking spaces are common parts of the building. 3. This was one of a number of issues, albeit the main issue, between the parties at trial.[2] The issue relating to the 13 parking spaces turned on the construction of a number of documents but principally the Deed of Mutual Covenant dated 16 April 1987 in respect of the building (“the DMC”). The other documents included the First Assignment, also dated 16 April 1987, relating to a unit in the building[3] (“the First Assignment”) and also the Government Grant in relation to the land on which the building was constructed (and in particular Special Conditions 12 and 13 thereof) and the Approved Building Plans of the building dated 18 March 1987. 4. Suffiad J decided the issue in favour of the IOs.[4] He concluded that, on a construction of the DMC, it was clear that the intention of the parties to it was that the 13 parking spaces “were meant to be part of the loading and unloading areas of the building and as such would be part of the common areas of it”. He also rejected the First Owners’ argument based on tenancy by estoppel.[5] That argument was premised on the fact that the IOs had entered into various tenancy agreements in respect of the 13 parking spaces. The last of those tenancy agreements related to 12 of the 13 spaces and was for the period from 1 December 2004 to 30 November 2006. That agreement was, however, only entered into between the IOs and Tai Fat after the IOs’ solicitors had written to assert that the 13 parking spaces in issue were part of the common areas of the building. 5. The First Owners appealed against Suffiad J’s judgment and essentially advanced the same arguments in support of their case as to ownership of the 13 parking spaces. The Court of Appeal dismissed the appeal at the conclusion of the hearing with the reasons for its decision being given subsequently by Barma JA.[6] 6. In the CA Reasons, Barma JA carefully set out the contentions of the First Owners as to why Suffiad J’s construction of the DMC was erroneous[7] but rejected them and concluded[8] that the judge was “clearly right to conclude that the 13 Car Parking Spaces formed part of the common areas of the building”. The First Owners’ arguments were then each separately addressed by Barma JA in the CA Reasons.[9] 7. With one exception, relating to the way he dealt with the First Owners’ case based on estoppel by convention (addressed below), we agree with the reasons given by Barma JA for rejecting the First Owners’ arguments which in turn were consistent with the reasons given by Suffiad J at first instance. It is unnecessary to rehearse all the reasons leading to the conclusion that the 13 parking spaces in question form part of the common areas of the building. The principal reasons, however, are that: (1) The definition of “common areas” in the DMC includes at sub-paragraph (b) “loading and unloading areas” and the 13 parking spaces were listed in the DMC under the heading “Loading and Unloading Areas” in the First Schedule to the DMC; (2) Only ownership shares were issued in respect of the 13 parking spaces but not management shares, thus suggesting they were intended for common ownership rather than private ownership (since, if the latter, management fees on the basis of management shares would be expected to be payable); (3) The reservation of the 13 parking spaces would be necessary to ensure compliance with Special Conditions 12 and 13 of the Government Grant imposing requirements as to the minimum space for the parking, loading and unloading of vehicles; (4) As shown by the approved building plans, there would be considerable practical difficulties if the 13 parking spaces were not common areas and this fact militates in favour of the IOs’ construction of the DMC. 8. The First Owners’ arguments advanced in its printed case on appeal before this Court, being in substance a repetition of its arguments below, do not affect the conclusion reached by the Court of Appeal affirming that of the judge below. The First Owners’ argument that the reservation of the car parking spaces by the vendors in the First Assignment means that it was intended that the 13 parking spaces would not form common areas but would be reserved for private ownership does not overcome the above points. On the terms of the First Assignment, it is to the DMC that one looks in order to ascertain what parts of the building form its common areas. We are satisfied that the Court of Appeal correctly construed the DMC and did not err by ignoring terms in it as contended by the First Owners. We are also satisfied that, as part of the factual matrix in which to construe the DMC, the Court of Appeal was entitled to have regard to the issue of practical difficulty[10] that would be caused to occupants of the building if the car parking spaces were not common areas. 9. The exception referred to above relates to the First Owners’ reliance on the principle of estoppel by convention. Barma JA said that the estoppel by convention argument was not open to the First Owners because it had not been pleaded or investigated at the trial.[11] This is not correct since the defence was pleaded[12] and it was not dealt with separately by Suffiad J. 10. At trial, as noted above, Suffiad J considered a related but separate pleaded defence of tenancy by estoppel and concluded[13] that this argument did not provide the First Owners with a defence to the IOs’ claim that the 13 parking spaces are common areas. His conclusion was based on the provisional conclusion of the Court of Appeal in an earlier summary judgment appeal in these proceedings (reported at [2007] 4 HKLRD 440) and it is not necessary to consider that particular argument further since it was not pursued by the First Owners on appeal. 11. What the First Owners do maintain is that the principle of estoppel by convention avails them in asserting their title to the 13 parking spaces. However, reliance on this principle does not assist the First Owners. Estoppel by convention is concerned with a common assumption relied upon as a basis upon which the persons sharing such common assumption enter into a transaction or legal relationship: First Laser Ltd v Fujian Enterprises (Holdings) Co Ltd (2012) 15 HKCFAR 569 at [79(6)], citing Unruh v Seeberger (2007) 10 HKCFAR 31 at [142]. It is also necessary for the party relying on the principle to show that it would be unjust for the other party to attempt to depart from the common assumption and that he would suffer detriment arising from his having entered into the relevant transaction on the basis of the common assumption if the other party were permitted to set up rights inconsistent with that assumption: First Laser Ltd v Fujian Enterprises (Holdings) Co Ltd (2012) 15 HKCFAR 569 at [79(7)], citing Unruh v Seeberger (2007) 10 HKCFAR 31 at [150]. 12. Here, the First Owners’ pleaded case relates to (a) the letting of the 13 parking spaces from 1987 to the manager of the building and then from 1998 to the IOs, and (b) the further letting of 12 of those spaces after the IOs had, through their solicitors, disputed the ownership of those spaces. However, although the IOs had claimed the repayment of the rent paid in respect of the 13 parking spaces, Suffiad J dismissed that part of the IOs’ claim and accordingly, the First Owners are unable to show any detriment arising from the transaction or transactions which it is said were entered into on the basis of the common assumption. For this reason alone, the plea of estoppel by convention must fail. 13. On behalf of the First Owners, Mr KM Chong[14] sought to advance an additional argument in his oral submissions, namely that the Court of Appeal should not have given weight to the matter of practical convenience in relation to the layout of the 3rd floor of the building because the designation of the one parking space on the 2nd floor of the building for private ownership gave rise to the same or similar difficulties. This argument is lacking in logic since the 2nd floor layout simply highlights the practical inconvenience of the 3rd floor layout on the First Owners’ case. In any event, being a new point not raised below it also faced the insuperable difficulty that it could not satisfy the conditions in Flywin Co Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 356. 14. For these reasons, we dismissed the appeal with costs to the respondent. Postscript 15. The Court understands that this appeal is the last appeal for which leave to appeal was granted “as of right”,[15] the Court of Appeal’s judgment under appeal being dated 27 August 2014 and so before the coming into effect of the Administration of Justice (Miscellaneous Provisions) Ordinance 2014 on 24 December 2014. If this is indeed the last of the “as of right” appeals, this category of case can now be consigned to the footnotes of legal history since the arguments in favour of the abolition of appeals to this Court “as of right”,[16] fully applicable to the present appeal for which leave to appeal would not otherwise have been granted, have happily now led to the repeal of s.22(1)(a) of the Hong Kong Court of Final Appeal Ordinance.[17] Mr K.M. Chong and Mr Alvin Chong, instructed by Kenneth C.C. Man & Co., for the Plaintiff by original action & the 1st Defendant by counterclaim (1st Appellant) and the 2nd – 4th Defendants by counterclaim (2nd – 4th Appellants) Mr Edward Chan SC, Mr Andrew Mak and Ms Carol Wong, instructed by Chung & Kwan, for the Defendant by original action & the Plaintiff by counterclaim (Respondent) [1] The particular parking spaces in issue are those numbered 1 and 2 on the 1st Floor and those numbered 4, 5, 11, 12, 13, 14, 20, 36, 37, 38 and 39 on the 3rd Floor. [2] In HCA 104/2006 before Suffiad J. [3] Being Unit D on the 19th Floor of the building. [4] HCA 104/2006, Judgment dated 15 January 2014 (“CFI Judgment”), at [85]. [5] CFI Judgment at [90]. [6] CACV 22/2014 (Lam VP, Kwan and Barma JJA), Reasons for Judgment dated 23 December 2014 (“CA Reasons”). [7] At [13]. [8] At [23]. [9] At [29] to [34]. [10] Which Barma JA carefully analysed in the CA Reasons at [22]. [11] CA Reasons at [34]. [12] At paragraph 10 of the Re-Amended Reply and Defence to Counterclaim. [13] CFI Judgment at [90]. [14] Appearing with Mr Alvin Chong. [15] Pursuant to (the now repealed) section 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance (Cap.484). [16] See e.g. China Field Ltd v Appeal Tribunal (Buildings) (No.1) (2009) 12 HKCFAR 68 at [13] to [18], Chinachem Charitable Foundation Ltd v Chan Chun Chuen (2011) 14 HKCFAR 798 at [20] and [107], and Wealth Duke Ltd v Bank of China (Hong Kong) Ltd (2011) 14 HKCFAR 863 at [1]. [17] By section 8(1) of the Administration of Justice (Miscellaneous Provisions) Ordinance 2014. |
Chief Justice Cheung: 1. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Fok PJ: A. Introduction 3. This appeal arises out of the prosecution of the appellant, then a member of the Legislative Council (“LegCo”), for an alleged offence of contempt during a committee meeting. It raises the question of the extent to which a member of LegCo may be subject to criminal prosecution for disorderly conduct interrupting proceedings. The Court has previously examined the question of the liability of persons acting disruptively in the public gallery[1] and that of persons acting violently against police officers in the precincts of LegCo,[2] but not that raised in this appeal. A.1 The alleged facts 4. The facts alleged to have occurred and on which the prosecution of the appellant was based were simple. On 15 November 2016, LegCo’s Panel on Housing and its Panel on Development held a joint meeting. The meeting was attended by the appellant, then a member of the Panel on Housing, and Mr Ma Siu-cheung, the then Under Secretary for Development, as well as others. Mr Ma had with him a folder containing confidential documents, which he placed on the bench in front of him. In the course of the meeting, after he had asked Mr Ma to produce certain documents relating to an issue under discussion, the appellant rose from his seat, walked over towards Mr Ma, snatched his folder and then passed it to another member of LegCo in attendance, Mr Chu Hoi-dick, for him to read. The Chairperson of the meeting issued repeated verbal demands to the appellant for him to return the folder to Mr Ma and return to his seat. Eventually, the Chairperson ordered the appellant to withdraw from the meeting pursuant to Rule 45(2) of the Rules of Procedure and temporarily suspended the meeting. Mr Chu, having read the contents of Mr Ma’s folder, eventually returned it to a security guard and it was then given back to Mr Ma. A.2 The prosecution and proceedings below 5. Following this incident, with the consent of the Secretary for Justice,[3] the appellant was prosecuted[4] for the offence of contempt under section 17(c) of the Legislative Council (Powers and Privileges) Ordinance (Cap.382) (“LCPPO”), which provides that: “Any person who – … (c) creates or joins in any disturbance which interrupts or is likely to interrupt the proceedings of the Council or a committee while the Council or such committee is sitting, commits an offence and is liable to a fine of $10,000 and to imprisonment for 12 months, and in the case of a continuing offence to a further fine of $2,000 for each day on which the offence continues.” 6. At the request of the defence, the magistrate gave a ruling on preliminary issues regarding the ambit and constitutionality of section 17(c). In particular, she was asked to rule on whether the section applies to a member of LegCo and to proceedings other than those involving a person called to give evidence under oath.[5] She was also asked to rule on whether the provision is unconstitutional in violating “the freedom of speech and debate of the member and/or LegCo’s exclusive authority over its internal affairs enshrined in the Basic Law”.[6] 7. The magistrate ruled that, on its true interpretation, section 17(c) “is applicable to the proceedings of [LegCo] or a committee in general but it is not applicable to the members of [LegCo].”[7] Having so ruled, she did not deal with the issue of constitutionality. 8. The prosecution appealed by way of Case Stated[8] with questions as to the correctness of the magistrate’s ruling and also raising the constitutional validity of section 17(c). By order of a judge of the Court of First Instance, the Case Stated was reserved for the consideration of the Court of Appeal.[9] 9. In a comprehensive judgment, Poon CJHC (with whom Lam VP[10] and D Pang JA agreed) held that the magistrate was: (1) wrong to rule that conduct caught by section 17(c) is protected by the privilege in section 3 of the LCPPO (see below); (2) wrong to hold that section 17(c) is inapplicable to members of LegCo; and (3) right to find that section 17(c) applies to all proceedings of LegCo and its committees and is not confined to proceedings involving the taking of evidence. He also held against the argument that section 17(c) is unconstitutional.[11] B. The issues in this appeal 10. The Appeal Committee granted leave to appeal to the appellant in respect of the following questions of law, namely: “(1) Whether what is said and done during proceedings of the Legislative Council (“LegCo”) and its committees falls within the privilege enjoyed by LegCo provided that it does not amount to an ordinary criminal offence. (‘Question 1’) (2) Upon the true interpretation of the Legislative Council (Powers and Privileges) Ordinance, Cap 382 (“LCPPO”): (a) Whether section 17(c) applies to a member of LegCo. (‘Question 2(a)’) (b) Whether ‘proceedings’ in section 17(c) is confined to proceedings involving the taking of evidence under oath. (‘Question 2(b)’) (3) Whether the Court of Appeal was correct in respect of the following: (a) That the absolute freedom of speech and debate of LegCo under section 3 of the LCPPO does not extend to conduct caught by section 17(c) of the LCPPO. (‘Question 3(a)’) (b) That LegCo had, by enacting section 17(c) of the LCPPO, in fact relinquished to and/or conferred upon the courts a penal jurisdiction over the conduct and discipline of members of LegCo during the proceedings of LegCo and its committees. (‘Question 3(b)’) (c) That section 17(c) of the LCPPO as applicable to a member of LegCo is not unconstitutional. (‘Question 3(c)’).” 11. Despite the breadth of the questions for which leave to appeal was sought and granted, in light of the parties’ submissions in their respective written cases and at the hearing before this Court, the issues on this appeal have been more focused. The appellant contends that, as a matter of law, he is not subject to liability under section 17(c) of the LCPPO because of, first, the constitutional protection of freedom of speech and debate or proceedings in LegCo, and/or, second, the principle of non-intervention by the courts in the conduct of LegCo proceedings. The first contention involves construing section 17(c) of the LCPPO and will require consideration of Article 77 of the Basic Law (“BL77”) and sections 3 and 4 of the LCPPO (set out below). The second contention requires consideration of this Court’s decision in Leung Kwok Hung v President of the Legislative Council (No.1) (2014) 17 HKCFAR 689. 12. In advancing the appeal, Lord Pannick QC[12] draws attention to three particular aspects of the appellant’s case, namely that (i) the appellant was a member of the LegCo Panel on Housing, (ii) his impugned conduct was in relation to the business of the joint meeting of the two LegCo Panels, and (iii) the alleged offence is inextricably linked to the proceedings of the LegCo Panels and is not an “ordinary crime”. C. Whether appellant immune from prosecution by reason of freedom of speech and debate in LegCo C.1 Appellant’s conduct prima facie caught by section 17(c) 13. It is to be noted that not every interruption to proceedings constitutes an offence under section 17(c), which only penalises those interruptions which are the result of a disturbance to the relevant proceedings. The dictionary definition of “disturbance” is relevant and includes: “1. The interruption and breaking up of a … proper functioning; … an instance of … a breach of the public peace … 2. Interference with the continuance of any action or process. … 4. Interference with rights or property.”[13] 14. Accordingly, the offence is committed when a defendant creates a disturbance which interrupts or breaks up the proper functioning of LegCo or its committees and, in particular, occurs when the resulting interruption involves interference with the rights of others. 15. The wording of section 17(c) refers to “any person” and, in context and having regard to the purpose of the LCPPO (see below), there is no reason to exclude a LegCo member from its ambit. A compelling contextual argument for this is the presence, in section 20 of the LCPPO,[14] of the qualification “other than a member or officer of the Council”. Where the LCPPO is not intended to apply to a member of LegCo, it says so. The expression “any person” is also used in section 19 of the LCPPO (creating offences of interfering with members, officers and witnesses),[15] without the section 20 qualification, and, if that were read as not applying to LegCo members, would, like section 17(c), produce anomalous results. Given the statutory purpose of the LCPPO, there is no good reason to exclude a LegCo member from liability for interfering with other members or officers or witnesses. Similarly, as Lord Pannick QC accepted, there is no good reason to exclude a LegCo member, in circumstances where they are not protected by the freedom of speech and debate conferred on them, from liability for contempt constituted by the creation of a disturbance interrupting proceedings. 16. On the facts set out in Section A.1 above, which have yet to be established, the appellant was prima facie caught by section 17(c) of the LCPPO. The joint panel meeting was a proceeding of a committee of LegCo.[16] The appellant was a person who evidently created a disturbance which interrupted the proceedings of that committee while it was sitting. The central question in this appeal, to which I shall now turn, is whether the appellant’s conduct fell within any privilege conferred on members of LegCo. C.2 The argument in reliance on the protection of freedom of speech and debate 17. The first and principal reason advanced by the appellant for not being liable under section 17(c) on the facts as alleged involves reliance on the privileges conferred by law in respect of statements made at meetings of LegCo and its committees. Specifically, the appellant relies on: (1) BL77, which provides: “Members of the Legislative Council of the Hong Kong Special Administrative Region shall be immune from legal action in respect of their statements at meetings of the Council.” (2) LCPPO section 3, which provides: “There shall be freedom of speech and debate in the Council or proceedings before a committee, and such freedom of speech and debate shall not be liable to be questioned in any court or place outside the Council.” (3) LCPPO section 4, which provides: “No civil or criminal proceedings shall be instituted against any member for words spoken before, or written in a report to, the Council or a committee, or by reason of any matter brought by him therein by petition, Bill, resolution, motion or otherwise.” 18. The appellant also contended that, since section 3 of the LCPPO is closely modelled on Article 9 of the Bill of Rights 1689,[17] it is relevant to have regard to English cases concerned with Article 9,[18] including the UK Supreme Court’s interpretation of that provision in R v Chaytor [2011] 1 AC 684. That case concerned the prosecution of members of the UK Parliament for submitting false claims for expenses and allowances. The UK Supreme Court held that the members in question were not immune from prosecution by reason of Parliamentary privilege because the submission of claims was not part of the proceedings in Parliament to which the privilege extended. 19. It was submitted on behalf of the appellant that the ambit of protection conferred by section 3 of the LCPPO (as under Article 9 of the Bill of Rights 1689 on which it is modelled) is “the core or essential business of Parliament [here LegCo], which consists of collective deliberation and decision making”[19] and that the prosecution in the present case would involve the criminal court in addressing “the proceedings in Parliament [that is LegCo]”[20] and “the legislative or deliberative processes of”[21] of LegCo. The appellant’s prosecution in this case would require the court to assess the conduct of the LegCo Panel meeting and what a member of LegCo had done during that meeting in the course of the collective deliberations, and whether this conduct was a disturbance which interrupted the business of LegCo, or was likely to do so. 20. Therefore, it was submitted, so long as the appellant’s alleged conduct occurred during the business of the LegCo Panel meeting, section 3 of the LCPPO (and likewise BL77) confers an absolute privilege and grants him immunity from prosecution even if his conduct was such as to fall within the terms of section 17(c). C.3 The ambit of a LegCo member’s freedom of speech and debate and the correct interpretation of section 17(c) 21. The appellant’s argument requires acceptance of the proposition that the conduct of the appellant constituted an exercise of the protected freedom of speech and debate. 22. Whilst it may be correct to say that section 3 of the LCPPO is modelled on Article 9 of the Bill of Rights 1689 and that the former, like the latter, confers an absolute privilege which cannot be waived,[22] it nevertheless remains for the Court to determine, on its true construction, where the boundaries of section 3 lie. This necessarily also entails a consideration of section 17(c) of the LCPPO, which is part of the context of section 3, and the question of how, as a matter of statutory construction, the two sections intersect. 23. The proposition that it is for the courts to determine the scope of the legislature’s privilege is clearly laid down in Leung Kwok Hung v President of the Legislative Council (No.1) (2014) 17 HKCFAR 689 at [39]-[43]. In particular, that case establishes that “… in the case of a written constitution, which confers law-making powers and functions on the legislature, the courts will determine whether the legislature has a particular power, privilege or immunity” (ibid. at [39]). Similarly, the UK Supreme Court affirmed in R (Miller) v Prime Minister [2019] 3 WLR 589 at [66], by reference to R v Chaytor [2011] 1 AC 684, that “it is for the court and not for Parliament to determine the scope of Parliamentary privilege, whether under article 9 of the Bill of Rights or matters within the ‘exclusive cognisance of Parliament’; …”. 24. Adopting the well-established principles of statutory construction[23] of examining the language of the relevant provisions by reference to their context and purpose, one notes that section 3 of the LCPPO is not in identical terms to Article 9 of the Bill of Rights 1689.[24] The latter extends its protection to “proceedings in Parliament”, as well as freedom of speech and debates, and the English cases emphasise that it protects what is “said or done within the walls of Parliament”.[25] In the LCPPO, the privilege or immunity applies to “speech and debate” (section 3) and “words spoken … or written” (section 4) in LegCo, and is reflected in the immunity for “statements” in BL77. This Court has, of course, previously acknowledged that freedom of expression embraces, as one of its dimensions, the manner in which an individual wishes to express their views and is therefore not limited to spoken or written words.[26] At the same time, however, section 17(c) provides a criminal offence of contempt for interruptive disturbances (see [13] and [14] above) and so the question of whether any particular conduct falls within the protected freedom of speech and debate or not must depend on a proper construction of the relevant provisions of the LCPPO as a whole. 25. The statutory purpose is the starting point of any such construction. The LCPPO was enacted in 1985 in anticipation of the resumption of the exercise of sovereignty over Hong Kong by the People’s Republic of China. It was recognised that the powers and privileges of the former colonial legislature would cease to have effect after 30 June 1997 and so the then Hong Kong Government proposed the Bill which became the LCPPO in order to provide a statutory footing for LegCo’s management of its own affairs, effective investigatory powers and its powers and privileges. That legislative scheme included the creation of offences and penalties, over which jurisdiction was conferred on the courts. This statutory purpose is reflected in the debates in LegCo second reading and committee stage of the Bill, including in particular the speeches of the Chief Secretary moving its second reading.[27] The enactment of the LCPPO in July 1985, included sections 3, 4 and 17(c), as well as other provisions, and preceded the drafting of the Basic Law. There is no suggestion that the Basic Law was intended either to depart from, or extend, the powers and privileges of LegCo in the LCPPO (as noted above, BL77 only immunises “statements at meetings of the Council”). 26. The statutory purpose of the LCPPO, reflected in its Long Title,[28] has more recently been explained in the judgment of Ribeiro PJ in HKSAR v Fong Kwok Shan Christine, as including the provision of: “… a statutory framework aimed at creating a secure and dignified environment in the LegCo complex conducive to the legislature carrying out its constitutional functions at its sittings without disruption or disturbance, while permitting members of the public to observe the proceedings within the Chamber as an open legislative process”.[29] 27. Construing the statutory privilege of free speech and debate in LegCo contextually and purposively, I would reject the appellant’s argument that his impugned conduct fell within the protection of free speech and debate relied upon. The LCPPO is to be construed as a coherent whole with sections 3 and 4 having to be read in context together with other provisions including section 17(c). As the Court of Appeal observed (at [42]): “Protection of the core legislative and deliberative business in terms of free speech and debate in the Council and proceedings in a committee is conferred by sections 3 and 4. Together with other privileges and immunities, they aim at enabling LegCo to carry out its functions independently and without outside interference. The provisions regulating admittance, etc and for offences, including section 17(c) aim at maintaining the secure and dignified environment that LegCo needs to carry out its functions.” 28. The protection of freedom of speech and debate in LegCo is self-evidently an important right. It enables members of LegCo to advocate opinions freely and robustly and without inhibition due to the fear of legal proceedings for such speech and debate. It would be a significant inroad into that freedom if a member of LegCo were subject to legal proceedings for things said by him in the course of sometimes heated political debate. Equally, as the passage quoted in the preceding paragraph demonstrates, the provisions regulating admission and creating offences are designed to achieve the statutory purpose of creating a secure and dignified environment conducive to the legislature carrying out its constitutional functions at its sittings without disruption or disturbance. 29. Accepting the appellant’s broad argument in the present case that, merely because he was present at, and had been participating in, a committee meeting of LegCo, he had absolute immunity for his actions however and whenever occurring and even if they amounted to a disruption caught by section 17(c), would be to extend the privilege of free speech and debate beyond the purpose for which it is granted. 30. In the present case, in my view, his conduct did not fall within the speech and debate protected by sections 3 or 4 of the LCPPO or BL77. At the meeting in question, if the prosecution’s case is established, the appellant created a disturbance by the act of crossing the floor of the chamber during a debate and snatching property belonging to someone else which he passed to a third party over the owner’s objections. He thereby interfered with the rights of Mr Ma, to whom as a public officer the privileges and immunities enjoyed by LegCo members are also extended,[30] including his privacy rights in relation to the confidential documents in his file. The appellant acted in breach of the LegCo rules and ignored the Chairperson’s repeated demands that he resume his seat and return the folder to Mr Ma. This led to the suspension of the meeting whilst the disruptive consequences of the appellant’s actions were addressed. By his actions, the appellant created a disturbance which interfered with the ability of other members of LegCo to carry out their proper functions. In doing so, he was not making a speech, nor was he participating in debating any business that was before the meeting. 31. Concluding that the appellant’s conduct, falling as it did within section 17(c), did not come within the protection of sections 3 and 4 or BL77 is not to say that the freedom of speech and debate in LegCo is qualified, in the same way as, for example, the generally applicable rights of free speech and assembly under Articles 16 and 17 of the Hong Kong Bill of Rights. As noted above, the Court has acknowledged that freedom of expression embraces the manner in which an individual expresses their views. In conveying information and ideas an individual member might well conduct themself in a manner which falls within the freedom of speech and debate conferred. On the other hand, whilst the limits of the freedom are widely drawn and properly described as absolute, conduct which does not form part of any speech or debate in LegCo falls outside the section 3 privilege. Such conduct which creates a disturbance constituting an interruption to proceedings interfering with the proper functioning of LegCo or its committees, and in particular where it interferes with the rights of others, may attract liability under section 17(c). There may be cases where it is more difficult to see the division between conduct which falls within the protection of speech and debate and that which does not. This is not such a case. Here, it is plain that the appellant was not engaged in speech and debate in LegCo when he conducted himself in the manner alleged to have created a disturbance. It follows that his conduct, prima facie contrary to section 17(c), is not protected by the privilege conferred by sections 3 and 4 or BL77. D. Whether appellant immune from prosecution by reason of the non-intervention principle 32. The appellant’s second ground for contending that he is immune from prosecution for the alleged offence involves the proposition that the Court should refrain from exercising criminal jurisdiction over contempts of LegCo under section 17(c) of the LCPPO on the basis that taking jurisdiction would offend the non-intervention principle which is said to derive from the doctrine of separation of powers as affirmed by this Court in Leung Kwok Hung v President of the Legislative Council (No.1).[31] 33. Whilst recognising that the exclusive competence of Parliament (or, in Hong Kong, LegCo) to manage its own affairs without interference from the courts or others can be waived or relinquished,[32] it was submitted on behalf of the appellant that: (1) given the constitutional significance of the principle, clear words would be required to conclude that exclusive competence had been waived; (2) section 17(c) says nothing express about exclusive competence and cannot be read as displacing that principle in the context of an ordinance which includes section 3; and (3) there is scope for section 17(c) to operate even if it does not extend to the conduct of a member of LegCo. 34. The non-intervention principle was stated in Leung Kwok Hung v President of the Legislative Council (No.1) as: “… the principle that the courts will recognise the exclusive authority of the legislature in managing its own internal processes in the conduct of its business, in particular its legislative processes. The corollary is the proposition that the courts will not intervene to rule on the regularity or irregularity of the internal processes of the legislature but will leave it to determine exclusively for itself matters of this kind (the non-intervention principle).”[33] 35. That case concerned the question of whether the court should exercise its powers of judicial review regarding the regularity or otherwise of the President of LegCo’s decision to curtail the time for debate and to bring a long filibuster to an end. This was clearly a matter involving the internal processes of the legislature. The present case is entirely different. In exercising jurisdiction in respect of the appellant’s prosecution under section 17(c), the court is carrying out its judicial function of applying primary legislation enacted by LegCo itself. There is no issue of separation of powers. LegCo has carried out its constitutionally allotted legislative function of enacting the offence provision conferring jurisdiction on the courts and the courts carry out their constitutionally allotted adjudicative function in trying prosecutions for the offence so enacted. Contrary to the appellant’s arguments, the non-intervention principle has no application. 36. Regardless of whether or not conduct caught by section 17(c) would previously have been or is still susceptible to internal LegCo disciplinary proceedings, by enacting section 17(c) as primary legislation, LegCo has deliberately vested the courts with the criminal jurisdiction thereby created. To the extent that it might have been arguable that the conduct was subject to regulation as part of LegCo’s internal processes, LegCo has waived any exclusivity in its disciplinary jurisdiction and conferred penal powers on the courts. LegCo itself has never claimed criminal jurisdiction (as opposed to disciplinary jurisdiction) in respect of misconduct committed inside LegCo. Insofar as there is now overlapping jurisdiction over misconduct of the type covered by section 17(c), the fact that internal LegCo disciplinary proceedings might have been commenced in respect of a particular incident will be a relevant factor in any decision of the Secretary for Justice to grant consent pursuant to section 26 for the institution of a prosecution under the LCPPO in respect of the same incident.[34] 37. None of the appellant’s arguments in support of the contention that LegCo has not waived its exclusive competence over members of LegCo for disturbances falling within section 17(c) are convincing reasons for holding that the non-intervention principle applies here. The wording of section 17(c) and its application to members of LegCo is clear and unambiguous. Part IV of the LCPPO, including section 17(c), is part of the “statutory framework aimed at creating a secure and dignified environment in the LegCo complex conducive to the legislature carrying out its constitutional functions at its sittings without disruption or disturbance, while permitting members of the public to observe the proceedings with the Chamber as an open legislative process” (see [26] above). Excluding members of LegCo from the operation of section 17(c) would be anomalous in providing them with an immunity from prosecution for behaviour which, on any view, is inimical to the legislative and deliberative business of LegCo. E. Conclusions and Disposition 38. For the reasons set out above: (1) Where, by conduct not forming part of any speech or debate, a LegCo member has created a disturbance which interrupts proceedings within the meaning of section 17(c), the freedom of speech and debate conferred on him by sections 3 and 4 of the LCPPO or BL77 does not provide the member with an immunity from prosecution for the offence of contempt under section 17(c). (2) The non-intervention principle does not require that the courts refuse to exercise criminal jurisdiction over a member of LegCo in a prosecution under section 17(c). (3) It is not necessary to address more specifically the separate questions for which leave to appeal was granted. In particular, it was not argued on behalf of the appellant that the Court of Appeal was wrong to conclude that proceedings in section 17(c) were confined to proceedings involving the taking of evidence under oath (Question 2(b)). Nor did the appellant pursue the argument that the Court of Appeal was wrong in holding that section 17(c) is not unconstitutional (Question 3(c)). 39. Accordingly, I would dismiss the appeal. The appellant is not immune from prosecution for the alleged offence and the courts are not precluded from exercising jurisdiction in respect of the charge. Mr Justice Chan NPJ: 40. I agree with the judgment of Mr Justice Fok PJ. Lord Reed of Allermuir NPJ: 41. I agree with the judgment of Mr Justice Fok PJ. Chief Justice Cheung: 42. Accordingly, the appeal is unanimously dismissed. Lord Pannick QC and Ms Margaret Ng, instructed by Ho Tse Wai & Partners, assigned by the Director of Legal Aid, Mr Carter Chim and Mr Jason Lee, instructed by Ho Tse Wai & Partners, on a pro bono basis, for the Appellant Mr Johnny Mok SC, instructed by the Department of Justice, and Ms Vinci Lam SC, DDPP, Mr William Liu, DLO (Civil Law) (Ag.) and Mr Antony Leung, SPP, of the Department of Justice, for the Respondent [1] HKSAR v Fong Kwok Shan Christine (2017) 20 HKCFAR 425. [2] HKSAR v Leung Hiu Yeung (2018) 21 HKCFAR 20. [3] Required by section 26 of the LCPPO. [4] ESS 16969/2017, before Ms Ada Yim Shun-yee, Ag Principal Magistrate. [5] Ruling on Preliminary Issues, 5 March 2018, Amended Question One. [6] Ibid., Amended Question Two. [7] Ibid. at [32]. [8] Pursuant to section 105 of the Magistrates Ordinance (Cap.227). [9] Pursuant to section 118(1)(d) of (Cap.227). [10] Now Lam PJ. [11] [2020] HKCA 424, HCMA 520/2018, Judgment dated 2 June 2020 (“CA Judgment”) at [11] and [83]. [12] Appearing with Ms Margaret Ng, Mr Carter Chim and Mr Jason Lee. [13] Shorter Oxford English Dictionary (6th Ed., 2007) Vol.1, p.722. [14] Section 20 provides: “Any person, other than a member or officer of the Council, who – (a) enters or attempts to enter the Chamber or the precincts of the Chamber in contravention of any of the Rules of Procedure or any resolution under section 8(2); or (b) contravenes any administrative instructions issued under section 8(3), or any direction given thereunder, regulating the admittance of persons to or the conduct of persons within the Chamber or the precincts of the Chamber, commits an offence and is liable to a fine of $2,000 and to imprisonment for 3 months.” [15] Section 19 provides: “Any person who – (a) assaults, obstructs or molests any member going to, being within or going from the precincts of the Chamber, or endeavours to compel any member by force or menace to declare himself in favour of or against any motion or matter pending before the Council or a committee; or (b) assaults, interferes with, molests, resists or obstructs any officer of the Council while in the execution of his duty; or (c) tampers with, deters, threatens, molests or in any way unduly influences any witness in regard to any evidence to be given by him before the Council or a committee; or (d) threatens, molests or in any way punishes or injures or attempts to punish or injure any person for having given evidence before the Council or a committee or on account of any evidence which he has given before the Council or a committee, commits an offence and is liable to a fine of $10,000 and to imprisonment for 12 months.” [16] Section 2 of the LCPPO defines “committee” as “(a) a standing or select committee or any other committee of the Council; (b) a subcommittee of any committee referred to in paragraph (a).” [17] This provides: “That the Freedome of Speech and Debates or Proceedings in Parlyament ought not to be impeached or questioned in any Court or Place out of Parlyament.” [18] Reference was made to Bradlaugh v Gossett (1884) 12 QBD 271, Stockdale v Hansard (1839) 9 Ad & E 1, and Chenard v Arissol [1949] AC 127. [19] [2011] 1 AC 684 per Lord Phillips of Worth Matravers PSC at [62]. [20] Ibid. [21] [2011] 1 AC 684 per Lord Rodger of Earlsferry JSC at [122]. [22] [2011] 1 AC 684 per Lord Phillips of Worth Matravers PSC at [61]. [23] See e.g. Chan Ka Lam v Country and Marine Parks Authority [2020] HKCFA 33, (2020) 23 HKCFAR 414 at [26]-[27]. [24] “That the Freedome of Speech and Debates or Proceedings in Parlyament ought not to be impeached or questioned in any Court or Place out of Parlyament.” [25] Bradlaugh v Gossett (1884) 12 QBD 271 at p.275, R v Chaytor [2011] 1 AC 684 at [29], [52] and [54]. [26] HKSAR v Fong Kwok Shan Christine (2017) 20 HKCFAR 425 at [42], citing Mayor of London v Hall [2011] 1 WLR 504 per Lord Neuberger of Abbotsbury MR (as he then was) at [37]. [27] Such statements being admissible to ascertain statutory purpose: see HKSAR v Cheung Kwun Yin (2009) 12 HKCFAR 568 at [13]-[14], HKSAR v Li Kwok Cheung George (2014) 17 HKCFAR 319 at [37]. [28] “To declare and define certain powers, privileges and immunities of the Legislative Council and of the members and officers thereof and of the Chief Executive and public officers designated by him in relation to attendance at sittings of the Legislative Council and committees thereof; to secure freedom of speech in the Legislative Council; to make provision for regulating admittance to and conduct within the precincts of the Chamber of the Legislative Council; to provide for the giving of evidence in proceedings before the Legislative Council or committees thereof, and for offences in respect of such proceedings and related matters; and for purposes incidental to or connected therewith.” [29] (2017) 20 HKCFAR 425 at [82]. [30] By section 8A of the LCPPO. [31] (2014) 17 HKCFAR 689. [32] R v Chaytor [2011] 1 AC 684 per Lord Phillips of Worth Matravers PSC at [63]. [33] (2014) 17 HKCFAR 689 at [28]. [34] CA Judgment at [72], referring to R v Chaytor [2011] 1 AC 684 at [81]. |
Chief Justice Ma: 1. I agree with the judgment of Madam Justice McLachlin NPJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Madam Justice McLachlin NPJ. Mr Justice Fok PJ: 3. I agree with the judgment of Madam Justice McLachlin NPJ. Mr Justice Cheung PJ: 4. I agree with the judgment of Madam Justice McLachlin NPJ. Madam Justice McLachlin NPJ: A. Introduction 5. The appellant was convicted of trafficking in a dangerous drug and sentenced to 8½ years in prison after a trial before a jury. The appellant was absent for a portion of the trial due to a medical condition. The issue on this appeal is whether the trial judge’s refusal to adjourn the trial while he sought medical help for a painful dental problem requires that his conviction be set aside and a new trial ordered. 6. I conclude that while the trial judge should have granted the brief adjournment requested for the appellant to seek medical attention, the appellant’s absence from a portion of the trial did not render his trial unfair, having regard to the entirety of the proceedings. Accordingly, I would dismiss the appeal. B. Facts and Judicial Proceedings B.1. Events Leading to the Arrest 7. In August 2016, PC 4543 (“PW1”) and PC 9687 (“PW2”) were on plain clothes patrol on the street. PW1 spotted the appellant who was accompanied by a female friend, Ms Chan. PW1 thought the appellant was acting suspiciously because of the way he was walking and holding his hands in front of his crotch area as if to conceal something in his clothing. PW1 asked PW2 to join him in intercepting the appellant and Ms Chan. PW1 touched the crotch area of the appellant and felt something hard. The police officers took the appellant to a nearby disabled toilet for a further search, which revealed drugs hidden in the appellant’s underpants. PW1 cautioned the appellant, who made certain admissions. The appellant says that PW2 induced him to admit possession of the drugs by promising that the appellant would only be charged for possession of dangerous drugs and Ms Chan would be released (“inducement”). He was taken to the police station, where he signed a post-record of his verbal admissions given in the disabled toilet and made further admissions in a video-recorded interview (“confession”). He was then charged with trafficking in a dangerous drug, contrary to section 4(1)(a) and (3) of the Dangerous Drugs Ordinance, Cap 134. B.2. The Trial 8. The trial began with a voir dire to determine whether the confession was voluntary and hence admissible. The appellant alleged that the confession was inadmissible because of the inducement. On day 2 of the voir dire, while the prosecution’s first witness, PW1, was still testifying, the appellant indicated that he was unwell with a swollen and infected gum and a headache, for which he had taken painkillers. The trial judge responded that the trial could continue in his absence because he was represented by counsel. The appellant’s counsel replied that this was an option but indicated that after completion of the evidence of PW1, he would seek the trial judge’s further direction. At 11:06am, while PW1 was still being cross-examined, the appellant informed the trial judge that he felt dizzy and requested to leave but the proceedings could continue in his absence. The trial judge agreed, saying he could be brought back when he felt fit. 9. Shortly after the appellant left the courtroom, at 11:29am, the court adjourned for the mid-morning break. After the break, the appellant’s counsel informed the trial judge that the appellant felt a bit better but would go to see the doctor at Lai Chi Kok Reception Centre in the afternoon. The trial judge responded, “we’ll continue this afternoon without him”. The transcript then reveals the following exchange: “MR. LO: Yes. Well, but, your Ladyship, is it I … COURT: That’s perfectly proper. He is not well. There is no reason why he should be here. You said you had full instructions. We can move on. Otherwise, unless he is dead or dying, he stays. So he has a choice. MR. LO: Your Ladyship, but … COURT: I can’t see that he is in any prejudice. It’s a voir dire. You have full instructions. MR. LO: Okay.” After the conclusion of the cross-examination of PW1 at 1:03pm, immediately before the lunch adjournment, the appellant’s counsel renewed his concern: “MR. LO: Your Ladyship, my latest instruction from my client is still – is that he would like to go back to the Lai Chi Kok for … COURT: To be then … MR. LO: Yes. COURT: Well, then we will … MR. LO: But I – your Ladyship, your stance is clear and I know it’s hard to convince your Ladyship otherwise. However, I urge you to – I urge your Ladyship to reconsider whether it is the best interest to the defendant if he is – if … COURT: He is well-represented, Mr Lo. He has given full instructions. Your case has been put. It has been reduced to your grounds of objection. If he is that unwell, then of course he must go back. If he feels he needs to be here, then he can choose but as far as I am concerned, there will be no prejudice to your client whatsoever being represented by you and your instructing solicitor. This isn’t the trial. This is – before a jury at this stage. This is a voir dire. MR. LO: Yes, but such decision would affect to some certain extent his – the trial. COURT: No, Mr, I’m not with you on that. He has a choice. It’s up to him to decide what he wishes to do. You’re more than competent to deal with this. MR. LO: Well, I’m … COURT: He hasn’t with the main witness given you other instructions during your cross-examination. You’re well prepared. MR. LO: All I could say, your Ladyship, is I’m flattered. COURT: And I hope he manages to get some sort of medication which will make him better. MR. LO: Grateful, your Ladyship. COURT: And we’ll see what the doctor has to say. 2:30, gentlemen.” 10. At 2:30pm, the trial resumed in the absence of the appellant. The appellant’s counsel informed the trial judge that the appellant had gone back to Lai Chi Kok Reception Centre to consult a doctor as he had a dental problem with tremendous pain, and it was anticipated that the appellant could be present in court the next morning. He reapplied for a short adjournment to the next day. The trial judge stated the proceedings would continue and told the appellant’s counsel not to try again as she had already made her ruling and decision. The appellant was absent from the voir dire for the whole afternoon and thus not present for the examination in chief and cross-examination of PW2, who had allegedly given the inducement that made the confession involuntary. Having sought medical attention, the appellant returned to the trial the next morning. B.3. The Court of Appeal 11. The appellant applied for leave to appeal against his conviction to the Court of Appeal. Unrepresented, he complained of the refusal of the trial judge to adjourn his case to allow his counsel to prepare for the voir dire, and of the trial judge’s failure to provide adequate jury directions on the possibility of hiding the dangerous drugs inside his underpants. The application was dismissed. 12. In an Addendum to its judgment, the Court of Appeal noted that the clerk’s log revealed that the appellant had claimed he was ill on day 2 of the voir dire but that the trial had continued that afternoon in his absence. However, since it had already issued an order dismissing his application for leave to appeal, the court viewed itself as functus officio and did not deal with this matter or its significance. This is now before us. B.4. The Present Appeal 13. The Appeal Committee of this Court granted leave to appeal on the substantial and grave injustice ground, namely that it was reasonably arguable that the appellant was deprived of a fair trial by the trial judge’s refusal to grant a short adjournment due to the appellant’s stated inability to attend court by reason of illness and instead, continuing with the trial in his absence. C. The Law 14. Article 11(2)(d), section 8 of the Hong Kong Bill of Rights Ordinance, Cap 383,provides that in the determination of any criminal charge against him, a person shall be entitled to be present at his trial: “Article 11 Right of persons charged with or convicted of criminal offence … (2) In the determination of any criminal charge against him, everyone shall be entitled to the following minimum guarantees, in full equality— … (d) to be tried in his presence …” 15. This well-established right allows the accused to see and hear the case against him, confront his accusers, and give prompt and continuous instructions to his legal representatives. The presence of the accused may also place psychological pressure on witnesses to tell the truth, enhancing public confidence that justice has been done. See R v David Jeremy Taylor, Tina Kaisa Paivarinta-Taylor [2008] EWCA Crim 680 at [16]: “...The right to be present at court is vital. It is not only a right so that the defendant can participate by giving instructions and following the trial, but also so that he can see and hear the witnesses who are giving evidence against him. This is not only part of the process by which a defendant participates at trial, but is also a sanction by which the public can be confident that there are pressures on those witnesses who give adverse evidence against a defendant to tell the truth. To give an account of events in a witness statement or within the seclusion of a police station is one thing. It is quite another to have to stand up in public, face-to-face with a defendant, and repeat those assertions. …” 16. The right to be present at one’s trial is part of the broader right of everyone charged with a criminal offence to a fair trial.[1] It is not an absolute right. The trial judge has a discretion to allow the trial to proceed in the accused’s absence in appropriate circumstances. As Lord Bingham said in R v Jones (Anthony), [2003] 1 AC 1 (“Jones”), at [6]: “... The presence of the defendant has been treated as a very important feature of an effective jury trial. But for many years problems have arisen in cases where, although the defendant is present at the beginning of the trial, it cannot (or cannot conveniently or respectably) be continued to the end in his presence. This may be because of genuine but intermittent illness of the defendant … . In all these cases the court has been recognised as having a discretion, to be exercised in all the particular circumstances of the case, whether to continue the trial … . The existence of such a discretion is well established … . But it is of course a discretion to be exercised with great caution and with close regard to the overall fairness of the proceedings; a defendant afflicted by involuntary illness or incapacity will have much stronger grounds for resisting the continuance of the trial than one who has voluntarily chosen to abscond.” 17. The authorities[2] establish a number of factors that should be considered in determining whether a trial should be continued in an accused’s absence. They include the following: - Was the accused’s absence voluntary or involuntary? Where an accused is absent because of illness, the absence is generally treated as involuntary. - Has the accused waived the right to be present at his trial? This is a question of fact to be determined in all the circumstances. - Would an adjournment resolve the problem of the accused’s absence? If so, would the adjournment required be short or long? Would an adjournment impact negatively on the conduct of the trial, for example, the effect of delay on the memory of witnesses? - Is the accused legally represented? If so, to what extent are his legal representatives able to receive and act upon instructions in his absence? - Would the accused be prejudiced by his absence, having regard to the nature of his defence and the evidence against him? - Would there be a risk of the jury reaching an improper conclusion about the accused’s absence? 18. The factors to be considered cannot be reduced to an exhaustive or conclusive checklist. It is clear, however, that a judge in exercising the discretion should carefully consider all the relevant circumstances arising in the case at hand with the “overriding concern … to ensure that the trial, if conducted in the absence of the [accused], will be as fair as circumstances permit and lead to a just outcome.”[3] It is also clear that the judge should proceed with “utmost care and caution”[4]. The decision to proceed with a trial in the absence of an accused should only be in “rare and exceptional cases”[5], and if an accused is absent because of illness “it would very rarely, if ever, be right to exercise the discretion in favour of commencing the trial, at any rate unless the defendant is represented and asks that the trial should begin.”[6] Indeed, it has been said that the discretion “should be sparingly exercised and never if the accused’s defence will be prejudiced by his absence.”[7] 19. Where an appellate court concludes that the discretion has been exercised improperly, the remaining question is whether, viewing the trial as a whole, the absence of the accused rendered the trial unfair. See Jones.[8] 20. As I earlier stated, the right to be present at one’s trial is part of the broader fair trial right. Not every departure from the norm will require a new trial. As the proviso in section 83(1) of the Criminal Procedure Ordinance, Cap 221 states: “…the Court of Appeal may, notwithstanding that it is of opinion that the point raised in the appeal might be decided in favour of the appellant, dismiss the appeal if it considers that no miscarriage of justice has actually occurred.” While this Court is not bound to apply the proviso, the principle enshrined is nevertheless inherent in the Court’s function to do justice. As Bokhary PJ observed in Tang Siu Man v HKSAR [1998] 1 HKLRD 350, at p.379I-J, “To allow an appeal just because something has gone wrong at the trial even though it has not resulted in a miscarriage of justice would not be doing justice.” D. Application of the Law 21. The first question is whether the trial judge in this case exercised her discretion to order the trial to continue in the appellant’s absence correctly. I conclude she did not. 22. The trial judge did not consider the factors referred to in the cases in a careful and systematic way. She did not allude to the authorities that suggest great caution in ordering a trial to proceed where an accused cannot be present because he is genuinely ill. Most importantly, she very quickly concluded that there would be no prejudice to the accused because the matter at that stage was the voir dire, not the trial proper; and because the accused had instructed his counsel. 23. The trial judge’s suggestion that the accused’s presence is less necessary at a voir dire to determine the admissibility of a confession than at the trial proper was, with respect, misplaced. The issue of the admissibility of the confession was crucial to the appellant’s defence. 24. The trial judge’s suggestion that the appellant had a choice to stay or leave is also questionable. The appellant’s counsel advised the trial judge that the appellant was in great pain. To suggest the appellant had a real choice of whether or not to avail himself of his right to be present at the trial when he was in great pain was unrealistic and goes against the weight of authorities, which have consistently treated absence due to genuine illness as involuntary. 25. Similarly, the trial judge’s assumption that the appellant would not be prejudiced because he had instructed his counsel, and his objections to the admissibility of the confession had been reduced to grounds of objections filed with the court, while relevant, does not fully answer the appellant’s concern. One of the purposes of giving the accused the right to be tried in his presence is to allow him to instruct his counsel on the basis of what he hears the witnesses testifying against him say. The trial judge seems to have assumed that, because the appellant did not give his counsel instructions in relation to PW1, he also would not do so for PW2 and accordingly would not be prejudiced by being absent for the testimony of PW2. Yet the two officers played different roles in the arrest, and PW2 was the officer alleged to have made the vitiating inducement. 26. Critically, the trial judge appears not to have taken into account the fact that the adjournment would have been brief: for the afternoon only. When the brevity of the proposed adjournment is weighed against the importance of the appellant’s right to be present at all stages of his trial and his involuntary absence, the cautious approach required by the authorities suggests that the better course here would have been to adjourn the proceedings until the next morning. 27. The remaining question is whether the trial, considered as a whole, was fair, notwithstanding the appellant’s absence during PW2’s evidence. The appellant argues that the admissibility of the confession was important, and suggests that his absence may have prejudiced the possibility of having the confession declared inadmissible. He argues that because of the trial judge’s ruling, he was deprived of the opportunity to confront the most crucial witness of the voir dire in person – a witness whose evidence was consequently given free of pressure from the physical presence of the appellant and resulted in the admission of the confession. He says that this in itself constituted irremediable prejudice, rendering other considerations irrelevant. 28. The respondent’s counsel counters that the court must view the proceedings as a whole and ask whether the appellant’s trial was fair. He submits that the appellant’s absence from the courtroom for PW2’s evidence did not prejudice him and thus did not render his trial unfair. The respondent points to nine considerations. 1. The appellant had experienced counsel throughout the trial and the voir dire. 2. The appellant’s counsel agreed with the trial judge that he had full instructions. 3. The appellant’s counsel had filed detailed written grounds of objection to the confession, containing all conceivable challenges. 4. The alleged inducement by PW2 was made in the presence of PW1, who testified as to how it was not made in the appellant’s presence. 5. The appellant before leaving the courtroom knew that the trial would proceed in his absence and probably instructed his counsel over the lunch break before leaving to seek medical attention. (However, there is no evidence of what was discussed and the appellant was in pain.) 6. The absence of the appellant was for a short period of time. 7. The appellant did not attempt to recall PW2 at the end of the voir dire. 8. The appellant testified in the voir dire and had meaningful participation. 9. The voir dire was recanvassed in the trial proper. The evidence presented on the voir dire was again presented on the trial proper before the jury. (Although it can be countered that at this stage the damage had been done, in that the confession has been admitted and the jury had seen it.) 29. I agree with the respondent’s submission that the proceedings must be viewed as a whole and reject the appellant’s submission that his absence, without more, constituted an irremediable prejudice of his right that rendered the trial unfair. While some of the respondent’s points are stronger than others, I find it impossible, viewing the proceedings as a whole, to conclude that the appellant’s absence from the trial for the afternoon during which PW2 testified on the voir dire rendered his trial unfair. When asked by this Court whether additional or different questions would have been put to PW2 had the appellant been present, the appellant’s counsel did not identify any. He also rightly conceded that the appellant’s presence was only one facet of a fair trial and that other considerations listed by the respondent’s counsel also played a part. I find that any actual or perceived prejudice or unfairness by reason of the appellant’s absence could be, and was in fact, counterbalanced by other safeguards that the appellant enjoyed in his trial. 30. The trial judge should have granted a brief adjournment of the trial for the afternoon while the appellant sought medical assistance. However, in the circumstances of this case, it cannot be said that continuing the trial in his absence prejudiced his defence and thus rendered the trial unfair. Nor is this a case where the trial judge’s improper exercise of discretion would in itself bring the administration of justice into disrepute, requiring a new trial on that ground alone – something the respondent admitted could occur. While the trial judge’s “dead or dying” comment was insensitive and inappropriate, it was isolated, and offset by her stated belief that the appellant would not be prejudiced by continuing the trial that afternoon in his absence. 31. I conclude that the appellant has failed to show prejudice resulting in an unfair trial. In the words of the Hong Kong Court of Final Appeal Ordinance, Cap 484, he has not shown that a substantial and grave injustice has been done to him. 32. I would dismiss the appeal. Mr James Tze, instructed by H.Y. Leung & Co. LLP and assigned by the Director of Legal Aid, and Mr Tom Cheung, instructed by H.Y. Leung & Co. LLP on a pro bono basis, for the Appellant Mr Ira Lui SADPP (Ag.) and Mr Andy Lo SPP, of the Department of Justice, for the Respondent [1] Article 87 of the Basic Law and Article 10 of the Hong Kong Bill of Rights Ordinance. [2] Jones at [13] – [15] approving the Court of Appeal’s list of relevant factors (except “the seriousness of the offence”) in R v Hayward [2001] QB 862, applied in HKSAR v Kwan Wai Keung & Others (CACC 259/2011, unreported) at [6] and HKSAR v Singh Gursewak [2015] 1 HKC 498 at [30]. [3] Jones at [14]. [4] Jones at [13]. [5] R v Hayward at [22(4)]. [6] Jones at [13]. Although this is couched in the context of commencing trial in the accused’s absence, Lord Bingham also specifically recognised that the same discretion exists regardless of whether the question is one of commencing or continuing a trial in the accused’s absence, at [10]. [7] R v Pearson, The Independent25 February 1998 CA, [1998] Lexis Citation 3879 at p.13, citing R v Howson (1982) 74 Cr App R 172 at p.179. [8] Although their Lordships diverged on the question whether or not the lower court was correct in finding that the accused had waived his right to be present at his trial by absconding, the disagreement did not have any bearing on the unanimous decision to dismiss the appeal on the basis that the accused had, in all the circumstances, “enjoyed his Convention right to a fair trial”: [15]. |
Mr Justice Chan, Acting CJ: 1. The freedom of expression may take many forms. As was involved in the present case, they include the freedom of speech, the freedom of assembly and the freedom of demonstration. The right to the freedom of expression is guaranteed by art 27 of the Basic Law and art 17 of the Bill of Rights. This is a fundamental right to enable any person to air his grievances and to express his views on matters of public interest. In a free and democratic society, there are bound to be conflicts of interest and differences in opinion. It is important that those who purport to exercise the right to the freedom of expression must also respect the rights of others and must not abuse such right. Conflicts and differences are to be resolved through dialogue and compromise. Resorting to violence or threat of violence or breach of the peace in the exercise of this right will not advance one’s cause. On the contrary, this will weaken the merits of the cause and result in loss of sympathy and support. The means to achieve a legitimate end must not only be peaceful, it must also be lawful. Violent or unlawful means cannot justify an end however noble. It may also attract criminal liability. 2. The right to freedom of expression, like all fundamental rights and freedoms, must be given a generous interpretation. (See Ng Ka Ling & others v Director of Immigration (1999) 2 HKCFAR 4.) But this right is not absolute and may be subject to restrictions as prescribed by law in the interest of public order and for the protection of the rights and freedoms of others. See art 39(2) of the Basic Law and art 17 of the Bill of Rights. Any law which purports to restrict such right must be narrowly interpreted and the restriction must satisfy the test of necessity and proportionality. See Yeung May Wan & others v HKSAR (2005) 8 HKCFAR 137 and Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 (which were cases on the right of assembly and the right of demonstration). In construing the relevant statutory provisions which have the effect of restricting such right, the court must have regard to competing public interests, including the maintenance of public order and the rights and freedoms of others. The right balance has to be struck between the preservation of public order and the exercise of the individual’s rights and freedoms and between the competing rights and freedoms of individuals or groups of individuals. 3. As described in Mr Justice Tang PJ’s judgment and shown on the videos, the conduct of the appellants was disgraceful. They showed absolutely no regard or respect for the rights of others and had abused the right to freedom of expression. The 1st appellant’s conduct was, to say the least, distasteful and the 2nd appellant’s conduct constituted a breach of the peace and an assault. Although they could have been charged with or guilty of some other offences, the question in these appeals is, however, whether their conduct also incurred criminal liability under s.17B of the Public Order Ordinance, Cap 245. 4. There is no challenge on the constitutionality of s.17B. It is clear from the language of this provision that s.17B(2) is aimed at preventing the outbreak of public disorder and s.17B(1) at protecting the rights and freedoms of others in transacting their normal business. 5. Both s.17B(1) and s.17B(2) require proof of disorderly conduct: “acts in a disorderly manner” in s.17B(1) and “behaves … in a disorderly manner” in s.17B(2). Although the 2nd appellant does not dispute his conduct was disorderly, the 1st appellant argues that what he did was not. I must say that this term has caused me some difficulty. I was initially attracted to Mr Justice Tang’s analysis. But having considered the matter further, I would, with respect, prefer to adopt the approach taken by Mr Justice Ribeiro. 6. There is no definition in the statutory provision and no comprehensive definition by any court of this term “acts/behaves in a disorderly manner”. Section 17B had its origin in s.5 of the Public Order Act 1936 in the UK. In Brutus v Cozens [1973] AC 854, which dealt with the meaning of “insulting words” in that section, Lord Reid said (at p.861) that the meaning of an ordinary word of a statute is a question of fact for the trial court. This approach was adopted by the Divisional Court in Chambers v DPP [1995] Crim L R 896 which held that “disorderly behavior” were to be treated as words in ordinary everyday use. This was followed by Beeson J in HKSAR v Cheng Siu Wing [2003] 4 HKC 471 who held that these words “are to be treated as words in everyday use and given their normal meaning”. It was also accepted that the disorderly conduct in s.5 of the 1936 Act (s.17B of our Ordinance) need not involve any element of violence (Chambers v DPP) or amount to a breach of the peace (Campbell v Adair [1945] JC 29). 7. In New Zealand, disorderly behavior in a public place is an offence under s.4(1)(a) of the Summary Offences Act 1981 albeit punishable only with a maximum fine of $1000. Another section, s.3, creates a more serious offence which requires an element similar but not exactly the same as that in our s.17B(2). The Supreme Court of New Zealand in Brooker v Police [2007] 3 NZLR 91 held that disorderly behavior in s.4(1)(a) (the lesser offence) means behavior seriously disruptive of public order. This was followed in Morse v Police [2012] 2 NZLR 1. One would expect that the Supreme Court of New Zealand would give the same meaning to “disorderly behavior” in the more serious s.3 offence (similar to our s.17B(2)). It is however important to note that it was considered necessary by the Supreme Court of New Zealand to set a high threshold for disorderly behavior as an offence. 8. Unlike the position in New Zealand, it is not an offence in Hong Kong to behave in a disorderly manner in public. To constitute an offence under s.17B(1), an accused must have acted in a disorderly manner for the purpose of preventing the transaction of the business of a public gathering and for an offence under s.17B(2), he must have behaved in a disorderly manner either with the intent to provoke a breach of the peace or that a breach of the peace is likely to be caused by his conduct. The reasons in the New Zealand cases for imposing a higher threshold including constitutionality considerations do not necessarily apply with the same force in Hong Kong. 9. Further, not only is disorderly behavior by itself not an offence, s.17B(2) refers also to other types of behavior such as using, distributing, displaying writing containing threatening, abusive or insulting words. These other types of behavior do not necessarily involve a serious disruption of public order. Also, neither s.17B(1) nor 17B(2) requires proof that there is an actual serious disruption of public order, only that the disorderly behavior was done with the intent to provoke a breach of the peace or had the likely effect of causing a breach of the peace. It is unlikely and I do not believe that the legislature intends by “acts/behaves in a disorderly manner” in s.17B to mean conduct causing a serious disruption of public order. 10. Hence, I am more inclined to follow the English authorities and accept that the term “acts/behaves in a disorderly manner” should be given an ordinary and everyday meaning and that whether there is disorderly conduct for the purpose of s.17B is a question of fact for the trial court having regard to the nature and manner of the conduct and the circumstances of the case. As Gleeson CJ said in Coleman v Power (2004) 220 CLR 1, at para. 12: “Concepts of what is disorderly, or indecent, or offensive, vary with time and place, and may be affected by the circumstances in which the relevant conduct occurs.” 11. The s.17B(2) offence also requires the prosecution to prove that the accused in behaving in a disorderly manner has the intent to provoke a breach of the peace or that a breach of the peace is likely to be caused by his conduct. With regard to this element of the offence, I would like to make the following observations. For the sake of brevity, I would use the term disorderly conduct to include also using, distributing or displaying any writing containing threatening, abusive or insulting words. 12. First, as pointed out earlier, this offence is aimed at preventing an outbreak of public disorder. Although in most cases, the accused’s disorderly conduct would probably have constituted a breach of the peace or some offence already, it is not necessary to show that his conduct has actually provoked or caused others to commit a breach of the peace. It is sufficient to show that there is a real or imminent risk that others would breach the peace or resort to violence as a result of the accused’s disorderly conduct. 13. Secondly, the fact that the accused’s disorderly conduct is a breach of the peace is not sufficient to establish the s.17B(2) offence. The language of the section clearly contemplates a breach of the peace by a person or persons other than the accused. (See Secretary for Justice v Chiu Hin Chung [2013] 1 HKLRD 227.) The first limb requires proof of an intent to provoke a breach of the peace and this clearly does not refer to the accused’s own breach of the peace, although one cannot rule out the possibility that his breach of the peace was committed with the requisite intention to provoke others to breach the peace. The second limb is equally clear: it refers to the likely effect of the disorderly conduct on others. As McCulloch J in Marsh v Arscott (1982) 75 Cr App Rep 211 at 216 said of a provision similar to s.17B(2): “This section is describing breaches of the peace which are brought about, or are likely to be brought about, by other words or behavior occurring earlier, although usually not very long before. The phrase “whereby a breach of the peace is likely to be occasioned” indicates that Parliament was concerned with cause and effect i.e. with conduct which is likely to bring about a breach of the peace and not with conduct which is itself a breach of the peace and no more.” (emphasis added) 14. Thirdly, for the first limb of the s.17B(2) offence, it is necessary to consider the subjective intent of the accused and for the second limb, to assess objectively the likely effect of the disorderly conduct. The court has to examine all the circumstances of the case, including the conduct of the accused, the nature and manner of such conduct, the presence of other persons, such as persons holding opposing views, and the likely reaction of those present (see Viscount Dilhorne in Brutus v Cozens at p.865). The accused’s knowledge of such circumstances is also relevant to the issue of his intention. 15. Fourthly, the accused’s disorderly conduct may be aimed at another person or a group of persons or simply those who are present within the sight and hearing of his conduct. There might be persons who would not be affected but there might be others who would be easily provoked into violent retaliation. The accused has to take his “audience” or target as he finds him. (See Jordan v Burgoyne [1963] 2 QB 744.) There were suggestions in some cases that trained police officers are unlikely to be provoked to commit a breach of the peace (see Marsh v Arscott (1982) 75 Cr App R 21, Coleman v Power (2004) 220 CLR 1, and R v Li Wai Kuen (1973-1976) HKC 346) and hence if no other person is present or has been provoked, no offence under s.17B(2) has been committed. While this may be the case generally, I do not think one should rule out the possibility that even a trained officer might in some situations be provoked to react with violence to the disorderly conduct. It is interesting to note that Huggins J in Li Wai Kuen was careful in adding that “I would not suggest that there could never be a case where the abuse was so gross that even a police officer might be likely to be provoked into violence retaliation, particularly if the language used were also threatening …” . 16. With regard to the s.17B(1) offence, I would agree with the analyses in the judgments of Mr Justice Ribeiro and Mr Justice Tang and have nothing useful to add. 17. For the reasons given by Mr Justice Ribeiro and Mr Justice Tang, I would agree that the prosecution in this case had failed to substantiate the two charges against the appellants. I too would allow the appellants’ appeals and dismiss the prosecution’s cross appeal. Mr Justice Ribeiro PJ: 18. The appellants were demonstrating against fare increases on the Mass Transit Railway. They attended at a prize-giving ceremony organized by the MTR in a public square at the conclusion of a sporting event that it had sponsored. The appellants did not content themselves with displaying placards and chanting protest slogans, as other demonstrators were doing. They decided to invade the podium where those officiating at the prize-giving ceremony were gathered. The appellants were charged with offences under sections 17B(1) and 17B(2) of the Public Order Ordinance.[1] I gratefully adopt the detailed account of the facts set out in the judgment of Mr Justice Tang PJ. 19. The public order offences in question can, of course, be committed without engaging any human rights issues. However, in the present case, the charges relate to conduct in the course of a demonstration and the argument has proceeded on the footing that the appellants’ conduct must be judged in the context of the constitutional rights of peaceful assembly and freedom of demonstration. 20. Thus, although the constitutional validity of sections 17B(1) and 17B(2) has not been challenged and the disposal of the appeal turns on whether, in the events which have happened, the requisite elements of those offences have been proved against each appellant, it is necessary to consider the scope and limits of those constitutional rights and how they relate to cases like the present. A. The offences and the decisions below 21. Section 17B is headed “Disorder in Public Places” and provides as follows:- (1) Any person who at any public gathering acts in a disorderly manner for the purpose of preventing the transaction of the business for which the public gathering was called together or incites others so to act shall be guilty of an offence and shall be liable on conviction to a fine at level 2 and to imprisonment for 12 months. (2) Any person who in any public place behaves in a noisy or disorderly manner, or uses, or distributes or displays any writing containing, threatening, abusive or insulting words, with intent to provoke a breach of the peace, or whereby a breach of the peace is likely to be caused, shall be guilty of an offence and shall be liable on conviction to a fine at level 2 and to imprisonment for 12 months. 22. The Magistrate, Mr Marco Li,[2] convicted both appellants under section 17B(2) and sentenced them each to 14 days’ imprisonment, granting them bail pending appeal. He did not consider it necessary to deal with the charges under section 17B(1) but indicated that he would equally have found them guilty under that section. 23. Their appeal to the Court of First Instance was heard by Barnes J,[3] who quashed their convictions under section 17B(2). However, her Ladyship found them guilty under section 17B(1) instead. In place of the sentence of imprisonment imposed by the Magistrate, she fined the 2nd appellant $3,000 and the 1st appellant $2,000. 24. The appellants were granted leave to appeal by the Appeal Committee on 17 November 2012.[4] B. The right of peaceful assembly and freedom of demonstration 25. Hong Kong residents are justly proud of their tradition of peaceful demonstration. Marches involving tens or even hundreds of thousands of demonstrators have frequently been held without a single incident of public disorder or damage to property. B.1 Article 17 of the Bill of Rights and Article 27 of the Basic Law 26. The right to hold such demonstrations is a fundamental constitutional right. Article 17 of the Bill of Rights,[5] which is given constitutional status by Article 39 of the Basic Law, states: “The right of peaceful assembly shall be recognized. No restrictions may be placed on the exercise of this right other than those imposed in conformity with the law and which are necessary in a democratic society in the interests of national security or public safety, public order (ordre public), the protection of public health or morals or the protection of the rights and freedoms of others.” 27. And Article 27 of the Basic Law states: “Hong Kong residents shall have freedom of speech, of the press and of publication; freedom of association, of assembly, of procession and of demonstration; and the right and freedom to form and join trade unions, and to strike.” 28. It must be read together with Article 39 which relevantly provides: “The rights and freedoms enjoyed by Hong Kong residents shall not be restricted unless as prescribed by law. Such restrictions shall not contravene the provisions of the preceding paragraph of this Article.” 29. The “preceding paragraph” referred to in Article 39 is the paragraph which accords constitutional status to the ICCPR as enacted in the Hong Kong Bill of Rights Ordinance.[6] Article 39 therefore endorses the right of peaceful assembly provided for by Article 17 of the Bill of Rights subject to the restrictions mentioned above. 30. As this Court has held,[7] there is no substantive difference between the right of peaceful assembly guaranteed by Article 17 of the Bill of Rights and freedom of demonstration enshrined in Article 27 of the Basic Law. I shall accordingly refer to the rights interchangeably and focus in this judgment on the text of Article 17 as setting out the scope and limits of the right. B.2 The importance of those rights 31. The importance of the right to demonstrate, and of the closely related freedom of expression, is well-recognized. As this Court has acknowledged, they are rights which lie at the heart of Hong Kong’s system. They guarantee freedoms which are of cardinal importance for the stability and progress of society – freedoms which promote the resolution of conflicts, tensions and problems through open dialogue and debate.[8] 32. The Court has emphasised that such fundamental rights must be given a generous interpretation so as to give individuals their full measure, and that restrictions on such rights must be narrowly interpreted.[9] B.2 The limits of those rights 33. Demonstrators are therefore free to assemble and to convey views which may be found to be disagreeable, unpopular, distasteful or even offensive to others and which may be critical of persons in authority. Tolerance of such views and their expression is a hallmark of a pluralistic society. At the same time, it must be recognized that those freedoms are not absolute and demonstrators must ensure that their conduct does not go beyond the constitutional limits of those rights. 34. Such limits are set by the combined effect of the constitutional provisions themselves and compatible laws enacted by the legislature and developed at common law. Basing itself on the text of Article 17, the Court held in Leung Kwok Hung v HKSAR[10] that: “The exercise of the right of peaceful assembly, whether under the Basic Law or under BORO, may be subject to restrictions provided two requirements are satisfied: (1) The restriction must be prescribed by law (the ‘prescribed by law’ requirement). (2) The restriction must be necessary in a democratic society in the interests of national security or public safety, public order (ordre public), the protection of public health or morals or the protection of the rights and freedoms of others (the necessity requirement).” No issue arises in the present case in relation to the “prescribed by law requirement”.[11] 35. It is established that the “necessity requirement” involves the application of the proportionality test[12] which enables a proper balance to be struck between the interests of society on the one hand and the individual’s right of peaceful assembly on the other.[13] Accordingly, limits may be set to the right of demonstration by validly promulgated laws provided that the restrictions they impose are for a legitimate purpose; are rationally connected with the pursuit of such legitimate purpose; and are no more restrictive than necessary to achieve that legitimate purpose.[14] 36. In relation to the right of peaceful assembly, the Court has held that Article 17, reflecting Article 21 of the ICCPR, exhaustively lists the only legitimate purposes for which restrictions on that right may be imposed.[15] Thus, restrictive laws may legitimately have as their purpose the safeguarding of national security, public safety, or public order (ordre public); the protection of public health or morals; or the protection of the rights and freedoms of others. Such laws are valid if they pass the proportionality test. 37. While it is conceivable that each one of those legitimate purposes might, in given circumstances, be relevant to setting limits on the freedom to demonstrate, for the purposes of this appeal, laws aimed at the maintenance of public order and laws aimed at protecting the rights and freedoms of others are of the most immediate relevance. 38. Article 17 allows a line to be drawn between peaceful demonstrations (where, as noted above, full rein is given to freedom of expression) and conduct which disrupts or threatens to disrupt public order, as well as conduct which infringes the rights and freedoms of others. In Leung Kwok Hung v HKSAR,[16] having recognized that the interests of “public order (ordre public)” are listed by Article 17 as a legitimate purpose, the Court held that there is no doubt that such concept “includes public order in the law and order sense, that is, the maintenance of public order and the prevention of public disorder”.[17] It concluded that a statutory scheme giving the Commissioner of Police discretion to regulate public processions with a view to maintaining public order was constitutionally valid after severance of certain objectionably vague words.[18] 39. Once a demonstrator becomes involved in violence or the threat of violence – somewhat archaically referred to as a “breach of the peace” – that demonstrator crosses the line separating constitutionally protected peaceful demonstration from unlawful activity which is subject to legal sanctions and constraints. The same applies where the demonstrator crosses the line by unlawfully interfering with the rights and freedoms of others. 40. The law therefore imposes bounds on the constitutionally protected activity of peaceful assembly. The need for such limits is sometimes dramatically illustrated in situations involving demonstrations and counter-demonstrations. It is not uncommon for one group, demonstrating in favour of a particular cause, to find itself confronted by another group demonstrating against that cause. The situation may be potentially explosive and the police will generally try to keep them apart. Obviously, if both remain within their lawful bounds, all will be well. But often, conflict and public disorder may result. Sometimes, both sides will have broken the law. But in some cases, the disruption of public order is caused only by one side. The task of the law enforcement agencies and the courts is then to identify the source of such disruption by identifying the demonstrators who have crossed the line into unlawful activity. They thereby avoid curtailing or punishing the constitutionally protected activities of the innocent group. 41. Such a situation arose in the classic common law case of Beatty v Gilbanks,[19] where charges of unlawful assembly were brought against the Salvation Army since they had gone ahead with their procession knowing from past experience that an opposing group calling themselves the “Skeleton Army” was likely to cause a breach of the peace. The Court dismissed those charges. It was not the Salvation Army whose conduct posed a threat to public order and their right of peaceful assembly was upheld. In contrast, in Wise v Dunning,[20] a Protestant preacher who used deliberately provocative language and gestures before a hostile Roman Catholic audience was held to have been properly bound over since a breach of the peace by members of his audience was the natural consequence of his acts. Sedley LJ put it this way in a more recent decision:[21] “... a judgment as to the imminence of a breach of the peace does not conclude the constable's task. The next and critical question for the constable, and in turn for the court, is where the threat is coming from, because it is there that the preventive action must be directed.” 42. Lines also have to be drawn where a demonstrator’s conduct impinges unacceptably upon the rights of others (which may or may not be constitutionally protected rights). Such a line had to be drawn, for instance, in Yeung May Wan v HKSAR,[22] where the Court had to decide whether the offence of obstructing a public place[23] was properly applied so as to curtail a static, peaceful demonstration by a small group of Falun Gong protesters which obstructed only part of the pavement, on the basis that they were interfering with the rights of other users of the public highway.[24] To take another example, the Court of First Instance[25] recently had to decide whether the right to demonstrate entitled protesters to take their demonstration into a private residential development without the consent of the owners, or whether that right was constrained by the need to respect the private property rights of the residents. 43. In practice, restrictions on the right to demonstrate are likely to be tested where a demonstrator is subjected to some form of restraining action by a law enforcement agency possibly, but not necessarily, leading to a criminal charge on account of the demonstrator’s conduct. The law relied on to justify the action taken against the demonstrator may then require examination. In some cases, its constitutionality may have to be examined: Does it pursue one of the listed legitimate aims? If so, does it pass the proportionality test? If the law is constitutionally valid, the question becomes whether the demonstrator’s conduct falls within the restriction imposed by the law, bearing it in mind that the restriction is narrowly construed while the constitutional right receives a generous interpretation. C. The appellants’ conduct 44. The appellants were fully entitled to protest against the MTR’s fare increases in the exercise of their rights of peaceful assembly and demonstration. But to stay within their constitutionally protected sphere, they had to avoid committing a breach of the peace – a concept examined below – and they had to avoid infringing the rights and freedoms of others. 45. As McGrath J recently pointed out in the New Zealand Supreme Court: “Freedom of assembly is not limited to gatherings for the purpose of protest. It extends to formal and informal assemblies in participation in community life. Gatherings for purposes that are ostensibly less political are also important to citizens for forming opinions and, ultimately, for participating in the democratic process.”[26] 46. That applies to the persons on the podium who were exercising their rights of peaceful assembly and free expression at the prize-giving ceremony. 47. The Court viewed video recordings showing the conduct of the appellants. The 1st appellant’s conduct was comparatively mild. He climbed over the barriers and rushed onto the stage and, standing some distance away from the speaker, scattered “devil money” in the air as his form of protest. He then turned away and did not resist being marched off the stage by security staff. An employee of the MTR had unsuccessfully attempted to stop him and had suffered a minor injury to his elbow. The interruption to the ceremony was very brief and, although the speaker was obviously surprised by the 1st appellant’s sudden appearance, she took it in her stride, laughing it off. 48. The 2nd appellant’s conduct was significantly more intrusive and threatening. He leapt over the barriers surrounding the stage, dashed at speed onto the podium and lunged towards the speaker (the Secretary for Transport) who was addressing the crowd through a microphone. His conduct undoubtedly caused those on the stage to fear for the speaker’s safety. Persons who had been seated at the back of the stage spontaneously leapt to their feet to try to intercept the 2nd appellant in her defence. The master of ceremonies suffered minor injuries in this process. Security staff swarmed onto the stage to bundle the 2nd appellant off the podium. The reaction of the persons on the stage was quite natural since no one could have known what the 2nd appellant’s intentions were as he lunged towards the speaker. As it turns out, his object was to seize the microphone away from her and to use it to shout his protest slogans. The ceremony resumed about a minute after the 2nd appellant’s intrusion. 49. In my view, the 2nd appellant’s conduct crossed the line and was unacceptable as a form of demonstration. It put the persons on the podium in fear of one of them being harmed, constituting a breach of the peace. Those persons were entitled to exercise their constitutional rights of peaceful assembly and freedom of expression without being subjected to apparent threats of imminent violence. The 2nd appellant’s actions may very well have constituted a common assault since he appears intentionally or recklessly to have caused another to apprehend immediate and unlawful personal violence.[27] And, as discussed below, he could have been arrested and bound over to keep the peace. The police have a duty to prevent such intrusions. The security personnel were entitled to act using reasonable force in the defence of others and in self-defence. If the law were to take a different view, the very constitutional rights now being invoked by the appellants would be at risk of being subverted in counter-demonstrations by thugs and bully boys seeking to suppress the expression of views they do not like. D. The constitutionality of the public order offences charged 50. The appellants were not, however, charged with common assault. Nor was it sought to have them bound over. Instead, the decision was taken to bring charges under section 17B(1) and section 17B(2) of the Public Order Ordinance.[28] I turn now to consider whether those charges were made out. 51. There has rightly been no challenge to the constitutionality of those sections. As noted above, Article 17 recognizes the maintenance of public order and protection of the rights and freedoms of others as legitimate purposes capable of justifying a restriction on the right of peaceful assembly. 52. Section 17B(1) makes it an offence to act in a disorderly manner for the purpose of preventing the transaction of the business for which a public gathering was called together. It is obviously aimed at protecting the right of peaceful assembly exercised by others. 53. Section 17B(2) has two principal elements. It involves in the first place, proof of noisy or disorderly behaviour; or of the use of threatening, abusive or insulting words by the defendant. In the present case, the focus of the charges is on disorderly behaviour. Secondly, the offence requires proof that such conduct was performed with intent to provoke a breach of the peace, or in circumstances where such conduct was likely to cause a breach of the peace. It is therefore plainly an offence aimed at maintaining public order or preventing public disorder. 54. Restricting the right of peaceful assembly by setting the boundaries established by these two sections (and, indeed, by other offences which prohibit violence or the threat of violence) involves in my view, the rational and proportionate furthering of the aforesaid legitimate purposes. They set a proper balance between the interests of demonstrators exercising their right of peaceful assembly on the one hand, and the interests of public order and the rights and freedoms of persons affected by that exercise on the other. It should not ordinarily be necessary in future for a magistrate or judge to dwell on the constitutionality of these offences. E. Was an offence under section 17B(1) proved? 55. The offence under section 17B(1) targets a “person who at any public gathering acts in a disorderly manner for the purpose of preventing the transaction of the business for which the public gathering was called together”. The main issue which arises concerns the meaning of “preventing”. 56. When indicating that he would, if necessary, also have convicted the appellants under section 17B(1), the Magistrate stated (in translation): “... the appellants’ conduct satisfied the meaning of ‘prevent’ as they had disrupted or even brought the ceremony to termination”. While I can see how the ceremony can be said to have been “disrupted”, I am with respect unable to see any basis for suggesting that their conduct “brought the ceremony to termination”. It was not in dispute that it resumed shortly after the interruptions. I can see no basis for inferring that they must have intended to prevent the ceremony from transacting its intended business, the obvious inference being that they merely wanted to interrupt it to dramatise their protest. 57. On appeal before Barnes J, Mr H Y Wong, counsel for the 1st appellant, submitted that the word “preventing” should be held to require proof that the gathering was “completely brought to an end” or “aborted”, something that manifestly had not happened in this case. The Judge did not accept that argument. She pointed to various dictionary meanings and concluded that “preventing” in section 17B(1) covered situations where the gathering had “to stop for a moment due to hindrance”. Her Ladyship added (in translation): “As a result of the 1st appellant’s conduct, the Secretary’s speech stopped for a few seconds. Shortly after she resumed speaking, the 2nd appellant snatched away the microphone, so that she was unable to continue with her speech. It is obvious that the appellants were preventing the prize presentation ceremony of the walking race from going on by behaving in that way in order to stay on the stage and capture everyone’s attention for as long as they could, to fulfil their purpose of escalating the intensity of their protest.” 58. I am with respect unable to agree with that construction of “preventing”. In my view, both as a matter of language and of the evident statutory purpose of section 17B(1), a person only has the “purpose of preventing the transaction of the business for which the public gathering was called together” if his purpose is to make it impossible in practical terms to hold or continue with the gathering; or, at least, to interrupt the gathering for such a duration or by using such means as substantially to impair the intended transaction of business. It certainly does not apply where, as in the present case, the demonstrators’ purpose evidently did not involve more than a brief interruption of the prize-giving. 59. The same result is arrived at on a purposive construction. As stated above, the evident purpose of section 17B(1) is to protect the exercise by others of their right of peaceful assembly. The need for such protection is obviously triggered where the defendant’s purpose is to prevent the public gathering from happening or continuing; or substantially preventing it from transacting the intended business of the gathering. But an intrusion which must have been envisaged to cause only a minor interruption, with the gathering then resuming, cannot be said to have been intended to deny the people attending the gathering that right. It is not the statutory purpose to employ section 17B(1) to punish such minor interruptions. 60. As previously noted, restrictions on fundamental rights are narrowly construed. So if “preventing” can properly be given a range of meanings, the Court inclines towards adopting a meaning which preserves a wider ambit for the relevant rights. 61. For the abovementioned reasons, it is my view that the appellants’ convictions under section 17B(1) must be set aside. I turn then to consider their possible liability under section 17B(2). F. Did the appellants commit offences under section 17B(2)? 62. Section 17B(2) (set out in Section A above) is derived from the United Kingdom’s Public Order Act 1936, section 5.[29] Focussing on the “disorderly behaviour” aspect of the offence,[30] the elements which the prosecution must prove under section 17B(2) are that the defendant: (a) in a public place; (b) behaved in disorderly manner; (c) either (i) with intent to provoke a breach of the peace; or (ii) whereby a breach of the peace was likely to be caused. 63. It is common ground that the relevant incident occurred in a public place. And in the case of the 2nd appellant, Mr Martin Lee SC realistically accepted that his conduct was “disorderly”. However, Mr H Y Wong did not accept that the behaviour of his client, the 1st appellant, could be so described. 64. Both appellants in any event deny that there is any evidential basis for holding that their conduct was either intended to provoke or was likely to cause a breach of the peace when those expressions are properly construed. F.1 The meaning of “disorderly behaviour” 65. The courts have not attempted a definition of “disorderly behaviour”. However, there have been attempts to relate that phrase to other familiar terms. Thus, in the Scottish case of Campbell v Adair,[31] it was held that “disorderly” indicates “less aggressive conduct than would be required to constitute a breach of the peace”. In New Zealand, in Kinney v Police,[32] Woodhouse J said that “disorderly behaviour” meant “something more than unmannerly, or disturbing or annoying” behaviour. And the Divisional Court in England has held that there need not be any element of violence, present or threatened, nor proof of any feeling of insecurity, in an apprehensive sense, on the part of the public to establish disorderly conduct in a harassment case.[33] Moreover, it was pointed out that “disorderly behaviour” did not need to be threatening, abusive or insulting, since the Public Order Act deals separately with the use of words meeting that description. Similarly, in section 17B(2) the use of “threatening, abusive or insulting words” forms a separate limb of the offence. 66. In the same case, the Divisional Court held that the proper approach is that of the House of Lords in Brutus v Cozens[34] where their Lordships decided that the meaning of “insulting behaviour” was a question of fact for the trial court. As Lord Reid held in Brutus v Cozens: “The meaning of an ordinary word of the English language is not a question of law. The proper construction of a statute is a question of law.”[35] 67. In my view, that is the approach which should be adopted in Hong Kong. As Gleeson CJ pointed out in Coleman v Power:[36] “Concepts of what is disorderly, or indecent, or offensive, vary with time and place, and may be affected by the circumstances in which the relevant conduct occurs.” 68. Such concepts are best left to the trial judge to be applied in their ordinary meaning to the time, place and circumstances of the conduct in question. In the present case, the Courts below held that the 1st appellant’s conduct did constitute “disorderly behaviour”. They were entitled to take that view. The 1st appellant climbed over barriers plainly intended to keep uninvited persons off the stage. He evaded interception by an MTR employee who attempted to stop him (and who consequently suffered a minor injury) and ran onto the stage where he momentarily interrupted proceedings with his “devil money” demonstration before being marched off the podium. As a matter of ordinary language, such behaviour is capable of being described as “disorderly”. F.2 “Disorderly behaviour” – the Australian and New Zealand cases 69. There was considerable discussion of the Australian High Court’s decision in Coleman v Power[37] and the decisions of the New Zealand Supreme Court in Brooker v Police[38] and Morse v Police.[39] While there is much of interest to be found in those judgments and while the meaning of “disorderly behaviour” is extensively considered in the New Zealand decisions, those cases must be treated with caution in Hong Kong since their analysis and construction of the relevant statutory provisions (which are materially different from section 17B(2)) were undertaken to address a constitutional problem which we do not face. For the reasons which follow, in my view, they are decisions which have no immediate relevance to the present appeal. 70. As indicated in Section D above, the constitutionality of section 17B(2) is not in issue. It has two main elements, the first involving the defendant’s conduct (relevantly “disorderly behaviour” in the present case) and the second involving a requirement that such conduct be intended to provoke or likely to cause a breach of the peace. Thus, the section 17B(2) offence can be accommodated as a justified restriction in pursuit of a legitimate purpose recognized by Article 17 as previously discussed. 71. In contrast, the three cases mentioned above were all concerned with offences which do not make liability dependent upon proof of an intention to provoke or the likelihood of causing a breach of the peace. Nor is liability dependent upon the defendant denying others the right of peaceful assembly. In Coleman v Power,[40] the offence[41] was constituted simply by any person, in any public place, using “any threatening, abusive or insulting words to any person”. The Court was concerned with a defendant charged with using insulting words addressed to a policeman (asserting that he was corrupt). In Brooker v Police[42]and Morse v Police,[43] the offence[44] makes liable every person who simply “in or within view of any public place, behaves in an offensive or disorderly manner...” The Court in Brooker v Police was concerned with deciding how “behaves in [a] ... disorderly manner” should be interpreted where an individual staged a solo protest against police conduct outside the house of a constable who was trying to get some sleep. And in Morse v Police, it was concerned with “offensive behaviour” involving the burning of a New Zealand flag on ANZAC day. 72. Earlier versions of those offences, like section 17B(2), required proof of a second element involving a breach of the peace. But that requirement had been dropped, as Gleeson CJ explained: “Section 7 of the Vagrants Act replaced s 6 of the Vagrant Act 1851 (Qld). That section prohibited the using of threatening, abusive or insulting words or behaviour in any public street, thoroughfare or place with intent to provoke a breach of the peace or whereby a breach of the peace may be occasioned. The omission of the element relating to a breach of the peace, in the 1931 Act, was plainly deliberate. The legislative changes in Queensland in 1931 were similar to changes in New Zealand in 1927. In New Zealand, the Police Offences Act 1884 (NZ) made it an offence to use any threatening, abusive or insulting words or behaviour in any public place within the hearing or in the view of passers by, with intent to provoke a breach of the peace, or whereby a breach of the peace may be occasioned. By legislation in 1927, the provision was altered by omitting any reference to a breach of the peace, and by expanding the description of the prohibited conduct to cover behaving in a riotous, offensive, threatening, insulting or disorderly manner, or using threatening, abusive or insulting words, or striking or fighting with any other person.”[45] 73. Having eliminated the breach of the peace requirement, the offences acquired an extremely wide reach and potentially came into conflict with constitutionally protected rights. In Australia, constitutional protection was conferred on the implied freedom of communication about government and political matters as laid down in Lange v Australian Broadcasting Corporation.[46] And in New Zealand, the constitutional rights were those protected by section 14 of the New Zealand Bill of Rights Act 1990, guaranteeing freedom of expression, including the freedom to seek, receive, and impart information and opinions of any kind in any form, subject (as provided by section 19(3)) to reasonable restrictions prescribed by law which are necessary to protect other important interests, including public order and the rights and reputations of others. 74. Thus, the Australian High Court and the New Zealand Supreme Court were engaged in construing the concepts of “insulting words” and “disorderly behaviour” and “offensive behaviour” in their legislation to achieve compatibility with constitutionally protected rights.[47] In New Zealand, this was done by interpreting the “disorderly behaviour” offence as one aimed at maintaining public order and confining it to cases where the disorderly behaviour is disruptive of public order, interfering with others’ use of public space;[48] although it was held that this did not mean that it had to lead to violence.[49] “Offensive behaviour” was given a like meaning. The majority in the Australian High Court drew similar lines, holding that by construing the offences as intended to suppress the disturbance of public order, they could be given a meaning compatible with the implied constitutional freedom. Thus, the expression “insulting words” was construed to mean words intended to or reasonably likely to provoke unlawful physical retaliation.[50] 75. In Hong Kong, for the reasons discussed above, there is no need to adopt such a particular construction in relation to the words “behaves in a ... disorderly manner” to make section 17B(2) compatible with Article 17. 76. The 2nd appellant accepts that his conduct was “disorderly” and, for the reasons given above, the Courts below were entitled to find that the same applies to the 1st appellant as a matter of ordinary language. F.3 The requirement that a breach of the peace is likely to be caused F.3a Meaning and consequences of a “breach of the peace” 77. To decide whether the second element of section 17B(2) has been made out against the appellants, it is necessary to consider the meaning of “breach of the peace”. The modern authority is R v Howell,[51] where Watkins LJ explained the concept as follows: “... there is a breach of the peace whenever harm is actually done or is likely to be done to a person or in his presence to his property or a person is in fear of being so harmed through an assault, an affray, a riot, unlawful assembly or other disturbance. It is for this breach of the peace when done in his presence or the reasonable apprehension of it taking place that a constable, or anyone else, may arrest an offender without warrant.”[52] 78. Approving that decision, Lord Bingham of Cornhill noted in R (Laporte) v Chief Constable of Gloucestershire,[53] that “the essence of the concept was to be found in violence or threatened violence” and it was on that basis that the European Court of Human Rights found that the concept possessed sufficient certainty in law.[54] 79. However, a person may provoke a breach of the peace without any violence or threat of violence on his part: “... it suffices that his conduct is such that the natural consequence of it is violence from some third party”.[55] That third party need not be the person provoked or a by-stander, it could, for instance, be a member of the provoker’s group.[56] The actual or feared harm must be unlawful[57] and, where the harm is anticipated, there must be a real risk and not the mere possibility of such harm.[58] Moreover, the anticipated harm must be imminent.[59] 80. As appears in the passage from R v Howell cited above, a breach of the peace or reasonable apprehension of an imminent breach of the peace gives rise to a common law power of arrest without warrant. It also gives rise to a power to take measures short of arrest to prevent such breach.[60] 81. Moreover, while a breach of the peace is not, as such, a criminal offence, it founds an application to bind over.[61] The jurisdiction to bind over dates back at least to the 1361 Statute of Edward III.[62] In Hong Kong, the jurisdiction is now conferred by the Criminal Procedure Ordinance,[63] with procedural provisions contained in the Magistrates Ordinance.[64] It is a jurisdiction aimed at preventing breaches of the peace in the future. A binding-over order may thus be made requiring a person to keep the peace where there are grounds for reasonably apprehending that he may become involved in a breach of the peace in future. That person may, for instance, have previously been involved in violence to a person or property; or may threaten such violence; or be guilty of conduct giving rise to a reasonable apprehension that such violence will take place.[65] 82. It was with these principles in mind that I expressed the view[66] that the 2nd appellant could have been arrested and bound over to keep the peace. His conduct whereby one or more of the persons on the podium were put in fear of being harmed amounted to a breach of the peace giving rise to a power of arrest and provided a basis for binding him over to prevent future breaches. F.3b Section 17B(2)’s second element 83. But section 17B(2) is not designed to penalise persons who simply commit breaches of the peace. That is of central importance to the disposal of this appeal. The appellants would only be guilty of an offence under that section if their disorderly behaviour was either intended or likely to cause a breach of the peace by someone else. It is not enough to show that they were guilty both of disorderly behaviour and of committing a breach of the peace. This is a conclusion dictated by the language of section 17B(2) and reflected in the Hong Kong authorities and the authorities on section 5 of the United Kingdom’s Public Order Act 1936 from which section 17B(2) is derived and which is structured in the same way. 84. There are two forms of the offence and each form involves proof of two elements.[67] For present purposes, the first element in both forms of the offence is disorderly behaviour which as discussed above, is established against both appellants. 85. The second element in the first form of the offence requires such disorderly behaviour to be carried out “with intent to provoke a breach of the peace”. Plainly, the defendant’s intent must be to provoke a breach of the peace (in the sense explained in Howell and discussed above) by another person or other persons as a consequence of his disorderly conduct. It cannot sensibly be applied to a case where the defendant is guilty of disorderly behaviour and where he alone commits a breach of the peace. In such a case, it would make no sense to speak of him acting “with intent to provoke” a breach of the peace. He would have simply have committed a breach of the peace. 86. The second element in the second form of the offence requires the disorderly behaviour to be such that “a breach of the peace is likely to be caused”. Once again, such language is inapt for describing a situation involving the conduct of the defendant and no one else. This form of the offence requires an assessment of the likely reaction to the defendant’s disorderly conduct by the persons who are affected by it. 87. This view has the support of the authorities. Thus, in Jordan v Burgoyne,[68] a case involving section 5 of the Public Order Act 1936, Lord Parker CJ put the focus firmly on the likely reaction of the crowd in Trafalgar Square to the defendant’s pro-Hitler remarks: “...if words are used which threaten, abuse or insult - all very strong words - then that person must take his audience as he finds them, and if those words to that audience or that part of the audience are likely to provoke a breach of the peace, then the speaker is guilty of an offence.” 88. In Marsh v Arscott,[69] McCullough J, sitting with Donaldson LJ in the English Divisional Court stated in relation to the said section 5: “The phrase ‘whereby a breach of the peace is likely to be occasioned’ indicates that Parliament was concerned with cause and effect, ie with conduct which is likely to bring about a breach of the peace and not with conduct which is itself a breach of the peace and no more. Were this the law every common assault occurring in a public place would also be an offence against this section. Many such assaults will in fact be likely to lead very quickly to a breach of the peace, and these will be within the section; but, without more it is not enough that conduct which is threatening, abusive or insulting is of itself a breach of the peace.” 89. In Parkin v Norman,[70] a case involving the “threatening, abusive or insulting words” stream of the offence, McCullough J elaborated as follows: “The purpose of the Act was to promote good order in places to which the public have access ... It is clear, both from the long title and from sections 1, 2 and 4 that Parliament intended to prevent activities liable to lead to public disorder, regardless of whether or not those engaging in them intended that disorder should result. The use of the phrase ‘whereby a breach of the peace is likely to be occasioned’ in section 5 reflects this thinking. ... But not all threats, abuse or insults necessarily have this result. Qualifying words were therefore required, and conduct of this kind was only prohibited if it was likely to lead to a breach of the peace or, as was added, if it was so intended. It was the likely effect of the conduct on those who witnessed it with which Parliament was chiefly concerned. What is likely to cause someone to break the peace is his feeling that he has been threatened or abused or insulted, and this will be so whether or not the words or behaviour were intended to threaten or to abuse or to insult.” 90. In Percy v DPP,[71] Collins J in the Divisional Court emphasised that the provocation had to be directed at others: “The conduct in question does not itself have to be disorderly or a breach of the criminal law. It is sufficient if its natural consequence would, if persisted in, be to provoke othersto violence, and so some actual danger to the peace is established.” 91. The section 17B(2) offence therefore has a somewhat paradoxical feature. Whereas a defendant who acts in a disorderly fashion may commit the offence if he misbehaves in a situation where less than law-abiding people might react by breaching the peace, he escapes liability if he indulges in the same conduct in the presence of law-abiding and disciplined persons who are regarded as unlikely so to react. 92. The purpose of section 17B(2) is in other words, to prevent a person instigating public disorder involving others rather than simply punishing that person for his own misbehaviour. It therefore excludes from its ambit many situations where the defendant’s disorderly behaviour or threatening, abusive or insulting words, and so forth, are not likely to produce such violence. In Coleman v Power,[72] Gleeson CJ described some such situations: “There may be any number of reasons why people who are threatened, abused or insulted do not respond physically. It may be (as with police officers) that they themselves are responsible for keeping the peace. It may be that they are self-disciplined. It may be simply that they are afraid. Depending upon the circumstances, intervention by a third party may also be unlikely. ... And if violence should occur, it is not necessarily unlawful. Depending upon the circumstances, a forceful response to threatening or insulting words or behaviour may be legitimate on the grounds of self-defence or provocation. Furthermore, at common law, in an appropriate case a citizen in whose presence a breach of the peace is about to be committed has a right to use reasonable force to restrain the breach.” F.3c The reaction of police officers and trained security personnel 93. The likelihood of a breach of the peace is assessed as a matter of fact, taking account of the nature of the disorderly behaviour and the circumstances in which such behaviour occurred. 94. As reflected in the passage cited from the judgment of Gleeson CJ, the courts have consistently regarded police officers generally as persons unlikely to react by breaching the peace. Since the police have a legal duty to keep the peace[73] the courts have recoiled from the suggestion that in taking measures to preserve public order they might be regarded as acting unlawfully by themselves committing breaches of the peace. 95. Thus, in Marsh v Arscott,[74] where a defendant directed threatening, abusive or insulting words at the police with no one else present, McCullough J held that: “...no breach of the peace was likely to have been occasioned. No other person was likely to have broken the peace, and all that the police were likely to do was arrest him, as they did.” 96. Donaldson LJ pointed out that there were other offences that could be charged: “...there are a number of other offences which can be charged, where appropriate, and the most obvious of course is common assault or assault on the police in the execution of their duty, and it must never be forgotten in any event that the police, in pursuance of their duty to keep the peace, have a right and a duty to detain those who are threatening it.”[75] 97. Similarly, in Redmond-Bate v DPP,[76] Sedley LJ pointed out that in Percy v DPP:[77] “...a bind-over on a woman who kept climbing over the perimeter fencing into a military base was quashed because there was no sensible likelihood that trained security personnel would be provoked by her conduct to violence.” 98. A similar view has been taken in the Hong Kong courts.[78] In one such case, trained security staff of the Hong Kong Jockey Club were regarded as unlikely to have reacted to disorderly conduct by committing a breach of the peace, especially in full view of members of the racing public.[79] F.3d Was it proved that a breach of the peace was likely to be caused in the present case? 99. Barnes J held that the section 17B(2) offence was concerned with “the effect or influence which the disorderly conduct is likely to produce on the people who witnessed the conduct in question at the scene”.[80] She noted that the Magistrate had not analysed the evidence or made findings in respect of such influence or effect.[81] Her Ladyship held that the evidence showed that the MTR staff had acted in a “very restrained and professional manner” and that they “would not themselves breach the peace when, in the course of the performance of their duty, some people disrupted the order”.[82] She concluded that it had not been established that the appellants’ disorderly conduct was likely to cause other people present to breach the peace and quashed the section 17B(2) convictions.[83] 100. I respectfully agree with Barnes J’s approach and conclusion. The only persons who were in the immediate vicinity of the appellants when they invaded the stage were the officiating guests and MTR staff on the podium, security guards and possibly the police. There was no evidential basis for suggesting that any of them might have reacted unlawfully by committing a breach of the peace in response to the intrusion. Neither was there any evidence that other members of the public present, whether the competing athletes or otherwise, might have been prone to reacting violently to the disorderly behaviour of the two appellants. It follows that Barnes J was right to overturn their convictions under section 17B(2). G. Conclusion 101. For the foregoing reasons, I conclude that convictions both under section 17B(1) and section 17B(2) cannot be sustained against the appellants. I would therefore allow their appeals. I would direct that any submissions as to costs should be lodged in writing within 21 days from the date of this judgment and that in default of such submissions, there be no order as to costs. 102. Before leaving this judgment, I am anxious to reiterate that the 2nd appellant’s acts described in Section C above are unacceptable and exceed the boundaries of the constitutionally protected right of peaceful assembly and demonstration. As it turns out, he was charged with offences that are designed to prevent the instigation of public disorder rather than individual disorderly behaviour. If he had been charged with common assault, he may very well have been convicted. He could in any event have been arrested and bound over to keep the peace. The 1st appellant’s conduct was less objectionable, but he too behaved in a disorderly manner and a binding over order to keep the peace might very well have been justified in his case. Mr Justice Tang PJ: Introduction 103. On 10 April 2011, for the purpose of a prize presentation ceremony following a fund raising event,[84] a stage was erected on a drained pond at Statue Square. The prize presentation ceremony began at about noon. Persons including guests who were involved in the prize presentation ceremony were seated on the stage, among whom the Secretary for Transport and Housing Madam Eva Cheng (“the Secretary”) and the Chairman of the MTR, Mr Raymond Ch’ien (“Mr Ch’ien”). We were told that because protests were expected, the MTR had deployed a total of 29 staff members and 20 contract security guards to maintain order. In addition, a significant number of police constables were strategically positioned. Measures[85] were taken to ensure that only authorised persons could enter certain areas, including the prize presentation stage. 104. The event was recorded on videotape by the MTR Corporation as well as by Cable TV. The police also carried out their own video recording. Four sections of video footage were produced as exhibits at trial. The video recordings show that while Chairman Ch’ien was speaking on the stage, demonstrators were shouting the slogan “Shame on MTR for their fare hike”. The shouting continued even after the Secretary had begun to speak. 105. These appeals are concerned with what happened in the next minute or so, which were captured on video. The summary below is largely taken from the Statement of Findings of the trial magistrate, Mr Marco Li. 106. While the Secretary was speaking, Mr Chow Nok-hang (hereafter called the 1st appellant) rushed onto the stage from the left and scattered hell money. The Secretary was startled and cried out “wow” she then said “This is not some kind of sport. Children, you should not imitate that. Hahaha…”. While the 1st appellant was being taken away, he shouted “Shame on MTR for their fare hike.” Earlier, PW1 the organizer of the event was standing on the drained pond, had tried to stop the 1st appellant from going up onto the stage but he became unbalanced. He got hold of the 1st appellant’s thigh but lost balance again, and his elbow was injured when he hit the kerb. 107. Immediately after that, Mr Wong Hin-wai (hereafter called the 2nd appellant) jumped onto the stage and ran towards the Secretary. Mr Ch’ien sprang up from his seat trying to stop him. The 2nd appellant snatched away the microphone placed in front of the Secretary and shouted the slogan “Shame on MTR for their fare hike” through the microphone. A large number of persons, presumably those involved with security, came forward. They separated the Secretary from the 2nd appellant and took him away together with the microphone. At about that time, a demonstrator wearing a black upper garment went towards the stage, he appeared to be trying to go onto the stage, but he was stopped by the staff. He raised his arm and shouted “Shame on MTR for their fare hike”. The learned magistrate said: “PW2 … the MC … pulled his partner to his side fearing that she would be knocked down. … He tried to stop the second appellant but was not fast enough. He believed that the secondappellant had taken hold of Secretary Cheng’s microphone and said something. Then a group of personnel together with him carried the secondappellant down the stage. He suffered minor injuries during the struggle: … The second appellant put up slight resistance but soon calmed down.” The charges 108. As a result the 1st and 2nd appellants[86] were each charged with one count of “Behaving in a disorderly manner in a public place”, contrary to s17B(2) of the Public Order Ordinance Cap 245 (“POO”) and an alternative count of “Acting in a disorderly manner at a public gathering” under s17B(1) of the Public Order Ordinance. 109. Section 17B provides : “(1) Any person who at any public gathering acts in a disorderly manner for the purpose of preventing the transaction of the business for which the public gathering was called together or incites others so to act shall be guilty of an offence and shall be liable on conviction to a fine of $5000 and to imprisonment for 12 months. (2) Any person who in any public place behaves in a noisy or disorderly manner, or uses, or distributes or displays any writing containing, threatening, abusive or insulting words, with intent to provoke a breach of the peace, or whereby a breach of the peace is likely to be caused, shall be guilty of an offence and shall be liable on conviction to a fine of $5000 and to imprisonment for 12 months.” 110. The particulars of the offence alleged that each of the appellants in respect of the s17B(1) offence “… acted in a disorderly manner for the purpose of preventing the transaction of the business of the ‘MTR Hong Kong Race Walking 2011’ for which the public gathering was called together.” And in respect of the s17B(2) offence that each of them behaved “in a noisy[87] or disorderly manner, with intent to provoke a breach of the peace, or whereby a breach of the peace was likely to be caused.” 111. The trial magistrate convicted them of the s17B(2) offence and sentenced each of them to 14 days imprisonment. He said, had it been necessary to do so, he would have also convicted them on the alternative charges under s17B(1). 112. On appeal Barnes J quashed their conviction under s17B(2) but convicted them on the alternative charges of “Acting in a disorderly manner at a public gathering” contrary to s17B(1). She set aside the prison terms and fined the 1st appellant $2000 and the 2nd appellant $3000. Both the appellants and the prosecution have appealed to us. Public Order Offences 113. Section 17B(1) and (2) are public order offences[88], and may impact upon important freedoms, such as the freedom of speech, of assembly and of demonstration, which are fundamental freedoms protected by the Basic Law and the Hong Kong Bill of Rights Ordinance. The freedom of assembly, demonstration and speech are closely associated.[89] It is clear that at the material time the appellants were engaged in a public demonstration against a MTR fare hike. They were exercising their rights of free speech, assembly and demonstration. 114. In respect of such fundamental freedoms, this court has emphasized: “…It is well established in our jurisprudence that the courts must give such afundamental right a generous interpretation so as to give individuals its full measure. Ng Ka Ling & Others v Director of Immigration (1999) 2 HKCFAR 4 at pp.28-29. On the other hand,restrictions on such a fundamental right must be narrowly interpreted. Gurung Kesh Bahadur v Director of Immigration (2002) 5 HKCFAR 480 at para.24. Plainly, the burden is on the Government to justify any restriction. This approach to constitutional review involving fundamental rights, which has been adopted by the Court, is consistent with that followed in many jurisdictions. Needless to say, in a society governed by the rule of law, the courts must be vigilant in the protection of fundamental rights and must rigorously examine any restriction that may be placed on them.”[90] 115. The reason for such approach was given by the majority earlier in their judgment when they said: “1. The freedom of peaceful assembly is a fundamental right. It is closely associated with the fundamental right of the freedom of speech. The freedom of speech and freedom of peaceful assembly are precious and lie at the foundation of a democratic society. 2. These freedoms are of cardinal importance for the stability and progress of society for a number of inter-connected reasons. The resolution of conflicts, tensions and problems through open dialogue and debate is of the essence of a democratic society. These freedoms enable such dialogue and debate to take place and ensure their vigour. A democratic society is one where the market place of ideas must thrive. These freedoms enable citizens to voice criticisms, air grievances and seek redress. This is relevant not only to institutions exercising powers of government but also to organizations outside the public sector which in modern times have tremendous influence over the lives of citizens. Minority views may be disagreeable, unpopular, distasteful or even offensive to others. But tolerance is a hallmark of a pluralistic society. Through the exercise of these freedoms minority views can be properly ventilated.” 116. Their lordships went on to say that although these freedoms may be restricted as prescribed by law, such restriction must be necessary in a democratic society in the interests of national security or public safety, public order (order public), the protection of public health or morals or the protection of the rights and freedoms of others. Any restriction must be both necessary and proportionate.[91] 117. The possible impact on freedom of assembly and expression in connection with a charge of public obstruction was considered in Yeung May Wan where persons responsible for a largely static and peaceful demonstration and the display of a banner by between 4 and 16 persons outside the Liaison Office of the Central People’s Government were charged with obstruction of a public place contrary to s4A of the Summary Offences Ordinance Cap 228 by setting out the banner (the 1st charge), and doing an act whereby obstruction might accrue to a public place contrary to s4(28) by assembling together and displaying the banner (the 2nd charge), and of wilfully obstructing a police officer contrary to s36(b) of the Offences Against the Person Ordinance Cap 212 (the 3rd charge) and assaulting a police officer contrary to s63 of the Police Force Ordinance Cap 232 (the 4th to 6th charges)(the wilful obstruction and assault charges). The Court of Appeal quashed the convictions on the public place obstruction charges but upheld those on the wilful obstruction and assault charges. The defendants’ appeals to this court were unanimously allowed. In the joint judgment of Li CJ, Chan and Ribeiro PJJ and Sir Anthony Mason NPJ they said: “31. Central to the case is the fact that the arrests were made and the charges of public place obstruction laid against the defendants because of their conduct in the course of a peaceful public demonstration. This was not a simple case of obstruction, for instance, by inconsiderate parking of a vehicle or by dumping waste building materials on the road or by a hawker impeding pedestrians on a pavement. Here, the fact that the defendants were at the time of arrest engaged in a peaceful demonstration meant that the constitutionally protected right to demonstrate was engaged. Indeed, a peaceful demonstration, may also engage the closely related guaranteed freedoms of opinion, expression and assembly. Such fundamental rights, when engaged, have an important bearing on the scope of the offence of obstruction and consequently on the scope of police powers of arrest on suspicion of that offence. … 44. where the obstruction in question results from a peaceful demonstration, a constitutionally protected right is introduced into the equation. In such cases, it is essential that the protection given by the Basic Law to that right is recognised and given substantial weight when assessing the reasonableness of the obstruction. While the interests of those exercising their rights passage along the highway obviously remain important, and where exercise of the right to demonstrate must not cause an obstruction exceeding the bounds of what is reasonable in the circumstances, such bounds must not be so narrowly defined as to devalue, or unduly impair the ability to exercise, the constitutional right.”[92] Disorderly manner 118. The allegations of acts or behaviour in a disorderly manner was common to the offences under s17B(1) and (2). These offences are not unique to Hong Kong and have a long history. There are decisions from other common law jurisdiction on similar offences, which provide helpful illumination. I will refer to some of these decisions below. 119. In New Zealand, s3 and s4 of the Summary Offences Act 1981 dealt with offences involving disorderly manner behaviour. It was an offence under s3 punishable by three months imprisonment or a fine not exceeding $2000, for any person “who, in or within view of any public place, behaves, or incites or encourages any person to behave, in a riotous, offensive, threatening, insulting, or disorderly manner that is likely in the circumstances to cause violence against persons or property to start or continue.” Section 4(1)(a) created a lesser offence, punishable only by a fine not exceeding $1000, which did not require any such conduct to be “likely in the circumstances to cause violence against persons or property to start or continue.” 120. In Brooker v Police [2007] 3 NZLR 91, a decision of the Supreme Court of New Zealand, the defendant, who believed that a constable had behaved unlawfully towards him, went to her home shortly after 9 am, knowing that she had been on duty all night, knocked on her door, and after she opened it and asked him to go away, retreated to the grass verge of the road where he sang songs in a normal voice and played his guitar. When the police, summoned by the constable, told the defendant to stop and go away he refused. The defendant whose conviction under s4(1)(a) was upheld by the Court of Appeal appealed to the Supreme Court on the ground that his behaviour could not be regarded as “disorderly” under s4(1)(a) when read in conformity with s14 of the New Zealand Bill of Rights Act 1990, which guarantee the right to freedom of expression. By a majority, his conviction was set aside. 121. Elias CJ was of the view at [34] that even this lesser offence was capable of significant impact upon important freedoms and that [24] “disorderly behaviour under s4(1)(a) means behaviour seriously disruptive of public order. Simply causing annoyance to someone else, even serious annoyance, is insufficient if public order is not affected.” Thus, the disorderly behaviour must be seriously disruptive of public order. [42] to [47]. Moreover, “the value protected by the Bill of Rights must be specifically considered and weighed against the value of public order … As a result, public order will less readily be seen to have been disturbed by conduct which is intended to convey information or express an opinion than by other forms of behaviour.”[59] 122. Blanchard J [56] said to fall within s4(1)(a), the behaviour must substantially disturb the normal functioning of life in the environs of that place. “It must cause a disturbance of good order which in the particular circumstances of time and place any affected members of the public could not reasonably be expected to endure because of its intensity or its duration or a combination of both those factors” Thus, no one should be convicted “ unless there has been a substantial disruption of public order.” 123. Tipping J said: [90] “Conduct in a qualifying location is disorderly if, as a matter of time, place and circumstance, it causes anxiety or disturbance at a level which is beyond what a reasonable citizen should be expected to bear … Where … the behaviour concerned involves a genuine exercise of the right to freedom of expression, the reasonable member of the public may well be expected to bear a somewhat higher level of anxiety or disturbance than would otherwise be the case.” 124. McGrath J dissented on the facts. He said at [146] “The detriment to the complainant’s privacy interests, because of the time, place and manner of the appellant’s protest which sought to interrupt her from resting at her home, went well beyond what any citizen, public official or not, should have to tolerate in her home environment.” 125. Thomas J also dissented, at [186] he said “Disorderly behaviour may range from behaviour which disrupts public order to behaviour which, because it is an annoyance, impacts on public order. Such behaviour may, or may not, implicate a right or rights. The Court’s decision in any given case will depend on the time, location and circumstances and will essentially be a question of fact and degree.” 126. Morse v Police [2012] 2 NZLR 1, another decision of the New Zealand Supreme Court, was concerned with offensive conduct under s4(1)(a)[93]. There were flag burning, horn blowing by a group of protestors, during a Dawn Parade on ANZAC Day, to attract attention to what they were doing. The head notes in the report stated that the Supreme Court of New Zealand held (unanimously) that “The offence … was concerned with public order. To be offensive under s4(1)(a), a behaviour … had to be productive of disorder”. And by a majority (Elias CJ and Anderson J dissenting) to such an extent that it was beyond what could be expected to be tolerated by other reasonable people in a democratic society. 127. Morse v Police is important because it provides important insight on what persons subject to the impugned conduct could be expected to tolerate. 128. Blanchard J said the test is that of a reasonable person who, “must surely be a person who is sensitive to such values[94] and displays tolerance for the rights of the person whose behaviour is in question. In other words, the hypothetical reasonable person (of the kind affected) is one who takes a balanced, rights-sensitive view, conscious of the requirements of s5 (New Zealand Bill of Rights Act), and therefore is not unreasonably moved to wounded feelings or real anger, resentment, disgust or outrage, particularly when confronted by a protestor.” [64] 129. Tipping J said at [70] “It cannot, however, be right that the unreasonable reactions of those who are affected by the behaviour can be invoked as indicative of a threat to public order. Hence those affected by the behaviour must be prepared to tolerate some degree of offence on account of the rights and freedoms being exercised by those responsible for the behaviour. It is only when the behaviour of those charged under s4(1)(a) causes greater offence than those affected can be expected to tolerate that an offence under s4(1)(a) will have been committed. And it is always necessary for the prosecution to demonstrate a sufficient disturbance of public order. [71] In this context public order is sufficiently disturbed if the behaviour in question causes offence of such a kind or to such an extent that those affected are substantially inhibited in carrying out the purpose of their presence at the place where the impugned behaviour is taking place. Only if the effect of the behaviour reaches that level of interference with the activity in which those affected are engaged is it appropriate for the law to hold that their rights and interests should prevail over the right to freedom of expression of those whose behaviour is in contention. That is the appropriate touchtone. [72] All relevant matters of time, place and circumstance must, however, be brought to account when applying the touchstone to the behaviour in question and thereby deciding whether the defendant's conduct is offensive in law. The application of the touchstone is contextual not abstract; but those affected are required, for the purpose of the necessary assessment, to be appropriately tolerant of the rights of others. Tolerance to the degree thought appropriate by the Court is the pivot on which the law reconciles the competing interests of public order and freedom of expression. A free and democratic society is justified in limiting freedom of expression at the point when public order is sufficiently disturbed.” 130. In Australia, in Coleman v Power [2004] 220 CLR 1, the High Court was concerned with s7(1)(d) of the Vagrants Act 1931 of Queensland, which provided that “any person who, in any public place or so near to any public place ... uses any threatening, abusive, or insulting words to any person … shall be liable to a penalty … ”[95] Section 7(1)(d) was enacted to replace s6 of the Vagrant Act 1851, which prohibited the using of threatening, abusive or insulting words or behaviour in any public street … “with intent to provoke a breach of the peace or whereby a breach of the peace may be occasioned”.[96] 131. The defendant was distributing pamphlets in a mall containing charges of corruption against several police officers. He was approached by a police officer who demanded a pamphlet. The defendant refused and said loudly “this is constable (BP) a corrupt officer”. He then sat down wrapping his arms around a pole and violently resisted attempts to arrest him. His conviction under s7(1)(d) was set aside by a majority, which comprised Gummow, Hayne, Kirby and McHugh JJ.[97] 132. Gleeson CJ said “the removal in 1931 of the requirement concerning a breach of the peace undoubtedly gave rise to a problem of confining the operation of the legislation within reasonable bounds.” He resolved that problem by interpreting as having been built into s7 a requirement related to serious disturbance of public order or affront to standards contemporary behaviour [23]. 133. Gummow and Hayne JJ in a joint judgment said at [183], the insulting words which are proscribed are those which “are intended to provoke unlawful physical retaliation, or they are reasonably likely to provoke unlawful physical retaliation from either the person to whom they are directed or some other who hears the words uttered.” Kirby J agreed. 134. Section 17B(2) has its English equivalent in s5 of the Public Order Act of 1936, which provided “any person who in any public place or at any public meeting uses threatening, abusive or insulting words or behaviour with intent to provoke a breach of the peace, or whereby a breach of the peace is likely to be occasioned, shall be guilty of an offence.” In Redmond-Bates v Director of Public Prosecutions [2000] HRLR 249, a decision of the English Divisional Court (Sedley LJ and Collins J) where the question was whether the conduct of the defendants was likely to provoke a breach of the peace. Although the Human Rights Act 1998 had not yet come into force, Sedley LJ considered the human rights dimension of such an offence. There, 3 women Christian fundamentalists preached from the steps of a cathedral and attracted a crowd some of whom were showing hostility. A policeman fearing a breach of the peace told the women to stop. They refused and were arrested for wilful obstruction of a police officer. The appellant was convicted. The issue on appeal was whether it was reasonable for the police officer, in the light of what he perceived, to believe that the appellant was about to cause a breach of the peace. Her appeal was allowed. At para 18, Sedley LJ[98] said: “…The question for PC Tennant was whether there was a threat of violence and if so, from whom it was coming. If there was no real threat, no question of intervention for breach of the peace arose. If the appellant and her companions were (like the street preacher in Wise v Dunning) being so provocative that someone in the crowd, without behaving wholly unreasonably, might be moved to violence he was entitled to ask them to stop and to arrest them if they would not. If the threat of disorder or violence was coming from passers-by who were taking the opportunity to react so as to cause trouble (like the Salvation Army in Beatty v Gilbanks), then it was they and not the preachers who should be asked to desist and arrested if they would not. … 20. … What Speaker’s Corner (where the law applies as fully as anywhere else) demonstrates is the tolerance which is both extended by the law to opinion of every kind and expected by the law in the conduct of those who disagree, even strongly, with what they hear…” 135. Earlier at para 6, Sedley LJ explained: “… In Beatty v Gilbanks (1882) 9QBD 308, this Court (Field J and Cave J) held that a lawful Salvation Army march which attracted disorderly opposition and was therefore the occasion of a breach of the peace could not found a case of unlawful assembly against the leaders of the Salvation Army. Field J, accepting that a person is liable for the natural consequences of what he does, held nevertheless that the natural consequences of the lawful activity of the Salvation Army did not include the unlawful activities of others, even if the accused knew that others would react unlawfully.” 136. In Jordan v Burgoyne [1963] 2 QB 744, the English Court of Appeal held that, a speaker who used words which threatened, abused or insulted, had to take his audience as he found it and, if the words spoken to that audience were likely to provoke a breach of the peace, the person could be convicted under s5 of the Public Order Act, 1936. Since the offence is concerned with the maintenance of public order, naturally, the likely reaction of the audience is highly relevant. Even so, as the passage from the judgment of Sedley LJ in Redmond-Bate quoted at para 134 above shows, if the threat of disorder or violence was coming from those who were taking the opportunity to react so as to cause trouble, it was they and not the speaker who should be asked to desist and arrested if they would not. In Jordan, Lord Parker CJ said, of the offending speech “I cannot myself, having read the speech, imagine any reasonable citizen, certainly one who was a Jew, not being provoked beyond endurance, and not only a Jew but a coloured man, and quite a number of people of this country who were told that they were merely tools of the Jews, and that they had fought in the war on the wrong side, and matters of that sort.”[99] Jordan recognised that people may be so provoked that they lost control of themselves, and that as a matter of common sense, persons with certain attributes might reasonably be expected to react more strongly than those without. I have no doubt that a person who behaved in a manner which actually provoked persons present beyond reasonable endurance or might do so may be convicted under s17B(2).[100] 137. Although, unlike these appeals, Brooker, Morse and Coleman were concerned with offences which contained no express requirement of any likelihood to cause violence, I do not believe that diminishes the relevance of those decisions. They show that, notwithstanding the minor nature of the relevant offences, they must be judged according to their possible impact on fundamental rights. There is no suggestion in any of these cases that had the relevant offence required a likelihood of violence, a less exacting approach would be adopted in determining whether the impugned conduct was serious enough to satisfy the requirement of the offence. Elias CJ at [31] said that he did not think the “word ‘disorderly’ can have a different meaning in s3 and s4. The additional element of seriousness in s3 arises from the likelihood of violence”. Indeed, the minority in Brooker in part explained their dissent by stressing the difference between s3 and s4. For example, McGrath J said “ …Section 3 … addresses behaviour at an extreme point on the range of what is disorderly.” Thomas J said “the use of the word ‘disorderly’ in s3 cannot have the effect of elevating the seriousness of the behaviour contemplated in s4(1)(a). They are different offences, the one more serious than the other.” I believe, when, as here, the offence requires a likelihood of violence, the impugned conduct must indeed be serious. How then does one decide whether the conduct is sufficiently serious? To that question I now turn. 138. In the present case, the appellants were exercising their freedom of speech, of assembly and of demonstration in a public place and in the presence of a large number of the public. Freedom of expression, assembly or demonstration would be meaningless if they can only take place in private or away from persons who may find the views, ideas or claims that an assembly or demonstration or speech is promoting annoying or offensive.[101] However, as Gleeson CJ noted “it is often the case that one person’s freedom ends where another person’s rights begin.”[102] The rights of those who may be affected by such conduct “obviously remain important” and the exercise of such rights by protesters must not exceed “the bounds of what is reasonable in the circumstances, (but) such bounds must not be so narrowly defined as to devalue, or unduly impair the ability to exercise, the constitutional right.”[103] 139. I would reconcile these competing rights, adopting the language used in the cases cited above, and say that those affected are expected to take a balanced, rights sensitive view, conscious of the requirement of the Hong Kong Bill of Rights, and would not be unreasonably moved to wounded feelings or real anger, resentment, disgust or outrage, particularly, when confronted by a protestor,[104] but the exercise of such rights by protesters must not exceed “the bounds of what is reasonable in the circumstances, (but) such bounds must not be so narrowly defined as to devalue, or unduly impair the ability to exercise, the constitutional right.” It is only when the conduct even when viewed against such a generous standard, “went well beyond what any citizen, public official or not, would have to tolerate”, in the circumstances in which it occurred[105], can such conduct properly be regarded as disorderly conduct within the meaning of s17B(1) or (2). Findings of Disorderly Conduct 140. In para 18 of the Statement of findings the learned magistrate said: “The appellants … rushed onto the stage at a highspeed. They should have anticipated resistance by the personnel and body clashes in the course of it. Eventually PW1 and PW2 indeed sustained injuries as a result. I am of the view that the appellants’ behaviour was unruly and offensive and therefore they did behave in a disorderly manner. I do not accept that the first appellant was genuinely exercising his freedom of expression because the law only protects the freedom to express oneself ‘peacefully’. The first appellant’s behaviour was not peaceful at all by whatever standard.” 141. Article 17 of the Hong Kong Bill of Rights[106] used the expression “right of peaceful demonstration”. A similar expression is used in Article 11 of the European Convention on Human Rights. In this context, I would note the following passages from the guidelines on Freedom of Peaceful Assembly 2nd edition published by OSCE/ODIHR (Organisation for Security and Co-operation in Europe / Office for Democratic Institution and Human Rights) dated 25 October 2010: “25. Peaceful assemblies: Only peaceful assembly is protected by the right to freedom of assembly. The European Court of Human Rights has stated that “[i]n practice, the only type of events that did not qualify as ‘peaceful assemblies’ were those in which the organizers and participants intended to use violence.”[107] Participants must also refrain from using violence (though the use of violence by a small number of participants should not automatically lead to the categorization as non-peaceful of an otherwise peaceful assembly – see para 164). An assembly should, therefore, be deemed peaceful if its organizers have professed peaceful intentions, and this should be presumed unless there is compelling and demonstrable evidence that those organizing or participating in that particular event themselves intend to use, advocate or incite imminent violence. 26. The term “peaceful” should be interpreted to include conduct that may annoy or give offence to persons opposed to the ideas or claims that it is seeking to promote, and even include conduct that temporarily hinders, impedes or obstructs the activities of third parties. Thus, by way of example, assemblies involving purely passive resistance should be characterized as peaceful. Furthermore, in the course of an assembly, ‘an individual does not cease to enjoy the right to peaceful assembly as a result of sporadic violence or other punishable acts committed by others in the course of the demonstration, if the individual in question remains peaceful in his or her own intentions or behaviour’.” 142. It appears that the learned magistrate took the view that because the appellants were not expressing their views peacefully, they were not entitled to the protection which the law extends to freedom of expression. Presumably, the learned magistrate’s finding that they had not expressed their views peacefully proceeded from his view that they had behaved in a disorderly manner. With respect, he ought to have first considered whether their conduct was disorderly because they exceeded the bounds of what is reasonable in the circumstances, such that they could not reasonably be expected to be tolerated. 143. Moreover, he should have considered the conduct of each of the appellants separately. Mr McCoy SC accepted that it was not and never had been the prosecution case that the appellants had acted in concert, or that their conduct should not be considered independently. The Appellants’ conduct 144. In paras 106 and 107 above, I have substantially reproduced the learned magistrate’s description of the disruption to the ceremony. We were shown the video recording at the hearing and I have watched the recording carefully since the hearing. They show that there were 10 persons on stage. They were seated in one single row. The Secretary was seated on the 5th chair from the left, between Sir Chung-kong Chow, at that time, the Chief Executive Officer of the MTR and Dr Ch’ien. Shortly after the Secretary had begun her speech, the 1st appellant stepped onto the stage. He was several feet away from the first person on the left (and I think well over 10 feet from the Secretary) when he scattered the hell money. It is obvious that he stepped onto the stage to scatter hell money, and that was his sole purpose. There was no apparent reaction from those seated on the stage.[108] After that was done he stood there quietly, waiting to be taken away. As he went peacefully, he shouted the slogan. The reaction of the Secretary has been recorded earlier. To complete the picture I should mention the finding that PW1 who was standing on the drained pond had tried to stop the 1st appellant and in doing so became unbalanced and hurt himself. The fact that the 1st appellant's conduct had provoked such a reaction may support a finding that his behaviour was disorderly within the meaning of s17B. I return to para 18 of the Statement of findings where the learned magistrate said: “The appellants being ‘uninvited guests’ rushed onto the stage at a high speed. They should have anticipated resistance by the personnel and body clashes in the course of it.” The learned magistrate had not distinguished between the appellants. It appears from the video recordings that the 1st appellant had not rushed onto the stage at a high speed. Unfortunately, the learned magistrate had not dealt with the 1st appellant’s conduct separately from the 2nd appellant’s conduct. Nor did he have in mind the need to reconcile the 1st appellant’s right of demonstration and, for example, the right of the organizers of the event to stop people from approaching or ascending the stage. In such circumstances, I believe it is unsafe to treat para 18 as a sufficient finding of disorderly conduct on the part of the 1st appellant. 145. Since I have come to the conclusion that there was no disorderly behaviour on the part of the 1st appellant, his appeal must be allowed. In Brutus v Cozens [1973] AC 854, the appellant who went onto the Centre Court in Wimbledon during a match to protest against apartheid, was charged under s5 Public Order Act 1936 with “insulting … behaviour … whereby a breach of the peace was likely to be occasioned”. His acquittal on finding that the behaviour was not insulting was upheld. So too in R v Ambrose (1973) Cr App R 538, where a young man was charged with using insulting words said to be likely to cause a breach of the peace under s5 of the Public Order Act of 1936. The Court held that the words complained of were incapable of being insulting words for the purposes of s5 prosecution and it was unnecessary to decide whether the fact that persons who were told about what was said were very angry and said that they would have felt like assaulting the appellant. The 2nd appellant 146. Mr Martin Lee SC who represented the 2nd appellant rightly accepted that the conduct of the 2nd appellant was of a different character from the 1st appellant.[109] The video tapes showed clearly that the 2nd appellant ran at great speed towards the stage and directly at the Secretary. He grabbed the microphone[110] whilst it was being used by the Secretary. PW2, the MC said he pulled his partner “to his side fearing that she would be knocked down”, as the learned magistrate said the video recording did not show that. The recording showed clearly that both Sir Chung Kong Chow and Dr Ch’ien stood up, and Dr Ch’ien actually came forward, clearly to protect the Secretary. The only reasonable inference is they were apprehensive of the 2nd appellant’s intention. The fact that the 2nd appellant only took away the microphone which the Secretary was using only became apparent later. I believe in rushing onto the stage, directly at the Secretary and grabbing the microphone which she was using, the 2nd appellant’s behaviour, even when viewed most generously, was disorderly. It went well beyond “what any citizen, public official or not, should have to tolerate”, in the circumstances in which it occurred.[111] That being the case I go on to consider whether the charges or any of them has been made out. Section 17B(1) 147. Section 17B(1) is concerned with disorderly behaviour “for the purpose of preventing the transaction of the business for which the public gathering was called together…” The two key words for consideration are “purpose” and “preventing”. 148. The video recordings show that just under one minute elapsed from the scattering of hell money (The 2nd appellant came on the scene shortly thereafter) to the Secretary resuming her speech. The question is whether the 2nd appellant’s conduct was for the purpose of preventing the transaction of the business for which the gathering was called. I will deal with preventing first. 149. Barnes J said at para 94 that “prevent” did not require that the transaction of the business to be brought completely to an end or being aborted. She said “because to stop for a moment due to hindrance also fits the (dictionary) definition. The magistrate’s finding as to the meaning of ‘prevent’ is correct”. 150. Mr McCoy submitted that an interruption of a gathering long enough to remove a heckler would be sufficient for the purpose of s17B (1). 151. Mr Martin Lee SC has traced s17B(1) to s1(1) of the English Public Meetings Act 1908 (“PMA 1908”) which was enacted in response to the suffragettes’ protests against Mr Lloyd-George, the Chancellor of the Exchequer, at Albert Hall, London in December 1908. A contemporary report in the New York Times described the incident in the following terms: “Some of the women were armed with whips, and they repelled vigourously every attempt to eject them. There were fierce tussles every few moments in different parts of the hall, and every time Mr Lloyd-George made an attempt to speak his voice was drowned with mingled groans and cheers. Finally the Chancellor, who for a quarter of an hour had been trying to get in a word, sat down, and the organist present tried to sooth the hysterical sisterhood by playing ‘What Can the Matter Be?’. It was of no use; pandemonium still reigned/…/At the end of half an hour or more the opposition was worn out, and Mr Lloyd-George was able to continue his speech with only occasional interruptions.”[112] 152. Mr Lee showed that there was vigorous debate in both Houses of Parliament on the impact the proposed law would have on the exercise of free speech, in particular when heckling and interjections frequently occurred at public or political meetings, and indeed, in the House of Commons. The debate showed that the proposed law was not directed at such conduct.[113] 153. Mr Lee told us that the predecessor of s17B(1) was first enacted as s5(1) of the Public Order Ordinance 1948 and in introducing the Public Order Bill before the Legislative Council in 1948, the Acting Attorney General said: “The past twenty years have witnessed the growth all over the world of political parties organized more thoroughly than has been the case before and prepared in some cases to enforce their views by forcible methods. Clauses 3-5[114] inclusive of the Bill, which are based on similar provisions in the United Kingdom, are designed to curb the activities of such political organisations while at the same time preserving and strengthening the right of public meeting of ordinary peaceful citizens.”[115] 154. Since “preventing” also impacts on important freedoms, it should be interpreted so that it is confined within reasonable bounds. Here, too, it is necessary to balance the conflicting rights of the protestor and the rights of the persons at the gathering. I believe such rights should be reconciled in the way I suggested in para 137 above. I believe, properly construed “preventing” requires an interruption to an extent beyond what could be expected to be tolerated by other persons in a democratic society,[116] such as breaking up or a substantial interruption of a gathering. 155. Given the cardinal importance of the freedom of expression, demonstration and assembly I have no doubt that the interruption for a minute or so in this case is insufficient. Moreover, s17B(1) provides in terms of preventing the transaction of the business for which the gathering was called. That argues against a brief interruption of a gathering. But, I do not agree with Mr Lee that nothing short of an abortion of the gathering would suffice. I have set out the report from the New York times to show that Mr Lloyd-George was able to continue after a half hour or so. If Mr Lee is right Public Meeting Act 1908 would have been enacted in vain. 156. Section 17B(1) also requires that the disorderly behaviour was for the purpose of preventing the transaction of the business for which the gathering was called. Barnes J was of the view that because the gathering was interrupted that was the purpose of the disorderly conduct. With respect I do not agree. 157. In Sweet v Parsley[1970] AC 132, Lord Morris said in connection with s5 of the Dangerous Drugs Act, under which it was an offence for an occupier to permit premises to be used for the purpose of smoking cannabis, that it “denote a purpose which is other than quite incidental or causal or fortuitous: they denote a purpose which is or has become either a significant one or a recognized one though certainly not necessarily an only one. There is no difficulty in appreciating what is meant if it is said that premises are used for the purposes of a dance hall or a billiard hall or a bowling alley or a hair-dressing saloon or a café.” I believe purpose under s17B(1) is used in a similar sense. 158. I see no basis for the conclusion that the 2nd appellant had as his purpose, the prevention of the transaction of the business for which the gathering was called. 159. For the above reasons, I would allow the 2nd appellant’s appeal against his conviction under s17B(1). Section 17B(2) 160. I turn to the s17B(2) offence. I start with the finding that the 2nd appellant’s conduct was disorderly within the meaning of s17B(2), and go on to consider whether the 2nd appellant conducted himself in that way, “with intent to provoke a breach of the peace, or whereby a breach of the peace is likely to be caused”. 161. Mr McCoy submitted that the 2nd Appellant’s conduct was not only disorderly, it amounted to a breach of the peace. I agree. Indeed, if, as seemed to be the case, he intentionally or recklessly caused another to apprehend immediate and unlawful violence, he could be charged with common assault. Breach of the Peace 162. What amounts to a breach of peace was settled by R v Howell [1982] QB 416. It is clear from Howell that violence is the central element in determining what amounts to a breach of the peace and: “an act done or threatened to be done which either actually harms a person, or in his presence his property, or is likely to cause such harm, or which puts someone in fear of such harm being done. There is nothing more likely to arouse resentment and anger in him, and a desire to take instant revenge, than attacks or threatened attacks upon a person’s body or property.” WatkinsLJ, delivering the judgment of the English Court of Appeal. [426G] 163. In Percy v DPP [1995] 1 WLR 1382, a decision of the English Divisional Court (Balcombe LJ and Collins J), the Divisional Court commented on the last sentence of Watkins LJ’s judgment cited above, and said: “It is clear from the last sentence that harm to property will constitute a breach of the peace only if done or threatened in the owner's presence because the natural consequence of such harm is likely to be a violent retaliation. Thus Reg v Howell makes it clear that there must be violence or threatened violence for there to be a breach of the peace to justify an arrest.” 164. I prefer to take the view that attacks or threatened attacks on property in the owner’s presence are tantamount to threatened violence on the owner and for that reason, it is a breach of the peace. It is commonsense that this kind of conduct would put the owner in fear of violence. 165. The fact that the 2nd appellant’s conduct amounted to a breach of the peace led to several submissions from Mr McCoy to which I will now turn. 166. Mr McCoy submitted that on the basis of the 2nd appellant’s own breach of the peace he could be convicted under s17B(2). With respect, I cannot agree. In Marsh v Arscott (1982) 75 Cr App R 211, a decision of the English Divisional Court (Donaldson LJ and McCullough J), which was concerned with s5 of the Public Order Act 1936, McCulloch J said (with the agreement of Lord Justice Donaldson) at p216 “This section is describing breaches of the peace which are brought about, or are likely to be brought about, by other words or behaviour occurring earlier, although usually not very long before. The phrase ‘whereby a breach of the peace is likely to be occasioned’ indicates that Parliament was concerned with cause and effect, i.e. with conduct which is likely to bring about a breach of the peace and not with conduct which is itself a breach of the peace and no more. Were this the law every common assault occurring in a public place would also be an offence against this section. Many such assaults will in fact be likely to lead very quickly to a breach of the peace, and these will be within the section; but, without more it is not enough that conduct which is threatening, abusive or insulting is of itself a breach of the peace.” 167. With respect, I agree. Indeed, the language of s17B(2) is so clear that I will say no more. 168. Mr McCoy also submitted that because the 2nd appellant’s conduct would inevitably lead to his arrest, the arrest would itself be a breach of the peace which was caused by the 2nd appellant’s conduct. He submitted that an arrest, however gentle, would involve some physical contact with the 2nd appellant by the trained personnel, which would technically be a breach of the peace. So, the 2nd appellant’s conduct was likely to cause a further breach of the peace. 169. The strongest support for this submission comes from the judgment of Lord Denning MR in Reg v Chief Constable of Devon and Cornwall, Ex parte Central Electricity Generating Board (CEGB) [1982] QB 458, 471, where he said : “There is a breach of the peace whenever a person who is lawfully carrying out his work is unlawfully and physically prevented by another from doing it. He is entitled by law peacefully to go on with his work on his lawful occasion. If anyone unlawfully and physically obstructs the workers -- by lying down or chaining himself to a rig or the like – he is guilty of a breach of the peace. Even if this were not enough, I think that their unlawful conduct gives rise to a reasonable apprehension of a breach of the peace. It is at once likely that the lawful worker will resort to self-help by removing the obstructor by force from the vicinity of the work so that he obstruct no longer. He will lift the recumbent obstructor from the ground. This removal would itself be an assault and battery -- unless it was justified as being done by way of self-help. Long years ago Holt CJ declared that ‘the least touching of another in anger is a battery’: see Cole v Turner (1705) 6 Mod. Rep. 149. Salmon on Torts, 17th edition (1977), p 120 adds that even anger is not essential: an ‘unwanted kiss maybe a battery.’ So also the lifting up of a recumbent obstructor would be a battery unless justified as being done in the exercise of self-help. But in deciding whether there is a breach of the peace or the apprehension of it, the law does not go into the rights or wrongs of the matter -- or whether it is justified by self-help or not. Suffice it that the peace is broken or is likely to be broken by one or another of those present. With the result that any citizen -- and certainly any police officer -- can intervene to stop the breach. ” 170. I have quoted a longer passage because in Percy the court regarded the first two sentences quoted above as erroneous. The court said: “Neither Lawton LJ or Templeman LJ agreed with (Lord Denning’s) observations. Indeed, it is in our view implicit in what each said that they took the view that some violence or threat of violence was necessary: see per Lawton LJ at 476 F-G and Templeman LJ at 480 A-C.” 171. CEGE was concerned with protests at a possible site for a nuclear power station. The protestors obstructed entrance to the site. They were well organized, for example, after an injunction was obtained against some, others took their place. So injunction was not an effective remedy. The organizers issued a leaflet giving objectors detailed instructions about peaceful methods of protest and informing them that no attempt could legally be made to manhandle them. The board wrote to the chief constable asking for his assistance in enabling it to perform its statutory duties by preventing further obstruction. The chief constable replied that without “a more definitive legal mandate” the police will not remove the obstructors since there was no actual or apprehended breach of the peace, nor an unlawful assembly. The Board brought judicial review against the police’s refusal to intervene because there was no imminent breach of the peace. 172. I believe the headnote, which did not reflect Lord Denning’s remarks relied on by Mr McCoy, has correctly stated the basis of the decision, it stated that the police had power to remove or arrest obstructors if there was a breach of the peace or the reasonable apprehension of it, or an unlawful assembly; that by wilfully obstructing the operations of the board the obstructors were deliberately breaking the law, so that the board was entitled to use the minimum force reasonably necessary to remove those obstructing the exercise of its powers, that the use of self-help in such circumstances engendered the likelihood of a breach of the peace, and accordingly, the police were entitled to be present in order to intervene as necessary. 173. Moreover, it is implicit in the passages in the judgments of Lawton and Templeman LJJ referred to in Percy that they did not share Lord Denning’s view. For example, Lawton LJ said “as soon as one person starts to, or makes to, lay hands on another, there’s likely to be a breach of the peace.” Lawton LJ did not say that as soon as one person lays hands on another there would be a breach of the peace. Templeman LJ said “The board and the police may instruct the obstructors to leave the site and warn them that if they do not leave the site and remain off the site the obstructors will be liable to be forcibly removed or arrested. If after such a warning the board enter the site with the object of completing the survey, the possibility of a confrontation with the obstructors will at once raise a danger of breaches of the peace when the board’s workmen seek to carry out their work and find the obstructors lying in their path. An obstructor who will not leave the site unless he is forcibly removed presents a threat and danger of a breach of the peace even if he disclaims any intention of causing a breach of the peace.” It is obvious that Templeman LJ did not regard the forcible (but justified) removal of the obstructors to be a breach of the peace. 174. I would add that in Marsh, after the passage quoted in para 166 above, McCullough J went on to say: “In the circumstances here, assuming the defendant to have been acting unlawfully in using threatening words and behaviour, no breach of the peace was likely to have been occasioned. No other person was likely to have broken the peace, and that the police were likely to do was arrest him, as they did. On that basis too an acquittal (of a charge under s5 of the Public Order Act) would, in my judgment, have been inevitable.” 175. If Mr McCoy is right, a breach of the peace which is likely to result in a lawful arrest, though the arrest be unresisted and peaceful, would also constitute an offence under s17B. In other words, a breach of the peace committed in public would also be an offence under this section, and the offender would not only be exposed to being bound over he would liable to imprisonment for 12 month and a fine of $5000 under s17B(2). I do not agree. 176. Mr McCoy further submitted that the 2nd appellant’s conduct was likely to cause a violent or unlawful reaction, from policemen or trained personnel responsible to keep order, which would itself be a breach of the peace. Such risk must be real and not a mere possibility. 177. In R v Li Wai Kuen [1973-1976] HKC 346, Huggins J (as he then was) said at 348 “There is a Canadian case which is in many respects similar to the present, where it was held to be unbelievable that the officer to whom the abuse was addressed could be provoked to commit a breach of the peace: R vZwicker (1938) 1 DLR 461. I myself had occasion to say something similar in this court in an unreported case some years ago. I would not suggest that there could never be a case where the abuse was so gross that even a police officer might be likely to be provoked into violent retaliation, particularly if the language used were also threatening, but it is to the credit of the police forces in those countries where the common law prevails that they conduct themselves with outstanding tolerance and good humour even in the face of provocation more grave than that in the present case.” This has remained the sentiment in Hong Kong. I would also note that in Coleman, Gleeson CJ said in relation to insulting word to a policeman that “It may eliminate, for practical purposes, any likelihood of a breach of the peace.” 178. I believe unlawful reaction from law enforcement officers and other trained personnel can be eliminated for practical purposes because of their training, discipline and professionalism. Moreover, the Community expects and the law requires no less. In the common-law world, I can say with confidence that, if they use excessive violence in effecting arrest, they will be visited with the full force of the law. 179. In para 22 of the Statement of Findings the learned magistrate said: “I am of the view that PW1, PW2 and other staff had shown restraint without over- reaction in stopping and removing the appellants. I find their action under those circumstances reasonable. Before the appellants took the actions, they must have reasonably anticipated obstruction, bodily clashes and even harm caused because of the use of force. I find that their behaviour involved violence breaching public order and the peace of society. In fact their conduct had provoked someone to follow suit. Therefore the only reasonable inference that I draw would be that they had the intent. I am satisfied that the prosecution had proved (with intent to provoke a breach of the peace, or whereby a breach of the peace was likely to be caused) beyond reasonable doubt.” 180. I believe the learned magistrate has insufficiently considered whether there was a real risk of a breach of the peace from the trained personnel on the stage. Since, apparently, no more force than was required was used to subdue the 2nd appellant, there was no breach of the peace by anyone other than the 2nd appellant. 181. That was also Barnes J’s view, she said: “67. I have repeatedly read the magistrate’s Statement of Findings. I do not see he had any analysis or finding as to the inference or effect which the appellants’ disorderly conduct might produce on other people at the scene who witnessed such conduct, except his description about members of the staff and the man dressed in black who, according to the magistrate, ‘followed the appellants’ example’. … 69. Leaving the man dressed in black for a moment, I have said earlier that the facts of this case showed that the staff members who intercepted the appellants exercised great restraint…” 182. As for the person said to have been provoked into following suit, the learned magistrate said at para 21(iv) “P3(d)(one of the tapes) showed that when the appellants were taken away, a protester dressed in black tried to get close to the stage but was stopped. The protester also shouted the same slogan as the 2nd appellant: ‘MTR fare increase, shameful.’ I can draw a reasonable inference that the protester was provoked or encouraged to follow the steps of the appellants.” Earlier, when dealing with the video recordings at para 6, under P3(d) the magistrate noted “12:13:46 — the protestor dressed in black raised his arms and shouted ‘MTR fare increase, shameful!’ ” 183. I have watched the recording most carefully, I see no evidence that the person dressed in black behaved in a disorderly manner, much less committed a breach of the peace. If that was the magistrate’s finding he should state it clearly and explain how he arrived at that conclusion. As it is I find the Magistrate’s finding difficult to follow and am unsure of his meaning. I place no reliance on it. 184. In relation to the man dressed in black Barnes J said: “76. … I do not think that the only reasonable inference is that the man was provoked by the 1st and/or 2nd appellants to try to go onto the stage … there was no solid ground on which the magistrate could find that the prosecution had proven that the 1st and 2nd appellants had the intent to provoke a breach of the peace.” With respect, I agree. 185. I therefore conclude that the learned magistrate had wrongly convicted the 2nd appellant under s17B(2). This is not a case where one could say that the 2nd appellant’s conduct was likely to cause a breach of the peace by persons attending the prize giving ceremony. A protest against MTR fare hike was highly unlikely to arouse strong emotion in those attending the ceremony. Had the 2nd appellant seized a microphone from a speaker at a political rally, to silence the speaker or so that the 2nd appellant could express a contentious view, a finding that he behaved in a disorderly manner, with intent to provoke a breach of the peace, or such that a breach of the peace was likely to be caused, might be justified. Disposition 186. For the above reasons, I would allow the appeals of the 1st and 2nd appellants and dismiss the cross appeals of the Government. Mr Justice Litton NPJ: Introduction 187. The question before this Court, as certified by the Appeal Committee on 27 November 2012, is as follows: “What are the elements of the offences created respectively by section 17B(1) and section 17B(2) of the Public Order Ordinance?” 188. The short answer, a complete answer, is this: The elements of those offences are those found in the statute itself: In the words used in the statute. Nowhere else. 189. The criminal law, here as elsewhere, is maintained by sanctions. Sanctions are imposed by words. Since the criminal justice system is largely codified, those words are found in statutes – Ordinances and subsidiary legislation – which regulate activities within the community, thus ensuring freedom for all under the law. 190. By far the largest number of criminal cases are tried in the magistrate courts. Day in, day out, magistrates apply the words in statutes to the facts of the case: To make a mystery of ordinary words in statutes is to grievously debase the rule of law, and make it an ineffective instrument of civil society. This is particularly so in a bilingual system[117] where obscurities could happen through translation. Nowadays, most cases in the magistrate courts are conducted in Chinese (as it was in the present case). The police force, given the duty of enforcing the law, operates almost exclusively in the Chinese language. When appellate courts give directions to the courts of trial, and to the law enforcement agencies, as to the meaning of words in criminal statutes, through the medium of the English language, they must be sensitive to this inherent disability. 191. The magistrate courts, governed by the Magistrates Ordinance, Cap 227, are courts of summary jurisdiction. That is clear from the long title. Words like “disorderly conduct” and “breach of the peace” have appeared in the statutes of Hong Kong for well over 100 years. Countless magistrates in myriad cases over the past century have applied those words to situations as found in court. 192. In the list of duties imposed on the police force under section 10 of the Police Force Ordinance, Cap 232, the very first is that of “preserving the public peace”. And, as the English Court of Appeal in R v Howell [1982] QB 416 at 427 reminds us, when breach of the peace or the reasonable apprehension of such breach, happens in the ordinary citizen’s presence, that citizen has the right to arrest the offender without warrant. It goes further: At common law, the citizen not only has such right, he has a duty to take reasonable steps “to make the person who is breaking or threatening to break the peace refrain from doing so, and those reasonable steps in appropriate cases will include detaining him against his will”: See Lord Bingham’s judgment in R(Laporte) v Chief Constable of Gloucestershire [2007] 2 AC 105 at 125-6, quoting Lord Diplock in Albert v Lavin [1982] AC 546 at 565. When the common law imposes such a duty on the ordinary citizen, it may seem surprising that there could be doubt as to what “breach of the peace” means in law. And yet, as will be explained later, that is precisely the case. 193. What behaviour amounts to disorderly conduct, or when a situation constitutes a breach of the peace, or a threat thereof, depends on the circumstances of the time and place. The social context in which the events occur forms an important part of the picture. As the author of Public Order: A guide to the 1986 Public Order Act [Format Publishing 1987] at p.93 notes: The conduct of a football crowd would be disorderly if it were repeated in a theatre during a performance. 194. The question is one of degree. It is purely a question of fact, for the fact-finding tribunal to decide. The appellate courts would do the system, and the community, great harm if they interfered too readily in such fact-finding function, or added degrees of sophistication to such function which are unwarranted. 195. As Lord Reid said in Cozens v Brutus [1973] AC 854 at 861C, the meaning of an ordinary word of the English language is not a question of law. It is a matter for the fact-finding tribunal to consider, not as a matter of law, but as fact, whether in the whole of the circumstances the words of the statute do or do not apply to the facts which have been proved. 196. All that having been said, there is in fact a problem with the scope and meaning of the expression “breach of the peace” (“破壞社會安寧”) and this is a case where the expression warrants close scrutiny. “Breach of the peace” 197. There is no offence known to the criminal law as “breach of the peace”; a person cannot be charged with breaching the peace. And yet, under s 61 of the Magistrates Ordinance, he can be bound over to keep the peace[118], and is liable to be imprisoned in default of compliance with the order. The power given to magistrates under s 61 is to administer preventative justice: To prevent a future event happening when public order might be disturbed by a breach of the peace. But this brings us no further to defining the scope of the expression “breach of the peace”, nor to identify with any precision when disorderly behaviour is likely to cause a breach of the peace, which lies at the heart of the offence created under s 17B(2) of the Public Order Ordinance, Cap 245. 198. Take the recent case of a demonstration by a group of people outside the Liaison Office of the Central People’s Government at Connaught Road West, Hong Kong. Secretary for Justice v Chiu Hin Chung [2013] 1 HKLRD 227. Mills barriers had been erected outside the main gate. Police officers were stationed both inside and outside the barriers. There were security guards within the forecourt of the Liaison Office, as well as the manager of the security company. Outside, in the demonstration area, there were reporters present, apart from police officers, security personnel and, of course, the demonstrators themselves. The two defendants (like the appellants here) were charged with disorder in a public place under s 17B(2) of the Public Order Ordinance. Their disorderly conduct was the following: (i) The 1st defendant stood on a barrier and threw a placard and a bottle containing about 1.7 kg of cornstarch into the forecourt of the Liaison Office. A piece of paper was stuck to the bottle with the Chinese characters meaning “toxic melamine”. (ii) The second defendant threw a plastic bag containing cornstarch into the forecourt. The bag broke open and scattered the power, some landing on three people, two of whom complained of discomfort in the eyes as a result, and one of itchiness in the forehead. 199. Shortly after this episode, the demonstration was called off. The entire event, from beginning to end lasted about 18 minutes. Had they been arrested, taken away and brought before a magistrate to be bound over to keep the peace for, say, 18 months, under s 61 of the Magistrates Ordinance, that would most probably have been justified. The magistrate would have examined their past disorderly behaviour and considered whether such behaviour might, on a future occasion, lead to a breach of the peace. But they were charged under s 17B(2)[119], which looks to the actual situation on the ground at the time of the charge. 200. The question at trial then was whether, in light of all the circumstances, their conduct had produced a breach of the peace or was likely to have caused a breach of the peace? 201. The magistrate concluded that those present at the demonstration – the reporters, the security personnel, the police officers, the demonstrators themselves – were unlikely to react to the defendants’ disorderly conduct by resorting to violence or riotous behaviour, and acquitted the defendants. The government’s appeal to the High Court was dismissed. In short, the courts found that the public peace had not been disturbed or was likely to be disturbed: No-one was likely to engage in riotous behaviour as a result of the defendants’ action: Their own disorderly behaviour had no significant impact on the behaviour of others, apart from the fact that they were arrested and taken away. 202. This line of reasoning follows cases of some antiquity: For example Wise & Dunning [1902] 1 KB167 where the question was whether the stipendiary magistrate had authority to bind over the appellant to keep the peace. He, a Protestant lecturer, had held meetings in public places in Liverpool, causing large crowds to gather. He used gestures and language highly insulting to the religion of the Roman Catholic inhabitants. The consequence of his acts at one meeting was to cause some of the listeners to rush towards him; the police intervened and got him away to safety. The appellant had not himself committed any offence. His conduct was not disorderly. But he had provoked a violent reaction from others. His counsel, F.E. Smith (later Lord Birkenhead LC) argued that as his conduct was lawful, and was not disorderly, he could not be bound over simply because the conduct of others might be unlawful. The court disagreed. He could be bound over to keep the peace if the natural consequence of his acts was that others might breach the peace. 203. This bears out the point that counsel makes in this case: For the offence under s 17B(2) to be established, the court looks not only to the acts of the accused but also to the natural reaction of others to his acts. This is always in the context of public order. The aim of the statute is to keep the public peace. In considering whether acts are likely to cause a breach of the peace, the following question is relevant: Are persons in the vicinity likely to engage in an affray, to behave riotously, to act violently or to threaten violence as a result of the behaviour of the accused? Violence and Threat of Violence 204. As can be seen, this view of what constitutes “behaviour likely to cause a breach of the peace” focuses on violence and threats of violence on the part of others. That this seems to be the correct view is borne out by the judgments of Lawton and Templeman LJJ in R v Chief Constable of Devon & Cornwall [1982] 1 QB 458[120] where, at 476G Lawton LJ speaks of violence and tumultuous behaviour being apprehended by the police, justifying arrest for breach of the peace; and at 480C Templeman LJ used the memorable phrase: “Even Mahatma Gandhi discovered to his sorrow that in the conduct of ordinary mortals passive resistance remains passive only so long as the resistance is successful”. The learned Lord Justice was here adverting to the possibility of the Electricity Board’s workmen forcibly removing the objectors and the objectors resisting such removal, causing a breach of the peace: creating a situation where there would be a danger of a breach of the peace, even if the objectors disclaimed any intention of causing such breach. 205. Lord Denning M.R., in the same case at 471, would go further, and would give a wider meaning to the expression breach of the peace. He stated: “There is a breach of the peace whenever a person who is lawfully carrying out his work is unlawfully and physically prevented by another from doing it. He is entitled by law peacefully to go on with his work on his lawful occasions. If anyone unlawfully and physically obstructs the worker – by lying down or chaining himself to a rig or the like – he is guilty of a breach of the peace.” This tends to suggest that breach of the peace occurs simply through act of the objectors unlawfully interfering with the work of the Electricity Board workmen, without considering whether those workmen might take physical steps to have them removed, producing a situation of violent confrontation, or the threat of violent confrontation. This is out of line with the mainstream of authority on the point: see for instance the later case of R (Laporte) v Chief Constable of Gloucestershire (supra) at 134: A case of preventive action to forestall a breach of the peace. At 134B Lord Rodger of Earlsferry speaks of arrangements to contain the demonstrators from reaching their destination (an airbase heavily used by the United States Air Force for hostile operations against Iraq): Should the demonstrators reach their destination, “there would be outbreak of violence. This would constitute a breach of the peace within the definition in R v Howell (Errol) [1982] QB 416, 427”. 206. Lord Denning’s view in R v Chief Constable of Devon and Cornwall was rejected by the Divisional Court in Percy v D.P.P. [1995] 1 WLR 1382 (Balcombe LJ and Collins J) where, at 1394, applying the definition in R v Howell, that court reiterated the proposition that breach of the peace necessarily involved violence or threats of violence. In Percy[121] there was no evidence to suggest that violence was the natural consequence of the defendant’s action. The order made in the magistrate court binding her over to keep the peace was accordingly quashed. Preventative Justice v Punitive Justice 207. For a charge under s 17B(2), the starting point in every case is whether the conduct of the defendant was disorderly. Even if it was not, as in Wise v Dunning then, if the defendant’s action was calculated to provoke others into violence or acts of violence, and such acts (by others) is a real possibility, a binding over order under s 61 of the Magistrates Ordinance can properly be made. But no charge under s 17B(2) in such circumstance can possibly succeed, because disorderly behaviour is an ingredient of the offence. This underlines the difference between preventative justice under s 61 of the Magistrates Ordinance and punitive justice under s 17B(2) of the Public Order Ordinance. 208. Since violence or threat of violence is inherent in the concept of “breach of the peace”, the next question must be: Where is the threat coming from? If it is only from the defendant himself, there can be no breach of the peace, though he would probably be guilty of an offence such as common assault, or worse. 209. Having (hopefully) defined the scope of “breach of the peace” in a charge brought under s 17B(2) of the Public Order Ordinance, I turn to the proceedings in the courts below. The Magistrate’s Findings 210. The actions of the two appellants, leading to the charges brought against them under s 17B(2) were almost simultaneous, but there is no suggestion that they acted in concert. 211. What happened was this. On 10 April 2011, a section of Statue Square in Central Hong Kong had been cordoned off by mills barriers. This was for a prize-giving ceremony organized by the MTR Corporation. A stage had been erected for the purpose. Persons involved in the prize-giving ceremony were seated on the stage including the prize-winners and, at a table in front of the stage, the dignitaries including the chairman of the MTR Corporation Mr Ch’ien and the Secretary for Transport and Housing Madam Eva Cheng. There were a number of MTR Corporation staff members and security personnel inside the barrier. There were also some police officers present, both inside and outside the barrier. Outside the barrier, some demonstrators were shouting slogans, protesting against fare increase by the MTR Corporation. 212. What then happened was this. The two appellants broke through the barrier, and rushed towards the stage where Madam Cheng was giving a speech in front of a microphone, with Mr Ch’ien sitting alongside. The 1st appellant rushed onto the stage and scattered “hell money” in the air and shouted “shame on MTR for their fare hike”[122]. After that, he stood there quietly and made no resistance when he was held. Almost simultaneously, the 2nd appellant dashed onto the stage; Mr Ch’ien pulled Madam Cheng to one side; the 2nd appellant got hold of Madam Cheng’s microphone and shouted “shame on MTR for their fare hike” through the microphone. 213. PW1, the event organizer, had tried to tackle with the 1st appellant, got hold of his thigh but lost balance, falling down and hurting his left elbow. PW2, the master of ceremonies, likewise tried to grapple with the 2nd appellant and sustained minor injuries. As mentioned earlier, a number of guards came forward and held the 1st appellant, who put up no resistance. As regards the 2nd appellant, the security personnel separated Madam Cheng from the 2nd appellant; he put up a slight resistance and the guards took him away, with him holding the microphone. 214. At about this time another person, wearing a black upper garment (“man in black”) managed to penetrate the barrier, went towards the stage, apparently trying to mount it, and was stopped by the staff. This person also shouted “Shame on MTR for their fare hike”. 215. On these facts, the magistrate concluded that each of the appellants had behaved in a disorderly manner with intent to provoke a breach of the peace in terms of s 17B(2) and sentenced each of them to 14 days’ imprisonment. He summed up his findings in this way (§22): “Before the appellants took the actions, they must have reasonably anticipated obstruction, bodily clashes and even harm caused because of the use of force. I find that their behaviour involved violence breaching public order and the peace of society. In fact their conduct had provoked someone to follow suit. Therefore the only reasonable inference that I draw would be that they had the intent.” 216. As can be seen, the finding of intent to provoke a breach of the peace was based to a large degree on the action of the man in black. The magistrate concluded that the man in black had been provoked or at least emboldened by the action of the two appellants into breaching the barrier and attempting to mount the stage. Appeal to Barnes J 217. On appeal to the High Court, the appellate judge Barnes J upheld the magistrate’s finding of disorderly behaviour: a finding which could hardly be in doubt in this case. The behaviour of the appellants penetrating the barrier and rushing onto the stage was momentarily threatening; they brought the prize-giving ceremony to a halt, albeit for a short while. The focus of the appeal before Barnes J was therefore on the finding of intent: Intent to provoke a breach of the peace. 218. The judge held that whilst the 1st appellant’s act of rushing onto the stage and scattering “hell money” was “very insulting”, and that the 2nd appellant had acted in a violent manner in rushing onto the stage and snatching the microphone whilst Madam Cheng was speaking, their intent in both cases was to draw people’s attention to their grievances: Moreover, the judge found that the action of the man in black was equivocal; there was no evidence to sustain the magistrate’s conclusion that his action was the result of anything done by the appellants; accordingly the finding of intent to provoke a breach of the peace could not upheld. 219. The judge’s approach was this: Were the persons within the enclosure – the staff, the security personnel, the persons on the stage – likely to be provoked by the appellant’s disorderly behaviour to act violently and breach the peace? The judge framed the issue in this way: Whilst admittedly the behaviour of the appellants was violent and had caused minor injuries to two staff members, was “their conduct likely to cause the two injured persons or other people who might be injured by their conduct to take revenge and result in a breach of the peace?” (§61 of her judgment). She went on to say that the staff members had acted “in a very restrained and professional manner….They would not themselves breach the peace when, in the course of the performance of their duty, some people disrupted the order”. The result was that Barnes J quashed the conviction on s 17B(2), but substituted for that a conviction on s 17B(1). Section 17B(1) 220. Section 17B(1) provides: “(1) Any person who at any public gathering acts in a disorderly manner for the purpose of preventing the transaction of the business for which the public gathering was called together or incites others so to act shall be guilty of an offence and shall be liable on conviction to a fine of $5,000 and to imprisonment for 12 months.” 221. In my respectful view, the substituted conviction under s 17B(1) cannot be sustained. As mentioned earlier (para 218) the judge had found that the appellants’ intent was to draw people’s attention to their grievances: This does not sit well with her finding that their purpose was to prevent the transaction of the business taking place. I agree with counsel’s submission that for purpose under s 17B(1) to be made out, there has to be something more than a brief interruption to the business of the public gathering: There was no evidence here that either of the two appellants had set out to prevent the prize-giving ceremony taking place. The conviction of the two appellants under s 17B(1) must be quashed. 222. The matter must then be looked at afresh by this Court. Section 17B(2) 223. As can be seen from footnote 119 above, where breach of the peace was likely to be caused by the appellants’ disorderly behaviour, the offence is complete: Though, if the intent to provoke a breach of the peace was made out, a magistrate would obviously treat the offence as one of greater culpability. 224. The point that must be borne in mind in every case is this: Where a person behaves in a disorderly manner in a public place – a place where a large number of people are gathered – the result is often unpredictable. The 1st Appellant 225. Whilst the action of the 1st appellant in rushing onto the stage might, momentarily, have been frightening, there was no finding by the magistrate that his behaviour was seen by any one as threatening violence. The magistrate’s finding was that Secretary Cheng, then in the course of giving her speech, was startled rather than alarmed: Secretary Cheng’s reaction to the 1st appellant’s act of scattering “hell money” was to say: “This is not some kind of sport. Children, you should not imitate that….”. The 1st appellant shouted “shame on MTR for their fare hike” and was almost immediately held by security personnel. He put up no resistance and was quietly led away. 226. The appellate judge, as mentioned earlier (para 218 above), concluded that the finding of intent to provoke a breach of the peace was wrong in law. It was not sustained by the evidence. I agree with that conclusion. The question still remains: Was it established beyond a reasonable doubt, on the facts as found, that the disorderly conduct of the 1st appellant was likely to cause a breach of the peace? 227. In my judgment, the answer is No. The fact that PW1 sustained a mild injury in trying to grapple with the 1st appellant is not enough. The magistrate said (§22) that the appellants must have anticipated “obstruction, bodily clashes and even harm caused because of the use of force” and therefore their behaviour had breached public order and “the peace of society”. In my judgment, the brief episode whereby PW1 failed to physically stop the 1st appellant from mounting the stage is not enough to constitute a breach of the peace. There is no suggestion that it led to any kind of confrontation between them. It follows that his conviction under s 17B(2) cannot be restored. The 2nd Appellant 228. The disorderly behaviour of the 2nd appellant was initially more menacing. When he jumped onto the stage and rushed towards Secretary Cheng, the reaction of those on the stage was one of alarm. Mr Ch’ien sprang from his seat as the 2nd appellant snatched away the microphone in front of Secretary Cheng. The magistrate’s finding was to this effect: “PW2 ... the MC [master of ceremony]... pulled his partner to his side fearing that she would be knocked down. … He tried to stop the 2nd appellant but was not fast enough. He believed that the 2nd appellant had taken hold of Secretary Cheng’s microphone and said something. Then a group of personnel together with him carried the 2nd appellant down the stage. He suffered minor injuries during the struggle: ... The 2nd appellant put up slight resistance but soon calmed down.” 229. Plainly the 2nd appellant had, by his disorderly behaviour, caused a situation where persons on the stage had an immediate and real fear of physical harm. The proceedings on the stage – the prize-giving ceremony organized by the MTR Corporation – were interrupted and brought briefly into chaos. He was undoubtedly guilty of common assault. 230. But, in relation to a charge of public disorder causing (or likely so cause) a breach of the peace, the court looks beyond the misbehaviour of the accused to the reaction of others at the scene. As to this, the appellate judge said this (§67): “I have repeatedly read the magistrate’s Statement of Findings. I do not see he had made any analysis or finding as to the influence or effect which the appellants’ disorderly conduct might produce on other people at the scene who witnessed such conduct, except his description about members of the staff and the man dressed in black who, according to the magistrate, ‘followed the appellants’ example’.” 231. I respectfully agree with her conclusion. It follows that, on the magistrate’s findings of fact, no conviction for disorderly conduct likely to cause a breach of the peace can be sustained. Conclusion 232. In my judgment, had the 2nd appellant been brought before a magistrate to be bound over to keep the peace under s 61 of the Magistrates Ordinance, such order would almost certainly be sustained. The case of the 1st appellant is more equivocal, depending on a magistrate’s view of the matter overall, including any risk of future misconduct. 233. I have had the advantage of reading in draft Ribeiro PJ’s judgment and am in total agreement with that judgment. I concur in the orders he proposed. Lord Millett NPJ: 234. I agree with the Judgments of Mr Justice Chan, Acting CJ, Mr Justice Ribeiro PJ and Mr Justice Litton NPJ. Mr Justice Chan, Acting CJ: 235. The Court unanimously allows the appellants’ appeals and dismisses the HKSAR’s appeal. The question of costs will be dealt with in accordance with para. 101 in Mr Justice Ribeiro’s judgment. Mr Martin Lee SC, Mr Randy Shek and Mr Carter Chim, instructed by Ho Tse Wai, Philip Li & Partners, for Wong Hin Wai Mr H Y Wong, instructed by Ho Tse Wai, Philip Li & Partners, for Chow Nok Hang Mr Gerard McCoy SC, instructed by the Department of Justice and Mr Martin Hui, SADPP and Mr Derek Lau, PP of the Department, for HKSAR [1] Cap 245. [2] ESCC 3256/2011 (11 January 2012). [3] HCMA 193/2012 (20 July 2012). [4] FAMC No 45/2012 (27 November 2012). [5] Reflecting Article 21 of the International Covenant on Civil and Political Rights (“ICCPR”). [6] Cap 383. [7] Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 at §20. [8] Ibid, at §§1 and 2; Yeung May Wan v HKSAR (2005) 8 HKCFAR 137 at §1. [9] Ng Ka Ling v Director of Immigration (1999) 2 HKCFAR 4 at 28-29; Gurung Kesh Bahadur v Director of Immigration (2002) 5 HKCFAR 480 at §24; Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229at §16. [10] (2005) 8 HKCFAR 229 at §17. [11] There is no difference between the Article 17 expression “in conformity with the law” and the Basic Law Article 39(2) expression “as prescribed by law”: Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 at §18. The requirement is explained in Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381 and Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 at §§25-29. [12] HKSAR v Ng Kung Siu & Another (1999) 2 HKCFAR 442 at 460; Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 at §33. [13] Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 at §35. [14] Ibid at §36. [15] Ibid at §35. [16] (2005) 8 HKCFAR 229. [17] At §69, the Court adding that the concept of “public order (ordre public)” went further. [18] Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 at §95. [19] (1882) 9 QBD 308. [20] [1902] 1 KB 167. [21] Redmond-Bate v DPP [2000] HRLR 249 at §6. [22] (2005) 8 HKCFAR 137. [23] Contrary to section 4A of the Summary Offences Ordinance (Cap 228). [24] The Court held that since a constitutionally protected right was involved: “While the interests of those exercising their right of passage along the highway obviously remain important, and while exercise of the right to demonstrate must not cause an obstruction exceeding the bounds of what is reasonable in the circumstances, such bounds must not be so narrowly defined as to devalue, or unduly impair the ability to exercise, the constitutional right.” (§44) [25] HKSAR v Au Kwok-kuen [2010] 4 HKC 235. [26] Morse v Police [2012] 2 NZLR 1 at §110. [27] Fagan v Metropolitan Police Commissioner [1969] 1 QB 439 at 444; R v Ireland, R v Burstow [1998] AC 147 at 161-162. [28] Set out in Section A above. [29] “Any person who in any public place or at any public meeting uses threatening, abusive or insulting words or behaviour with intent to provoke a breach of the peace or whereby a breach of the peace is likely to be occasioned, shall be guilty of an offence.” [30] It not having been alleged that they were guilty of using threatening, abusive or insulting words. [31] [1945] JC 29 at 33. The Court was concerned with the Glasgow Police Act, 1866, which by section 135(5), made it an offence if a person was “riotous, disorderly or indecent in his behaviour.” [32] [1971] NZLR 924 at 925. The defendant was charged under section 3D of the Police Offences Act 1927 which stated: “Every person commits an offence ... who, in or within view of any public place ... behaves in a riotous, offensive, threatening, insulting or disorderly manner ...” [33] Under section 5 of the Public Order Act 1986: Chambers v DPP [1995] Crim LR 896. [34] [1973] AC 854. [35] At 861. [36] (2004) 220 CLR 1 at §12. [37] (2004) 220 CLR 1. [38] [2007] 3 NZLR 91. [39] [2012] 2 NZLR 1. [40] (2004) 220 CLR 1 . [41] Under section 7(1)(d) of the Vagrants, Gaming and Other Offences Act 1931 (Q). [42] [2007] 3 NZLR 91. [43] [2012] 2 NZLR 1. [44] Under Section 4(1)(a) of the Summary Offences Act 1981. [45] Coleman v Power (2004) 220 CLR 1 at §§5 and 6. See also Brooker v Police [2007] 3 NZLR 91 at §25. [46] (1997) 189 CLR 520. [47] As required, in New Zealand, by section 6 of the New Zealand Bill of Rights Act. [48] Brooker v Police [2007] 3 NZLR 91 at §§31, 41 and 45 per Elias CJ, at §56 per Blanchard J, and at §90 per Tipping J; Morse v Police [2012] 2 NZLR 1 at §§2-3 and 36 per Elias CJ, at §§62 and 67 per Blanchard J, at §§69-71 per Tipping J and at §§102-§103. [49] Ibid, at §§33 and 45. [50] Coleman v Power (2004) 220 CLR 1 at §§183-184, 193-194 per Gummow and Hayne JJ (Kirby J agreeing). [51] [1982] QB 416. [52] At 427. [53] [2007] 2 AC 105 at §§27-28. [54] Steel v United Kingdom (1998) 28 EHRR 603. [55] Percy v DPP [1995] 1 WLR 1382 at 1391, citing Wise v Dunning [1902] 1 KB 167; R v Morpeth Ward Justices, Ex parte Ward (1992) 95 Cr App R 215. [56] Read v Jones (1983) 77 Cr App R 246 at 251-252. [57] McBean v Parker (1983) 147 JP 205 (Div Ct). [58] Percy v DPP [1995] 1 WLR 1382 at 1394. [59] R (Laporte) v Chief Constable of Gloucestershire [2007] 2 AC 105. [60] Ibid at §§39 and 45. [61] Ibid at §28. However, under section 19 of the Public Order Ordinance (Cap 245), a participant in an unlawful assembly (defined by section 18) who commits a breach of the peace is made guilty of the offence of riot. [62] 34 Edw 3. [63] Cap 221, section 109I: “A judge, a District Judge or a magistrate shall have, as ancillary to his jurisdiction, the power to bind over to keep the peace, and power to bind over to be of good behaviour, a person who or whose case is before the court, by requiring him to enter into his own recognizances or to find sureties or both, and committing him to prison if he does not comply.” [64] Cap 227, sections 36, 61-63. See Lau Wai Wo v HKSAR (2003) 6 HKCFAR 624. [65] Lau Wai Wo v HKSAR (2003) 6 HKCFAR 624 at §47. [66] In Section C above. [67] Leaving aside elements such as “in a public place” which are not presently controversial. [68] [1963] 2 QB 744 at 749. [69] (1982) 75 Cr App R 211 at 216. [70] [1983] QB 92 at 98. [71] [1995] 1 WLR 1382 at 1392. [72] (2004) 220 CLR 1 at §§9-10. [73] In Hong Kong, the first of the duties of the police listed in section 10 of the Police Force Ordinance Cap 232 is the duty “to take lawful measures for ... preserving the public peace ...” See also R (Laporte) v Chief Constable of Gloucestershire (HL(E)) [2007] 2 AC 105 at §66 on the duty of the police “to take whatever steps are reasonably necessary to prevent a breach of the peace”. [74] (1982) 75 Cr App R 211 at 216. [75] Ibid. [76] [2000] HRLR 249 at §9. [77] [1995] 1 WLR 1382. [78] R v Li Wai Kuen [1973-1976] HKC 346 at 348; HKSAR v Morter [2003] 2 HKLRD 510. [79] HKSAR v Pearce [2006] 3 HKC 105 at §29. [80] Judgment §64. [81] Judgment §67. [82] Judgment §62. [83] Judgment §§82-83. [84] Namely, the “MTR Hong Kong Race Walking 2011” which was jointly organised by the MTR and the Hong Kong Amateur Athletic Association. [85] These included several mills barriers. [86] The 1st appellant was a District Councillor Assistant and the 2nd appellant was a Councillor Assistant. [87] At trial, there was no separate reliance on “noisy manner”. [88] As Mr McCoy SC for the prosecution rightly accepted. [89] Leung Kwok Hung and others v HKSAR (2005) 8 HKCFAR 229 at p245 para 1 and Yeung May Wan and Others v HKSAR (2005) 8 HKCFAR 137 at p148 para 1. [90] Leung Kwok Hung, the majority judgment of Li CJ, Chan, Ribeiro PJJ and Sir Anthony Mason NPJ. Bokhary PJ dissented on the result, but his views on the importance of such rights were equally emphatic. [91] Leung Kwok Hung at pp252-254. [92] Bokhary PJ delivered a separate concurrent judgment. He said at 144 “what the public can reasonably be expected to tolerate is a question of fact and degree. But when answering that question, a court must always remember that preservation of the freedom in full measure defines reasonableness and is not merely a factor in deciding what is reasonable.” [93] Which, it will be remembered, does not have to be likely “to cause violence against persons or property to start or continue”. [94] Human right values. [95] Coleman should be noted for the importance which the High Court placed on the impact which such an offence may have on the freedom of expression. [96] As Elias CJ pointed out in Brooker at footnote 41, at p107, Gummow, Kirby and Hayne JJ held that s7(1)(d) required the likelihood of a breach of peace, but not Gleeson CJ, McHugh, Callinan & Heydon JJ who were “influenced in particular by the fact that the Australian Legislation had removed the earlier requirement of breach of the peace (as the New Zealand legislation had also done).” [97] However, it should be noted that whilst McHugh J took the view that s7(1)(d) merely required that they be uttered in a public place and were calculated to hurt the personal feelings of Constable Power and they did so, he agreed that the conviction had to be set aside because [81] “the words used by the appellant were a communication on political or government matters”, and s7(1)(d) which imposed an unqualified prohibition on the use of insulting words in public cannot be justified as compatible with constitutional freedom. McHugh J also expressed the view that [102] “Without seeking to state exhaustively the qualifications needed to prevent a infringement of the freedom of communication, the law would have to make proof of a breach of the peace and the intention to commit the breach elements of the offence. It may well be the case that, in the context of political communications, further qualifications would be required before a law making it an offence to utter insulting words would be valid.” [98] With the agreement of Collins J. [99] At p 748. [100] Of course, Jordan does not absolve those who reacted with violence or threat of violence from criminal liability. [101] Sedley LJ famously said in Redmond-Bate “Free speech includes not only the inoffensive but the irritating, the contentious, the eccentric, the heretical, the unwelcome and the provocative provided it does not tend to provoke violence. Freedom only to speak inoffensively is not worth having.” [102] Coleman at para 32, quoting the submission of the Solicitor General for Queensland. [103] Yeung May Wan at para 44, see para 117 above. [104] Per Blanchard J in Morse at para 64, see para 128 above. [105] Per McGrath J in Brooker at [146], see para 124 above. [106] Which is based on Art 21 of the International Covenant on Civil and Political Rights. [107] Footnote 56 in the text referred to Cisse v France, a decision of the European Court of Human Rights 9.4.2002 at para 37. [108] It seems that neither Sir Chung-kong Chow nor Dr Ch’ien was aware of the 1st appellant’s presence until after he had scattered the hell money. [109] Mr Lee also rightly accepted that the gathering was a public gathering and that it took place in a public place. [110] The microphone was on a stand. [111] Per McGrath J in Brooker at [146], see para 124 above. [112] “Suffragettes Riot in Albert Hall”, New York Times, 6th December 1908. See also House of Lords Hansard,18th December 1908 vol 198 cc2206-11. [113] See House of Lords Hansard, 18th December 1908 vol 198 cc2206-11; and House of Commons Hansard, 19th December 1908 vol 198 cc2328-43. [114] Clause 5 became s5(1) of the POO 1948. [115] Legislative Council Hansard, 20th October 1948. [116] Majority holding in Morse, see para 126 above. [117] Article 9, Basic Law: “In addition to the Chinese language, English may also be used as an official language by the executive authorities, legislative and judiciary of the Hong Kong Special Administrative Region”. [118] 61. Exercise on complaint of power to bind over to keep the peace (1) The power of a magistrate, on complaint of any person, to adjudge a person to enter into a recognizance and find sureties to keep the peace or to be of good behaviour towards such first-mentioned person shall be exercised by an order upon complaint, and the provisions of this Ordinance shall apply accordingly, and the complainant and defendant and witnesses may be called and examined and cross-examined, and the complainant and defendant shall be subject to costs, as in the case of any other complaint. (2) The magistrate may order the defendant, in default of compliance with such last-mentioned order, to be imprisoned for 6 months. [119] “(2) Any person who in any public place behaves in a noisy or disorderly manner, or uses, or distributes or displays any writing containing, threatening, abusive or insulting words, with intent to provoke a breach of the peace, or whereby a breach of the peace is likely to be caused, shall be guilty of an offence and shall be liable on conviction to a fine of $5,000 and to imprisonment for 12 months.” [120] This was yet another case of protestors hindering the work of the Central Electricity Board by so-called passive resistance. The question was whether the Chief Constable should be ordered by mandamus to have the obstructors forcibly removed. [121] Percy involved a woman repeatedly entering a military airbase, with the intention of protesting about the use of the base. She never threatened violence or did damage to property. [122] At §73 Barnes J on appeal commented “In Hong Kong, a Chinese-dominated society, scattering paper money offerings is indeed a very insulting act….” |
Mr Justice Chan PJ : 1. I agree with the judgment of Sir Thomas Gault NPJ. For the reasons given by him, I too would dismiss the appeal. Mr Justice Ribeiro PJ : 2. I agree with the judgment of Sir Thomas Gault NPJ. Mr Justice Tang PJ : 3. I have had the advantage of reading in draft the judgment of Sir Thomas Gault NPJ. For the reasons given by him I agree that the appeals should be dismissed. In deference to counsel’s submissions, I will add a few words. 4. We are concerned with voice identification of an audio recording, by Mr Lau (PW1), who claimed to be familiar with the voice of the appellants. In connection with such evidence, the learned judge reminded himself that he shouldapply: “13. … Turnbull warning with relevant and necessary modifications.” It is clear from the reasons for verdict that throughout the learned judge was mindful of those warnings. 5. Mr Chan submitted that PW1’s voice identification evidence was the result of or influenced by the content of the recorded conversation. If so, I agree, that might undermine the reliability of the voice identification. However, that was not the evidence of PW1. Nor did the reasons for verdict give any hint that the learned judge took that view. 6. Quite the contrary, the learned judge said: “102. Mr. Lau heard the voices of the two Defendants for many times within a long period of time. Evidence of Mr. Lau on the identification of their voices is absolutely credible and reliable.” 7. Nor did it appear that this finding was influenced by the circumstantial evidence in the case[1]. It was after this clear statement (and, an earlier statement to similar effect in para 100), that the learned trial judge went on to say: “103. Besides, there was also other peripheral circumstantial evidence to support the evidence of voice identification of Mr. Lau.” 8. The learned judge then took note of the circumstantial evidence which strongly supported Mr Lau’s evidence that the appellants were the speakers. 9. I believe in deciding what weight to put on the voice recognition evidence of Mr Lau, the learned judge was entitled, indeed, bound to have regard to all relevant and probative evidence in the case. This is not a case where the judge was uncertain about the reliability of the voice identification evidence. There was no undermining of the importance of maintaining the integrity of the modified Turnbullwarnings. Mr Justice Mortimer NPJ : 10. Having had the advantage of reading Sir Thomas Gault NPJ’s judgment in draft, I agree for the reasons he gives, that the appeals must be dismissed. Sir Thomas Gault NPJ : 11. This is an appeal pursuant to leave granted by this Court on 12 November 2012. 12. The issues for consideration are the same in respect of both appellants, and involve evidence of identification said to reside, in part, in a sound tape recording. 13. The appellants were tried in the District Court before HH Judge D Yau on 21 April 2011. Both were convicted on two charges; the first of doing acts tending and intended to pervert the course of public justice, and the second of misconduct in public office. 14. The appellants were police officers. In a criminal trial in 2007 in the District Court (“the earlier proceeding”), the 1st appellant was a prosecution witness having been deployed as an undercover officer investigating allegations of conspiracy to manage a vice establishment and money laundering. The 2nd appellant was an exhibits officer in the same trial. It is claimed that while the 1st appellant was giving evidence, but during the lunch break, the appellants had a discussion in a witness room that was recorded and disclosed the offending for which they were subsequently charged and convicted. 15. When the appellants were tried in the District Court, the judge’s reasons for verdict stated at the outset: “3. The Prosecution and Defence did not dispute on the admissibility of the relevant voice recording pen and the contents therein. In paragraph 4 of the Agreed Facts, it was agreed between all parties that the relevant voice recording pens had been produced by counsel for the 4th and 6th Defendants as exhibits in DCCC 1280/2005. It was also agreed between all parties that those voice recording pens were not handled improperly after they had been produced to the court.” 16. In this Court, Mr Charles J Chan represented both appellants. Mr Gerard McCoy SC and with him, Mr Jonathan Man Tak Ho (“Mr Man”), represented the respondent. 17. Mr Chan contended that the admissions of fact did not preclude an argument that the tape recording is inadmissible as a matter of law. Further, he said the admission, in any event, went no further than accepting the provenance of the taped evidence after the tape was produced to the court in the earlier proceeding. However, the tape, having been received in evidence, the case proceeded essentially as requiring determination of whether the evidence before the court proved that the participants in the recorded discussion were identified as the appellants and that they engaged in the charged criminal conduct. The evidence 18. There is no direct evidence in the present case establishing who made the recording, when it was made or the circumstances in which it was made and kept prior to its production to the court in the earlier proceeding. The prosecution contends that sufficient facts can be inferred from the content of the recordings when taken with other available evidence. 19. The tape records a conversation between two persons from which, the prosecution says, relevant evidence can be inferred. There was no challenge to the finding that whoever it was talking on the recording, there was a discussion concerning the giving of false evidence. 20. In his reasons for verdict, after referring to the admissions and recording the charges, the District Court Judge said that the only real issue in the case was the voice identification evidence of the prosecution witnesses in relation to the interlocutors in the audio recordings. At the outset of his consideration of the evidence, the judge said: “13. When considering the evidence on the voice identification, the court applied Turnbull[2] warning with relevant and necessary modifications, and reminded itself that even an honest witness might make a mistake in voice identification.” 21. Referring to the prosecution evidence, the judge described the witness PW1 (“Mr Lau”) as the most important prosecution witness and the only person who could positively identify the voices of the two appellants in the recorded conversations. He said that Mr Lau is a prosecuting counsel and had been counsel representing two of the defendants in DCCC 1280/2005. It was in the course of the trial in that case that the present appellants are said to have offended. 22. Mr Lau’s evidence in the present case was that towards the end of the prosecution case in DCCC 1280/2005, counsel for other parties produced to the court 45 voice recording pens. One contained the recording with which we are concerned. Mr Lau testified that he could identify the voices on the tape as those of the present appellants. The reliability of that evidence is in contention. 23. Mr Lau’s evidence was that, in the course of the earlier proceeding, in the morning of 1 June 2007, he had complained to the judge in the court that one of the police officers in the prosecution team whom he subsequently identified during an identity parade as the 2nd appellant, had peeped at a document that Mr Lau was reading. He knew that police officer from a previous case in the Kowloon City Magistracy. Mr Lau said that when he listened to the tape, he recognized the voice of the same police officer he knew as “Billy”. 24. The District Court Judge in his reasons for verdict said: “28. The court must handle this part of the evidence of Mr. Lau very carefully. The only useful part of such evidence and the only purpose that it can be admitted as evidence is the identification of voices of the people who spoke in (the audio recordings contained in) the voice recording pen.” 25. The judge summarized the voice identification evidence as follows: “31. First of all, Mr. Lau testified that the 1st Defendant had testified in court in the capacity as prosecution witness in a trial case before Magistrate Mr. Peter Law at Kowloon City Magistracy. Such a case at Kowloon City Magistracy was one of the cases of keeping vice establishments deriving from DCCC 1280/2005. In such a case at Kowloon City Magistracy, the 1st Defendant as an undercover police officer pretended to be a customer and visited the vice establishment concerned. 32. Moreover, in the case (DCCC) 1280/2005, the 1st Defendant testified at the witness box for a long period of time. Mr. Lau was responsible for cross-examining the 1st Defendant so he had sufficient time and chances to familiarize himself with the voice of the 1st Defendant. Although the 1st Defendant had not yet started testifying in court during the first suspended trial, the 1st Defendant had assisted in handling documents. According to Mr. Lau, the 1st Defendant was relatively familiar with documents, and sometimes after Mr. Lau had asked the 2nd Defendant i.e. the exhibits officer something about documents, the 2nd Defendant would seek assistance from the 1st Defendant. 33. Mr. Lau testified that even before commencement of the re-trial of (DCCC) 1280/2005, since Mr. Lau had had contacts with the 1st Defendant in the trial case at Kowloon City Magistracy, he was already able to identify the voice of the 1st Defendant. The trial case at Kowloon City Magistracy lasted for about 12 to 15 days. The 1st Defendant testified for about 1 to 2 days. 34. All in all, in the presence of Mr. Lau, the 1st Defendant testified for about 30 days or 120 hours. The last time Mr. Lau heard the voice of the 1st Defendant was when the 1st Defendant testified in the voir dire of DCCC 1280/2005 i.e. in about late 2007 or early 2008. Regarding the 2nd Defendant 35. Regarding voice identification of the 2nd Defendant, first of all, Mr. Lau testified that the 2nd Defendant never acted as a witness in DCCC 1280/2005 or in other cases handled by Mr. Lau. 36. Mr. Lau said that he talked with the 2nd Defendant for many times because the 2nd Defendant had also assisted in the trial of the case at Kowloon City Magistracy. Besides, the 2nd Defendant also assisted in the process of the trial on many occasions during the suspended trial of DCCC 1280/2005 and the subsequent 130-day retrial. 37. Mr. Lau said that the 2nd Defendant was responsible for passing documents to the defence. Through these contacts and occasional chit-chats with the 2nd Defendant, Mr. Lau became familiar with the voice of the 2nd Defendant. Mr. Lau said that the 2nd Defendant was rather talkative so during court adjournments Mr. Lau talked with the 2nd Defendant for many times. Although contents of those conversations were not something important and also not personal, such kind of chit-chats occurred for about 50 to 60 times, each lasting for about 1 to 2 minutes.” 26. In cross-examination, Mr Lau said that when asked by the police about the matter in April 2010, some 3 years and 2 months later, his initial recall was vague though he remembered having complained to the judge about the person he remembered having peeped at documents he was reading. His evidence was that, after having located and reviewed notes of the earlier proceeding he had retained, he recalled that the person who peeped at his papers was “Billy”. 27. Mr Lau did concede that he had not seen the two appellants alone together in the witness room during court adjournments. 28. The judge heard some expert testimony to the effect that there was no indication that the tape recording had been edited or interfered with and that there was no technical indication of when it had been recorded. 29. PW4 (“Mr Ng”) was the prosecuting counsel in the initial suspended trial and re-trial in DCCC 1280/2005. He confirmed that the 1st appellant was the second prosecution witness. He said that one of the police officers who assisted him was called “Billy”. PW4 had also prosecuted in the trial at Kowloon City Magistracy where the same undercover police witnesses gave evidence. 30. In the reasons for verdict, the District Court Judge noted PW4’s evidence was that he had listened to the relevant audio recordings and was unable to identify the voices recorded. The judge then stated: “57. … After hearing the evidence of Mr. Ng on this aspect, I deliberately remind myself that I must exercise extra care when dealing with the evidence of PW1 Mr. Lau in relation to voice identification. The reason is that Mr. Ng was the prosecutor in that case. He should have more chances and in closer proximity than any other people to have contacts with the Defendants. Theoretically he should be in a better position to identify the voices of the Defendants.” 31. The judge went on to note that PW4 could not recall who was the subject of the complaint on 1 June. 32. In his summary of the evidence of PW4, the judge set out the following findings: “59. …. Mr. Ng testified that as exhibits officer, the 2nd Defendant had been assisting Mr. Ng to pass exhibits to the judge for most of the time. Mr. Ng said that he was sure he had more opportunity than PW1 Mr. Lau to talk to the 2nd Defendant. 60. Another important point in the evidence of Mr. Ng is that when the Defence produced a series of voice recording pens to the court in that case, Mr. Ng and PW1 Mr. Lau were assigned to take part in the preparation of the transcript. According to the evidence of Mr. Ng, during the course of preparing the transcript, Mr. Lau made mistakes for many times and mixed up which voice in the audio recordings belonged to whom. Mr. Ng further said that Mr. Lau had to guess the identity of the persons in the recordings and that Mr. Lau himself had made mistakes for many times and even had to be corrected by his own defence team. 61. However, the Defence did not cross-examine Mr. Ng in relation to the voice identification of the relevant sessions of audio recording in the present case to clarify whether Mr. Lau had made any mistakes concerning such sessions. On the contrary, Mr. Lau gave specific evidence in relation to the relevant session(s) of audio recording in the present case and confirmed accuracy of his evidence on voice identification. 62. Upon invitation by the court and being agreed by the Prosecution and Defence, Mr. Ng listened to the relevant parts of the audio recordings in court again. What Mr. Ng could do was only to speculate that the voice which the Prosecution alleged to belong to the 2nd Defendant could be the voice of the 2nd Defendant. Mr. Ng was completely unable to give evidence in relation to whether the voice of the 1st Defendant was that of the 1st Defendant.” 33. The 5th prosecution witness was the officer-in-charge of case DCCC 1280/2005 over the relevant period. She gave evidence directed to aspects of the proceedings and the roles of participants. In relation to our present task, her evidence does not take matters much further. One point from her evidence noted by the judge in his reasons is: “72. Another important part of the evidence of WDIP Lee is that according to Madam Lee, in the case DCCC 1280/2005 exhibits were all kept in a large box and such large box was in the custody of her subordinates. During lunch breaks or court adjournments, they would normally take the box with them when they left the courtroom. Generally, they would put it in a witness room near the courtroom. Madam Lee said in general the 2nd Defendant was responsible for watching over the said exhibits box.” 34. PW5 was unable to identify the voices on the tapes. 35. Four further police officers gave evidence of having listened to the relevant tape in September 2009 and had been unable to identify the voices recorded. The judge did not find their evidence added significantly. The District Court Judge’s Findings 36. Having set out the evidence, including that of a character witness for the defence (the appellants elected not to give evidence), the judge found all of the witnesses honest and reliable. He found the contents of the transcript of the audio recordings prepared by PW3 are accurate. His findings on the voice identification evidence of PW1 were: “100. I find that evidence of PW1 Mr. Lau on voice identification of the audio recordings is true and accurate. I give full weight to his evidence. I find that regarding the 1st Defendant, Mr. Lau had ample opportunities to fully familiarize himself with the voice of the 1st Defendant at the trial at Kowloon City Magistracy and at the trial of DCCC 1280/2005. 101. Regarding the 2nd Defendant, although Mr. Lau heard the voice of the 2nd Defendant on relatively fewer occasions, he still had sufficient opportunities to hear the voice of the 2nd Defendant in the process of handling documents throughout the whole trial of DCCC 1280/2005. As the officer in charge of exhibits in the case, the 2nd Defendant definitely had many opportunities to talk with Mr. Lau. Furthermore, although the trial period was relatively shorter, the 2nd Defendant was also the exhibits officer in the trial at Kowloon City Magistracy and Mr. Lau was also the defence counsel in that case. This also increased the opportunity of him hearing the voice of the 2nd Defendant. 102. Mr. Lau heard the voices of the two Defendants for many times within a long period of time. Evidence of Mr. Lau on the identification of their voices is absolutely credible and reliable.” 37. The judge then added his findings on the peripheral circumstantial evidence. He accepted that references to names and nicknames on the tape were to police officers and police activities connected with case DCCC 1280/2005 and another case with which the appellants and those referred to on the tape were closely familiar. The District Court Judge found also that the taped conversation revealed that the two males were recorded as talking about the incident in the courtroom on 1 June 2007 when complaint was made about “Billy” peeping at PW1’s documents. 38. The judge also mentioned reference on the tape to another previous case: “110. In counters 205 and 211 of the audio recordings, Male 2 asked Male 1 if he could remember another previous case involving “city”. According to the evidence in our present case, both the 1st and 2nd Defendants had been involved in the trial of a case concerning vice establishments which was heard at Kowloon City Magistracy, and the trial of such case concerning vice establishments also involved the undercover operation that was involved in the trial of DCCC 1280/2005. In both cases, the 1st Defendant was one of the members in the undercover operation, while the 2nd Defendant was an exhibits officer. Notebook of the 1st Defendant confirmed that he had testified in a case called city sauna (literal translation).” 39. With reference to the time when and the place where the recorded conversation occurred, the District Court Judge’s reasons for verdict state: “116. Evidence which is able to assist us in trying to find out on what date and at what time the audio recordings were made are from the contents of the conversations. In the recorded conversations, Male 1 and Male 2 mentioned a floppy disc. Transcript of the trial of DCCC 1280/2005 shows that the 1st Defendant testified before lunch on 1st June that he would bring along with him a floppy disc when he performed the undercover operation. Obviously the two males were discussing the evidence which had been given by one of them. I find that the only irresistible inference is that the two males were the 1st and 2nd Defendants, and that they were discussing the evidence which had been given by the 1st Defendant at the trial of DCCC 1280/2005 at an earlier time on 1 July 2007. Place of making audio recordings 117. Without direct evidence of the person who placed the voice recording pen, the Prosecution could only rely on circumstantial evidence to try to convince the court to make an inference of the place of occurrence of the conversations recorded in the audio recordings. The evidence referred to by the Prosecution included the following. 118. The trial of DCCC 1280/2005 was heard by Mr. Jenkins. Mr. Jenkins’ court was at court no. 24 on 8/F of Wanchai Law Courts, Wanchai Tower at that time. According to the evidence of PW2 the expert witness, such conversation took place in a room. It was heard from the audio recording that the 1st Defendant told someone else over the phone that he needed what kind of food. The 2nd Defendant brought back some food and lemon tea later. They talked with each other while eating the food. According to the evidence of PW5 WDIP Lee, the 2nd Defendant was the officer responsible for watching over the exhibits box in the case during court adjournments. She also testified that in general the exhibits box would be put in the witness room during court adjournments. In counter 232 of the transcript of the audio recordings, someone mentioned quarter past. This seems to indicate that the then time was 2:15pm which was also the finishing time for the lunch, the time for them to prepare to return to the courtroom and continue with the trial. Since they had only a very short time left at that time, they were definitely at a place very near the courtroom. 119. I find that based on the above evidence, I am able to make an irresistible inference that the conversation in the audio recordings took place in the witness room on 8/F of Wanchai Law Courts, Wanchai Tower during lunch time on 1 June 2007.” 40. The judge took into consideration that others were not able to identify the voices on the tape and set out why he nevertheless accepted the evidence of PW1. When doing so, he mentioned again the “Turnbull” warning. He stated his conclusion as: “123. I find that the 1st and 2nd Defendants had conversations in the witness room at 8/F of Wanchai Law Courts, Wanchai Tower, while the 1st Defendant was still giving evidence for the Prosecution in court in the case DCCC 1280/2005 on 1 June 2007. I find that the contents of their conversations are as stated in Exhibit P23 the transcript. I find that their conversations relate to the evidence which had been given by the 1st Defendant at the trial of DCCC 1280/2005. I find that they also discussed how the 1st Defendant should further testify when the trial was resumed, that the 1st Defendant should not mix up the true and false parts of his evidence, and that the 1st Defendant should memorise the false parts so as to avoid confusion in future.” The Case in the Court of Appeal 41. In their appeal to the Court of Appeal, the appellants advanced four grounds all of which were rejected. Of those the first; that the contents of the audio recording did not disclose the charged offending, and the fourth, that the District Court Judge had a conflict of interest, were rejected. They were not pursued in this Court and need not be mentioned further. 42. The remaining grounds were dealt with together in the Court of Appeal judgment. The court considered four matters; they were: the making and custody of the tape recording, the possibility that it had been tampered with, whether the voice identification evidence of Mr Lau should have been admitted by the judge, and the weight that should be accorded in Mr Lau’s evidence. 43. The judgment of the Court of Appeal cited the leading authorities on evidence by audio recordings. By reference to HKSAR v Lee Chi Fai, the court accepted that the content of the tape was obviously relevant to the charges. The court then said: “27. … Secondly, its prima facie authenticity must be considered. In general, the prosecution would have evidence concerning the provenance and history of the audio recording. However, this is not ‘indispensible’. As Roberts CJ said in Choi Kit Kau v The Queen, this is the ‘best’ method of proving. However, the authority case shows that this is not the only way to prove.” 44. The court accepted that the authorities establish that authenticity can be proved circumstantially. The judgment reviewed the expert evidence and accepted the finding of the District Court Judge that the expert evidence established the tape as prima facie authentic. The court then addressed the identification evidence of Mr Lau and concluded that, although he was not an expert, the judge was right to accept his evidence because of the opportunities he had to become familiar with the voices of the appellants he said were recorded on the tape. The court said: “37. … The Applicants emphasized that there were other witnesses in the case who were unable to identify the voices depicted in (Exhibit) P37. However, the judge had the advantage of seeing and hearing testimony of every witness. He could observe the response, wisdom, alertness and manner etc. characteristics of every witness, and then he had the right to accept the evidence of one of the witnesses.” The Case in this Court 45. In this Court, Mr Chan, for the appellants, presented extensive written argument on the difficulties inherent in dealing with evidence in the form of tape recordings. He argued that only with clear evidence of the making and preservation of any recording and expert evidence of its accuracy and reliability with available voice recorded material for comparison, should such evidence be admitted. He contended that warnings adapted from the guidance in Turnbull are not sufficient to avoid the risks of relying on evidence of tape recordings. 46. When he dealt more specifically with the circumstances of the present case, Mr Chan was critical of the inadequacies in the identification evidence. In that regard, he went considerably beyond the evidence and cross-examination of PW1 before the trial judge. That cross-examination focused almost entirely on opportunities PW1 had to become familiar with the voices of the appellants. Counsel’s criticisms of the inadequacy of the evidence explaining how PW1 was able to recognize the voices when others could not, seems to have rested on the one answer that Mr Lau acknowledged having never received any special training on voice identification. 47. The real issue, however, is whether it was open to the judge to conclude that the evidence that was given proved that the voices recorded on the tape were those of the two appellants. Decision 48. The issues surrounding evidence in the form of recordings are broadly similar though the means of recording may be different. Audio tapes, video tapes, films, photographs, even DNA analysis, whatever the technology used, raise issues of authenticity and accuracy that must be addressed with reference to the particular circumstances. When a recording is relied on for identification, not only the accuracy of the record, but also the reliability of the witness identifying what is recorded may arise. These matters are facts which must be proved. 49. Visual identifications are well recognized as requiring care and the courts recognize this as the decision in Turnbull clearly shows. The same care and equivalent warnings are applicable to other forms of identification evidence, including voice identifications. 50. In HKSAR v Lai Wai Cheong[3], the Court of Appeal accepted that the Turnbull guidelines are applicable to evidence of identification, whether of appearance or voice. A tape recording can be admitted and relied upon as evidence of the contents where a proper basis for its reliability is established. In the early case of R v Maqsud Ali[4], Marshall J, for the Court of Criminal Appeal, said: “… We can see no difference in principle between a tape recording and a photograph. In saying this we must not be taken as saying that such recordings are admissible whatever the circumstances, but it does appear to this court wrong to deny to the law of evidence advantages to be gained by new techniques and new devices, provided the accuracy of the recording can be proved and the voices recorded properly identified; provided also that the evidence is relevant and otherwise admissible, we are satisfied that a tape recording is admissible in evidence. Such evidence should always be regarded with some caution and assessed in the light of all the circumstances of each case. There can be no question of laying down any exhaustive set of rules by which the admissibility of such evidence should be judged.” 51. In Choi Kit Kau v The Queen[5], Roberts CJ said: “[T]he best method of proving that a tape recording produced in court is authentic is to show that it has been, since the time it was recorded, continuously in the custody of persons who assert that it was not tampered with. This is a course which should be followed if the authenticity of a tape is challenged and is desirable even if it is not.” 52. Where the “best” method is unavailable, the authenticity of a tape may still be capable of proof. In HKSAR v Lee Chi Fai and Others[6], the Court of Appeal adopted the analysis in R v Murphy and Another[7]: “ Authenticity, in our view, like most facts may be proved circumstantially. In the case of a video film, the direct way is to call the cameraman who took it and the court will normally expect him to be called. But if he is not available, he need not be called; other evidence will suffice if it is logically probative that the video was authentic. That evidence may be adduced in other ways and from other sources.” 53. In R v Chen[8], the Victoria Court of Criminal Appeal received evidence of tape recordings where the makers were dead or unavailable. The court said: “The test is whether there is sufficient material before the court to allow the tribunal of fact acting reasonably to conclude that the recorded sounds reproduce those originally made by the persons identified by the evidence. In other words, there must be evidence, which the tribunal of fact is entitled to accept, that the recording is of a conversation which occurred and which would be admissible if proved by oral testimony. In our opinion, admissibility does not depend on the party tendering the tapes having removed absolutely any chance that they are inaccurate.” 54. There is much of assistance in the lengthy judgment of the Court of Appeal (Criminal Division) of Northern Ireland in R v Murphy and Another. The case involved video-taped evidence forming part of the prosecution case though the makers of the films did not give evidence. 55. The Court of Appeal in England in R v Flynn and St John[9] ruled that evidence of recognition of a voice by a lay person was admissible, but on the facts of that case evidence of police officers of voice recognition should have been ruled inadmissible. The opportunities for familiarization with the voices of the accused were very much less than in this case and there was expert evidence casting doubt on the reliability of the tape recordings. The court’s conclusions were summarized at p 279 as: “ There are other considerations which apply to both appellants. We have already noted the two most important factors, namely the limited opportunity for the officers to acquire familiarity with the appellants’ voices and secondly, the poor quality of the covert recording. To these we add the following. First, the police officers’ purported recognition of the appellants’ voices is in marked contrast to the evidence of the two experts who are unable to recognise their voices; in Dr Holmes’ case she was unable to identify individual voices. Secondly, nothing is known of the ability of any of the police officers to recognise voices. There is no evidence that any of them had any training in auditory analysis. Thirdly, the identification of the voices was carried out by listening to the covert tape on a standard laptop computer, as opposed to the sophisticated equipment used by the experts. Fourthly, in our judgment, it is significant that DC Gittings’ transcript contains words attributed to Flynn which Dr Holmes could not distinguish as words, let alone recognise as attributable to Flynn. Fifthly, the expert evidence shows that lay listeners with considerable familiarity of a voice and listening to a clear recording, can still make mistakes.” 56. To the judgment in that case the court added this postscript: “ As appears from the above we have been dealing in these appeals with issues arising out of voice recognition evidence. Nothing in this judgment should be taken as casting doubt on the admissibility of evidence given by properly qualified experts in this field. On the material before use we think it neither possible nor desirable to go as far as the Northern Ireland Court of Criminal Appeal in O’Doherty which ruled that auditory analysis evidence given by experts in this field was inadmissible unless supported by expert evidence of acoustic analysis. So far as lay listener evidence is concerned, in our opinion, the key to admissibility is the degree of familiarity of the witness with the suspect’s voice. Even then the dangers of a mis-identification remain; the more so where the recording of the voice to be identified is poor.” 57. In Jones & Harris[10], the Court of Criminal Appeal of Victoria rejected submissions for two appellants that evidence of voice identifications should not be received. In the case of the appellant Jones tape-recorded telephone conversations together with circumstantial evidence consistent with factual statements made during the telephone calls was received as probative of identity. Similarly, in the case of Harris, voice identification evidence from witnesses familiar with his voice and supported by circumstantial evidence was held to have been rightly admitted. 58. I see no reason why, in certain circumstances, the identity of participants and, the timing and circumstances of a recorded conversation, cannot be proved by reference to the content of the recording. It must be possible as where the maker is unknown or unavailable and the content when placed in a context of known facts establishes time and place. Similarly, the identity of a speaker may emerge from what is said. Statements revealing the facts or knowledge that only an offender could know frequently can lead to identification. For example, statements made by disguised offenders in the course of a robbery can be relied upon to identify them. Statements made anonymously in writing or in the course of a telephone call demanding ransom after a kipnapping may support identification. 59. Of course other possible contingencies must be excluded – such as voice imitation. Those matters go to the weight to be accorded the evidence of the conversation. 60. The authorities make clear the care with which tape recordings must be considered. But with appropriate safeguards, and careful directions, there is no reason to construct rigid exclusionary rules. As with all evidence, reliability is to be assessed in all the circumstances. 61. In many cases, it would be question-begging to seek to prove the authenticity of a tape recording from the contents of the recording itself. Mr Chan, for the appellants, submitted that the voice identification in this case is flawed because PW1 was not shown to have recognized the speakers solely by their voices and without reliance on the context with which the speakers exhibited familiarity. He argued that: “In substance, the whole exercise would not stand to test the ability of PW1’s ability in the voice identification. It is apparent that both PW1 and essentially the learned trial Judge had been affected by this potential contextual bias, using the content to reinforce their ‘belief’ that the voices belonged to the Appellants. … The Appellants respectfully submit that to assess the evidence of voice identification of PW1, it has to be done in separation of the content of Exh. P37. Otherwise, one would fall into the same flaw or weakness in suggesting that PW1 was capable of identifying something apparently representing the details of a content that he was familiar with and borrow force from this to his ability of voice recognition because it is a ‘content recognition’ which might subconsciously affect the listener and also it is a logical fallacy amplified infinitely because one cannot examine how much the recognition is attributable to voice and content respectively.” 62. I do not accept that the “context”, indeed all the surrounding circumstances, may not be taken into consideration in evaluating evidence of identification. The argument to the contrary is unreal and inconsistent with the authorities already mentioned. 63. Of greater significance is whether PW1’s evidence of his recognition of the identity of the voices on the tape may have been not solely his own, but was contributed to by others who did not give evidence of recognition or identification of the voices. PW1’s evidence was that when the existence of the tapes was exposed at the end of 2007, he was one of the people involved in preparing transcripts. There were 45 tapes produced at the trial of DCCC 1280/2005 though only one contained the conversation with which we are directly concerned. 64. At the trial of this case, when PW1 gave evidence that he could identify the voices on the tape, he was asked when he first disclosed this. His evidence was: “A: Actually, I disclosed (this) at the trial of DCCC 1280 because actually in the process of preparing these transcripts, (the identities of) Male 1 and Male 2 had been mutually agreed by the prosecution and defence in that trial. Q: The prosecution and defence did not agree on who was Male 1 and who was Male 2; otherwise it would have been written at an early stage --- it would have been specified at the beginning that Male 1 was whose voice and Male 2 was whose voice. Do you agree? This was not agreed by both sides. Is it? A: I dare not say (whether it is the case or not) for individual transcript. For example, if you are talking about whether the transcript for 1 June had been mutually agreed at that time, we --- I have to go back and ‘check’ my notes, but regarding the transcripts being produced to the court at that time, most of the Male 1, Male 2 or Female 1, or Male 1, Male 2, Male 3, all were mutually agreed by the prosecution and defence before the transcripts were produced to the court; otherwise the cross-examination could not be continued. Q: I put it to you that, by saying that the prosecution and defence mutually agreed, you mean agreeing the contents of the transcripts but not the identities of the voices appeared in the transcripts. This has never been agreed. Do you agree? Since … A: I have to think about this first. I do not have much recollection about this.” 65. Later in his evidence, PW1 explained why in October 2010 he was prompted to consider the details of the “peeking” incident of 1 June 2007. He said that in connection with other litigation it had become necessary for him to review the relevant documents and his contemporaneous notes. There was also a professionally prepared transcript then available. He said this brought back memory of the incident. It was not put to him that this recollection and identification in 2010 and subsequently were aided by having been involved, with others, in 2007 in preparation of the first transcripts (which in any event did not include the identities of the recorded speakers). Of course this would not exclude the possibility of there having been discussion or speculation at the time, but there is no evidence of that. At the trial of the present proceeding, the tape was played and PW1 identified the voices as those of the appellants. Doubtless by then he would have listened to the tapes a number of times. Standing alone his evidence that he could identify the voices after the lengthy lapse of time would warrant concern. But the circumstantial evidence gives real credibility to his recollections, as they clearly did for the District Court Judge and the Court of Appeal. And the peeking incident gave him a particular reason to remember. 66. I have not been persuaded that the reasons for verdict contain material errors of law. Nor has the judgment of the Court of Appeal been shown to address incorrectly the arguments presented to that court. The case has involved an assessment of the reliability of oral evidence of identification bolstered by circumstantial evidence directed to the authenticity of the tape recording. The courts below were convinced by the evidence tying the recorded conversations to the appellants and to the occasion on which they occurred. Both lower courts reviewed the absence of evidence from others whose exposure to the voices of the appellants was no less than PW1 but nevertheless accepted his evidence. 67. The dangers of misidentification of voices especially by lay listeners were acknowledged. PW1’s familiarity with the voices of the appellants was fully investigated and his evidence was firm. 68. Accordingly, I am satisfied that the verdicts were open on the evidence and there has been demonstrated no “substantial and grave injustice” (So Yiu Fung v HKSAR[11]) as would be required under s 32(2) of the Court of Final Appeal Ordinance to warrant disturbing the convictions. 69. I would dismiss the appeals. Mr Justice Chan PJ : 70. The Court unanimously dismisses the appeal. Mr Charles J Chan, instructed by Munros, for the appellants Mr Gerard McCoy SC, instructed by the Department of Justice, and Mr Jonathan Man, of that Department, for the respondent [1] In the present case, the prosecution also relied on circumstantial evidence to establish the identity of the speakers. In the end, the appellants were convicted on the totality of the evidence. In R v Jones and Harris (1989) 41 A Crim 1, a decision of the Court of Criminal Appeal in Victoria, the prosecution also relied on both circumstantial and voice recognition to identify the speaker. [2] R v Turnbull and Another [1977] QB 224, CA. [3] [1998] 1 HKLRD 665, 668. [4] [1966] 1 QB 688. [5] [1980] HKLR 433, 439. [6] [2003] 3 HKLRD 751, 762. [7] [1990] NI 306, 344. [8] (1993) 66 A Crim R 154. [9] [2008] EWCA Crim 970, [2008] 2 Crim Appeal R 20. [10] (1989) 41 A Crim R 1. [11] (1999) 2 HKCFAR 539. |
The Respondent is a Pakistani who resided in Hong Kong since August 1997. In 2005, he was arrested and charged with two counts of wounding with intent. He was remanded in jail custody pending trial between November 2005 and March 2006. The Respondent was found to have applied to the Director of Immigration for verification of his status as a permanent resident in mid-March 2006. It is accepted that, at the time when he made his application, if the fact that he was held in custody pending trial was not taken into account, he had been ordinarily resident in Hong Kong on a continuing basis for at least the previous seven years. Some two weeks after the application was made, the Respondent was convicted and sentenced to 3 years imprisonment. The day before his release from prison, he was served with an order of deportation for life issued by the Secretary for Security. The Respondent brought judicial review proceedings against the deportation order. The trial judge upheld the deportation order, but was reversed by the Court of Appeal. The Court of Final Appeal (“CFA”) dismissed the appeal. The issue before the CFA was whether a period of time spent in custody pending trial is to be read as a period of “imprisonment or detention pursuant to the sentence or order of any court” in section 2(4)(b) of the Immigration Ordinance when the trial results in a conviction and sentence of imprisonment. The Appellants noted that where a person who served a period of detention in custody pending trial was subsequently convicted and sentenced to a term of imprisonment, section 67A of the Criminal Procedure Ordinance operates to treat the length of that sentence as being reduced by the time spent in custody pending trial. It was submitted that, viewed as such, the period of custody pending trial becomes part of the sentence of imprisonment by operation of section 67A. The CFA rejected the argument and held that there is a fundamental qualitative difference between detention pending trial, which is not punitive, and imprisonment pursuant to the sentence of the court after trial, which serves the very purpose of being punitive. The legislative intent behind section 67A is to treat the prisoner fairly by recognising the hardship imposed upon him if he was kept in custody pending trial for the purpose of ensuring the integrity of the criminal trial process. It is not designed to give the period of detention pending trial the necessary punitive character. Further, the Appellant’s submissions would give rise to a potential for injustice, as it places pivotal emphasis on whether bail is granted or its conditions are met. |
Background 1. Mr. Cheung Wai Kwong (“Cheung”) was prosecuted for the offence of “using an unlicensed vehicle” contrary to sections 52(1)(a) and 52(10)(a) of the Road Traffic Ordinance, Cap.374 (“RTO”). 2. The prosecution’s case that Cheung was “using” the vehicle in question was based on the following evidence: Cheung was sitting in the driver’s seat of the car with the headlights and reading light on; he bent down inside the car and looked outside from time to time; he switched off the headlights and alighted from and locked the car; and he walked towards the rear of the car (collectively “the relevant evidence”). 3. Based on the relevant evidence, a magistrate held that Cheung was “using” the car and, on that basis, convicted him. 4. On appeal, the Court of First Instance (“CFI”) held that the word “use” in section 52(1) of RTO applied only to (i) the driver of the vehicle or (ii) the driver’s employer where the driver was employed to drive for the employer’s affairs. The CFI held that, since Cheung did not belong to either of those categories of persons, Cheung did not “use” the vehicle and his conviction was quashed. 5. The prosecution appealed to the Court of Final Appeal, with the focus of the appeal being the interpretation of the word “use” in section 52(1) of RTO. The Meaning of “Use” 6. The Court construed the language of section 52(1) of RTO in the light of its purpose and context, and concluded as follows: (1) By using the two words “use” and “drive” in section 52(1) of RTO, the Legislature must have contemplated different meanings to be attached to the two words. To “use” a vehicle includes driving it but also embraces a wider range of activities. (2) To “drive” means to operate and control the course of a motor vehicle. The usual (but not the only) scenario is where a person sits in the driver’s seat and directly operates the vehicle with the engine running. Depending on the reason for stopping, a person may still be driving the vehicle when it is stopped. (3) To “use” a vehicle means to exercise a measure of control, management or operation over the vehicle as a means of transport, including any period of time between journeys. The circumstances in which a person may “use” a vehicle vary infinitely. Ultimately, each case is one of fact and degree. (4) The word “use” must also be understood in light of the concept of being “in charge of”, which is found in other sections of RTO (for example, section 39A of RTO, which makes it an offence for a person to be “in charge of” a vehicle with an alcohol concentration above the prescribed limit). “In charge of” is a broadly defined concept. To “use” a vehicle imports something more active than being “in charge of” it. (5) A person may vicariously use a vehicle through another person. It was well-established in the authorities that “use” in a provision like section 52(1) of RTO (which is qualified by the alternatives of suffering or permitting the use of vehicle) should be construed narrowly so that such vicarious user may occur only where a person employs another person to drive or use a vehicle for the former’s business. This was not the situation in the present case since there was no question of Cheung having used the vehicle vicariously through another person. Disposition of the Present Case 7. Based on the analysis in paragraph 6 above, the Court rejected the approach of the CFI (see paragraph 4 above). By asking whether Cheung was the driver or the employer of the driver, the CFI wrongly focused on Cheung’s identity. The real focus should instead have been on whether the activities of Cheung were sufficient to constitute “use” of the car. 8. The Court concluded that, based on the relevant evidence, Cheung’s activities did not constitute “use” of the car for the purposes of section 52(1) of RTO. 9. Accordingly, the Court affirmed the CFI’s order quashing Cheung’s conviction, and dismissed the prosecution’s appeal. |
1. This case arose out of a shareholder dispute. Prior to the proceedings, LCL held approximately 46.58% of the issued shares of CYF and was its largest shareholder. Dato Poh Po Lian (“Dato Poh”) was the sole director and shareholder of LCL. A3 to A8 together held 25.211% of the issued shares in CYF. A2, A1’s wife, controlled A3 to A8. 2. A1 and Dato Poh fell out, and a struggle for board control at CYF ensued. LCL attempted to install its own nominees, but the resolution did not pass as a special resolution (requiring 75% approval) was required for removing directors under bye-law 86(4). 3. LCL then alleged that bye-law 86(4) contravened paragraph 4(3) of Appendix 3 of the Listing Rules, which stated that a director was to be removed by an ordinary resolution. On three occasions, LCL proposed a resolution to change the bye-law requirement for removing a director from a special resolution to an ordinary resolution, but A1 and A2 held enough shares to block the resolution each time. 4. In April 2010, LCL began proceedings against A1 to A8 and CYF under section 168A of the Companies Ordinance (Cap. 32), contending that CYF was in breach of the Listing Rules, putting its listed status and shareholders’ interests in jeopardy, and that this was unfairly prejudicial to CYF shareholders. LCL asked the Court for an order that bye-law 86(4) be amended such that directors could be removed via an ordinary resolution in compliance with the Listing Rules. 5. While the proceedings were ongoing, Dato Poh regained control of the board at the AGM on 8 April 2011. 6. At first instance, Barma J ordered the bye-laws to be amended as demanded by LCL. 7. The stock, which was previously suspended for various reasons, resumed trading after such amendment. A1 to A8 had reduced their shareholding below 5% by 21 September 2012 and lost their blocking vote. The case had therefore become completely academic. 8. However, none of this was revealed to the Court of Appeal, which upheld Barma J’s ruling and granted leave to appeal to the Court of Final Appeal. 9. The Court of Final Appeal was only informed of the facts set out in paragraph 7 above two days before the hearing. 10. The Court admonished the Appellants and their solicitors for failing in their duty to the court and wasting the Court’s resources at two levels of appeal, ordering indemnity costs against them. 11. Counsel for the Appellants invited the court to the merits of the appeal, notwithstanding the academic nature of the case. The Court, however, found that the facts were too unusual to be broadly applicable and relevant. |
FACTS 1. In May 2011, as part of the government’s measures to protect country park enclaves, the Respondent prepared a working paper (“the Working Paper”) for the consultation and advice of the Country and Marine Parks Board (“the Board”). The Working Paper provided for an action plan to assess the suitability of including 54 enclaves into their surrounding country parks or for protection by other measures (“the Assessments”) based on a new set of criteria. Of the enclaves assessed, 6 of them were deemed not appropriate for inclusion into their surrounding country parks (“the 6 Enclaves”). 2. The Appellant applied for judicial review in respect of the Respondent’s decision not to consult the Board when determining that the 6 Enclaves should not be incorporated into their surrounding country parks (“the Decision”). Under section 5(1)(b) of the Country Parks Ordinance (Cap 208) (“the Ordinance”), the Board “shall … consider and to advise the [Respondent] on, the policy and programmes prepared by the [Respondent] in respect of country parks and special areas, including proposed country parks and special areas”. 3. The Court of First Instance held that the words “policy” and “programmes” refer to the formulation of principle (as policy) and the making of plan or scheme (as programme) on a high level of generality. It held that the Assessments were neither “policy” nor “programmes” in respect of country parks. 4. The Court of Appeal dismissed the Appellant’s appeal. The fact that the Assessments were conducted with the same approach and with the same set of criteria did not mean that each should be viewed together to form a programme. ISSUES 5. The Appellant appealed to the Court of Final Appeal on two questions of law. First, under what circumstances does the Respondent have a duty to consult the Board? Secondly, to what extent, if any, does the Respondent have a duty to consult the Board regarding the Assessments? DECISION 6. The Court unanimously allowed the appeal. The Decision was quashed and the Respondent was required to consult the Board on the suitability of incorporating each of the 6 Enclaves into their surrounding country parks. REASONS 7. Section 5(1)(b) of the Ordinance must be interpreted by reference to its context and purpose. The respective functions of the Respondent and the Board are clearly set out in the Ordinance and overlap in relation to the designation of areas as country parks. There exists a clear link between the duty of the Respondent in relation to designating or not designating areas as country parks and the participation of the Board in this matter. The Respondent and the Board are the only relevant persons involved in determining whether an area should be recommended to the Chief Executive for designation as a country park. 8. The word “policy” refers to a course or set of general principles that guides or points the way towards an objective. On the other hand, the word “programme” is more specific. It refers to a plan of action, a project or scheme, or a series of intended activities, events or future actions to implement a policy. It is not limited to mean only a plan or outline of those matters. It is capable of referring to intended activities, events or actions themselves. Read together, “policy” and “programmes” indicate the range of matters on which the Respondent must consult the Board under section 5(1)(b) of the Ordinance. Whether something falls within a “policy” or “programme” depends on the facts of each case. 9. A policy or programme is “in respect of” country parks if it involves something to do with country parks, whether if actual or proposed. 10. The assessment of enclaves for the purposes of designation of country parks by reference to the new criteria set in the Working Paper fell within the meaning of “policy”. The Assessments fell within the meaning of “programmes” under section 5(1)(b) of the Ordinance because they were part of a programme to implement the policy protecting the 54 enclaves, which is a programme “in respect of” the neighbouring country parks or “in respect of” proposed country parks. Accordingly, the Respondent is required to consult the Board on whether or not to include the 6 Enclaves into their surrounding country parks. |
1. Z (“Wife”) and X (“Husband”) were married. C (“Cohabitee”) is the cohabitee of the Husband. The Wife petitioned for divorce and applied for ancillary relief. 2. A primary issue between the parties was the beneficial ownership of the shares in New Asia-International (Group) Ltd (“NAIGL”), a private BVI company. If the shares belong to the Husband they would be taken into account in determining the award to the Wife of ancillary relief, increasing it. So the ownership of the shares was tried as a preliminary issue in the Wife's application for ancillary relief, in which application the Cohabitee became an intervener for the purposes of the preliminary issue. 3. At first instance, Saunders J found as a fact that 83.1% of the shareholding of NAIGL (“the Shares”) belong to the Husband, thus deciding the preliminary issue in favour of the Wife and against the Husband and the Cohabitee. On appeal to the Court of Appeal by the Husband and the Cohabitee, the Court of Appeal affirmed the finding of fact that the Shares belong to the Husband, thus making that finding of fact a concurrent one. 4. On appeal to the Court of Final Appeal by the Husband and the Cohabitee, the Court of Final Appeal held that it would not be purposeful to embark upon a review of the concurrent findings of fact in this case by the courts below and dismissed the appeal. The Court of Final Appeal’s practice, in common with that of the courts of last resort of comparable legal systems, is not to review concurrent findings of fact save in rare and exceptional circumstances. This practice springs from the nature of a court of last resort’s role, which is primarily of resolving points of law of the highest importance. Furthermore, the practice also serves to spare litigants from the oppression of unduly protracted litigation. |
1. A wealthy couple divorced, and during the matrimonial proceedings, the court had to determine what assets belonged to the Husband (“H”) so as to be available for distribution. The H and the H’s Father (“F”) claimed that a significant portion of the assets in question belonged to F, while the Wife (“W”) claimed that a fraudulent transaction had taken place between them to defeat her claim for financial provision. 2. W compelled H to produce certain documents through the discovery process. H protested that some of those documents were protected by legal professional privilege (“LPP”), whereby communications between a lawyer and client are not subject to compulsory disclosure. However, the Court of First Instance (“CFI”) held that this rule did not apply since the documents involved the commission of a crime. Amongst the documents H produced, W alleged that one was a forgery. H and F did not admit to forgery, but eventually did not oppose the order setting the transactions aside. The Judge referred the case to the Secretary of Justice (“SJ”) in the light of his findings in the financial provision proceedings that H and F had committed the crimes of perjury, forgery and attempting to pervert the course of justice. 3. The SJ applied to the Court for access to the documents in relation to the alleged crimes. W wanted to assist the investigation by giving the SJ the documents in her possession. Since documents received in the discovery process are subject to an undertaking that they will only be used for the proceedings in which they were disclosed, W applied to the Court to be released from her undertaking. The CFI granted the SJ access to documents and released the wife from her undertaking. 4. The Court of Appeal set aside the order granting the SJ access to the documents because some of them might be protected by LPP and required the SJ first to establish independently that LPP was inapplicable because the documents fell under the crime exception. 5. The Court of Appeal held however that as between W and H and F, it had been established in the CFI that the documents were not protected by LPP. It upheld the CFI order allowing W to give the documents to the SJ, even though the SJ might not obtain them directly from H or F in his pending application. 6. The Court held that a party should not be released from the undertaking without special circumstances, and only where it would not cause injustice to the person who produced the documents. W argued that as a potential victim who wished to report a crime, her release from the undertaking was justified. 7. The Court emphasised that LPP is an absolute right enshrined in Article 35 of the Basic Law, which the SJ had not yet established to be inapplicable. He should have access only if he established in the pending application that the documents are not protected by LPP, being documents involving the commission of a crime. That process should not be side-stepped simply by obtaining them from the Wife. 8. The Court therefore reversed the Orders releasing W from her undertaking with respect to the contested documents. |
1. The Appellant, a barrister, was instructed to represent Ms Lau, who was charged with theft in a separate set of criminal proceedings. Ms Lau was a director of a company, which in turn was a corporate director of another company called EC Textiles. Ms Lau was alleged to have created a deed of charge securing facilities at a bank over property which did not belong to her. Ms Mak, the solicitor in charge of this transaction and deed execution, was summoned to give evidence as a prosecution witness in the criminal proceedings against Ms Lau. The Appellant drafted letters which were issued through his instructing solicitor’s firm to Ms Mak, asserting legal professional privilege (“LPP”) on behalf of EC Textiles and threatening legal or disciplinary action against her if LPP was not protected. 2. The Appellant was charged with the offence of attempting to pervert the course of justice. He was convicted at trial and sentenced to six months’ imprisonment. The Court of Appeal dismissed his appeal. It was of the view that whatever the Appellant’s belief in the validity of the LPP point, he was not entitled to harass or bully Ms Mak, the witness, intending by that harassment to force her into taking a course which she was not willing to take, namely, making an application to the court to assert LPP as a basis for not giving evidence. 3. The Court of Final Appeal unanimously allowed the appeal. First of all, it found ample basis for the Appellant to believe that there existed an implied retainer between Ms Mak and EC Textiles. It agreed with the Court of Appeal in giving the Appellant the benefit of the doubt as to his belief in the existence of LPP. During the Appellant’s preparation of Ms Lau’s case, he wrote notes containing his opinion that there was a LPP point to be taken or at least to be further explored. Furthermore, it was evident that he had a poor understanding of the scope and effect of LPP. The Court of Final Appeal rejected the prosecution’s theory that he was a barrister with sound knowledge of the law who cynically used LPP as a pretext for his threats against Ms Mak. 4. In relation to the issue of whether the Appellant’s conduct had the prohibited tendency to pervert the course of justice, the Court of Final Appeal agreed with the Court of Appeal’s reasons for reversing the trial judge’s finding of a prohibited tendency. However, the Court of Final Appeal rejected the Court of Appeal’s substituted basis for such finding. The Appellant caused the threatening letters to be sent for the purpose of pressuring Ms Mak to raise the LPP claim by making an application to the court. Applying pressure on her to make such an application did not constitute the offence charged as it did not constitute conduct with a tendency to interfere with the court’s capacity to administer justice and therefore did not have the prohibited tendency. 5. The Court of Final Appeal reminded members of the legal profession to exercise caution when approaching a witness or potential witness of the other side. Approaching such a witness without informing the other side is bound to arouse suspicion of impropriety. |
1. The Plaintiff is a licensed money lender and lent the Defendant $30,000. As he defaulted in making repayments, it obtained a judgment against him, a charging order on his flat and an order for vacant possession and sale, all in default of acknowledgement of service by the Defendant. The Appellant, the Defendant’s wife, approached the Court contending that the Defendant was mentally incapacitated and sought orders that she be appointed his guardian ad litem and that the judgment and consequential orders be set aside. 2. The Plaintiff objected to her appointment and Deputy District Judge Yu dismissed her application. He rejected the Appellant’s expert evidence in favour of the Plaintiff’s and held that it had not been established that the Defendant was mentally incapacitated. The Court of Appeal upheld the Judge’s decision. 3. There were two questions before the Court:- a. What is the correct approach in law to deciding whether a person should be allowed to act as guardian ad litem with a view to protecting the interests of a person sued as defendant, who is alleged to be a mentally incapacitated person? b. Is it appropriate to permit the plaintiff in such cases to oppose such intervention by the proposed guardian ad litem? 4. As regards the first question, the Court held that the lower courts had fallen into error in failing to distinguish between cases where the court was being asked to debar a party from direct access to the court and cases like the present where the Appellant was seeking to act as the Defendant’s guardian ad litem to protect his interests in the face of the Plaintiff’s suit. Since the Appellant was neither acting in an adversarial position vis-à-vis the Defendant nor restricting the Plaintiff’s access to the courts, a judicial inquiry into the Defendant’s mental incapacity was unnecessary provided that the documents specified in the Rules were filed in court. The Courts below had consequently adopted too stringent a test before allowing the Defendant to defend the Plaintiff’s action through a guardian ad litem. 5. As regards the second question, it was inappropriate to allow the Plaintiff whose interests were adverse to those of the mentally handicapped Defendant to prevent him from being represented by a guardian ad litem. This meant that possible lines of defence against the Plaintiff’s claim have never been properly explored. 6. Accordingly, the Court unanimously allowed the appeal, appointed the Appellant as the Defendant’s guardian ad litem and restored the Appellant’s applications to set aside the default judgment and consequential orders. |
1. The parties were a wealthy couple owning approximately 50% of the shares in a publicly listed company called ADHL. ADHL’s wholly owned subsidiary held four of the six units in Severn Villa on the Peak. The parties later divorced and the wife applied for ancillary relief. 2. The issue in the Court of Final Appeal concerned a clawback order, which would have allowed the wife to benefit from any possible future redevelopment of Severn Villa by requiring the husband to pay the wife, upon the commencement of the redevelopment, a further sum representing one half of the notional increase in the value of the ADHL shares attributable to the redevelopment. 3. No such order was sought in the Court of First Instance; it was only obtained in the Court of Appeal. 4. Both parties appealed to the Court of Final Appeal. The husband challenged the propriety of the clawback order, while the wife argued that the terms of the clawback order were such that the order was nugatory. 5. For the following reasons, the Court held that it was inappropriate to make the clawback order:- a. First, the making of the clawback order was not fair. The effect of the clawback order was that the wife would get the benefit of what was likely to be ADHL’s best asset without taking the burden of the further investment necessitated by ADHL’s financial condition. Also, the wife was not going to contribute to the expenses or share in any of the risks involved in the redevelopment of Severn Villa. b. Second, the court must as far as possible try to achieve a clean break between the parties. In this case, the terms of the clawback order were fraught with difficulties and would inevitably have given rise to substantial disputes between the parties in the future. c. Finally, if the question of a clawback order had been properly raised at trial, the husband would have adduced additional evidence to deal with aspects of fairness and the foreseeable problems that a clawback order would have caused. 6. Accordingly, the Court unanimously allowed the husband’s appeal and dismissed the wife’s appeal. |
1. On 2 June 2004, the Appellant assaulted a Correctional Services Department (“CSD”) officer whilst serving an 18-year prison sentence for drug trafficking. He was convicted by the Magistrate of common assault and sentenced to six months’ imprisonment to be served consecutively. His appeal was dismissed by the Court of First Instance. In support of his application for leave to appeal to the Court of Final Appeal, he relied on two undisclosed inconsistent statements purportedly made by the two CSD officers who had testified against him at the common assault trial. The Respondent conceded the appeal and the Court of Final Appeal quashed the conviction. 2. Subsequently, the statements relied on were found to have been forged and the Appellant was convicted in the District Court after a 96-day trial of perverting the course of justice in relation to the appeal heard by the Court of Final Appeal, and sentenced to four years in prison. The Court of Appeal dismissed the Appellant’s appeal and increased the sentence from four years to six. The Respondent sought an order to re-open and set aside the Court of Final Appeal judgment on the ground that it was obtained by the Appellant’s fraud. 3. The Court held that it had a discretionary power to re-open an appeal where a reasonable basis existed for alleging that its judgment was obtained by fraud. It had an implied power exceptionally to order an appeal to be re-opened where justice so demanded. 4. The Court held that it would not be appropriate to reinstate the original six-month sentence for the common assault. By increasing the sentence from four years to six years for perverting the course of justice, the Court of Appeal had sufficiently punished the Appellant for his fraud on this Court. The six-year sentence reflected the Appellant’s overall criminality. 5. If the Court were to re-open its judgment and then embark on a determination of whether it had in fact been obtained by fraud, disproportionate judicial and public resources would have to be employed without practical consequences in terms of sentence. Accordingly, the Court declined to exercise its discretion to re-open the appeal and dismissed the Respondent’s application. |
1. The Appellant and Mr Kwok Wing (“Kwok”) had been close friends for 30 years. Kwok was the chairman and a major shareholder of Tack Fat Group International Limited (“Tack Fat”), a company listed on the Hong Kong Stock Exchange. 2. On 4 June 2008, Kwok caused a total of 40 million share options to be granted to two mainlanders. The options were exercised two days later by the two mainlanders. However, Tack Fat never received any money for the shares. Between 16 June and 29 July 2008, all 40 million shares, in the name of the two mainlanders, were sold in the stock market. The Appellant had no knowledge of any of the share dealings between Kwok, the two mainlanders, and Tack Fat. 3. On 1 August 2008, at Kwok’s request, the Appellant arranged to allow HK$14,049,380 to be transferred from the two mainlanders’ Hong Kong bank accounts and be deposited into a bank account of Mickles International Limited (“Mickles”), a Hong Kong company of which the Appellant was a director and sole shareholder. Unknown to the Appellant, the money derived from the sale of shares was fraudulently obtained from Tack Fat. Twenty-six days later, the same amount (minus bank charges) was, again at Kwok’s request, remitted by the Appellant from Mickles’ bank account to a bank account of Asia World Agricultural Development (Cambodia) Limited, a company controlled by Kwok. 4. The Appellant was charged with one count of dealing with property known or believed to represent proceeds of an indictable offence, contrary to sections 25(1) and (3) of the Organized and Serious Crimes Ordinance (“OSCO”). Before the District Court, the Appellant was convicted, and sentenced to a term of imprisonment of two years and six months. The Appellant’s appeal was dismissed by the Court of Appeal. Three grounds were submitted by the Appellant on the appeal in the Court. 5. First, in relation to offences under section 25(1) of OSCO, when seeking to determine whether a person has reasonable grounds to believe that the property dealt with represents the proceeds of an indictable offence, the Court held that when assessing the whole of the evidence, the judge or jury are entitled to take into account the Appellant’s perception and evaluation of the facts and matters as constituting or contributing to reasonable grounds. Accordingly, since the lower courts did not take into account the Appellant’s case on the trust that existed between himself and Kwok, it failed to take into account of the Appellant’s perception and evaluation of relevant facts. The appeal was allowed on this ground. 6. Second, in the determination of whether the defendant’s grounds of belief are reasonable, the test is whether any reasonable person looking at grounds “would believe” that the property dealt with represents the proceeds of an indictable offence rather than a test of “could believe”. The Court of Appeal had erred in following an earlier case and applying the “could believe” test, which is an inappropriately low standard compared to the “would believe” test. The appeal was also allowed on this ground. 7. Third, the Appellant asked the Court to consider whether it is a defence to a charge under section 25(1) of OSCO for a defendant to show that notwithstanding the establishment by the prosecution of reasonable grounds to believe that the property dealt with represents the proceeds of an indictable offence, he nonetheless honestly and reasonably did not suspect the property to represent such proceeds. The Court held that this “halfway house” defence does not arise. 8. The appeal was allowed and the conviction set aside. |
1. The Appellant was convicted, with others, of an offence of conspiring to commit a money laundering offence contrary to sections 25(1) and (3) of the Organised and Serious Crimes Ordinance (“OSCO”). Their appeal to the Court of Appeal was dismissed. His co-accused then successfully appealed to the Court of Final Appeal against their conviction of that offence in the related case of HKSAR v Li Kwok Cheung George & Ors (2014) 17 HKCFAR 319. 2. In HKSAR v Li Kwok Cheung George & Ors, the Court of Final Appeal held that the ordinary meaning of “proceeds of an indictable offence” in section 25(1) of OSCO was confined to funds derived from the commission of an indictable offence. Thus, no money laundering offence could be committed contrary to section 25(1) of OSCO where a person deals with funds that are known not to derive from any offence but instead are only intended to be used as part of a fraudulent conspiracy. 3. In the present appeal, the Court of Final Appeal noted that, although the grant of an extension of time to appeal on the basis of a subsequent authoritative judgment holding the previous understanding of the law as incorrect was rare and exceptional, the Appeal Committee’s grant of an extension here was justified since the Appellant’s conviction was in the same case, was for the same offence as his successful co-accused and was based on the same facts and evidence. 4. The Court held that in the light of its judgment in HKSAR v Li Kwok Cheung George, the appellant’s conviction in respect of Charge 4 was unsustainable as a matter of law for precisely the same reasons that led to the appeals of his co-accused being allowed in that case. 5. Accordingly, the Court of Final Appeal held that the money laundering offence charged against the Appellant had not been established and that the appellant’s conviction of the money laundering offence, alone amongst the various parties charged with that offence and on an erroneous view of the law, involved a substantial and grave injustice. It therefore unanimously allowed the appeal. |
1. The Appellant is a Pakistani national who had committed offences of overstaying in Hong Kong in 1992, 1994, 1999 and 2000 respectively, entering each time with a passport bearing a slightly different name and a different date of birth. When convicted in respect of his last period of overstaying, he was sentenced to a total of 7 months’ imprisonment. 2. Upon being discharged from prison, the Director of Immigration immediately placed him under administrative detention pursuant to section 32(2A) of the Immigration Ordinance. A removal order against him was made on 10 September 2005 but it was not served because the Appellant lodged a claim under the Convention Against Torture (“CAT”) against being returned to Pakistan. The removal order was revoked on 15 September 2005 and the Appellant was eventually released on recognizance on 7 October 2005 as his CAT claim was processed. 3. The Appellant sued the Director for damages for false imprisonment claiming that he had been unlawfully detained during the six week period after his release from prison. His claim failed in the District Court and in the Court of Appeal. 4. The Court of Final Appeal allowed his appeal. It held that his detention was initially lawful but that the Director was duty bound to decide with reasonable diligence and expedition whether it would be possible to reach a decision to remove him within the time limits for detention laid down in section 32(2A) of the Immigration Ordinance and to release him once it became clear that such decision could not be reached in time. The Court held that if the Director had acted with reasonable diligence and expedition, his release would have occurred 10 days earlier and held that liability in damages for false imprisonment for those 10 days had been established. 5. The Court did not accept the Appellant’s submission that the entire period of detention was unlawful because the Director had breached a public law duty to publish a statement of policy identifying the criteria to be adopted in exercising his powers under section 32. No such duty was held to exist, the question being instead whether the person affected was able to know enough about the basis of his or her detention to be able to make informed and meaningful representations regarding the exercise of the power. Because of the built-in requirements of section 32 and because of the Appellant’s background as a repeated immigration offender, he was well aware of the basis of his detention in the present case. 6. The Court held that arguments raised by the Appellant on the basis of Article 5(1) of the Hong Kong Bill of Rights and Articles 28 and 41 of the Basic Law added nothing to the public law argument which had succeeded. It also held that in any event, by virtue of Article 39 of the Basic Law and the immigration exception contained in section 11 of the Hong Kong Bill of Rights Ordinance, the Appellant was unable to rely on those constitutional provisions. 7. Taking the trial judge’s assessment of $30,000 for the entire period as a base, the Court awarded the Appellant $10,000 as damages for false imprisonment on the basis of his having unlawfully been detained for 10 days and accordingly allowed the appeal. |
1. The appellants were charged and convicted on two counts of conspiracy to defraud. The first count alleged a conspiracy to defraud the Stock Exchange of Hong Kong (“SEHK”) and the second, a conspiracy to defraud China Jin Hui Mining Co Ltd (later known as Natural Dairy (NZ) Ltd, “462”), a company listed on the SEHK with the Stock Code No. 462 and its existing shareholders. A1 was also convicted on a further count of money laundering in respect of his dealing with the alleged proceeds of such conspiracies to defraud. 2. A1 was a director of 462 while A2 was the ultimate beneficial owner of the companies that entered into an agreement to sell to 462 some farms in New Zealand (the “Acquisition”). Given the size of the Acquisition, 462 was required under the Listing Rules to make a public announcement and publish a circular approved by the SEHK. In both of these documents, A1 and A2 claimed that they (including the companies controlled by them) are independent from each other and not connected persons to the Acquisition. A3 was brought in by A2 to handle the accounts of the farms. 3. The prosecution case is that the appellants conspired together to cause SEHK to allow the publication of the aforementioned announcement and circular, and to cause 462 to approve the Acquisition and its financing measures (the “Intended Results”) using dishonest means. 4. Through the particulars contained in the indictment, the prosecution alleged that, in order to achieve the Intended Results: a. A1 and A2 had dishonestly made false representations in relation to or concealed the connections between themselves and their interests otherwise in the Acquisition (“Particulars (a)-(c)”). b. A1, A2 and A3 had dishonestly made false representations in relation to or concealed the true financial position of the farms (“Particulars (d)-(e)”). 5. The trial judge instructed the jury that, in order to convict the appellants of conspiracy to defraud, the jury must be sure that in respect of each count, that the appellants had agreed to use dishonest means to bring about the Intended Results. Of particular relevance, the jury was also reminded that: a. The dishonest means referred to in Particulars (a)-(c) concerned only A1 and A2, while Particulars (d)-(e) covered all appellants. b. In relation to Particulars (a)-(c), the trial judge instructed the jury that it is sufficient if the jury is satisfied that A1 and A2 were “working together” in the Acquisition when deciding whether they had made misrepresentations or concealments regarding their connection and interest in the Acquisition. c. The prosecution do not need to prove all of these particulars, but it is sufficient that one or more of these are made out, and the jury is sure that at least two of the appellants knowingly and intentionally made these representations or concealed the truth. 6. After trial, the jury convicted all the appellants in relation to the two counts of conspiracy to defraud, and A1 was further convicted of a count of money laundering in relation to his dealing with the funds derived from the Acquisition. 7. A1, A2 and A3 were respectively sentenced to imprisonment for 7 years and 9 months, 8 years and 3 months and 5 years. All appellants were further disqualified from management of companies for 10 years. 8. The Court of Appeal dismissed the appellants’ appeals. The appellants further appealed to this Court. ISSUES 9. The appellants argued that, since Particulars (a)-(c) and Particulars (d)-(e) involved different dishonest means with different alleged co-conspirators, they are therefore two different conspiracies. As it is wrong for one count of conspiracy to defraud to contain more than one conspiracy, the counts in the present case are improper in that they respectively include both Particulars (a)-(c) and Particulars (d)-(e) (the “Duplicity Argument”). 10. The appellants also argued that, for the purposes of directing the jury as to the alleged falsity of the representations under Particulars (a)-(b) as to A1 and A2’s alleged connections with each other and the Acquisition, it was wrong for the trial judge to use the “working together” formulation instead of properly defining legal concepts such as “connected persons” or “connected transactions” to the jury (the “Misdirection Argument”). The Duplicity Argument 11. The essence of an offence of conspiracy to defraud is the making of an agreement in which the co-conspirators agreed to use dishonest means intending to achieve the object of either injuring or imperiling the victim’s economic interests, or deflecting the victim from performing his duty. 12. Hence, generally speaking, to find the co-conspirators guilty, the prosecution’s job is complete if he could prove that there is such an agreement to use some unspecified dishonest means to achieve the fraudulent object. 13. In proving such an agreement, the prosecution need to spell out facts and matters which they rely on in order to inform the accused of the case they have to meet. This is done through providing particulars in an indictment. That said, not every fact specified in an indictment would necessarily have to be proven by the prosecution in order to secure a conviction. For example, in the case of an indictment for an offence of conspiracy to defraud such as the present case, the particulars frequently set out some overt acts allegedly performed by the co-conspirators which the prosecution rely upon to infer the existence of an agreement to use dishonest means. In such a case, these particulars are supplied merely to provide reasonable information in respect of the agreement alleged. It would therefore be sufficient for the prosecution to prove the existence of the agreement with or without proving these overt acts also. 14. However, it would be a very different situation where the prosecution rely on the particulars as the very dishonest means agreed upon. In such a case, the particulars, being an essential element of the offence of conspiracy to defraud, would have to be proven by the prosecution. 15. Therefore, it is important to determine whether the particulars in the present case are simply overt acts, or were they the very dishonest means agreed upon. Having regard to the wording of the indictment, the written and oral directions of the trial judge, and how counsel had conducted the trial, the Court found that Particulars (a) to (e) were relied upon as the agreed dishonest means rather than merely overt acts. As such, these particulars must be proven. 16. Having established that these particulars are all agreed dishonest means which have to be proven, and given how Particulars (a)-(c) and Particulars (d)-(e) encapsulate rather different dishonest means involving different co-conspirators, the counts containing both of these sets of particulars would thus essentially include two conspiracies each. Furthermore, as mentioned above, the jury was directed that it is sufficient that “at least” two of the accused were part of a conspiracy. Therefore, there is a risk that the jurors may have convicted the appellants without actually agreeing upon whether the dishonest means of the conspiracy was the one under Particulars (a)-(c) or that under Particulars (d)-(e), and who among A1, A2, and A3 were part of this conspiracy. In other words, there is a risk that the jury had not arrived at a valid verdict against the same appellants based on an agreement to employ the same dishonest means, which means that the prosecution may not have proven their alleged criminal agreement beyond reasonable doubt. The convictions against all of the appellants were thus unsafe. The Misdirection Argument 17. Given the conclusion above to the Duplicity Argument, the Court found it unnecessary and undesirable to deal with the issues arising from the Misdirection Argument. DISPOSITION 18. Accordingly, the appeals were unanimously allowed, and the convictions of the appellants were quashed. A re-trial was ordered, and the prosecution was given the choice to amend the present indictment or to issue a new one. |
1. The Appellant was convicted by a magistrate for careless driving contrary to section 38(1) of the Road Traffic Ordinance (Cap. 374). His appeal to the Court of First Instance was dismissed. Although the prosecution did not ask for costs, the judge ordered the Appellant to pay costs in the sum of HK$2,000 to the prosecution without first affording him an opportunity to be heard as to whether a costs order should be made. The Appellant duly paid those costs. 2. Section 13 of the Costs in Criminal Cases Ordinance (Cap. 492) governs the making of costs orders against defendants in unsuccessful magistracy appeals. The legal principles governing the making of a costs order under that section are those stated by Ribeiro PJ in HKSAR v Chui Shu Shing (2017) 20 HKCFAR 333. 3. It is first necessary for the judge to find that the appeal was not reasonably arguable. The judge must then go on to apply the principles laid down under section 15 of the same Ordinance, which obliges the court to ensure that any sum awarded is not punitive but only compensatory of properly incurred expenses, and that a contemplated award would be ‘just and reasonable’. 4. To do so, it is necessary for the court to have some idea of the magnitude of costs incurred by the prosecutor, which will likely arise in practice only where the prosecution applies for costs. The court must then afford a proper opportunity to the defendant to be heard as to whether the order should be made. The court must have regard to the financial means of the defendant and satisfy itself that any costs order is one that the defendant is able to pay. It would not be ‘just and reasonable’ to order the appellant to pay costs beyond his or her means. 5. In the present case, it was unquestionable that the judge did not adhere to these principles, and substantive and grave injustice resulted from the costs order made by him against the Appellant. 6. Accordingly, the appeal was unanimously allowed, the costs order made by the Court of First Instance quashed, and the Respondent ordered to refund the costs paid by the Appellant pursuant to the costs order. |
1. On 10 January 2011, at a works site adjacent to the East Rail Line near Tai Po Tau, the Respondent carried out works in the vicinity of an underground electricity cable. The works involved the erection of iron rods to set up a safety net and demarcate the works site. This involved rods of 1-2 meters in length being hammered by hand into the ground to a depth of approximately 1 foot. During the process of hammering, an underground electricity cable was damaged. 2. The Respondent was charged and convicted by a Magistrate under sections 10(1)(a) and 17(3) of the Electricity Supply Lines (Protection) Regulation, Cap. 406H (“the Regulation”) which prohibits a person from carrying out works in the vicinity of an underground electrical cable, unless before the works have begun he has taken reasonable steps to ascertain the existence of any such cable within the works site. This conviction was set aside on appeal to the Court of First Instance. 3. The Court of Final Appeal considered the interpretation of section 2 of the Regulation which defines “works” as meaning any kind of works involving or in connection with, among other things, “ramming” but as not including “works necessary to ascertain the alignment and depth of an underground electricity cable”. 4. The Court looked specifically at two issues. First, whether the word “ramming” should be construed as “ramming involving at least the use of machinery” and “excluding the act of hammering by hand”. Second, whether the erection of the iron rods to set up safety nets to form the boundary of the works site fell within the exclusion of “works necessary to ascertain the alignment and depth of an underground electricity cable”. 5. The Court held that under sections 2 and 10(1)(a) of the Regulation, “ramming” should be construed to include penetration of the ground by an object by means of force applied by any means, including a hammer, and not just by means of machinery. 6. On the second issue, the Court held that the preparatory acts of erecting the iron rods to set up safety nets to form the boundary of the works site were not necessary to the ascertainment of the alignment and depth of an underground electricity cable and so did not fall within the exclusion in the definition of “works” in section 2 of the Regulation. 7. The appeal was accordingly allowed, and the conviction restored. |
1. This appeal concerns the meaning and proper application of accounting standards relating to the treatment of available-for-sale financial assets (“AFSFAs”), and the duties of auditors in respect thereof for the purposes of professional disciplinary proceedings. 2. This Court dismissed the Appellants’ appeal, finding that: (a) The Appellants’ understanding of the relevant accounting standard was wrong; and (b) Section 34(1)(a)(vi) of the Professional Accountants Ordinance (Cap. 50) (“PAO”) does not incorporate a standard of reasonableness capable of excusing auditors’ default in observing the standard or otherwise excusing a failure to understand the applicable standard. 3. The 2nd Appellant audited the financial statements (the “Financial Statements”) of Heng Tai Consumables Group Limited (“Heng Tai”). The 1st Appellant acted as the engagement partner of the audit. 4. The relevant AFSFA was a parcel of shares (the “Shares”) held by Heng Tai in another listed company. 5. The standards for accounting treatment of AFSFAs are contained in Hong Kong Accounting Standard 39 (“HKAS 39”). The relevant version contains amendments as at May 2009. 6. HKAS 39 requires AFSFAs to be measured at fair value, and gains and losses of such assets to be recognised directly in equity through the statement of changes in equity. However, if the fair value should decline to an extent that provides objective evidence that impairment loss has been incurred, HKAS 39 requires the cumulative loss to be removed from equity, and recognised in profit or loss. 7. The auditors agreed with Heng Tai’s management that the Shares should not be treated as impaired, notwithstanding that their cumulative loss represented more than 60% of the investment cost. The auditors issued an unqualified audit report. 8. Investigations and proceedings were brought against the Appellants. The complaint, in substance, was that the Appellants had “failed or neglected to observe, maintain or otherwise apply a professional standard, namely [Hong Kong Standards of Auditing 700 (“HKSA 700”)], in that they failed properly to evaluate Heng Tai’s compliance with HKAS 39 in respect of the Shares, before issuing an unqualified audit opinion.” The Disciplinary Committee (“Committee”) of the Hong Kong Institute of Certified Public Accountants (the “Institute”) found the complaint substantiated. The Court of Appeal (“CA”) dismissed the Appellants’ appeal. 9. This Court concluded that on the true construction of HKAS 39, an impairment adjustment had to be made in respect of Heng Tai’s AFSFA which consisted of an equity instrument since there had been a significant or prolonged decline in its fair value. 10. A “significant or prolonged decline in the fair value of equity instrument below its cost” is a head of objective evidence of impairment, which is in addition to, and independent of, the categories of objective evidence set out in HKAS 39.59. It is also independent of the head of objective evidence described in the first sentence of HKAS 39.61. 11. On a proper construction, PAO s.34(1)(a)(vi) does not provide for any form of reasonable excuse as a justification for failing or neglecting to apply a relevant standard. 12. It is not aimed at punishment, but aimed simply at enforcing the applicable published standards in the interest of uniform and predictable professional practice without implying any fault, moral blame or misconduct. 13. This Court held that the auditors failed properly to evaluate Heng Tai’s failure to trigger HKAS 39.67 before issuing their unmodified audit opinion and thus failed or neglected to observe, maintain or otherwise apply the professional standards set out in HKSA 700. Accordingly, the appeal was dismissed. |
1. The Legislative (Amendment) Bill 2012 (the “Bill”) was introduced into the Legislative Council (the “LegCo”) for a first reading on 8 February 2012 and a second reading on 2 May 2012. The Bill sought to disqualify a person who had resigned as a member of the LegCo from standing for a by-election scheduled to be held within 6 months of his resignation. Prior to the second reading, two legislators proposed a total of 1,306 amendments to the Bill. This was part of an avowed attempt by the Appellant and other legislators to filibuster the Bill. 2. On 17 May 2012, the debate had continued for over 33 hours, during the course of which the President had on numerous occasions ruled speeches made by the Appellant and other filibusters to be irrelevant to the clauses and amendments. A Legislative Councillor referred to a “closure motion” that exists in other legislative bodies and suggested that the President conclude the debate immediately. 3. Subsequently, the President announced his decision at 9:00am on the same day to give all those involved until 12:00 noon to conclude the debate. He based his decision on rule 92 of the Rules of Procedure of the LegCo (the “Rules”) which provides that “in any matter not provided for” in those rules, the practice and procedure to be followed shall be as decided by the President. The debate ended as directed. The amendments to the Bill proposed by the legislators were put to the vote and were all defeated. The Bill eventually became law on 1 June 2012. 4. Two issues arise on the appeal: First, having regard to the Basic Law (the “BL”) and the Rules, under what circumstances may a decision of the President of LegCo made during the legislative process be judicially reviewed? Second, in light of the answer to that question, is the decision of the President of LegCo on 17 May 2012 to close the debate of the committee of the whole Council on the amendments to the Bill purportedly pursuant to Article 72(1) of the BL and Rule 92 of the Rules, amenable to judicial review? 5. Regarding the first issue, the Court held that on the basis of public policy, the provisions on the constitutional separation of powers set out in the BL and the doctrine of separation of powers and the principle of non-intervention embedded in the common law, the Court will only exercise jurisdiction to determine the existence, but not the manner of exercise, of a power, privilege or immunity of LegCo or its President. 6. Regarding the second issue, the Appellant submitted that the decision of the President is amenable to judicial review because Article 73(1) of the BL confers on the Appellant as a member of LegCo a right to participate in the legislative process of LegCo which he was deprived of by the President’s decision, and because rule 92 of the Rules confers no power on the President to close the debate. The Court held that the purpose of Article 73 of the BL is to confer certain powers and functions on LegCo as a law-making body but not on individual members of LegCo. The Court further held that the President has power to set limits to and to terminate a debate which is inherent in or incidental to his power under Article 72(1) of the BL to “preside over meetings”; and that it is not for the Court to consider whether the President’s power was properly exercised nor whether the President’s decision constituted an unauthorised making of a rule of procedure. 7. The Court accordingly unanimously dismissed the appeal. |
1. The Appellant was a Mainland Chinese company listed in Hong Kong. Following disputes between the parties under a joint venture agreement, the Respondent obtained an arbitral award (the “Award”) in its favour. Subsequently, the Respondent obtained leave from the Court of First Instance to enforce the Award in Hong Kong. In October 2016, the Respondent served a statutory demand on the Appellant in respect of the amounts due under the Award. The Appellant did not pay the amounts demanded and sought declaratory relief to prevent the Respondent from presenting a winding-up petition against it. 2. In the present proceedings, the Appellant argued that, since the Appellant was an unregistered company, the Respondent would not be able to satisfy the three core requirements for the Hong Kong court to exercise its jurisdiction to wind up the Appellant pursuant to section 327(3) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) (the “Ordinance”). The three core requirements are that: (1) There must be a sufficient connection with Hong Kong; (2) There must be a reasonable possibility that the winding-up order would benefit those applying for it; and (3) The court must be able to exercise jurisdiction over one or more persons in the distribution of the company’s assets. 3. In the courts below, the Appellant accepted that the first and third requirements were met and the argument proceeded on whether the second requirement was satisfied. At trial, Harris J held that the second requirement was satisfied because the leverage created by the prospect of a winding-up petition constituted sufficient benefit for the Respondent. Unless the Appellant was surprisingly indifferent to the adverse consequences of a winding-up order, such as the loss of its status as a Hong Kong listed company, one would expect it to pay the Award.The Court of Appeal upheld Harris J’s decision on the basis that there was a real possibility of benefit to the Respondent in the leverage created by the making of a winding-up order against the Appellant. 4. Before the Court of Final Appeal, the Appellant contended that the second requirement was not met on two broad bases: (1) First, since the three requirements are restraints on the court’s jurisdiction, they must be interpreted in light of comity and, in this case, comity required the court to pay sufficient deference to the jurisdiction of the company’s state of incorporation. This weighed against accepting leverage as a proper benefit. (2) Secondly, the benefit under the second requirement had to be a benefit resulting from the making of a winding-up order, not from any pressure or leverage arising before such an order was actually made. Further, the relevant benefit had to be money or property convertible into money, not an intangible benefit such as leverage. The purpose of the three core or threshold requirements 5. The Court noted that the jurisdiction to wind up foreign companies is provided by sections 327(1) and (3) of the Ordinance and that the three requirements are self-imposed restraints on the court’s exercise of jurisdiction to set in motion its winding-up procedures over a foreign company. But they were not statutory provisions and their interpretation should not be approached as if it were an exercise of statutory construction. They did not go to the existence of jurisdiction, but to the discretion of the court in deciding whether to exercise jurisdiction. It would therefore be preferable to refer to these requirements as threshold requirements, to avoid their description as “core” requirements being misunderstood. The nature of the benefit under the second threshold requirement 6. The Court observed that, in the case of an undisputed debt due and owing from a company to a creditor, the statutory demand mechanism provided a convenient means for seeking payment of that debt by the presentation of a winding-up petition. A company which failed to comply with a statutory demand is deemed to be insolvent. Where this was so, the case law recognised that it is entirely proper for a creditor to present a winding-up petition on the basis of the company’s insolvency as a means of applying commercial pressure to seek repayment of the undisputed debt. 7. The Court held that the benefit for the purposes of the second requirement is not limited only to one arising from the making of a winding-up order and need not be monetary or tangible in nature. The rationale of the benefit requirement is to ensure that the winding-up process will serve some useful purpose to the petitioner and the Court noted that the threshold for the benefit requirement had been recognised by the case law to be a low one. Since it was entirely proper to seek repayment of an undisputed debt by a statutory demand and winding-up petition, there was no reason to confine the relevant benefit narrowly to a consequence materialising only upon the making of the winding-up order itself. Further, once it was accepted that commercial pressure to achieve the repayment of an undisputed debt is an entirely proper purpose for a creditor’s winding-up petition, there was no reason to exclude such commercial pressure as a relevant benefit for the purposes of the second requirement. Comity and the three threshold requirements 8. The Court noted that, in the present context, comity meant that the court should exercise its winding-up jurisdiction over a foreign company only where it had a sufficient connection with Hong Kong. However, this issue did not arise in the present case because the Appellant had accepted, correctly, that the first requirement was satisfied. 9. The Court observed that the Appellant’s comity argument was an attempt to add a separate jurisdictional requirement of appropriate forum, namely that there was no more appropriate jurisdiction in which to wind up the company than Hong Kong. The Court held that there was no room for adding such a further requirement. If sufficient connection were established under the first requirement, any issue related to appropriate forum should only be a factor (as opposed to an essential requirement) that the court would consider at the hearing of the petition in deciding if a winding-up order should be made. Application of the principles to this case 10. The Court held that the second requirement could be satisfied by the commercial pressure placed on the debtor to pay an undisputed, or indisputable, debt by the invocation of the court’s winding-up procedures. In the present case, this was satisfied by the presentation of the winding-up petition. Disposition 11. Accordingly, the Court unanimously dismissed the appeal. It also directed that the sum paid into court pursuant to the order of Harris J, as a condition on which the winding-up petition presented by the Respondent in respect of the Appellant had been adjourned, together with the accrued interest thereon, be paid out to the Respondent forthwith. |
1. The Appellant was charged with taking part in an unlawful assembly (the “Offence”), contrary to sections 18(1) and (3) of the Public Order Ordinance (Cap.245) (“POO”). It was the Prosecution’s case that, on 2 November 2016, the Appellant, together with other persons, took part in an unlawful assembly outside a conference room of the Legislative Council Complex. 2. The Appellant was convicted after trial and sentenced to 4 weeks’ imprisonment by a Magistrate. His appeal against conviction and sentence to the Court of First Instance was dismissed. 3. Section 18(1) of the POO provides that “when 3 or more persons, assembled together, conduct themselves in a disorderly, intimidating, insulting or provocative manner”, they are an unlawful assembly if, in acting so, they: (1)“intend … to cause any person reasonably to fear that [they] will commit a breach of the peace” (the “Intended Limb”); or (2)are “likely to cause any person reasonably to fear that [they] will commit a breach of the peace” (the “Likely Limb”). 4. The issue on appeal was the requisite degree of mental element, if any, the prosecution must prove to convict a person charged under the Likely Limb of the Offence. 5. In Kulemesin v HKSAR (2013) 16 HKCFAR 195, this Court held that, in cases where a statutory offence is silent or ambiguous as to the mental state required for conviction, the presumption of there being a mental element arises. A court is then to ask herself two questions in tandem: first, whether the presumption is displaced; and second, if such presumption is displaced, what is the requisite mental requirement, if any, that needs to be established. In answering these two questions, five alternatives are available. They were considered in this appeal. 6. In this appeal: (1) The Appellant argued that under the Likely Limb, the Respondent either has to prove knowledge, intention or recklessness on the part of the defendant (the “1st Alternative”), or that the defendant did not act in an honest and reasonable belief that the circumstances or likely consequences of his conduct were such that he would not be liable for his actions (the “2nd Alternative”). (2) The Respondent argued that it is not necessary to establish any state of mind on the part of the defendant under the Likely Limb (the “5th Alternative”). 7. In the present case, the Court held that the 1st Alternative does not apply to the Likely Limb, as intention as a mental element is already provided for under the Intended Limb of the Offence. It can be assumed that the legislature did not intend to duplicate it in the Likely Limb. 8. The Court also held that the 2nd Alternative does not apply. This is because when defendants, in a group of at least three persons, have assembled together and conducted themselves in a disorderly, intimidating, insulting or provocative manner which, viewed objectively, will have been likely to cause any person reasonably to fear that the assembled persons will commit a breach of the peace, they are not persons who have acted in a reasonable, diligent and socially unblameworthy manner. Such construction aligns with the purpose of the Offence which is to prevent and control disorders, as early as possible. 9. In holding that the 5th Alternative applies, the Court concluded that, the offence under the Likely Limb is designed to prevent breaches of the peace from happening. As such, it is not logically linked to whether the assembled persons do or do not foresee reasonable apprehension of breach of the peace as the consequence of their acts, but is focused instead on responding to the objectionable nature and quality of those acts. 10. The Court further observed that, although no mental element needs to be proved under the Likely Limb, such construction does not “overcriminalise” behaviour as the Offence has built-in requirements ensuring that the conduct is deserving of criminal punishment. The Offence still requires proof of a guilty mind in relation to the acts of assembling together and acting together in conducting themselves in a disorderly, intimidating, insulting or provocative manner. Further, section 18(3) of the POO requires the prosecution to prove that a defendant took part in the unlawful assembly. 11. In the present case, on the facts found by the Magistrate and upheld by the Court of First Instance, the Appellant must have known at the time of the gathering in which he took part in the Legislative Council Complex that the group’s conduct was likely to cause fear of a breach of the peace. In the circumstances, regardless of the Court’s answer as to which of the Kulemesin alternatives applies, the Appellant’s appeal was bound to be dismissed. Disposition 12. Accordingly, the appeal was unanimously dismissed. |
1.Ricky and Jason were business partners in a chain of Japanese noodle restaurants in Hong Kong under the name “Ajisen Ramen”. Each Ajisen Ramen restaurant was held by a separate company (together, “the Ajisen Group”) in which Ricky, Jason and others held shares. In around 2004, the shareholders of the Ajisen Group decided to go into the sushi restaurant business, and Smart Wave was set up to operate a sushi restaurant under the name of “Itamae”. Ricky is a director and shareholder of Smart Wave. Ricky subsequently went on, on his own, to set up other sushi restaurants, each held by a separate company, being the 2nd to 30th Respondents (the “further restaurants”). 2. Disputes arose between the shareholders and they entered into a shareholders’ agreement known as the Hero Elegant Agreement under which it was intended that Hero Elegant Limited and its subsidiaries would operate the Itamae restaurants and Ricky and Jason (through a company owned by him), amongst others, would be issued shares in the separate companies operating those restaurants. Jason sued for breach of the Hero Elegant Agreement, claiming that Ricky had failed to perform it. The trial judge dismissed that claim, holding that Jason’s company had been in repudiatory breach of the Hero Elegant Agreement. There was no appeal in relation to that part of the judgment. 3. Jason also sued in a derivative action, on behalf of the shareholders of Smart Wave except Ricky, for breach of fiduciary duties owed by Ricky to Smart Wave as its sole director by opening further restaurants. 4. The central question in this appeal was whether, in the events that occurred, the conduct complained of went beyond the scope of the duties owned by Ricky to Smart Wave (“Question 1”). 5. The duty of a director to act in the best interest of the company is a statement of the positive duty of loyalty which encompasses (and is broader than) the conflict rule. The conflict rule provides that a fiduciary may not put himself in a position where his own interest and duties to the company conflict. 6. The majority held that Ricky was in breach of the conflict rule by setting up further restaurants because, in addition to the further restaurants being in competition with Smart Wave, there was the possibility that a business opportunity was diverted from Smart Wave. Furthermore, Smart Wave, as the first restaurant in what was to become a chain of restaurants, had an interest in the establishment and operation of the chain as it developed. The strength of the brand, and its popularity, would redound to its advantage. 7. The majority also held that the agreement between Jason, Daisy Poon (sister of Jason) and Ricky that Smart Wave would be the first of a number of companies, each operating one restaurant, was coupled with an expectation and agreement that they would all be substantial shareholders in each such company (together, the “2004 Agreement”). The Appellant could not rely only on that part of the 2004 Agreement that suits his case. Mr. Justice Ribeiro PJ and Mr. Justice Fok PJ also held that the 2004 Agreement was superseded by the mutual consent between the parties reflected in the Hero Elegant Agreement and, even if it continued to operate, it involved an agreement for the establishment of chain restaurants in which its parties would be able to participate as shareholders rather than an agreement simply allowing Ricky to open further restaurants on his own. 8. All shareholders with a right to vote at a general meeting of Smart Wave may assent to the opening of further restaurants by Ricky, even if those activities breach the conflict rule. However, the majority was unable to find such unanimous assent in this case. There was no direct evidence of any such acquiescence, let alone agreement, by the minority shareholders in Smart Wave authorising Ricky to open the further restaurants. Absent authorisation, Ricky was in breach of his fiduciary duties to Smart Wave. 9. The other question raised in this appeal was, in essence, whether inconsistent conduct or the failure of an alleged obligation to call “contrary evidence” was sufficient to deny the equitable relief which Jason sought on behalf of Smart Wave (“Question 2”). 10. The majority refused to entertain Question 2, since it was only raised for the first time in the Court of Final Appeal; it was not pleaded, nor was the evidence directed to it. Dissenting judgment of Mr. Justice Tang PJ (Mr. Justice Bokhary NPJ agreeing): 11. Dissenting on Question 1, the minority found that since Smart Wave was established pursuant to the 2004 Agreement, any fiduciary duties which Ricky might owe to Smart Wave must be consistent with and conform to the terms of the 2004 Agreement. And because Smart Wave was limited to operating the first Itamae restaurant only, as per the 2004 Agreement, the opening of further restaurants by Ricky would not be in breach of his fiduciary duties owed to Smart Wave. It also followed that the remedy to Ricky cutting the other parties out of their shares in the further restaurants would be contractual, pursuant to the 2004 Agreement, and the breach of the 2004 Agreement has been resolved by the Hero Elegant Agreement. The fact that the Hero Elegant Agreement miscarried by reason of Jason committing a repudiatory breach, through no fault of Ricky, made no difference to the contractual nature of the remedy. 12. The minority also found that the minority shareholders had been allotted shares in Smart Wave on the understanding that Smart Wave was to be the first of a number of companies, each operating one restaurant. In this way, there was understanding between all shareholders of Smart Wave that Ricky could open further restaurants. 13. The minority agreed with the majority that the Court should not entertain Question 2. CONCLUSION: 14. The appeal on Question 1 was dismissed by a 3:2 majority, and the appeal on Question 2 was dismissed unanimously. |
Facts 1. The Appellant was leaving a flat when he was intercepted by the police. Two packets of ice (the “First Batch”) were found in a sling bag which he was carrying. Inside the flat, ten packets of ice and one packet of ketamine (the “Second Batch”) were found in a black bag. A key to the flat was found in his sling bag. Under caution, the Appellant admitted to the police that all the ice belonged to him. 2. The Appellant was charged with a single count of trafficking in all the drugs found. He pleaded not guilty. At trial before a jury, the Appellant’s defence was that he was framed, that he had nothing to do with either batch of drugs and the admission he had made was extracted by force. 3. The prosecution case was conducted on the basis that the Appellant was in possession of both batches of drugs in the two bags. Neither the prosecution nor the defence sought to distinguish between the Appellant’s possession of the drugs in the two bags. However, in closing submissions, the prosecutor suggested that the jury could convict, even if they were satisfied that the Appellant was only in possession of one of the two bags. Defence counsel in his closing submissions postulated several different possible scenarios on the facts, but submitted that the jury had to be satisfied the Appellant was in possession of both bags before they could convict. The trial judge agreed and directed the jury that they could only convict if satisfied that the Appellant was in possession of both bags; it was not enough if they thought he was in possession of only one. In other words, the trial judge gave an “all or nothing” direction to the jury. The jury, by a majority of 6 to 1, found the Appellant guilty. 4. The Appellant applied for leave to appeal to the Court of Appeal on the basis that, notwithstanding that defence counsel had asked for an “all or nothing” direction, the judge should have required the prosecution to amend the charge by splitting it into several charges dealing with different scenarios regarding the Appellant’s possession of the drugs found in different places. 5. The application for leave to appeal was dismissed. The majority in the Court of Appeal held it was proper to direct the jury on an “all or nothing” basis dealing with one count of trafficking. McWalters JA, dissenting, held that the prosecution should have applied to amend the charge by laying an alternative count of trafficking in the First Batch only. Issue 6. On appeal before the Court of Final Appeal, the Appellant argued that the trial judge was under a duty to place before the jury all possible alternative scenarios which were open to it on the evidence, even if such alternatives were not raised by the parties and even if they were inconsistent with the defence case. The Appellant argued that the trial judge should have split the indictment into three counts involving trafficking in the First Batch, trafficking in the ice in the Second Batch and mere possession of the ketamine in the Second Batch. Since the trial judge failed to do so, there was a danger that the Appellant was unfairly over-convicted. Decision 7. The Court unanimously dismissed the appeal. Reasons 8. The primary responsibility for ensuring a fair trial rests on the trial judge. Alternative verdicts should be put to a jury only if they are obvious and supported by evidence. The way the defence case is run is relevant in determining whether there is sufficient evidence to support an obvious alternative verdict. If an alternative verdict does not arise in the way the defence case is run, this will in most cases be decisive. 9. When faced with the possibility of an alternative verdict, the trial judge has a discretion in deciding on the most appropriate course to take. The trial judge should elicit the views of the parties, which are relevant but not necessarily decisive. Counsel have the duty to assist the court in putting forward relevant considerations, particularly those relating to a fair trial, for the judge to consider. 10. In the present case, there was no evidence to suggest that the ketamine was for the Appellant’s own consumption, nor was this a part of his case. Hence, this was not an obvious alternative verdict. Since it was the Appellant’s defence that he had nothing to do with either batch of drugs, the scenario that the Appellant was in possession of only the First Batch was not an obvious alternative verdict either. 11. In any event, the Appellant was given what was undoubtedly a favourable direction. There was no danger that he was unfairly over-convicted. |
Facts 1. Human trafficking is a worldwide as well as a Hong Kong problem. Against this context, the Appellant, who is a Pakistani national, was brought to Hong Kong as a foreign domestic helper between 2007 and 2010. During that period, he was badly mistreated by his employer. His movements were restricted to the office and he worked long hours. He was regularly beaten and was not paid any wages. The employer also threatened him with serious harm if he left his employment. In 2010, his employer tricked him into returning to Pakistan. 2. After returning to Hong Kong in 2012, the Appellant made multiple reports about the mistreatment that he had suffered to the Immigration Department, the Police and the Labour Department. A claim for unpaid wages was registered, but there was no investigation of his complaints as a possible case of human trafficking for forced labour. 3. The Appellant applied for judicial review in respect of the Government’s breach of his rights under Article 4 of the Hong Kong Bill of Rights (“BOR4”). BOR4 is divided into three separate numbered paragraphs. BOR4(1) states that “no one shall be held in slavery; slavery and the slave-trade in all their forms shall be prohibited.” BOR4(2) states that “no one shall be held in servitude”. BOR4(3)(a) states that “no one shall be required to perform forced or compulsory labour.” 4. The Court of First Instance allowed the application. It held that firstly, implicit in each of the concepts prohibited by BOR4 is a prohibition against trafficking a person for each of slavery, servitude and forced labour respectively. Secondly, the Appellant was a victim of human trafficking for the purpose of forced labour. Thirdly, the Government had positive obligations under BOR4 to enact measures to ensure the prohibition of forced labour, including human trafficking for that purpose. The current legal regime is insufficient and the Government had failed to maintain a criminal offence that prohibits forced labour. 5. The Court of Appeal allowed the Government’s appeal in part, ruling that this is a case of forced labour and that the Government breached its investigative duty under BOR4 in relation to the Appellant’s complaints. However, it held that BOR4 does not cover human trafficking and does not impose positive obligations on the Government to specifically criminalise forced labour. Issue 6. The Appellant appealed to the Court of Final Appeal on two questions of law. First, does BOR4 prohibit human trafficking and, if so, what is the scope of the prohibition? Secondly, does BOR4 impose a positive duty on the Government to maintain a specific offence criminalising the activities prohibited under BOR4? Decision 7. The Court unanimously dismissed the appeal. Reasons 8. On the first question, the Court held that BOR4(1) may, by referring to “slavery and the slave-trade in all their forms”, prohibit human trafficking for the purposes of slavery. However, BOR4(1) does not prohibit human trafficking generally for the purposes of exploitation or for the purposes of servitude and forced or compulsory labour. Furthermore, BOR4(3)(a) does not prohibit human trafficking for forced or compulsory labour. 9. BOR4 is structured to distinguish between three separate and distinct concepts. Since the prohibition against forced or compulsory labour under BOR4(3)(a) is derogable, it is different from the prohibitions against slavery and servitude under BOR4(1) and BOR4(2). Furthermore, BOR4(2) and BOR4(3)(a) prohibit substantive conduct in the form of servitude and forced or compulsory labour, rather than the process of trafficking. To expand the meaning of BOR4 to prohibit human trafficking for exploitation generally would be to ignore the language of BOR4 and impermissibly alter the underlying concepts addressed in BOR4(2) and BOR4(3)(a). 10. On the second question, the Court held that the Government has a wide margin of discretion in the manner in which it complies with its positive obligations under BOR4, subject to the supervision of the courts. There is no absolute duty on the Government to maintain a specific offence criminalising forced or compulsory labour. To comply with its obligations under BOR4, the Government must afford practical and effective protection of rights under BOR4. Whether it has done so will depend on the facts of any given case. 11. In this case, it had not been shown that the breach of the Appellant’s BOR4 rights was caused by the lack of a specific offence criminalising forced or compulsory labour, or that existing offences failed to afford the Appellant sufficient protection. Nonetheless, this judgment did not prevent a different conclusion being reached in a future case. |
1. In these proceedings, the Court is asked to determine the legal questions of (a) whether the oaths taken by Mr. Nathan Law Kwung Chung (“Mr. Law”), Mr. Leung Kwok Hung (“Mr. Leung”), Ms. Lau Siu Lai (“Ms. Lau”), and Mr. Yiu Chung Yim (“Mr. Yiu”) on 12 October 2016 were valid in law and, (b) whether they should be regarded in law as having declined or neglected to take the oaths. Mr. Law, Mr. Leung, Ms. Lau, and Mr. Yiu are collectively referred to as the “Defendants”. 2. The Defendants are members-elect for the LegCo term starting from 2016. On 12 October 2016, they proceeded to take the LegCo Oath before the Clerk to the LegCo (“the Clerk”). The Clerk administered the oaths taken by Mr. Law, Mr. Leung and Ms. Lau but declined the jurisdiction to administer the oath-taking by Mr. Yiu on the ground that Mr. Yiu had altered the form of the oath (“the Clerk’s Decision”). 3. On 18 October 2016, the President of the LegCo (“the President”) ruled that the oath taken by Mr. Law was valid but the respective oaths taken by Ms. Lau and Mr. Yiu were not. However, the President allowed Ms. Lau and Mr. Yiu to retake their oaths (“the President’s Rulings”). Ms. Lau and Mr. Yiu retook the oaths on 2 November and 19 October 2016 respectively, and the President regarded their retaken oaths valid. 4. The Chief Executive (“CE”) and the Secretary for Justice (“SJ”) (collectively “the Plaintiffs”) sought (among others) (a) orders to quash the Clerk’s Decision and the President’s Rulings, and (b) declarations that the oath taken by each of the Defendants was invalid, that each of the Defendants has been disqualified from assuming or entering the Office of a LegCo Member (“the Office”). 5. On a proper construction of Article 104 (“BL104”) of the Basic Law (together with its Interpretation issued by the National People’s Congress Standing Committee on 7 November 2016 (“the Interpretation”)), the provisions in the Oaths and Declarations Ordinance (“ODO”) and as derived from the relevant case law, the Court identifies the following principles relating to the legal requirements for taking the LegCo Oath. 6. First, it is a constitutional and mandatory requirement that a member elect of the LegCo must properly and validly take the LegCo Oath both in form and in substance as required by the law before he could assume the Office. 7. Second, taking the LegCo Oath in form and in substance means, in law, that the oath taker must: (1) take the LegCo Oath in exactly the same form and content as prescribed under Schedule 2 of ODO (“the Exact Form and Content Requirement”); (2) do it solemnly and sincerely (“the Solemnity Requirement”); and (3) sincerely believe in and strictly abide by the oath (“the Substantive Belief Requirement”). 8. Third, under the Exact Form and Content Requirement, the oath taker must accurately and completely read out the oath as prescribed, and must not read out words which do not accord with the wording of the prescribed oath. Additions of other worded messages in the oath would be regarded in law as altering the form of the prescribed oath and thus in breach of the Exact Form and Content Requirement. 9. Fourth, under the Solemnity Requirement, the oath taker must take the oath in such a solemn manner which is consistent and commensurate with the occasion of taking the LegCo Oath. “Solemn” means dignified and formal. The manner should reflect and demonstrate the due respect consistent with the utmost constitutional importance of the oath taking procedure and support the serious and important commitment of the oath taker to bind himself to the pledges in the oath. 10. Fifth, under the Substantive Belief Requirement, the oath taker in taking the oath must at the time of the oath also faithfully and genuinely believe and commit himself or herself to uphold and abide by the obligations in the LegCo Oath. 11. Sixth, an oath taker who seeks to alter the form, the manner and the substance of the oath when taking it will offend Art. 104 of BL, and the oath so purportedly taken will be unlawful and of no effect. He will be regarded as declining and neglecting to take the oath. A LegCo member-elect who declines or neglects to take the oath would be disqualify automatically as a matter of law from assuming or entering into the Office. 12. Seventh, the Court is the final arbiter in determining whether an oath taker’s oath is compliant with the legal requirements. 13. Eight, the Court adopts an objective test in assessing such compliance: (i) In an objective assessment, the Court will look at the conducts, manner and words adopted by an oath taker in taking the LegCo Oath with a view to deciding what meaning those conducts, manner and words convey to a reasonable person. The oath taker’s subjective intention or thinking is irrelevant. (ii) In the objective assessment, the oath taker would be regarded in law to have declined or neglected to take the oath if (a) he objectively intended to adopt the particular manner, conducts or words in taking the oath, and (b) the particular manner, conducts or words objectively viewed do not comply with any of the oath taking legal requirements. It is not necessary element to find that the oath taker objectively intended to flout the law. Mr. Law 14. It is not disputed that, right before reading out the oath, Mr. Law made an Opening Statement “誓詞，英文係‘Affirmation’，佢拉丁文原意係使其更堅定更堅強。宣誓就係一個莊嚴嘅儀式，要我地向香港人承諾未來要知行合一，捍衛香港人嘅權利。但今日呢個神聖嘅儀式，已經淪為政權嘅工具，強行令民意代表屈服喺制度同埋極權之下。You can chain me, you can torture me, you can even destroy this body, but you will never imprison my mind. 我今日要完成必要嘅程序，但係唔代表我會屈服喺極權之下。香港市民永遠都係我地服務同埋團結嘅對象，我係絕對唔會效忠於殘殺人民嘅政權，我一定會堅持原則，用良知守護香港。希望在於人民，改變始於抗爭。”[1]. 15. Further, he adopted a distinct rising tone whenever he spoke the word “國” in reading the phrase “中華人民共和國香港特別行政區” of the LegCo Oath. Right after reading out the oath, he made a closing statement “權力歸於人民，暴政必亡，民主自決，抗爭到底。” 16. The Plaintiffs submit that, objectively assessed the above way in which he took the oath, Mr. Law did not comply with the legal requirements to faithfully or truthfully believe and commit himself to upholding and abiding the obligations set out in the LegCo Oath. 17. Applying the legal principles to the above indisputable objective facts of this case, the Court agrees with the Plaintiffs’ submissions. (a) Viewed objectively, by the Opening Statement, Mr. Law manifested a reasonable person the message that (i) the requirement to take the LegCo Oath was something that Mr. Law as the elected representative was “forced” to do under the system and a totalitarian authority, and (ii) the requirement to take the LegCo Oath was only a political tool employed by the PRC and the HKSAR to force him to pledge allegiance to the HKSAR of the PRC and the uphold the BL. (b) By adopting a rising intonation in pronouncing the word “國＂in the phase “the HKSAR of the PRC” in the oath, and understood in the context of the Opening Statement, Mr. Law has objectively expressed a doubt on or disrespect of the status of the PRC as a legitimate sovereign of the HKSAR. (c) The Court and Court of Appeal have previously held in another case that doubting or refusing to recognize the legitimacy of the PRC as the sovereign of the HKSAR is inconsistent with and contrary to the swearing allegiance to the HKSAR and to uphold the BL. (d) For all these reasons, view objectively, Mr. Law did not manifest a genuine and truthful intention to commit himself to and abide by the obligations in the LegCo Oath when purportedly taking it. (e) Further, there is no dispute that Mr. Law intentionally made the Opening Statement and adopted the rising tone. In the premises, Mr. Law is regarded in law to have declined or neglected to take the LegCo Oath on 12 October 2016 when requested to do so. 18. Further, Mr. Law read the Opening Statement right before he read out the LegCo Oath, and the Closing Statement right after. Objectively viewed, Mr. Law intended to convey the worded messages in the opening and closing statements as part of the oath taking itself. The Court therefore also agrees with the Plaintiffs’ submissions that by making the Opening and Closing Statements in the way he did, Mr. Law failed to comply with the Exact Form and Content Requirement in taking the LegCo Oath. 19. Mr. Law has provided various subjective explanations in his affirmation explaining what he did in the oath taking process. These explanations are evidence or matters relating to Mr. Law’s subjective thought process, thinking and subjective meanings he sought to accord to his conducts. The Court do not regard them relevant to the objective test for determining the legal compliance of his oath taking. In any event, even if the court was to consider them, Mr. Law’ explanations are not borne out by and are clearly inconsistent with the clear and objective evidence adduced before the Court. They therefore could not have any bearing in the objective assessment to displace the objective meaning as found by the court. 20. Mr Law also says the way and manner he adopted to take the LegCo Oath is modelled upon the previous ways and manner in which past LegCo members had taken the oath, which had been accepted to be valid by the President or Clerk. He therefore did not have any intention to flout the legal requirements when taking the oath in such a way. As such, he should therefore not be held to have declined or neglected to take the oath. The Court rejects this submission in light of the legal principle set out at paragraph 13(ii) above. 21. In the premises, the Court finds it clear in law that objectively Mr. Law declined or neglected to take the LegCo Oath on 12 October 2016 and is disqualified from assuming or entering the Office since 12 October 2016. The Plaintiffs are granted the reliefs as they sought against Mr. Law. Mr. Leung 22. It is not disputed that, after the Clerk called Mr. Leung to take the oath, Mr. Leung wearing a black T-shirt with the words “公民抗命” walked up to the table by carrying an opened yellow umbrella (with many words written thereon, including “結束一黨專政”) in his right hand and a paper board showing “人大831決議” in his left hand and at the same time shouted a slogan in Cantonese. After he reached the table, he made a statement in Cantonese “雨傘運動！不屈不撓！公民抗命！無畏無懼！人民自主自決！無須中共批准！我要雙普選！梁振英下台！”[2]. He then read out the words of the LegCo Oath in a truncated manner. After he completed reading out the words, he shouted another slogan “撤銷人大831決議！我要雙普選！”;[3], put down the umbrella, tore a piece of paper with the words “人大831決議” into pieces, threw them away towards the ceiling and left where he had been standing. 23. The Clerk treated the oath taking as valid. did not say anything about Mr. Leung’s purported oath-taking. 24. Applying the legal principles to the objective facts of this case, the Court agrees with the Plaintiffs’ submissions that Mr Leung did not comply with the Solemnity Requirement. 25. The ceremony and procedure of oath taking serve only one purpose, which is for the oath taker to comply with the constitutional requirements by taking the oath in the form and substance as prescribed and required by the BL and ODO. 26. In Mr. Leung’s case, the holding of an opened umbrella, the chanting of slogans, and the tearing of paper with message on it are not related to the very purpose of the oath taking. Objectively to a reasonable person, these theatrical acts and conducts clearly go outside an objective reasonable range of the requisite dignity and respect that would commensurate with the constitutional importance and seriousness of the oath taking process. Objectively viewed, the acts and conducts of Mr. Leung in his taking of the LegCo Oath therefore did not satisfy the Solemnity Requirement. 27. Furthermore, the Court also holds that, given Mr Leung made the chanted slogans right before and after his reading of the oath, objectively viewed by a reasonable person, Mr. Leung sought to convey the additional worded messages in the chant as part of the oath taking itself. His oath taking therefore also failed the Exact Form and Content Requirement. 28. Mr. Leung has provided various explanations in his affirmation saying that he made those short statements in the oath taking process to express to his voter his political goals. He also does not advocate for the independence of Hong Kong and is in fact genuine in making his pledges in the oath. The Court does not regard these subjective explanations relating to his thought process, thinking and subjective meanings he sought to accord to his conductsas relevant to the objective assessment. In any event, even if the court was to consider them, these explanations do not impact on the court’s conclusion on the failure to comply with the Solemnity Requirement, and indeed support the objective view that Mr. Leung sought to incorporate and convey in the oath taking additional worded messages, thereby violating the Exact Form and Content Requirement. 29. For the legal principle set out at paragraph 13(ii) above, the Court also rejects Mr. Leung’s reliance on the past rulings of the President in accepting previous oath taking by Mr. Leung himself and other LegCo members to say that he had no intention to flout the legal requirements and therefore did not decline or neglect to take the oath. Similarly, the court does not accept that LegCo practices on what are acceptable members’ conducts in conducting LegCo proceedings and debates as the benchmark for measuring the requisite solemnity for oath taking, since they are of very different nature and for different purposes. 30. The Court concludes that, objectively, Mr. Leung declined or neglected to take the LegCo Oath when he was requested to do so on 12 October 2016. He should be disqualified from assuming the Office since and is not entitled to claim to act as a LegCo member. The Clerk’s Decision to accept Mr. Leung’s purported oath as valid was wrong in law and should be quashed. The Plaintiffs are granted reliefs as they sought against Mr. Leung. Ms. Lau 31. It is not disputed that, after having been requested to take the LegCo oath, but before her reading out the words of the oath, Ms. Lau made an opening Statement “本人劉小麗謹此承諾，本人由街頭進入議會，定必秉承雨傘運動命運自主精神，與香港人同行，連結議會內外，對抗極權。我們要活在真誠磊落之中，打破冷漠犬儒，在黑暗中尋找希望，共同開創民主自決之路。推倒高牆，自決自強。”[4]. Ms. Lau then read the words of the oath at slow pace with a clear pause lasting about 6 seconds between each word of the oath. It took about 10 minutes for Ms. Lau to complete reading out the entire context of the LegCo Oath in this manner. Ms. Lau then made a closing Statement “爭取全民退休保障，落實墟市政策，捍衛香港人生活尊嚴”,[5] right after she completed reading out the text. On 13 October 2016, Ms. Lau published on the Facebook an article explaining her conduct during the oath taking process. Ms. Lau also gave her explanations reported in an article published in Apple Daily on the same date. 32. On 18 October 2016, the President ruled that the oath purportedly taken by Ms. Lau was invalid. Notwithstanding the ruling, the President said he was prepared to allow Ms. Lau to retake the oath. 33. Applying the legal principles to the objective facts of this case, the Court agrees with the Plaintiffs’ submission that the conducts of Ms. Lau clearly show objectively that she did not genuinely and faithfully accept and bind and commit herself to the obligations pledged in the LegCo Oath. The way in which Ms. Lau read out the LegCo Oath by breaking up each of the words with an interval of 6 seconds objectively clearly show to a reasonable person that she did not intend to convey any meaning of the contents and pledges of the LegCo Oath. Hence, objectively, Ms. Lau did not intend to commit herself to the obligations under the LegCo Oath. This is indeed confirmed by her own admissions in the Facebook article and the Apple Daily article. Accordingly, Ms. Lau has failed to comply with the Substantive Belief Requirement. 34. The Court also finds that Ms. Lau has violated the Exact Form and Content Requirement. Given that she made the opening and closing statements right before and after the reading of the oath, objectively viewed, she intended to convey additional worded messages (as embodied in the statements) as part of the oath taking itself. 35. Ms. Lau has provided in her affirmation various subjective explanations to say that she wanted to use the slow-paced reading to underline to the public “the hypocrisy” of some unidentified LegCo members who “treated the oath as going through the motion” and to convey the message that “their fluent oaths are hypocritical”. 36. The Court reiterates that these subjective explanations relating to her thought process, thinking and subjective meanings she sought to accord to her conducts are irrelevant to the objective assessment and should not be taken into account. Further, the Court also refuses to treat them as the relevant background and context as they could not have been known to a reasonable person at the time of the oath taking. In any event, even if the court was to consider them, the explanations cannot be accepted to displace obvious and unequivocal objective meaning conveyed by the conduct of the slow-paced reading as found by the court. 37. It clear that Ms. Lau intended to take the LegCo Oath in a slow-paced manner. Accordingly, she has objectively declined or neglected to take the LegCo Oath. The oath purported taken by her was therefore unlawful and invalid. As a matter of law, she has since been disqualified from taking the Office. In the premises, the Clerk’s Decision and the President’s Ruling were wrong in law and should be quashed. The Plaintiffs are granted reliefs as they sought against Ms. Lau. Mr. Yiu 38. It is not disputed that when Mr. Yiu first purported to take the LegCo Oath on 12 October 2016, he inserted and read out the extra words “定當守護香港制度公義，爭取真普選，為香港可持續發展服務”[6] in the middle of the LegCo Oath. The Clerk then told Mr. Yiu that, since he had added extra words to the oath, the Clerk had no jurisdiction to administer the oath and requested Mr. Yiu to retake the oath in the prescribed form. In retaking the oath, Mr. Yiu again added the same extra words at the end of the oath. The Clerk then informed Mr. Yiu that the Clerk had no jurisdiction to administer the oath. Mr. Yiu then returned to the seat. 39. On 18 October 2016, the President ruled that the oath purportedly taken by Mr. Yiu was invalid but that he acceded to Mr. Yiu’s request for retaking the oath. 40. The court agrees with the Plaintiffs’ submissions that the oath taken by Mr. Yiu on 12 October 2016 violated the Exact Form and Content Requirement. 41. The Court finds that, objectively viewed, Mr. Yiu intended to add the extra words in the middle of the LegCo Oath in his first attempt to take the oath. The Court notes that, after reading out the extra words, Mr. Yiu had paused momentarily and then continued to read out the remaining words in the LegCo Oath. The Court takes the view that, given that the extra words constituted a complete sentence of 25 words, objectively the fact that Mr. Yiu read the entire sentence out in the middle of the oath and completed reading the rest is consistent with the position that he intended to read it that way. Alternatively, if it was a mistake in inserting the extra words, a reasonable person in Mr. Yiu’s position would have started the oath over again without continuing reading the remaining wordings of the oath. Mr. Yiu’s then decision to continue to read out the remaining words after inserting the extra words clearly demonstrates that at the latest by then, he intended to insert and read out the extra words in the way he did in his first attempt. Mr. Yiu therefore violated the Exact Form and Content Requirement already in his first attempt, and has so declined or neglected to take the LegCo Oath when requested to do so. 42. In any event, the Court has no hesitation in finding that Mr. Yiu’s second attempt was also invalid. In the second attempt, Mr. Yiu was warned by the Clerk that the oath taking would be invalid by inserting extra words. Mr. Yiu has nonetheless inserted the extra words at the end of the prescribed form of the LegCo Oath. He read out the extra words immediately, continuously and smoothly after reading out the last sentence of the prescribed text of the LegCo Oath. Viewed objectively, the extra words uttered by Mr. Yiu were intended to be understood as part and parcel of the oath. This is a breach of Exact Form and Content Requirement. As Mr. Yiu has intentionally read out the extra words in the way he did, he has declined or neglected to take the LegCo Oath. He should be disqualified from taking the Office after his second attempt. 43. Mr. Yiu says he did not decline to take the LegCo Oath. He explained that he had made a mistake in the first attempt, and in any event he was under the misunderstanding of the law that he could add words to the LegCo Oath anywhere as long as he did not alter the substance of the pledges in it. He said he never intended to flout the oath taking law. 44. The Court rejects these arguments because: (a) as stated in paragraph 13(ii) above, it is not a necessary element in the objective assessment to find an intention to flout the law; (b) Mr. Yiu’s subjective explanations relating to his thought process, thinking and subjective meanings he sought to accord to his conducts are irrelevant to the objective assessment, and (c) in any event, the explanations support the Court’s conclusion that Mr. Yiu has violated the Exact Form and Content Requirement as in his own case, he did intend to add the words to the LegCo Oath even though to the end of it. 45. In the premises, Mr. Yiu failed to comply with the Exact Form and Content Requirement in taking the LegCo Oath on 12 October 2016. Objectively, he has in law declined or neglected to take the LegCo Oath. The President was wrong to allow Mr. Yiu to retake the oath. The President’s Ruling should be quashed. The Plaintiffs are granted reliefs as sought against Mr. Yiu. Defendant’s Stay Application 46. On the last day of the hearing, the Defendants applied for a permanent stay or dismissal of these proceeding against them on the basis that they are an abuse of process as their commencement was allegedly motivated by political considerations or ulterior reasons that the Plaintiffs have failed to disclose. This is particularly so as the Defendants say there are other members-elect of the LegCo in this term who have taken the LegCo Oath in allegedly the same manner and ways as the Defendants, but the Plaintiffs have not explained why they did not also bring the disqualification proceedings against the others. 47. Having considered the parties’ written submissions subsequently filed, the Court dismissed the application for stay for the following reasons: (a) It is noted that the Government has issued public statements back in December 2016 explaining that the decision of taking out the proceedings was based on legal advice including the advice from independent counsel and no political consideration had been involved. (b) The Defendants says that the Government is “politically motivated” in only bringing the proceedings against the Defendants but not the others so as to disqualify so many pro‑democrats and other non-establishment members as would destroy their majority in the LegCo in Geographical Constituencies. The Defendants also submit that it is proper to infer in these circumstances that these proceedings were only brought against them in succumbing to undue political pressure. The court finds these allegations at best speculative and the conclusions are illogical since they could not logically explain why the Plaintiffs would have to be selective and only proceeded against the four defendants but not the others, which could generally also be regarded as “pro-democrats” or the non-establishment camp. (c) Further, the authorities emphasize that the law draws an important and clear distinction between the use of the process for obtaining judgment and the misuse of the process for predominant purpose other than for which the proceedings are designed. It is clear that the Plaintiffs intended to proceed against the Defendants to trial and to seek reliefs as claimed. Even if (which the Court does not accept) the disqualification achieves some extraneous purposes, this cannot constitute an abuse of process because the alleged purpose is to bring about a result for which the law provides in any event. (d) When all these are assessed a whole, the Defendants have failed to discharge the burden imposed in law to show that the commencement of these proceedings against them is an abuse of process by the Plaintiffs to achieve an ulterior or political motive. [1] English translation: Affirmation, English being ‘affirmation’, has a Latin meaning strengthening the affirmative. Taking the oath is a solemn ceremony, requiring us (the members-elect) to make a promise to Hong Kong people that we will keep our words and actions as one, to protect the rights of the Hong Kong people. However, this solemn ceremony has today been rendered a political tool used by those in power to forcefully subject elected representatives under the system and the authority. You can chain me, you can torture me, you can even destroy this body, but you will never imprison my mind. Today I must complete the required procedure, but this does not mean 1am subjugating myself under the totalitarian authority. Hong Kong citizens will always be those whom we serve and unite, I will absolutely not bear allegiance to a political administration which brutally kills its people, I will maintain my principles, and protect Hong Kong people with my conscience. Hope is in the people, change is in resistance. [2] English translation: Umbrella Movement! Indomitable! Civil Disobedience! Without Fear! Self-Autonomy and Self-Determination for People! No Approval from the Communist Party of China is Required! I Want Dual Universal Suffrage! Leung Chun Ying Step Down! [3] English translation: Revoke NPC 831Decision! I Want Dual Universal Suffrage! [4] English translation: I, Lau Siu Lai, hereby make this pledge, that I, having entered the Council from the streets, will certainly carry forth the spirit of self-determination of destiny in the Umbrella Movement, walk with the Hong Kong people, connect the inside and outside of the Council, to fight against totalitarianism. We must live in truth, break the indifference and cynicism, look for hope in the darkness, and blaze a trail to democratic self-determination together. Tear down the high wall [for] self-determination and self-reliance. [5] English translation: Fight for universal retirement protection, implement policy for bazaar and staunchly defend the dignity of Hong Kong people in their living. [6] Translated as: I will protect the justice system in Hong Kong, fight for true democracy, and serve Hong Kong for its continuing development. |
1. These appeals concerned the protection conferred by Articles 6 and 105 of the Basic Law (“BL6 and BL105”) on private property rights in connection with planning restrictions laid down by the Town Planning Board (“TPB”). 2. The appellants, who are property owners and developers, had succeeded in having the TPB’s decisions quashed on traditional judicial review grounds in the lower courts, but unsuccessfully contended that the planning restrictions represented a disproportionate and therefore unconstitutional infringement of their property rights. 3. The Court of Appeal made orders for remitter to direct the TPB to reconsider its decisions in accordance with the Court of Appeal’s judgment, which included its conclusion that the planning restrictions did not engage the constitutional rights in BL6 and BL105. The appellants challenged that conclusion in these appeals and sought a direction that the TPB consider whether the restrictions were unconstitutional. 4. The first question for the Court was whether BL6 and BL105 are engaged in relation to planning restrictions imposed by the TPB on the use of land. 5. Both Articles stipulate that the obligation to protect private property rights is to be discharged “in accordance with law”. Such a phrase does not serve to qualify or limit the protection conferred but provides an additional layer of legal certainty. 6. Even though the statutory power to impose planning restrictions existed prior to the appellants’ acquisition of the sites, this did not mean that the new and more intrusive constraints imposed by the TPB after the land’s acquisition could be disregarded as mere incidents of ownership so as to exclude the protection of BL6 and BL105. The Court thus concluded that both Articles were plainly engaged. 7. BL6 and BL105 are not absolute rights. It is for the Court to determine the permissible extent of any restrictions that limit such rights by a process referred to as a proportionality analysis. In addition to the existing three-step inquiry taken in a proportionality analysis, a fourth step should be added which involves asking whether a reasonable balance has been struck between the societal benefits of the encroachment and the inroads made into the constitutionally protected rights of the individual, asking in particular whether pursuit of the societal interest results in an unacceptably harsh burden on the individual. 8. The first two steps of the proportionality analysis were satisfied as it was assumed that the planning restrictions did pursue a legitimate aim and that they were rationally connected thereto. It was at the third stage of the inquiry, assessing the permissible extent of the incursion into the protected right, that two main standards have been applied: (i) whether the intruding measure is “no more than necessary” to achieve the legitimate aim (for which standard the appellants and interveners argued), and (ii) whether the encroaching measure is “manifestly without reasonable foundation” (for which standard the respondents argued). 9. The difference between the standards is one of degree and both standards are on a spectrum of reasonableness. The “manifest” standard has been used in cases where the Court recognizes that the originator of the impugned measure is better placed to assess the appropriate means to advance the legitimate aim espoused and is afforded a wide margin of discretion. It has been applied in cases involving implementation of political, social or economic policies but is not confined to such cases. 10. Having considered jurisprudence from the European Court of Human Rights, the Court concluded that the application of either standard would depend on the circumstances of the underlying case and the factual bases claimed for the incursion. The location of the standard in the spectrum of reasonableness depends on many factors relating principally to the significance and degree of interference with the right, the identity of the decision-maker, and the nature and features of the encroaching measure relevant to setting the margin of discretion. 11. In general, where the TPB reaches decisions which are not flawed on traditional judicial review grounds, any planning restrictions should be subject to review applying the “manifestly without reasonable foundation” test. It is highly unlikely that decisions arrived at lawfully and in conformity with principles of traditional review would be susceptible to constitutional review unless the incursions are exceptionally unreasonable. 12. The views of the Court on BL6 and BL105 differed from those of the Court of Appeal. It was ordered that the order of the Court of Appeal remitting the matter to the TPB for reconsideration of its decisions would remain, but the order for such reconsideration to be in accordance with the Court of Appeal’s views on the two Articles would be deleted. |
1. The current general practice in sentencing is that an applicant is afforded a full one-third discount from the starting point for sentence, if a plea of guilty is tendered up to and until the first day of trial. The judgment reviews that practice and provides for a revised practice. 2. In the revised practice, the following principles remain the same for all cases: (i) the court will retain an overriding discretion in sentencing and (ii) the court’s practice of not having regard to the strength of the prosecution case in determining the discount to be afforded for a plea of guilty. 3. The revised practice only applies to a defendant who in future will reach the stages in criminal proceedings for which revised discounts are identified (e.g. it applies to a defendant who is currently in the magistracy but will be committed or transferred for trial in the future). Defendants whose trial dates have already been fixed will benefit from the previous practice. 4. The effect of this judgment is to reflect the principle that the utilitarian value of a guilty plea is greater the earlier it is given. Pleas on first day of trial and thereafter (applicable at all levels of court) 5. For pleas of guilty made on the first day of trial, the appropriate discount is 20% from the starting point for sentence. 6. For pleas of guilty made during the trial itself (after the first day of trial), the discount would usually be less than 20%. The actual discount will reflect the circumstances in which the plea was tendered. The Court of First Instance 7. For cases to be heard in the Court of First Instance: the stage to afford a full one-third discount from the starting point is at the committal (i.e. the defendant should then be committed for sentence to the Court of First Instance). 8. If the indication to plead guilty is made after committal, up to the fixing of trial dates by the Listing Judge, the appropriate discount is 25% from the starting point. 9. After trial dates have been fixed, but before the first day of trial, the appropriate discount for an indication of plea of guilty lies between 25% and 20% from the starting point. The judge will have regard to the time at which the indication was given and all other relevant circumstances. The District Court 10. For cases transferred to the District Court: a full one-third discount from the starting point is to be afforded to defendants who indicate a guilty plea on the first or a subsequent Plea Day. 11. Defendants who indicate a plea of guilty between the fixing of trial dates at the Plea Day and the first day of trial are to be afforded discount of between 25% and 20% from the starting point. The judge will have regard to the time at which the indication was given and all other relevant circumstances. The Magistracy 12. For cases in the Magistracies, the opportunity to secure a one-third discount from the starting point occurs when the defendant is asked to tender a plea to the charge; if trial dates are fixed that opportunity is lost. 13. If the defendant indicates before the first day of trial that he wishes to plead guilty, the discount to be afforded lies between 25% and 20% of the starting point for sentence. The magistrate will have regard to the time at which the indication was given and all other relevant circumstances. |
1. This appeal arises from a mortgage action brought by the Respondent (“Lender”) against the Appellant (“Borrower”). The Judge dismissed the action on the ground that both the legal charge and the loan it secured were unenforceable because the parties had agreed an interest rate exceeding 60% per year, contrary to section 24 of the Money Lenders Ordinance (Cap 163). The Court of Appeal reversed the decision of the Judge and ordered enforcement of the charge and payment of the loan. The Borrower was granted leave to appeal to this Court. 2. The loan of around HK$40 million was advanced by the Lender to the Borrower in February 2015. Upon expiry of the original three-month loan period, the parties agreed to four successive extensions, the last of which allowed the period of extension to continue indefinitely. It is undisputed that up to and including the fourth extension, the interest rates charged by the Lender fell below 60% per year. In October 2016, the parties entered into a final agreement which retrospectively revised the interest rate over the whole period of extension. The revised interest rate also did not exceed 60% per year. 3. The unlawful interest rate forming the basis of the decision of the Judge was said to have been charged by the Lender under an agreement made by the parties between the conclusion of the fourth extension and the final agreement. That agreement was found to have existed by a process of inference. The evidence upon which the Judge made such an inference was a demand letter sent by the Lender’s solicitors to the Borrower in June 2016. That letter first set out, according to the terms of the four extensions, the Borrower’s total indebtedness at the time (principal and unpaid interest included), which was around HK$60 million. It went on to say that further interest “continued to accrue on the sum”. The Judge inferred from that letter that there must have been an agreement whereby interest had been charged on the said HK$60 million as from June 2016 which, when applied to a loan of some HK$40 million, produced an interest rate that was higher than the fourth extension rate and exceeded 60% per year. 4. The Judge took a poor view of the Lender’s failure to disclose its retained copy of the 2016 demand letter at an earlier stage of the proceedings, considering this as an attempt by the Lender to conceal the letter in order not to reveal that there had been an agreement charging an unlawful interest rate. 5. The Court of Appeal accepted that such an inferred agreement existed, and agreed with the Judge that there was a rule of law that whenever a loan was extended a new loan capitalising the unpaid interest arose. But the Court of Appeal considered the Judge had failed to apply this rule to the inferred agreement when he calculated the interest rate with reference to the original loan amount of some HK$40 million, instead of the deemed new loan amount of some HK$60 million. Applying the higher figure, the interest rate charged under the inferred agreement fell below 60% per year. Thus, no issue of unlawful interest rate arose and the Court of Appeal decided in favour of the Lender on the basis of the final agreement. Existence of the inferred agreement 6. This Court held there was no basis upon which the Judge could properly draw an inference that an agreement charging unlawful interest rate existed. The 2016 demand letter did not support such an inference. The use of the word “continued” in the letter must mean that interest continued to accrue at the fourth extension rate, and the words “on the sum” simply meant that such accruing interest would be added to the Borrower’s total indebtedness which happened to stand at some HK$60 million in June 2016. Neither the demand letter itself nor the parties in the proceedings alleged there was any agreement as inferred by the Judge. There was nothing to support the finding that the Lender attempted to conceal any such agreement, particularly given that the original of the 2016 demand letter would have been in the possession of the Borrower, making any such attempt a futile exercise. Effect of extension of loan 7. Although the point did not arise given the conclusion on the existence of the inferred agreement, this Court considered there was no rule of law that whenever parties agreed to vary the terms of a loan by extending its loan period or changing the interest rate, that must count as entering into a new loan. The law would simply give effect to what, as a matter of construction, appeared to have been the intention of the parties as shown by the language they had used. Disposition 8. Accordingly, this Court unanimously dismissed the appeal. The orders of the Court of Appeal were affirmed, although this Court departed from the Court of Appeal’s reasoning in reaching the same conclusion. |
The Facts 1. ENM Holdings Limited (“ENM”) operates a private members’ club, the Hilltop Club (the “Club”), on top of a hill in Tsuen Wan. It also owns the land on which the Club is situated (the “Club premises”). 2. The Club is surrounded by Government land. From public roads, the only way for vehicles to go in and out of the Club is through Hilltop Road (the “Road”), which is also on Government land. 3. The Road was in existence when ENM was granted the Club premises by the Government in 1976. It is not known who built the Road. 4. The Road was built by the “cutting and tipping method”. Part of the natural terrain was cut to create a flat surface. The cutting is then used to build a slope and an embankment downhill, widening the flat surface, which make up the Road. The Dangerous Hillside Orders 5. Features 33 and 156 are man-made slopes (the “Features”) which support the Road. They lie outside of the Road, and became dangerous and in need of repair. 6. The Building Authority (“BA”) came to a view that ENM was responsible for repairing certain subdivisions of the Features: Features 33(1) and 156(1) (the “Slopes”). 7. BA therefore issued ENM with dangerous hillside orders (the “Orders”) under s.27A of the Buildings Ordinance, Cap.123 (the “Ordinance”) over the Slopes. The Orders require ENM to investigate the Slopes and submit proposals for remedial/preventive work for BA’s approval. 8. For the purposes of this Appeal, BA relies on Special Condition 31 (“SC31”) of the grant, which provides the legal basis of ENM’s ownership of the Club premises (the “Grant”), to establish ENM’s responsibility for the Slopes. It provides, “The grantee shall construct a paved way to the standards laid down in the Building (Private Streets and Access Roads) Regulations… over the [the Road] and shall uphold, maintain and repair such paved way and everything forming portion of or pertaining to it …, and the grantee shall be responsible for the whole as if he were absolute owner thereof…” The Courts Below 9. ENM (among other things) denied responsibility for the Slopes under SC31. The Appeal Tribunal (Buildings) (the “Tribunal”) held that SC31 only covers the Road itself, but not the Slopes. On BA’s judicial review of the Tribunal’s decision, the Court of First Instance (the “CFI”) came to an opposite view, holding that “pertaining to [the Road]” should be read widely to include the Slopes, even if they lie outside Road. The Court of Appeal (“CA”) allowed ENM’s appeal on the construction of SC31. The BA now appeals the CA’s construction of SC31. The Parties’ Submissions 10. Before this Court, BA argued that, when the Grant was made in 1976, ENM and the Government must have proceeded under the false assumption that the Road had not been built. If ENM had to make the Slopes to build the Road, ENM would clearly be responsible for their maintenance. Since ENM is treated as if it had made the Slopes, it is responsible for them under SC31. 11. ENM replied that there is nothing to show that the Grant was made under this false assumption. Further, there was no awareness in 1976 that hillsides might attract onerous maintenance responsibilities. At the time slopes were not regulated; the Ordinance was only enacted four years later in 1980. The Court’s Analysis and Conclusions 12. SC31 has to be read in light of what ENM and the Government would have reasonably understood it to mean when they entered into the Grant in 1976. If an unusual or onerous duty was part of the Grant, it would have been spelled out in clear terms. 13. There is nothing to show that ENM and the Government assumed between themselves that there was no road. Instead, since the Road was already in existence, the words “shall construct a paved way to the standards laid down in the Building (Private Streets and Access Roads) Regulations” is apt to describe ENM’s duty to pave the existing road or upgrade it to the standard required under the regulation. 14. It follows that SC31 does not impose any maintenance duty on the Slopes, which were not built by ENM. The appeal is dismissed. |
1. This appeal concerns a claim by the Appellant for a success fee (“Transaction Fee”) in respect of a fundraising transaction entered into by the Respondent after the termination of a Financial Advisory Agreement supplemented by an Addendum (“FAA”). 2. The central question before this Court concerned the correct approach to contractual interpretation and the possible implication of terms in relation to contracts governing such payments. 3. The Respondent, pursuant to the FAA, engaged the Appellant to act as its financial adviser and sought advice and assistance on fundraising with a view to the Respondent expanding its business internationally. 4. The material provisions of the FAA stated that (1) the Appellant should provide a range of services to the Respondent during the period of its engagement, (2) the Appellant would be entitled to a Transaction Fee if the Respondent entered into a fundraising transaction and (3) the Appellant would in certain circumstances be protected by a so-called “tail-gunner clause” (“TGC”) so that the Appellant would be entitled to a Transaction Fee if a fundraising transaction were to take place within two years after the termination of the FAA. 5. In April 2009, the Appellant introduced Dentsply International Inc (“Dentsply”) to the Respondent as a prospective investor. After having a telephone conference, Dentsply decided not to invest in the Respondent. 6. In May 2010, after the FAA was terminated and without the Appellant’s participation, Dentsply approached the Respondent for business dealings. This eventually led to Dentsply’s investment in the Respondent (the “Investment”), and the parties announced the deal in December 2010. 7. In September 2011, the Appellant commenced an action against the Respondent for payment of a Transaction Fee pursuant to the TGC before the Court of First Instance (“CFI”). The CFI dismissed the Appellant’s claim, holding that the Appellant had failed to show that any work done by it was the effective cause of the Investment. The Appellant appealed to the Court of Appeal (“CA”) which dismissed the Appellant’s appeal, holding that the Appellant was not entitled to a Transaction Fee merely for having introduced a party to the Respondent without any involvement in the resultant transaction. 8. The Appellant argued before this Court that the TGC should be construed as requiring merely the introduction of a party as opposed to introduction of the ultimate transaction to entitle it to payment. The Appellant further contended that it should alternatively be entitled to a Transaction Fee by “shaping up” the Respondent to make it more attractive to potential investors. Both arguments were rejected by this Court. 9. The Court held that the purpose of the TGC was to guard against the Appellant being unfairly deprived of a Transaction Fee which it had substantially earned. 10. After interpreting the material provisions of the FAA, it held that it was not enough merely to introduce a third party, but the Appellant was also required to contribute to achieving the successful completion of an actual fundraising transaction in order to earn a Transaction Fee. Therefore, it was insufficient for the Appellant to have merely introduced the Respondent to Dentsply without having played any part in relation to achievement of the eventual transaction. Disposition 11. Accordingly, the Court unanimously dismissed the appeal. |
1. In 2012, the Appellant arrived at the Hong Kong International Airport from Kuala Lumpur. During inspection, heroin was discovered in the lining of her suitcase. 2. At trial in 2014, by a majority of 5:2, the jury found the Appellant guilty of trafficking in a dangerous drug, contrary to section 4(1)(a) and (3) of the Dangerous Drugs Ordinance (Cap 134). The Court of Appeal dismissed her appeal but in 2017, the Court of Final Appeal quashed her conviction and ordered a retrial. 3. At the second trial in 2017, the Appellant was convicted by a second jury on a 6:1 majority and sentenced to imprisonment for 21 years. She succeeded on appeal to the Court of Appeal, which quashed her conviction and ordered a second retrial. The Court of Appeal made no reference to the evidence before it relating to the Appellant’s psychiatric condition, noting only that a third trial and being remanded in custody “might be causing her frustration”. 4. At issue before this Court was whether the Court of Appeal had been wrong in ordering a second retrial, by not sufficiently taking into account the undue hardship and unfairness allegedly occasioned to the Appellant by the second retrial order, particularly given her psychiatric condition. 5. The Court held that the Court of Appeal should have taken into account the Appellant’s mental condition in determining whether to order a second retrial. 6. In deciding not to order a second retrial, the Court considered the following factors. 7. The Appellant had been in custody for 7½ years, from her arrest to the hearing of this appeal, through no fault of her own. If a third trial took place later this year, she would have been in custody for 8 years without her guilt having been established. If she were convicted and sentenced for 21 years again, taking into account the 1/3 allowance for good behaviour, she would already have been in custody for 8 years out of 14, more than half of a long sentence. 8. Psychiatric evidence before this Court put into perspective this lengthy period of custody. The medical experts agreed that the Appellant suffered from a moderate to severe Major Depressive Disorder with psychotic symptoms. She was significantly stressed when reminded of the ongoing court proceedings. 9. Although the offence in question was serious, the strength of the prosecution’s case was open to question. In the circumstances, it was clearly in the interests of justice not to order a second retrial for the Appellant. DISPOSITION: 10. The Court unanimously allowed the appeal, quashed the order for a retrial, and ordered the release of the Appellant. |
1. The 5 defendants (“D1 to D5”) herein were the executives of the Executive Council of the General Union of the Hong Kong Speech Therapists [香港言語治療師總工會] (“GUHKST”). They face one charge of conspiracy to print, publish, distribute, display and/or reproduce seditious publications, contrary to sections 10(1)(c), 159A and 159C of the Crimes Ordinance, Cap 200 (“the Charge”). 2. It is alleged by the prosecution that D1 to D5 among themselves and together with Wong Hoi-ching and other persons had embarked upon an agreement to cause the three picture books particularized in the Charge, i.e. “羊村守衛者” (“Book 1”), “羊村十二勇士” (“Book 2”) and “羊村清道夫” (“Book 3”), to be printed, published, distributed, displayed and/or reproduced in the name of GUHKST from 4 June 2020 (ie the day when Book 1 was published) until 22 July 2021 when they were arrested, and that these three books had the seditious intention as particularized in the Charge. 3. All defendants argue that the offence charged is unconstitutional on the ground that it is inconsistent with their freedom of expression, speech and publication, and/or freedom to engage in literary and artistic creation and other cultural activities guaranteed by the Basic Law (“BL”), and the Hong Kong Bill of Rights Ordinance, Cap 383 (“HKBOR”), and that the offence charged should therefore be struck down outright, or it should be given a remedial interpretation in the way suggested by counsel for some defendants to render it constitutionally compliant. It is also argued that the Charge should not cover “Central Authorities”, and that the facts proved by the prosecution are insufficient to prove the Charge beyond reasonable doubt against each of the defendants. 4. Nearly the whole of the prosecution evidence is admitted by the defendants. There is no submission of no case to answer, and the defendants elect not to give evidence and call no witnesses. On the other hand, certain facts have been agreed between D4 and the prosecution. 5. The following issues fall for consideration: - (1) Does the offence charged cover the “Central Authorities”? (2) What are the elements of the offence, in particular whether it requires proof of “the common law intention”? (3) Is the offence charged unconstitutional? (4) Were the three picture books or any of them seditious publication? (5) Was there the alleged conspiracy, and if so, did D1 to D5 or any of them take part in it? (6) Is prosecution of the offence time-barred? 6. On Issue (1), the court rules that the Central Authorities have been properly included in the Charge against the defendants. 7. Section 9(1)(a) of the Crimes Ordinance shall now read: “A seditious intention is an intention to bring into hatred or contempt or to excite disaffection against the Central Authorities, or against the Government of Hong Kong”. The other parts of the written section 9(1)(a) are to be disregarded as the types of colonial governments referred to therein do not exist now. 8. Sections 9(1)(c), 9(1)(f) and 9(1)(g) shall remain unchanged, but section 9(1)(d) shall read: “A seditious intention is an intention to raise discontent or disaffection amongst inhabitants of Hong Kong.” 9. On Issue (2), from the plain reading of the statutory provision in question, a person will not commit an offence contrary to section 10(1)(c) of the Crimes Ordinance unless: (a) he prints, publishes, sells, offers for sale, distributes, displays or reproduces any publication (“the prescribed act”); (b) the publication is having a seditious intention; and (c) at the time when he performs the prescribed act, (i) he intends to perform the prescribed act, (ii) he knows that the publication is having a seditious intention, and (iii) he has a seditious intention. 10. The court holds that “seditious intention” as defined in section 9 of the Crimes Ordinance has never included “an intention to incite persons to violence or to create public disturbance or disorder for the purpose of disturbing constituted authority” formulated by case law in various common law jurisdiction (“the Common Law Intention”) as its necessary ingredient, and that there is no basis today to interpret seditious intention to include the Common Law Intention. 11. As to Issue (3), since this prosecution is based on what the defendants had allegedly said and published, it raises the question whether the offence charged has infringed upon their rights to freedoms of expression, of speech, of publication, and of literary and artistic creation and other cultural activities. 12. It is accepted by all parties that these freedoms are fundamental rights guaranteed and protected by Articles 27 and 34 of the BL, Article 19 of the International Covenant on Civil and Political Right (“ICCPR”) which is implemented by Article 39 of the BL, as well as Article 16 of the HKBOR. It is also accepted that these are not absolute rights and may be subject to restrictions. However, such restrictions must be “prescribed by law” and must not contravene the provisions of ICCPR. 13. In its deliberation, the court must give a generous interpretation to the fundamental rights guaranteed by the constitution, and that any restriction must be narrowly interpreted. In the context of this particular case, it is particularly important to remember that: “This freedom [of expression] includes the freedom to express ideas which the majority may find disagreeable or offensive and the freedom to criticize governmental institutions and the conduct of public officials.” 14. After due consideration, the court is satisfied that despite the use of words like “hatred”, “contempt”, “disaffection”, and “discontent” in section 9 of the Crimes Ordinance, these concepts are not so vague or imprecise. The court is of the view that the degree of legal certainty satisfies the “prescribed by law” requirement stipulated in Article 19 of the ICCPR and Article 16 of HKBOR. 15. Applying the 4-step analysis as set out in Hysan Development Co Ltd v Town Planning Board, (a) The court is satisfied that criminalization of seditious acts clearly pursues a legitimate aim. (b) It is beyond argument that criminalization of seditious acts by sections 9 and 10 of the Crimes Ordinance is rationally connected with that legitimate aim. (c) The court finds that the restrictions imposed by sections 9 and 10 of the Crimes Ordinance on the right to freedoms of expression and publication are necessary for the protection of national security and protection of public order (ordre public), and they do not impose restriction more than necessary to limit the right to freedom of expression, publication, etc for the protection of national security and of public order (ordre public). (d) There is also nothing to suggest that a reasonable balance had not been struck between the restrictions and the societal benefits obtained as a result. 16. The court therefore rules that the constitutional challenge fails. 17. On Issue (4), upon the court’s analysis, each of Books 1, 2 and 3 is a publication having seditious intention. The seditious intention stems not merely from the words, but from the words with the proscribed effects intended to result in the mind of children as stated in section 9(1)(a), (c), (d), (f) and (g). 18. As to Issue (5), there is no dispute that Book 1, Book 2 and Book 3 are the publications of GUHKST. This per se provides direct evidence that all executives of the Executive Council of GUHKST had participated in this agreement to print, publish, distribute, display and reproduce the three picture books unless there is evidence that may prevent the inference to be drawn. As to who were the executives at the material times, the evidence has proved beyond reasonable doubt that D1 to D5 and Wong Hoi-ching were the executives of the 1st Executive Council of GUHKST from 12 December 2019 until the date of arrest on 22 July 2021. 19. In addition, there are other evidence linking each of the defendants to the agreement for the printing, publication, distribution, display, etc of Books 1, 2 and 3. The court finds that each one of them had a seditious intention to publish the books. 20. Based on the evidence, the court finds that it has been proved beyond reasonable doubt, from the roles played by each of the defendants, each of them had between 4 June 2020 and 22 July 2021 entered into an agreement amongst themselves and with Wong Hoi-ching and others to print, publish, distribute, display, and/or reproduce Books 1, 2 and 3, knowing that the books printed or to be printed are publications with seditious intention. The court finds that they intended to have this agreement carried out, and in the course of carrying out the agreement, Books 1, 2 and 3 had already been published, and Book 4 was being prepared. 21. As to Issue (6), it is beyond any shadow of doubt that the conspiracy entered into between the defendants had not come to an end before their arrest, and that the conspiracy was not just for printing of the books, but also for publishing, distributing and displaying the books as well. 22. As there is no time bar, each of D1 to D5 is convicted as charged. |
1. The appellant was convicted in the District Court on three counts of money laundering, contrary to section 25(1) of the Organized and Serious Crimes Ordinance, Cap 455 (“OSCO”). 2. It was alleged by the prosecution that the appellant had reasonable grounds to believe that the property he dealt with, directly or indirectly represented the proceeds of an indictable offence. 3. The appellant had set up two companies in Hong Kong, which opened Hong Kong dollar and foreign currency accounts. At trial, he claimed that through these accounts he ran an “underground” banking operation to overcome exchange control restrictions, and that he had performed “gatekeeping” precautions. 4. The dismissal of the appellant’s appeal by the Court of Appeal led to the appeal before the Court. 5. The key issues on appeal are: (1) where the relevant property had emanated from overseas activities, by reason of section 25(4) of OSCO, whether the prosecution had to prove that an accused knew of the nature of such activities and that such conduct constituted an indictable offence under Hong Kong law (“The s 25(4) point”); (2) where the relevant property is a chose in action (such as a deposit of money into a bank account), whether a global charge aggregating a number of different items would offend the rule against duplicity (“The duplicity issue”); and (3) whether the trial judge wrongly regarded the facts as being sufficient to establish the elements of the offence (“Factual issues”). The s 25(4) point 6. OSCO neither required proof of knowledge of the actual conduct that produced the relevant property, nor that such identified conduct would be illegal under Hong Kong law. It was sufficient for the prosecution to prove that an accused had reasonable grounds to believe that the property dealt with, directly or indirectly represented the proceeds of an indictable offence. The duplicity issue 7. There were numerous deposits followed by withdrawals in the accounts used by the appellant in his underground banking operation, all within a short period of time. Also given that no complaint had been made at or before trial based on duplicity, the three charges were unobjectionable. Factual issues 8. There was no merit in the complaint regarding the factual issues. The trial judge had carefully considered the underground banking operations and looked at the matter from the appellant’s point of view, particularly as to whether he performed “gatekeeping” precautions. The charges were established on the facts. Conclusion 9. Accordingly, the Court dismissed the appeal. |
1. In 2007, the 1st Appellant entered into a share purchase agreement (“the SPA”) with the Respondent under which it agreed to sell to the Respondent 370 million shares in a Hong Kong Company called Hans Energy Company Limited (“Hans”), and the 2nd Appellant guaranteed the 1st Appellant’s obligations under the SPA. The SPA included a put option under which, on the occurrence of certain specified events, the Respondent would be entitled to sell the shares back to the 1st Appellant. In 2009, the Respondent purported to exercise that option. 2. The appeal raised the issue of whether the put option was validly exercised. It concerned the construction of the put option clause in the SPA, in particular, whether the dilatoriness of the 1st Appellant in procuring or obtaining the necessary approval from the National Development and Reform Commission of the PRC (“NDRC”) in relation to the change in shareholding in a company formed specifically to carry out a petro-chemical dock construction project (the project being an attraction in the SPA to the Respondent) amounted to the occurrence of an “event”, which was “the failure [to obtain the necessary approval of NDRC]... at the fault of, or arising from an act or omission of [the 1st Appellant]”, thereby triggering the exercise of the put option. 3. At the Court of First Instance, it was held that the put option had been validly exercised, and the Appellants were ordered to pay to the Respondent the put option price, together with interest. The Appellants’ appeal was dismissed by the Court of Appeal. The Appellants appealed to the Court of Final Appeal. 4. The Court unanimously allowed the Appellants’ appeal. In relation to “event”, the Court held that giving the word its natural meaning, it is something which happens at a specific moment in time. A helpful definition was given by Lord Mustill in Axa Reinsurance (UK) PLC v Field, that “event” is something which happens at a particular time, at a particular place, in a particular way, as distinguished from “cause”, which can be a continuing state of affairs and can be the absence of something happening. Therefore, in order for there to be a triggering event for the exercise of put option in the SPA, it had to be possible to identify the date on which the event occurred. 5. In relation to “failure”, the Court held that while the continuous omission of the 1st Appellant to obtain approval could, if taken out of context, properly be described as a “failure” to obtain approval, it could not properly be described as an “event” and could not properly bear the meaning of a continuous state of affairs in the context of the put option clause in the SPA. The Respondent had been unable to point to a moment in time when the “failure” (i.e. the refusal by the NDRC to grant approval) occurred, therefore the continuing omission to obtain approval was incapable of acting as a trigger. Both in theory and in practice, it was impossible to identify the moment when the continuous omission to obtain approval had become attributable to the fault, or an act or omission of the 1st Appellant. 6. The Court came to the conclusion that the put option was never triggered, as the “event” described as “failure to obtain the necessary approval of NDRC” in the put option clause in the SPA was a refusal by NDRC to give that approval, and such event never occurred. On the contrary, NDRC finally gave the necessary approval, albeit belatedly. |
1. The Appellant was convicted after trial before a jury of the offence of trafficking in 1 kilogram of a mixture containing 0.86 kilogram of cocaine. 2. The Prosecution’s (i.e. the Respondent’s) case at trial was that the Appellant was arrested by a group of policemen, after a tip-off, at about 5:55 pm on 15 July 2011 in the corridor of King Wah House, Shan King Estate, Tuen Mun. A police officer searched the Appellant on the spot, and found that the Appellant was carrying a brick of suspected drugs. The police officer then arrested the Appellant for trafficking in a dangerous drug, and cautioned him. The Appellant replied “Ah Sir, I am caught. I carried the drugs for somebody else.” This oral statement was the relevant statement to be considered in the present appeal, as it was a confession that the Appellant knew that he was carrying a dangerous drug. Subsequently, the police made a post-recorded statement, and conducted a video-recorded interview. 3. The Defendant’s (i.e. the Appellant’s) case at trial was that as the Appellant was walking in the corridor, at least four to five people rushed towards him, and twisted his arms. At the same time, one of the policemen pressed his head down, while another took out a white paper bag from his shoulder bag. The Appellant was then handcuffed, but he was not cautioned, nor was he formally arrested. He was made to stand against a wall for about 9 minutes. The Appellant denied he made the oral statement. 4. At trial, a voir dire (i.e. a preliminary hearing) was held. The trial judge ruled that the post-recorded statement and the video-recorded interview were not admissible as evidence to be put before the jury, as he was not satisfied that they were made voluntarily. While the voluntariness of the oral statement did not appear to have been dealt with in the voir dire, this was of no consequence to the issues which arose in the present appeal, because it was in issue before the jury. 5. The trial judge directed the jury to consider whether the Appellant had in fact made the oral statement. He did not give any direction as to the voluntariness of the oral statement. 6. The Appellant was convicted. The Court of Appeal upheld the conviction. The Appellant appealed to the Court of Final Appeal. 7. Two issues arose before the Court. First, in what circumstances should a direction be given to a jury about the voluntariness of a confession, notwithstanding the fact that an accused denies making the confession. Secondly, if such a direction is required, whether the trial judge must direct the jury that if they conclude that a confession may have been obtained as a result of oppression, they are required to disregard it. 8. As to the first issue, the Court held that where there is a possibility that a jury may conclude that (1) a confession was made by the defendant, (2) the confession was true, but (3) the confession was, or may have been, induced by oppression, the trial judge should direct the jury on the voluntariness of the statement. This is so even where the defendant denies making the confession. 9. As to the second issue, the Court held that, in cases where the three conditions above are satisfied, the trial judge must direct the jury that if they conclude that a confession may have been obtained as a result of oppression, they must disregard it. This is known as the Mushtaq direction. 10. The defendant’s right to silence is the main rationale for the Mushtaq direction. 11. In the present case, even though the Appellant denied he made the oral statement, a Mushtaq direction should have been, but was not, given. 12. The Court allowed the appeal and quashed the Appellant’s conviction. A re-trial was ordered. |
This appeal concerns the ascertainment of the Government rent payable by Best Origin Limited (“Best Origin”) in 1997-1998 under the Government lease of Inland Lot No.8874 on Electric Road. As at the valuation date, the tenement was a development site undergoing the early phase of the development. Rents payable under Government leases of land in course of development or redevelopment are calculated by reference to its rateable value. Under the Rating Ordinance, a building site is not a rateable tenement and therefore does not attract a liability for rates. However, section 2 of the Government Rent (Assessment and Collection) Regulation changes this position by providing that when ascertaining Government rent, a building site should be treated as if it were a rateable tenement. The rules as to the ascertainment of rateable value are set out in sections 7(2) and 7A(2) of the Rating Ordinance, which together create a hypothetical test. The test requires the rateable value to be fixed based on the assumption that the tenement is subject to a yearly tenancy. It is calculated by reference to the rent of the yearly tenancy; the tenement will be assessed as it is on the valuation date, having regard to all the intrinsic quality and characteristics of the site which may affect the rental value. In 2001, Best Origin was one of the 59 developers which challenged the Director of Lands’ assessment of rent based on a substantial rateable value. They succeeded in the Court of Appeal, but the decision was reversed by the Court of Final Appeal (“CFA”) in the case reported as Commissioner of Rating and Valuation v Agrila Ltd and others (2001) HKCFAR 83. The challenge failed, and as a result of the CFA judgment, the Lands Tribunal was to assess the rateable value of the land on the basis that its mode or character of occupation on the valuation date was that of a development site. The Lands Tribunal ascertained the value by treating development potential as an intrinsic characteristic of a development site, which would generally result in a higher value as compared with a tenement lacking development potential. Best Origin appealed to the Court of Appeal and subsequently to the CFA on the basis that the Lands Tribunal made a number of errors of law in understanding and applying the principles relating to the assessment of rateable value. Both appeals were dismissed. In particular, CFA agreed with the reasoning of the Lands Tribunal except on two points, which are immaterial to the decision reached by the Lands Tribunal. Best Origin argued that the Lands Tribunal should not have taken into account development potential of the site. This error led the Lands Tribunal to assess what the premises may be capable of being developed into and then used for in the future, instead of reflecting the tenement as it is on the valuation date.It further criticized the Lands Tribunal for disregarding the fact that no developer in the real world would take up a site for development based on a yearly tenancy; it was contended that had this fact been properly considered, the resulting rateable value would have been nil or nominal. In response, the Government argued that it is in line with authorities for the valuer to take into account the prospect of the development. Further, Best Origin’s proposition that a lack of demand for a yearly tenancy in the real world would lead to a nil valuation was not supported by case law, and would enable occupiers of property for uses requiring long-term leases to escape liability for rates and Government rent. In essence, the CFA had to determine the implications of the fact that the mode and character of the occupation of the site was that of a development site. This involved an exercise in statutory construction of the relevant provisions and hypotheses. The CFA remarked that statutory hypotheses should be applied in a practical and flexible way without over elaboration beyond its statutory purpose. The CFA held that the starting point is to recognize that an active development site has an intrinsic characteristic of change towards completion of the development, where the site will grow in its physical appearance and value. Hence, the Lands Tribunal was correct to take into account the prospect of successful and profitable development, which is an intrinsic character of a development site during the course of construction. The CFA recognized that for many years courts have assessed the rateable values of tenements for public utilities such as sewage system and portion of railway lines, which no statutory undertakers would contemplate taking on a yearly tenancy. When dealing with these cases, the yearly character of the hypothetical tenancy should be interpreted as indicating an indefinite duration unless terminated by notice. Such tenements are generally valued on the contractor’s basis method of valuation by reference to an appropriate yield on their capital cost. The CFA confirmed that this approach should be extended to development sites for the purposes of assessing Government rent, taking account of the cost of the site but not the cost of the construction work. Therefore, the Lands Tribunal rightly concluded, and the Court of Appeal and the CFA have affirmed, that while a development site is not immediately productive of income or profits during the course of construction, it is nevertheless of real value to the occupier and has a significant rateable value for purposes of Government rent. |
The appellant was employed by the Hospital Authority as a doctor to provide medical consultations to out-patients in a clinic. On 16 occasions, the appellant booked appointments in the clinic, bought consultation tickets, wrote consultation summaries and prescribed medicines worth a total of $247 for his parents and his son. However, his parents and his son did not attend the clinic for these consultations. The diagnoses of his parents were conducted over long distance phone calls as they were overseas and the diagnoses of his son were conducted at home. The appellant was convicted of one count of misconduct in public office by the Deputy Magistrate. The conviction was upheld on appeal by the Deputy High Court Judge. There are two key issues: First, did the appellant falsify records of the Hospital Authority? Second, was the appellant’s conduct sufficiently serious to amount to the offence of misconduct in public offence? In respect of the falsification issue, the Deputy Magistrate and the Deputy High Court Judge held that the appellant falsified consultation summaries and computer records (the “Records”) as a whole as he failed to clearly state in the Records that his family members did not attend the clinic, knowing that such Records would give rise to the impression that they did. The Court of Final Appeal disagreed with the lower courts and concluded that the appellant’s omission did not amount to falsification of records for several reasons: firstly, the commonly understood meaning of “falsification” involves creating a false document or record, or changing any entry or adding any false entry in a document or record; the appellant did not do any of these. Secondly, there was no evidence of any requirement for a doctor to state in the Records whether a patient personally attended the clinic; nor was there any evidence showing that the Records were intended to record such personal attendance. Thirdly, there was no clear evidence as to any other way in which a doctor could get medicine for his family members whom he had diagnosed outside the clinic. In respect of the “seriousness” issue, the Court of Final Appeal held that the appellant’s conduct was not sufficiently serious to amount to the offence of misconduct in public office. The aim of this offence is to punish an abuse by a public officer of the power and duty entrusted to him for the public benefit or of his official position. It would be wrong simply to conclude that if the misconduct in question is not trivial, then it must be serious enough to merit criminal sanction. The Deputy Magistrate’s reasoning overlooked the fact that the appellant was not required by any rule or the Code of Professional Conduct to diagnose patients inside the clinic and that the appellant’s family members were entitled to public medical services. Further, it was not proved that the public had been deprived of medical services as a result of the appellant’s conduct. Accordingly, though the appellant showed preferential treatment to his family members by dispensing them with attendance at the clinic, his conduct was not so far below acceptable standards as to amount to an abuse of the public’s trust in the office holder. |
1. This was an appeal against the Appellant’s conviction for making a false declaration to obtain registration for carrying on a vocation, contrary to section 37(a) of the Crimes Ordinance (Cap.200) (“CO”). 2. In October 2013, the Appellant submitted to the Nursing Council an application for enrolment as a nurse and a declaration form in which he declared that he had not been convicted of any offence punishable with imprisonment in Hong Kong (the “Declaration Form”). In fact, the Appellant had been convicted in 2007 of two charges of obtaining property by deception for which he was sentenced to seven weeks’ imprisonment for each charge. 3. The prosecution alleged that the Appellant wilfully made the declaration which he knew to be false or fraudulent to procure himself to be registered as an enrolled nurse. 4. At trial, the Appellant argued that he genuinely believed that he was not required to disclose his previous conviction on the Declaration Form due to the provisions of the Rehabilitation of Offenders Ordinance (Cap. 297) (“ROO”). This belief was confirmed by the legal advice obtained by him from the Free Legal Advice Scheme (“Legal Advice”). As understood by the Appellant, the Legal Advice meant that he would be excused from disclosing his previous convictions unless the application form expressly excluded the ROO. Since the Declaration Form did not contain such an express exclusion, the Appellant claimed that he genuinely believed that he could properly declare that he had no previous conviction. 5. After analysing the content of the Legal Advice, the Deputy Magistrate disbelieved the Appellant’s evidence. This was because he was of the view (which the Appellant challenged in this appeal) that the Legal Advice did not convey what the Appellant said it meant. As the Deputy Magistrate understood it, the Legal Advice directed the Appellant to disclose his previous convictions on the Declaration Form. The Deputy Magistrate therefore concluded that the Appellant wilfully and knowingly made a false declaration, and convicted him. 6. The Appellant appealed to the Court of First Instance without challenging this aspect of the findings by the Deputy Magistrate. While the court upheld the Appellant’s conviction on grounds unrelated to the present appeal, the Deputy Judge remarked that the Deputy Magistrate was right in his understanding of the content of the Legal Advice. 7. The Appellant brought a further appeal to the Court of Final Appeal. 8. The central questions in this appeal turned on the construction of section 37(a) of the CO and the meaning of the Legal Advice. Specifically, (a) as a matter of law, whether the prosecution had to prove that the Appellant appreciated the falsity of the declaration and whether a genuine and mistaken belief that the declaration was not false negated the Appellant’s liability; and (b) whether the declaration made by the Appellant was one which he knew to be false. 9. The Court held that the mental element of the offence under section 37(a) of the CO requires the prosecution to prove that the defendant has an appreciation of the falsity of the declaration he is making. If a defendant honestly and genuinely believes that the declaration is not false, even if it is the result of a mistake of law, he cannot be said to know that it is false. In that event, the mental element of the offence will not be established. 10. In this case, the Appellant’s understanding of the Legal Advice was correct. The Deputy Magistrate and Deputy Judge should not have disbelieved the Appellant’s evidence that he held the honest and genuine belief that the declaration was not false. It followed that the prosecution had not proved beyond reasonable doubt that the Appellant knew that the declaration he made was false. Therefore, the basis of his conviction was flawed. DISPOSITION 11. Accordingly, the appeal was unanimously allowed and the Appellant’s conviction quashed. |
1. This appeal concerns an application for judicial review brought by the Appellant challenging the lawfulness of a policy adopted by the Respondent. The policy required applicants submitting building plans for approval under section 14 of the Buildings Ordinance (Cap. 123) (“Ordinance”) to provide proof and particulars of ownership or realistic prospects of control of the site shown on the plans (“policy”). 2. In support of the policy, the Respondent relied on section 16 of the Ordinance which specifies the grounds on which approval of plans or consent to the commencement of building works may be refused. The Appellant however contended that the Ordinance does not expressly or by implication require an applicant to be the owner or have a realistic prospect of control of the site. As “site” is not defined in the Ordinance or in the subsidiary legislation, the Appellant argued that it is simply the physical area that an applicant chooses to put on the plan. 3. In the light of the decision of the Privy Council in Attorney General v Cheng Yick Chi [1983] 1 HKC 14 (“Cheng Yick Chi”), that a site can only include land which an applicant owns or has a realistic prospect of controlling, which was binding on them, the Court of First Instance dismissed the application for judicial review, and the Court of Appeal similarly dismissed the Appellant’s appeal. The Appellant now appeals to the Court of Final Appeal, contending, inter alia, that Cheng Yick Chi was wrongly decided and that on a proper construction of the Ordinance and the subsidiary legislation, a site is simply the physical area which an applicant chooses to put on the plan. 4. The Court first considered the proper construction of the Ordinance. It held that “site” is the single most important determining factor in a building plan and the word should be interpreted according to its context and purpose. The approval of building plans is dealt with in the context of prohibition against building works without the necessary approval. The building plans were required to be approved or disapproved within a tight time table, and it was not envisaged that a site could be hypothetical. Given that the plans to be submitted were expected to be plans for bona fide intended developments, as a matter of statutory construction, “site” can only include land which an applicant owns or has a realistic prospect of controlling. Therefore, the Respondent was entitled to require particulars of ownership or realistic prospects of control of the site. 5. The Court came to the same conclusion reached by the Privy Council in Cheng Yick Chi, with which it was in respectful agreement. Accordingly, the appeal was unanimously dismissed. Concurring judgment of Mr Justice Ribeiro PJ: 6. Construing section 16 of the Ordinance in the light of its context and purpose, the policy is reasonably necessary to enable the Respondent fully to consider whether submitted building plans should be approved. 7. First, section 16(1)(d), taken in combination with section 16(1)(i), supplies a statutory basis for the policy. Ownership and realistic prospects of control are often directly relevant to ascertaining the extent, position and nature of the site as an essential step in calculating the permitted parameters of the development. Possible grounds for disapproval because of contravention by exceeding the statutory maxima may only emerge as a result of the Respondent requiring particulars and proof of ownership or control of the site in the first place. 8. Second, the policy is justifiable on a broader construction of section 16 in the context of other provisions in the Ordinance. The statutory intent maintains its focus on an actual, and not a purely hypothetical, development project. Resources naturally being limited, the state of affairs following from the Appellant’s contention would place heavy administrative burdens on the Respondent and cause delays in the approval process in relation to genuine and bona fide development projects. |
The Respondent was the holding company of the Rockapetta Group of companies (the “Group”), including Rockapetta Industrial Company Limited (“RICL”) and Grand Extend Investments Limited (“GEIL”). The Appellant was the co-founder, chairman and executive director of the Group. The Appellant extended loans totalling $83 million between 1995 and 1998. Financial documents indicated such loans were made to RICL and GEIL. The loans were partly repaid, reducing the outstanding balance of the loans to $44.5 million. In 2004, the Appellant sued the Respondent, claiming the outstanding balance of the loans he made in the sum of $44.5 million and interest. It was alleged that the Respondent was itself liable for the repayment of the loans. The trial judge held in favour of the Appellant against the Respondent. The Court of Appeal allowed the Respondent’s appeal on the basis that the trial judge erred in holding that the Appellant’s loans were made to the Respondent rather than to RICL and GEIL. The Court of Final Appeal unanimously dismissed the Appellant’s appeal. The essential issue was a factual one: who was or were liable for the repayment of the loans? The Court of Final Appeal rejected the Appellant’s submission that companies in the Group, including the Respondent, had assumed joint and several liability in relation to the loans. A claim on such a basis had not been made by the Appellant in any of the claim documents filed in court. The Court of Final Appeal referred to a number of documents and other matters evidencing the fact that the loans made by the Appellant were to RICL and GEIL, instead of the Respondent. Accordingly, the Respondent could not be held liable. The Court of Final Appeal observed that the present appeal is one of many instances of an unmeritorious appeal under the “as of right” provision of section 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance (Cap 484). If leave to appeal had been required, it would no doubt have been refused. Hopeless appeals brought under the “as of right” provision such as the present one lead to injustice and are wasteful of resources. The “as of right” provision no longer has any validity or proper purpose. |
1. The Appellant was convicted after trial of one count of trafficking in a dangerous drug, contrary to section 4(1)(a) and (3) of the Dangerous Drugs Ordinance, Cap.134. On a stop-and-search by the police, he was found in possession of a box containing cocaine and also in possession of the keys of a car beside him in which a further quantity of cocaine was found. 2. The Appellant’s case at trial was that he did not know what the box contained or of the presence of the drugs in the car. He did not give evidence at the trial but relied on the content of his video recorded interview (“VRI”) in which he explained that he had earlier handed his car over to a “Hak Chai”, who was a car repairman, to quote for its repair and he had arranged to meet Hak Chai on the night in question to pay him. When he arrived, Hak Chai had said he had to go to the lavatory and so asked the Appellant to wait by the car for him. Hak Chai left the Appellant with the car key and a box, saying that there was something valuable inside it and that someone would come and collect it. 3. However, there were three mistranslations in the English transcript of the VRI, which suggested that the Appellant had already paid Hak Chai and that the car had been fixed. As a result, the Trial Judge, who did not speak Cantonese, commented in the course of her summing-up to the jury that the Appellant’s answers in the VRI were inconsistent and that there were chronological difficulties in his account. 4. The Court of Appeal considered that the Judge had been misled by the mistranslations but concluded that the mistranslations did not result in any material unfairness for two reasons. First, much of what the Judge said was directed at the generally confused and muddled nature of the Appellant’s answers in his VRI. Second, by requesting to review the VRI, the jury had gone to the primary materials to determine for themselves what to make of the Appellant’s account. This was coupled with the observation that the bulk of what the Appellant said in the VRI should be clear to the native Cantonese speaker. 5. The issue in the appeal was whether the Judge's comments relying on the mistranslated portions of the VRI may have resulted in the Appellant not receiving a fair trial. 6. The Court of Final Appeal held that whether a mistranslation leads to unfairness in a trial will necessarily depend on the nature and context of the mistranslation and its importance to the issues in the particular case. 7. In the present case, there was only one issue, namely whether the Appellant knew the drugs were in the box and in the car. The contents of the VRI and the Appellant’s credibility were critical to that issue. Therefore, the Judge’s comments on the basis of the mistranslated portions of the VRI resulted in the summing-up being unbalanced and unfair to the Appellant. 8. The Court did not agree that the unfairness had been overcome by the reasons given by the Court of Appeal. It was speculative to assume all the jurors were native Cantonese speakers and to conclude that, by requesting to review the VRI, the jury must have done so in order to check the accuracy of the Judge’s comments on the Appellant’s answers. More importantly, it devalued the significance of the summing-up in the trial process, as the jury was bound, as well as entitled, to take the Judge’s summing-up into account in its deliberations. 9. The Court therefore concluded that it had been shown that substantive and grave injustice had been done to the Appellant since, in the circumstances, the Judge’s comments based on the mistranslations did result in the Appellant not receiving a fair trial. 10. The Court allowed the Appellant’s appeal, quashed his conviction and ordered a re-trial. |
1. Yiu Hoi Ying Charles (“Charles”) and Wong Nam Marian (“Marian”) were respectively the Director of Finance and Company Secretary of a listed company - Asia TeleMedia Limited (“ATML”). In July 2002, ATML owed Madam Liu Lien Lien (“Madam Liu”) sums totalling $83.39 million and was insolvent. ATML defaulted in repayment which led Madam Liu to serve five statutory demands on ATML between October 2002 and April 2006. On each occasion, she had been willing to negotiate and did not follow up the statutory demands by serving any winding-up petitions. ATML remained listed and was regarded as having value only as a potential listing-shell. 2. In February 2007, Madam Liu assigned the balance of ATML’s debt in the sum of $58.08 million plus accrued interest to Goodpine Limited (“Goodpine”). Goodpine demanded payment of the debt and served a statutory demand on 26 April 2007, stating that it would petition to wind-up ATML if ATML failed to pay the full amount within 21 days. The public was never informed of the assignment and statutory demand. In the meantime, there was a surge of speculative interest in ATML shares which sharply drove up their price and trading volumes. 3. Between 28 February and 5 June 2007, both Charles and Marian exercised share options and sold their shares, netting substantial profits. On 6 June 2007, Goodpine presented a winding-up petition and the share price of ATML fell very substantially. 4. A Market Misconduct Tribunal (the “MMT”) was constituted to determine whether any insider dealing had taken place. The MMT found that the assignment of the debt to Goodpine and the consequent statutory demand constituted inside information. It was also found that both Charles and Marian knew that the information, if it fell into the public domain, would be likely to have a material effect on the price of ATML shares. Accordingly, the MMT found that Charles and Marian were culpable of insider dealing under section 270(1) of the Securities and Futures Ordinance (the “SFO”), unless a defence could be established. 5. The MMT, however, acquitted Charles and Marian on the basis of the defence under section 271(3) of the SFO, which provided that a person should be acquitted if he did not have a purpose of making profit by using inside information. This was because the MMT found that (1) the sole motivation of Charles and Marian in selling the ATML shares was to seize the opportunity to sell at the surge prices, and that (2) they did not use the inside information since they believed that whatever threatened the share price would be resolved “behind closed doors” and would not influence the market price of the shares. The decision was upheld by the Court of Appeal. 6. The central question in this appeal was whether, on the findings of the MMT, it was correct as a matter of law to hold that Charles and Marian were entitled to rely on the section 271(3) defence. 7. It was agreed that the questions of whether insider dealing took place and also whether the defence applies should be determined at the time when the insider traded the shares. 8. Charles and Marian asserted that their sole purpose was to secure an unexpectedly high profit. This meant that they could only rely on the section 271(3) defence if they could prove that they did not use inside information to secure such profits. 9. The majority held that Charles and Marian failed to establish that defence. In selling the shares, they did take advantage of their knowledge that the prices they were securing would not have been achievable if the information was disclosed to the market. By doing so, they were using inside information and so were excluded from the section 271(3) defence. 10. In the majority’s view, MMT made an error in law since Charles and Marian’s subjective belief that the threat of liquidation would be sorted out in due course and that negative news about the company would remain “behind closed doors” was legally irrelevant. When they traded their shares for profit, they were using the information at that very time and a belief as to what might happen in the future to resolve ATML’s problems was beside the point. The majority therefore held that Charles and Marian were guilty of market misconduct by insider dealing. Dissenting judgment of Mr Justice Tang PJ: 11. In Tang PJ’s view, whether the insider can show that he had not in any way been motivated by the inside information is a question of fact on a subjective issue. 12. Tang PJ held that the section 271(3) defence should be interpreted to provide a defence for a defendant who can show that he would have done what he did even if he had not had the information. 13. On the facts, Tang PJ held that the MMT did not make an error in fact or in law, and did not believe that the Court was entitled to interfere with the MMT’s findings. The MMT was entitled to hold that, like the other employees of ATML, Charles and Marian sold because of the speculative bubble in the shares and the relevant information was not a factor. CONCLUSION: 14. Accordingly, the appeal was allowed by a 4:1 majority. |
The 1st Appellant, as debtor, and 2nd and 3rd Appellants as guarantors, took out a series of mortgaged loans with the Respondent, a moneylender. The Appellants defaulted in repayment in 2003 and the outstanding loan amount then was some $20 million. The Appellants and Respondent entered into successive Tomlin Orders in 2004 and 2005, each containing a schedule of monthly repayment for that year of part of the total outstanding amount. Upon default of the Appellants in complying with the 2005 Order, the Respondent sought to recover the entire loan. The Appellants claimed that since they had belatedly fully complied with the 2005 Order, their entire liability had been discharged and the Respondent could no longer claim the amount outstanding. The Court upheld the decision of the Court of Appeal and the Court of First Instance that there was a common intention between the two parties that the full payment of the 2005 instalments would not discharge the entire post-2005 debt. Since both parties appeared to have agreed that the result of their agreement should be embodied in the 2005 Order, it followed that if their Order could be construed as implying a full release of all outstanding debt, it did so by common mistake. The Court affirmed the trial judge’s finding that the 2nd Appellant was not an honest witness, that he always knew it was never the intention of the Respondent to release its debt and that it was misconduct on his part to use the form of the Tomlin Order to support a claim that the parties had done so. The Court held that there is no inconsistency on the Respondent’s part in asserting in the alternatives both common mistake and in the case of misconduct by one party, the unilateral mistake of the other. The Court upheld the lower courts’ rectification of the terms of the two Tomlin Orders which were made to reflect the Appellants’ duty to discharge all that is outstanding in the repayment of the approximately $20 million owed to the Respondent. The appeal is unanimously dismissed. |
1. China Mining Resources Group Limited (“China Mining”) is a company listed on the Hong Kong Stock Exchange. It wholly owned Biogrowth Assets Limited (“Biogrowth”), which in turn wholly owned Cell Therapy Technologies Centre Limited (“Cell Therapy”). At the material time, Luk Kin Peter Joseph (“Mr Luk”) and Yu Oi Kee (“Miss Yu”) were sole directors of Biogrowth but were not directors of China Mining. 2. United Easy Investments Limited (“United Easy”), a company apparently controlled by the aunt of Mr Luk’s wife, acquired Cell Therapy for HK$15 million (“the Transaction”). Mr Luk and Miss Yu signed board minutes of Biogrowth authorizing the Transaction, which stated that none of Biogrowth’s directors was interested in the Transaction (“the Board Minutes”). However, at trial it was found that Mr Luk was secretly the ultimate beneficial owner of United Easy such that the Transaction was a connected transaction requiring disclosures and subject to voting restrictions in accordance with the Stock Exchange rules. 3. Mr Luk and Miss Yu were convicted of conspiring as agents to commit an offence under section 9(3) of the Prevention of Bribery Ordinance, Cap 201 (“POBO”) by using the Board Minutes, which falsely stated that Mr Luk was not interested in the Transaction, to deceive and mislead their principal. The Court of Appeal held that, since Mr Luk and Miss Yu were the sole directors of Biogrowth, Biogrowth was incapable of being deceived by them. However, Mr Luk and Miss Yu were agents of China Mining and were convicted on that basis. 4. Additionally, Mr Luk was convicted of offering, and Miss Yu as an agent of China Mining, of accepting a bribe consisting of 1.5 million shares in China Mining as an inducement for Miss Yu’s participation in the conspiracy. 5. Three questions arose: First, were the lower courts right to hold that Mr Luk and Miss Yu were agents of China Mining even though being directors of its subsidiary (Biogrowth), they were under no legal obligation to act on behalf of China Mining? Second, were the Board Minutes a “document” for the purpose of section 9(3) of the POBO or does “document” only refer to documents of the same type as “receipt and account”? Third, was the Court of Appeal right to hold that the principle that the mind and will of the sole director(s) are treated in law as the mind and will of the limited company, applied in the present case so that Biogrowth was incapable of being deceived by Mr Luk and Miss Yu? 6. In relation to the first question, the Court stated that to become an agent of another for the purpose of section 9(3), it was not necessary to have some pre-existing legal, contractual or fiduciary obligation to act in relation to that person’s affairs or business. In the present case, when Mr Luk agreed with the Chief Financial Officer of China Mining that he would find a buyer for Cell Therapy, he created a reasonable expectation that he would act in the interest of China Mining and to the exclusion of his own interest. More specifically, he assumed a duty to act in good faith and not deceive China Mining into making a false statement to the Stock Exchange about his having no interest in the Transaction. Therefore, the lower courts were right to hold that Mr Luk was an agent of China Mining. As for Miss Yu, she was aware of the basis upon which Mr Luk put forward United Easy as a buyer and participated in his deception. That is sufficient for her liability under the conspiracy charge. 7. As to the second question, the Court held that the Board Minutes were a “document” for the purpose of section 9(3) of the POBO. There is no need to confine the meaning of “document” to documents of the same type as receipts and accounts. However, it also cannot mean any document but must be a document in respect of which the principal is interested and which contains a false or erroneous statement intended to mislead. 8. Finally in relation to the third question, the Court stated that Biogrowth was indeed capable of being deceived by Mr Luk and Miss Yu. To be liable under section 9(3) of the POBO, the deceiver need not have in mind the particular person whose state of mind will count as that of the principal. In the present case, the false statement in the Board Minutes deceived an authorised officer of China Mining into thinking the buyer was an independent party and he thereby executed the sale agreement on behalf of Biogrowth. That was an act of Biogrowth and that officer’s deceived state of mind could be attributed to Biogrowth. 9. In relation to the bribery offences, the Court held that even assuming Mr Luk and Miss Yu were only agents of Biogrowth, their knowledge of the bribe could not be attributed to Biogrowth, let alone treated as a grant of permission by Biogrowth to give and receive it. 10. There are no uniform principles by which one will attribute acts, knowledge and states of mind to a company. In every case, the criteria for attribution must be such as will give effect to the purpose and policy of the relevant substantive rule, whether that rule is contained in a statute or the common law. In the context of bribery offences under the POBO, it would be absurd, and would also defeat the purpose and policy of the statute, to attribute to the company the knowledge of its directors of their own breach of duty to the company by giving and taking a bribe. 11. Accordingly, the Court dismissed the appeals. |
With the leave of the court, the Applicant seeks to challenge, by way of judicial review, the decision of the Principal Magistrate Mr Peter Law (“Magistrate”) made on 25 April 2022 (“Decision”) refusing her application to lift reporting restrictions for committal proceedings pursuant to s87A(2) of the Magistrates Ordinance (Cap 227) (“MO”). By the direction of the court, the Secretary for Justice (“SJ”) is added as the Respondent of this judicial review. On 2 August 2022, the Court of First Instance gives judgment allowing the judicial review of the Applicant. The Court of First Instance held: 1. The issues in this judicial review, which concern the true interpretation of s87A(2) of the MO, are narrow, namely (i) whether the Magistrate was under a mandatory duty to lift reporting restrictions imposed by s87A(1) on committal proceedings at the instance of an accused; and (ii) if the Magistrate had a discretion in the aforesaid matter, whether he had taken into irrelevant considerations or ignored relevant considerations in coming to the Decision. 2. In gist, the Applicant submits that s87A means what it says, to the effect that reporting restrictions must be lifted if an application is made pursuant to subsection (2) requiring that the default position under subsection (1) of the section should no longer apply. As such, the Magistrate erred in supposing that a discretion existed. It is further submitted that even if such a discretion existed, the Magistrate’s reasoning was totally in opposition to the principles of Open Justice that govern the exercise of judicial power in the context of restricting access to, or reporting of, court proceedings. 3. On the other hand, SJ submits that purposively and properly construed and having regard to the ultimate aim of having a fair trial, an examining magistrate presiding over committal proceedings has a discretion under s87A(2) whether or not to lift reporting restrictions imposed by s87A(1). Furthermore, it is submitted that the Magistrate had properly exercised his discretion in the matter. 4. Having considered submissions of counsel and having regard to the existence of other measures available for the protection of witnesses, the court rejects SJ’s contention that the lifting of reporting restrictions under s87A(2) would frustrate the ultimate aim of doing justice. Besides, having regard to the legislative background of the provisions in the MO governing committal proceedings; the relevant articles in the Basic Law, the Bill of Rights and the National Security Law; and also the case authorities, the court can find no cogent or convincing reasons that the provisions in s87A(2), MO should bear the meaning as contended by SJ. To the contrary, a purposive and contextual interpretation and a consideration of the case law point in unison to the conclusion that s87A(2) means what it says in that the magistrate has no discretion but to lift the reporting restrictions at the instance of the accused. It follows that the Decision is ultra vires in that the Magistrate purported to exercise a discretion which did not exist. 5. Furthermore, even assuming that such a discretion did exist, based on BOR 10, the court is inclined to the view that a magistrate presiding over committal proceedings should not refuse to accede to an application made by an accused pursuant to s87A(2) unless such refusal is “strictly necessary” in the interests of justice. On that basis, the Decision would still be flawed in that it entails a failure to take into account relevant considerations, as a result of which it has not been shown that the reporting restrictions were “strictly necessary” in the circumstances. 6. That said, the court restrains from expressing any conclusive views as to whether s87A(2) is so wide as to violate the fair trial right (provided for in the BOR and entrenched by the BL) of the co-accused. This is because the issue does not arise in the present case. |
1. The case concerned a charge of money laundering. The Appellant was charged with dealing with all the monies deposited between 1 January 2006 and 26 October 2011 into her accounts with five banks and with jewellery and property found in her flat and in two bank safe deposit boxes rented by her. After trial, the Appellant was convicted and sentenced to 6 years’ imprisonment. 2. The Appellant appealed against the conviction on the basis that the charge was duplicitous in that it improperly charged more than one offence in one count of the indictment against her. 3. Applying the approach in HKSAR v Yeung Ka Sing Carson and HKSAR v Salim Majed (FACC 5 & 6/2015 and FACC 1/2015, unrep., Judgment dated 11 July 2016), the Court held that there was a sufficient connection between the acts of money laundering with which the Appellant was charged, such that they might fairly be regarded as forming part of the same transaction or criminal enterprise. Furthermore, there was a lack of any prejudice to the Appellant in the conduct of her trial and appeal to the Court of Appeal by reason of the form of the charge against her. Thus, the charge was held not to be duplicitous within the meaning of the Indictment Rules. 4. Accordingly, the appeal was dismissed. Nevertheless, the Court observed that, depending on the facts in other cases, a combined charge similar to that in this case could potentially give rise to a risk of unfairness due to the inherently duplicitous nature of such a charge. |
1. This appeal concerns the proper construction of a will. Mr. Tan Kiam Toen (the “Testator”) was a successful businessman. His main assets included shares (the “Shares”) in one Afro-Asia International Enterprises PTE Limited, which in turn held interest in one Singaporean listed company, EnGro Corporation Ltd. The Shares are registered in the names of the Testator’s 2 daughters, namely the 3rd Appellant and the 1st Respondent. 2. The Testator executed the will in question in 2008 (the “Will”). The Will provides that it governs “all the properties under [the Testator’s] name [wheresoever situate worldwide]”. It provides that his wife, Madam Ng, who survives the Testator, is to “enjoy during her lifetime the income derived from the estate of” the Testator, and that upon her death, the entire residue is to pass to specified charities. The Testator further declares that he does not intend to give any portion of his residuary estate to his children, stating that they have received adequate and appropriate care during their parents’ lifetime. 3. The Testator passed away in 2008. The Respondent as sole executrix of the Will included the Shares in the probate’s Schedule of Assets and Liabilities as the Testator’s assets in Hong Kong, along with other assets including the Testator’s art collections. 4. The Appellants, being the Testator’s 3 sons and 1 daughter, issued proceedings to seek the Court’s interpretation of the Will. They contended that words “under [the Testator’s] name” (the “Words”) mean the Will only governs assets held in the name of the Testator. Since the Shares are not held in the name of the Testator, but in his 2 daughters’ names on trust for him, the Shares are excluded from the Will and should not pass under the Will to the charities, but pass by way of partial intestacy to the Testator’s children. The 1st Respondent disagreed, submitting that the Words were intended to merely mean “belonging to the Testator”, encompassing property held on trust for him. 5. At the Court of First Instance, DHCJ B Chu (as she then was) concluded that the Shares are not excluded in the Will, holding that the Words are wide enough to cover assets beneficially belonging to the Testator. Furthermore, the Judge held that since the meaning of the Words was clear, it was not necessary to consider s. 23B of the Wills Ordinance to ascertain the meaning of the Words by adducing extrinsic evidence, as the section only operates only when the words in a will are ambiguous. In any event, the Judge held that even if s. 23B were engaged, the outcome would have been the same. The Court of Appeal upheld the Judge, and held that the Words in their dictionary meaning mean assets “belonging” to the person concerned. 6. The Court also questioned the validity of the Appellant’s narrower interpretation, as it would implausibly suggest that the Testator had gone to the trouble of making a will to provide for how his property should be dealt with after his death, but had chosen to exclude his most valuable assets from this exercise, leaving them to be dealt with on a partial intestacy. 7. Similarly, the Court reasoned that, on the Appellant’s narrower interpretation, by excluding the Shares, the gift of income to his widow could have no meaningful effect, as this effectively excludes the only obvious income-earning assets from the operation of the Will. Hence the Court concluded on the Will’s true construction, unaided by any extrinsic evidence, the Words apply to all properties belonging to the Testator, including properties held on trust for him. Other alternative meanings are less than reasonably arguable when the Will is read as a whole, and the Court dismissed the appeal. 8. Nonetheless, although it was unnecessary to do so since the Court had found an absence of ambiguity, the Court held that even if potential extrinsic evidence were adduced via s. 23B, it would not have led to a different outcome. 9. The evidence showed that before and after the Testator executed the Will, he had wished to make a gift whilst he was living of the Shares to Madam Ng and the children. This was not achieved before the Testator passed away. The Court found that this evidence, even if admissible, would not throw any light on the Testator’s testamentary intentions. Evidence that the Testator had intended when alive to make a gift of the Shares to his family, was not evidence of an intention to dispose of such property outside his Will if the intended gift failed to materialise. CONCURRING JUDGMENT OF TANG PJ: 10. Tang PJ took the view that, given the extrinsic evidence shows that in a previous will in 2006, the Testator had declared that he has no assets held by his daughters, it would seem clear that the Shares, now said to be beneficially held by the Testator, were not then regarded by the Testator as part of his estate. This declaration was not repeated in subsequent wills, and hence there is no way of knowing whether the Shares held in the names of others were regarded by the Testator as part of his “remaining properties”. 11. Tang PJ did not find it necessary to resort to the clause in the Will that gave Madam Ng life interest in the income, as Tang PJ regarded it as a standard clause normally found in wills that provide for life interests. On the evidence of the potential gift, Tang PJ agreed that the Testator could not have intended by the use of the Words to indicate that should the gift fail it would devolve as on intestacy. |
1. On 7 October 2011, Fu Ming Transport Co Ltd (“Fu Ming”) went into voluntary liquidation and dismissed its employees (including the Applicant) with immediate effect. The Applicant was owed severance payment and applied to the Respondent for an ex gratia payment in relation to this item under the Protection of Wages on Insolvency Ordinance, Cap 380 (“the PWIO”). The Respondent was of the view that no ex gratia payment was payable in relation to severance payment and his decision was upheld by the Board. The Court of First Instance dismissed the Applicant’s application for judicial review to challenge the Board’s decision. The Applicant’s appeal to the Court of Appeal was dismissed. The Applicant appealed to the Court of Final Appeal. 2. The question before the Court was one of statutory interpretation. Severance payments are calculated under s.31G of the Employment Ordinance, Cap 57 (“the EO”). After calculation under s.31G, in order to arrive at the net or actual severance payment due to an employee for the purposes of the EO, deductions are then made (by reason of s.31I of the EO) if an employee has benefits from, for example, an occupational retirement scheme or a mandatory provident scheme (“s.31I benefits”). Ex gratia payments are made under the PWIO to employees (like the Applicant) where an employer (like Fu Ming) fails to make severance payments by reason of insolvency. Financial limits are set out in s.16(2)(f)(i) of the PWIO on the amount of ex gratia payments payable on account of severance payment. These limits are calculable by applying the formula set out in s.16(2)(f)(i) to the amount of severance payment to which an applicant is entitled (the formula is $50,000 plus 50% of the excess beyond that amount). The question in the present appeal was how to calculate (for the purposes of applying the said formula) the appropriate amount of severance payment to which an applicant was entitled in order to arrive at the amount of ex gratia payment (if any) that can be made under the PWIO. The specific question was how and at what stage to take account of the s.31I benefits. 3. The Court of Appeal held that the formula in s.16(2)(f)(i) was first to be applied to the amount of severance payment calculated under s.31G of the EO to arrive at a sum, from which would then be deducted the s.31I benefits in order to arrive at the appropriate ex gratia payment (if any). This resulted in the Applicant getting no ex gratia payment in the present case. The Court of Appeal therefore applied the same approach in calculating ex gratia payments under the PWIO as was the approach under the EO. It held that the statutory intention of the PWIO was similarly to treat all employees the same irrespective of whether such employees had s.31I benefits. 4. The Court of Final Appeal held that this was a wrong approach as matter of statutory construction. Nothing in the wording of the PWIO permitted this approach and the words of this Ordinance did not permit the statutory intention held by the Court of Appeal. Instead, the amount of severance payment to which an applicant was entitled for the purposes of s.16(2)(f)(i) was the actual net amount of severance due and therefore any s.31I benefits had first to be taken into account in arriving at this net sum. Only then was the statutory formula applied to this net sum to arrive at the ex gratia payment on account of severance payment. 5. Accordingly, the Court unanimously allowed the appeal and quashed the decision of the Board. |
1. This appeal concerns a piece of land in Sai Kung (the “Disputed Land”) jointly owned by three brothers who died respectively in 1991 or 1992, 1997 and 1999 (the “Three Brothers”). The Appellant is the personal representative administering the estates of the two younger brothers. The 1st and 2nd Respondents are the children of the eldest brother and have inherited his share in the Disputed Land. The 3rd Respondent is the son of the 1st Respondent. 2. Since the 1970s, there had been an understanding among the Three Brothers and the 3rd Respondent that the latter could use and own the Disputed Land and build a house thereon when he became an adult (the “Common Understanding”). The Common Understanding did not include an assurance that the Three Brothers would leave the Disputed Land by will to the 3rd Respondent. Knowing about the Common Understanding, the 3rd Respondent started carrying out various building works on the Disputed Land since the 1980s. He also erected two buildings on the Disputed Land in 2002 and 2003 (the “Structures”). 3. The Appellant brought an action against the Respondents, seeking an injunction to restrain them from carrying out building works on the Disputed Land and requiring them to remove the Structures. Based on the Common Understanding, the Respondents argued that the 3rd Respondent is beneficially entitled to the Disputed Land, and the Appellant is prevented from claiming relief due to the doctrines of common intention constructive trust, proprietary estoppel, estoppel by acquiescence, and promissory estoppel. The 1st and 2nd Respondents counterclaimed against the Appellant for one-third of the rental income of a house built on land adjacent to the Disputed Land (the “House”). The House is jointly owned as to one-third by the 1st and 2nd Respondents and as to two-thirds by the Appellant as tenants-in-common in undivided shares. 4. The Court of First Instance (“CFI”) dismissed the Appellant’s claims and held that the 3rd Respondent is the sole beneficial owner of the Disputed Land, and the Appellant is a constructive trustee holding a two-thirds interest therein for him. The CFI also upheld the counterclaim of the 1st and 2nd Respondents. The Court of Appeal (“CA”) set aside the CFI Judgment and remitted a number of questions that raise both factual and legal issues to the CFI Judge. 5. On the Appellant’s application for leave to appeal, the CA held that the questions raised are reasonably arguable but decided to adjourn the leave application, pending the CFI’s determination of the remitted issues. The Appellant then successfully obtained leave to appeal to this Court from the Appeal Committee. 6. The issues on appeal related to the scope and timing of the “detrimental reliance” required to establish a proprietary estoppel and to whether the counterclaim for occupation rent and rental receipts by the 1st and 2nd Respondents as co-owners against the Appellant was made out. The requirement of “detrimental reliance” in proprietary estoppel 7. The issue was whether there was sufficient detrimental reliance by the 3rd Respondent on the Common Understanding prior to the death of all of the Three Brothers to give rise to a proprietary estoppel against the Appellant as the personal representative administering the estates of the two younger brothers. 8. The Court held that where there is a lack of the necessary detrimental reliance by the promisee prior to the death of the promisor, the promise or assurance by the promisor must be taken to have lapsed upon the latter’s death. If a promisee can establish a proprietary estoppel based on sufficient detrimental reliance incurred prior to the death of the promisor, his/her interest so created would prevail over the interests of the testamentary beneficiaries or of the next of kin (under the Intestates’ Estates Ordinance (Cap.73)). 9. On the facts of the case, the steps taken by the 3rd Respondent prior to the death of the Three Brothers to improve the Disputed Land constituted sufficient detrimental reliance by him upon the Common Understanding. The Court therefore ordered the Appellant to transfer her two-thirds interest in the Disputed Land to the 3rd Respondent. The payment of occupation rent to co-owners of land in cases other than partition or ouster in the absence of an agreement 10. The issue was whether the Appellant should be ordered to pay the 1st and 2nd Respondents occupation rent and rental receipts, despite the fact that they had not been ousted (i.e., excluded) from the House and there were neither partition nor analogous proceedings in being, nor any agreement between the parties giving rise to a duty to account. 11. The Court held that the CA’s reference to a “modern approach” that a court will order a payment of occupation rent even if there is no ouster simply when it is necessary to do equity between the parties is not supported by the existing authorities. 12. In a case where partition or analogous proceedings have been instituted but no co-owner has been ousted from the property in question, an equity in favour of one of the co-owners who spent money on substantial repairs and lasting improvements may be recognised while debiting the other co-owner with an occupation rent to set off the expenditure appropriately incurred. This reciprocally balances the parties’ interests in the distribution of the proceeds of sale of a co-owned property. 13. On the facts of the case, the Court held that the 1st and 2nd Respondents had failed to show any basis for claiming occupation rent or an account of rent. The counterclaim was therefore dismissed and it was unnecessary to remit the issue of building expenses incurred by the Appellant to the CFI for determination. DISPOSITION: 14. Accordingly, the appeal was unanimously allowed, the CA’s Orders were set aside and in their place, the Court dismissed the Appellant’s claim against the 1st, 2nd and 3rd Respondents and ordered her to transfer her share of the Disputed Land to the 3rd Respondent; the Court also dismissed the claim of the 1st and 2nd Respondents for an account of rent, making necessary consequential Orders. |
1. The Appellant was responsible for the management and operation of the Jockey Club Kau Sai Chau Public Golf Course (the “Golf Course”). On 18 May 2009, an employee of the Appellant (the “employee”) received an instruction to pick up four workers in a vehicle owned by the Appellant (the “light utility vehicle”) for some electrical engineering repair work. As the employee was driving the light utility vehicle on a road adjacent to one of the golf courses, it lost control and overturned as it was going downhill. The employee and the four workers were thrown out of the light utility vehicle and injured. One of the workers subsequently died as a result of his injuries. 2. The Appellant was charged with one count of using a motor vehicle without third party insurance, contrary to sections 4(1) and 4(2) of the Motor Vehicles Insurance (Third Party Risks) Ordinance (Cap 272) (the “MVI(TPR)O”). It was convicted at trial and fined HK$6,000. The Court of First Instance dismissed its appeal. The Appellant appealed to the Court of Final Appeal. The appeal raised questions concerning the definitions of “road” and “motor vehicle” in the MVI(TPR)O. 3. The Court unanimously dismissed the Appellant’s appeal. In relation to whether the section of the road where the accident occurred was a “road” to which the public had access, the Court considered that golfers playing at the Golf Course were members of the public in general. The Golf Course was a public golf facility and not a private club. There was ample evidence to find that golfers used and had access to the road in question. Therefore, it was a road to which the public had access. 4. In relation to whether the light utility vehicle was a “motor vehicle” as defined in the MVI(TPR)O, the material question was whether it was “a vehicle intended or adapted for use on roads”. The correct test to be applied was Lord Parker CJ’s objective test in Burns v Currell, namely whether a reasonable person looking at the vehicle would say that one of its users would be a road user. An application of the Burns test was highly fact-sensitive. In particular, the Court highlighted the fact that the light utility vehicle was regularly used on the road in question, being a road to which the public had access. The Courts below were correct to find that a reasonable person looking at the light utility vehicle would say that one of its users was use on a “road”. Therefore, the light utility vehicle was a “motor vehicle” as defined in the MVI(TPR)O. |
1. The charge was that, on 13 May 2013 at 10.12 am at Yu Tung Road Cycling Track near lamp post AC 1509, the Respondent being a person riding a bicycle on a road did, without reasonable excuse, fail to comply with the requirement indicated by a traffic sign of the type shown in Figure No. 155 in Schedule 1 of the Road Traffic (Traffic Control) Regulations Cap.374G (“the Regulations”). Figure No. 155 is a cycling restriction sign and indicates that cycling is prohibited beyond the sign and that cyclists must dismount and push their bicycle if they wish to proceed beyond the point of the sign. 2. The Respondent’s case at trial was that she was honestly and reasonably confused by the sign and thought that it meant cycling was permitted. 3. The magistrate convicted the Respondent and imposed a fine of $500 by way of sentence. The Court of First Instance (CFI) quashed the Respondent’s conviction and set aside her sentence on the basis that there had been material non-disclosure of relevant materials. The CFI held that the Figure No. 155 sign was ambiguous, unclear and confusing. Therefore, the CFI held that it offended the principle of legal certainty and also gave the Respondent a reasonable excuse for failure to comply with the traffic sign in question. 4. On the prosecution’s appeal to the Court of Final Appeal, the focus was on the nature and scope of the offence of failing to comply with the requirements of a traffic sign and the limits of the statutory defence of reasonable excuse. Specifically, the issues were whether the meaning of a traffic sign depends on the cyclist’s subjective interpretation and, if not, whether her mistaken belief in its meaning constitutes a reasonable excuse for failing to comply with the requirement indicated by it. 5. The Court held that the offence is not a failure to comply with a traffic sign but with the requirement that the traffic sign indicates. The interpretation of the sign is not dependent on the cyclist’s subjective appreciation or non-appreciation of the meaning conveyed by it. Instead, the interpretation of the sign is approached taking in the meaning assigned to it by the Schedule of the Regulations. It is therefore no part of the offence that the sign alone must be interpreted, either by the cyclist or by a court, in order to determine what it is that the cyclist should or should not do. 6. The Court held that a consideration of the defence of reasonable excuse involves looking to three matters: (i) the matters said to constitute reasonable excuse must be identified; (ii) the court will then examine whether the excuse is genuine; and (iii) the court must make an assessment of whether that excuse is reasonable, which the court will do on an objective standard depending on the particular facts of the case. In applying the test, the Court held that the Respondent’s excuse fell short of the “reasonableness” requirement in (iii) because: (a) given that the prescribed meaning of the Figure No. 155 sign is that set out in Schedule 1 of the Regulations and not as determined either by the cyclist or by the court by reference to the sign alone, there is no room, objectively, to conclude that the Respondent’s honestly held but mistaken belief as to the meaning of the sign was reasonable; (b) there are a number of traffic signs, the meanings of which are not immediately apparent merely from looking at them. It would be a recipe for traffic chaos if an honest belief that those signs had different meanings to those set out in the relevant Schedule of the Regulations could constitute a reasonable excuse for not complying with their requirements; (c) the meaning of a prescribed traffic sign being that set out in the relevant Schedule of the Regulations and reproduced in the Road Users’ Code, it is a simple matter for any cyclist to ascertain the meaning of any applicable traffic sign; (d) all users of the road have a responsibility to familiarise themselves with the meaning of traffic signs and road markings, since this is important not only in terms of compliance with the Ordinance and Regulations, but also from the perspective of road safety; and (e) it was contrary to the general principle that ignorance of the law is not a good defence. 7. The Court considered that whilst the non-disclosed materials might have been relevant to the “genuineness” requirement in (ii), they were not relevant to the “reasonableness” requirement in (iii). The Court also found that the principle of legal certainty simply did not arise as an issue and the CFI erred in holding that it was engaged in the context of the present case. 8. The Court unanimously allowed the prosecution’s appeal on the issues of law raised. |
1. On 12 September 2009, the Appellant killed his cohabitee. The Appellant admitted to the killing and pleaded guilty to manslaughter. The key disagreement between the Respondent (the “Prosecution”) and the Appellant was whether the defence of provocation or diminished responsibility was available to the Appellant, which would reduce the charge of murder to manslaughter. 2. For the same killing, the Appellant was tried for and convicted of murder three times. The Appellant appealed the latest conviction on the basis that the trial judge misdirected the jury by failing to draw their attention to the relevance of the psychiatric evidence adduced in support of diminished responsibility to whether the Appellant had lost his self-control because of provocation. The Court of Appeal (the “CA”) unanimously allowed the appeal and quashed the conviction. 3. The majority of the CA ordered a third re-trial for murder (i.e. a fourth trial). They did so after considering numerous factors. These included the seriousness of murder, the strength of the case against the Appellant, how the Appellant’s counsel gained tactical advantage by failing to point out the relevance of the psychiatric evidence to the Appellant’s loss of self-control and this was the first trial where the Appellant raised the defence of diminished responsibility. 4. The issue before this Court was whether, by ordering a third retrial for murder, the exercise of discretion by the majority of the CA miscarried. 5. This Court held that first, the Appellant’s counsel had not deliberately chosen to keep quiet about the relevance of psychiatric evidence to the question of loss of self-control and let the trial judge err for some tactical advantage. No tactical advantage would be gained by the Appellant’s counsel in doing so. In fact, neither the Prosecution nor the trial judge realised the relevance either and all three were on the same footing. Even if the Appellant’s counsel were at fault, it would be highly debatable that fault should be attributed to the Appellant. Secondly, the fact that diminished responsibility was raised for the first time at the third trial was not something that should count against the Appellant. There was evidence supporting the defence and the Appellant was entitled to run it. Whether raising it earlier could have prevented problems was highly speculative. Regardless, given the highly technical nature of this defence, any fault for not raising it earlier should not lie with the Appellant. By considering these two factors, the majority had taken into account irrelevant considerations when ordering the third re-trial. The CA’s exercise of discretion miscarried. 6. This Court held that the discretion should be re-exercised and in doing so decided not to order a third retrial. There were five matters which were particularly important to reaching this decision: 6.1. First, if a third retrial was ordered, this would be a fourth trial for murder, which would be oppressive to the Appellant on the facts of the present case. 6.2. Second, the Appellant had already been remanded in custody for a period of time equivalent to a sentence of imprisonment of almost 27 years (after taking into account the discount for an early guilty plea and remission for good behaviour). It went well beyond the higher end of the usual range of sentences for manslaughter. 6.3. Third, given the long lapse of time, the Appellant’s and other witnesses’ memory of the relevant events must be affected, affecting the quality of the evidence and demeanour of the witnesses. Since the Appellant’s performance in the witness box would be important to the issues in the fourth trial, the Court was not of the view that it could be satisfactorily remedied by the trial judge giving appropriate directions to the jury. 6.4. Fourth, as for the strength of the Prosecution case for murder, the Appellant’s case on provocation was at least reasonably arguable and a murder verdict was certainly not a foregone conclusion. 6.5. Fifth, even though the quashing of the convictions in the first and third trials was partly due to mistakes made by the Appellant’s counsel, this carried little weight. In the first trial, the primary responsibility for the mistake lay with the Prosecution. For the third trial, the mistake made did not arise out of a deliberate, tactical decision by the Appellant’s counsel. Disposition 7. Accordingly, the appeal was unanimously allowed. 8. This Court quashed the order for a third retrial, entered a conviction for manslaughter on the basis of provocation and sentenced the Appellant to such sentence that would allow for his immediate release from custody. |
1. Paragraph 1 of the judgment states that this is an assessment of damages for personal injuries suffered in a road traffic accident that occurred on 27 June 2014. At the time of the accident, the plaintiff, who was born on 1 October 1959, was about 54.5 years of age. Liability was admitted on 25 November 2015, before proceedings were commenced on 29 May 2017. Interlocutory judgment for damages to be assessed was entered on 8 June 2017 against the 1st and 2nd defendants. At the time of the accident, the 1st defendant was the driver of the 2nd defendant’s bus bearing registration number HS539. 2. Paragraphs 2 to 12 of the judgment contain a summary of the contents of the assessment bundles and the course of the trial. 3. Paragraph 13 of the judgment contains an overview of the parties’ cases and reproduces a table showing the amounts claimed by the plaintiff and the amounts conceded by the defendants. This table is set out below: 4. Paragraphs 14 to 22 of the judgment contain a review of the documentary evidence in relation to the accident that occurred, including statements taken by the police and photographs taken at the scene. 5. Paragraph 23 of the judgment sets out in detail the various treatments received by the plaintiff since the accident. 6. Paragraphs 24 to 37 of the judgment contain a review of the opinion evidence of the following experts: 7. Paragraphs 38 to 49 of the judgment contain a review of the plaintiff’s evidence. 8. Paragraphs 50 to 70 of the judgment contain the analysis of the evidence and the findings of the court. The key findings are contained in paragraphs 71 and 72 of the judgment which are set out below: “71. The plaintiff has told me a multitude of lies. He is a consummate, flagrant and egregious liar and I disbelieve his evidence. I find that he is a malingerer. I find that he suffered a contusion of the face and a mild neck soft tissue injury without any complications in the accident on 27 June 2014. I entirely reject his evidence and his claims that he suffered a multitude of disabilities, including his claims that he suffered frequent headaches and dizziness and severe headaches at night; severe pain on the back of his neck and persistent pain on his back; weakness of right hand, numbness and loss of sensation of his thumb and fingers; impaired hearing in his right ear; urinary incontinence; mentally slow in response and reduce concentration; depression, auditory hallucinations and suicidal ideas; being wheelchair-bound because of paralysis and loss of sensation of right leg. 72. I find that sometime after 31 August 2015, as discovered by an examination on 15 December 2017, the plaintiff suffered from a small PED which was not present in the previous examination conducted on or about 31 August 2015. This was a primary retinal disease not caused by ocular trauma. As a result, his right eye vision was blurred with distorted images. The newly diagnosed PED in the right eye and its subsequent visual impairment were not related to the accident on 27 June 2014 and his current ocular complaints of blurred and distorted vision in his right eye are not attributable to the accident. I reject the plaintiff’s evidence that he suffered from visual problems as a result of the accident on 27 June 2014.” 9. Paragraphs 73 to 76 contain the assessment of the quantum of the plaintiff’s claims by the court. The conclusions of the court are contained in paragraph 77 of the judgment which is set out below: “77. The plaintiff received the amount of $652,808.33 as employees’ compensation from Artwell Tapioca Limited on or before mid-March 2019 [E/361-363] which far exceeds my assessment of damages in this case as shown on the following table. Accordingly, I do not award any damages nor any interest on damages to the plaintiff. 10. Paragraphs 78 to 80, which are set out below, contain judge’s orders and directions in this action: “78. I dismiss the plaintiff’s action. I make a cost order nisi that the plaintiff pays the costs of the action to the 1st and 2nd defendants on an indemnity basis, to be taxed if not agreed. Such an order will become absolute unless a written application is made within 14 days by any party to vary it. I direct that such written application may be made by letter addressed to my clerk. Such letter should state the variation of my order that is sought and the reasons for seeking such variation. Upon application being made, I will dispose of the same on paper. I may or may not give directions to serve further written submissions before disposing of the same on paper. 79. As the cost order nisi will impact upon the Director of Legal Aid, I grant him leave to apply, by letter, to vary the order within 14 days and/or to apply for wasted costs orders, in respect of which I had made certain observations in paragraph 26 of my recent decision in Lai Sin Yan Elsie v. Tata Communications (Hong Kong) Ltd. HCPI 1092/2015, 14 August 2020.If application is made for wasted costs orders, I will give appropriate directions to enable affected parties to be heard and to deal with the same. 80. I also direct the solicitors for the defendants to send a copy of this judgment to Artwell Tapioca Limited or to their solicitors.” 11. A full translation of this judgment is available upon request. |
1. Tang Pui King (the “Deceased”) died intestate in 1978 and left a large estate (the “Estate”) to his five sons including the 1st Appellant and the Respondent. The 1st Appellant and the Deceased’s widow were appointed as administrators of the Estate. 2. In March 2003, the 1st Appellant bought a property in Yuen Long (the “Property”). Without having sought the Respondent’s or the other brothers’ consent, the 1st Appellant completed the purchase with $11.48 million of the Estate’s money, representing 40.4% of the total purchase price. The 1st Appellant then executed a declaration of trust stating that he held the property on trust for the 2nd Appellant, his corporate vehicle, and eventually assigned the Property to the 2nd Appellant. 3. In October 2003, the 1st Appellant repaid the amount taken from the Estate with interest at 3% per annum (the “Repayment”). The Respondent became aware of the 1st Appellant’s use of the Estate’s money in 2005 and commenced proceedings in 2009, claiming to be entitled to a share of the profit the 1st Appellant derived from the acquisition of the Property. 4. The trial judge held that the 1st Appellant had misused the Estate’s funds and that the Respondent was entitled to a share of the profit. This was affirmed by the Court of Appeal. 5. The Court held that the present case is concerned with a fiduciary who made a profit by applying his principal’s money for his own benefit. It is a straightforward case where a trustee has committed a breach of trust. 6. As a matter of law, the 1st Appellant’s taking of the Estate’s money for his own purposes was an unauthorised disbursement. Although the 1st Appellant had intended to repay and did so within a short time, this does not convert the misappropriation into an authorised loan. 7. When the Respondent discovered the disbursement, he had the right to elect whether to reject or affirm it. Had he rejected it, the 1st Appellant would have been obliged to make good the deficit in the Estate’s account. However, the Respondent has affirmed the transaction by treating it as an authorised investment of the Estate’s money for the benefit of the Estate. 8. The right to affirm or reject the use of the money to purchase the Property belongs to the beneficiaries and not the trustee. By insisting that the Repayment discharged the 1st Appellant’s liability to reimburse the Estate, he is attempting to buy out the Estate’s interest, which the Respondent has elected to reject. 9. The policy behind a claim by a beneficiary for a breach of trust in the present case is to deter the trustee from using the trust fund as his personal bank account. Such conduct puts the trust fund at risk without hope of gain, and equity’s response is to insist that any profit is for the beneficiaries and any loss for the trustee. 10. Accordingly, the Court dismissed the appeal. |
1. At about 2:45 a.m. on 15 October 2014 the police carried out Operation Solarpeak to clear the protestors of the Occupy Central movement. When the police reached the end of the underpass on Lung Wo Road, Tsang Kin Chiu (“Tsang”) was seen on the planter above Lung Wo Road pouring liquid on the police. 2. The prosecution case was that Tsang was pulled down from the planter to the pavement and subdued by several uniform police officers. After successfully handcuffing Tsang the uniform police officers handed Tsang over to D1-D6, who escorted Tsang away in the direction of Lung Wo Road. On the way Tsang was picked up and carried face down. 3. Protestors were to be taken to the escort coaches and cars on Lung Wo Road for transport to the Central Police Station. D1-D6 did not carry Tsang direct to where the coaches and cars were parked but instead carried Tsang to the north side of the Lung Wui Road Government Building Pump Station East Substation (“the substation”). 4. On reaching the substation D1-D6 were joined by D7, who helped carry Tsang to the north side of the substation. On reaching the north side of the substation Tsang was dumped on the ground and assaulted by the defendants. 5. Tsang was then frogmarched to Lung Wo Road where he boarded a car. D5 and D6 sat on either side of Tsang and accompanied him to the Central Police Station. At the police station Tsang was taken to room 7 where he stayed until he was escorted by coach to the Police College in Wong Chuk Hang. While in room 7 D5, in the presence of D6, slapped Tsang on the face twice. 6. Part of what happened that night was captured on video by TVB, Apple Daily, ATV and Now TV and police video teams. Photographs from Apple Daily and Oriental Daily also showed Tsang being escorted and carried face down. Apart from the police video, the defence objected to the admissibility of the video and photograph evidence. 7. CCTV of the Central Police Station recorded two police officers taking Tsang into and out of the police station. The defence objected to the admissibility of the CCTV recordings. 8. The court ruled all the video evidence, photographs and CCTV recordings admissible in evidence. 9. The defendants elected not to give evidence or call any witnesses on their behalf. Charge 1 - Causing grievous bodily harm with intent 10. The main issues were whether Tsang was the person seen assaulted on the video footage; whether the defendants were the assailants; whether the defendants were part of a joint enterprise and whether Tsang suffered grievous bodily harm. 11. The court was satisfied that the video footage, photographs and CCTV recordings were authentic and accurately depicted the events of that morning. 12. The court was satisfied reliance could be placed on the evidence of Tsang that after he was subdued for pouring liquid on the police he was handed over to other police officers who escorted him, carried him by his arms and legs face down and took him to the substation (the dark corner) where they dumped him on the ground and assaulted him. 13. The court was satisfied that the video footage and photographs showed Tsang being apprehended by uniform police officers for pouring liquid on the police; being handed over to crime officers; and being escorted and carried face down to the substation where he was assaulted. 14. The court was satisfied that Tsang was handed over to D1-D6, who escorted and carried him face down to the substation. The court was satisfied that when they arrived at the substation there was no change in the persons seen carrying Tsang, save that the positions of the six had changed and that they had been joined by D7. 15. The court was satisfied that by carrying Tsang to the substation where he was dumped on the ground and immediately assaulted, the only inference to draw was that Tsang was carried to the substation to be assaulted. 16. The court was satisfied that D3 participated in the assault by stabbing Tsang; stamping on Tsang and kicking Tsang and that D4, D5, D6 and D7 also participated in the assault by kicking Tsang. 17. D1 and D2 did not take part in the assault but watched what happened. The court was satisfied that every police officer has a duty to prevent the commission of a crime, even by fellow police officers. The court was satisfied that by carrying Tsang to the substation and watching their colleagues beat up Tsang, D1 and D2, the two senior officers, intended to and did encourage and support D3-D7 to carry out the assault on Tsang, intending Tsang to sustain unlawful personal violence. 18. The court was satisfied that most of the injuries to the face; the left side of the neck; the left shoulder and clavicle; the left flank; the right flank and some of the circular reddish bruises on the chest and back, were sustained during the assault at the substation. The court was not however satisfied these injuries amounted to grievous bodily harm but was satisfied they amounted to actual bodily harm. The defendants were therefore found not guilty of causing grievous bodily harm with intent and guilty of assault occasioning actual bodily harm. Charge 2 – Common assault 19. The main issues were whether Tsang was slapped on his face inside the Central Police Station and, if so, whether D5 was the police officer who slapped him. 20. Tsang identified D5 in a direct confrontation. The defence objected to the admissibility of this evidence. The court was satisfied the holding of a direct confrontation was not unfair and that the direct confrontation was conducted fairly. 21. The court was satisfied reliance could be placed on the evidence of Tsang that the two police officers who escorted him in the car to the Central Police Station were D5 and D6 and that while in room 7 of the police station D5 slapped Tsang on the face twice. |
This appeal concerned five lots of land in Kowloon City (the “five Lots”). The Government Leases under which each of the five Lots are held (the “Government Leases”) contained restrictive covenants, including prohibition against industrial user, the building of a factory and, if houses were to be built, building more than one house on each Lot. Currently there stands a house on each Lot. The Respondent wishes to redevelop the five Lots by building a 26 storey composite building straddling across all five Lots. The building plans for the redevelopment were rejected by the Lands Department. The position of the Director of Lands was that the proposed redevelopment breached the relevant restrictive covenants. The Respondent applied to the court for a declaration that the relevant restrictive covenants had not been breached. The trial judge dismissed the application on the basis that a composite 26 storey building was not a “house” contemplated by the Government Leases. The Court of Appeal held to the contrary and allowed the Respondent’s appeal. The Court of Final Appeal (the “Court”) allowed the appeal and restored the orders made by the trial judge. The central question in this appeal was whether the Government Leases permit the construction of the proposed building. This involved construing the meaning of the word “house” in the restrictive covenants and ascertaining the intention behind such covenants. The Court emphasized the overall importance of context in statutory interpretation. It examined, among others, the clauses in and the relevant factual circumstances underlying the relevant Conditions of Exchange and the Government Leases. It held that the meaning of the word “house” in the restrictive covenants must have reference to those characteristics of the houses which were actually standing on the Lots at the time the Government Leases were entered into. On proper construction, the only permitted redevelopment under the Government Leases is the building of no more than one house on each Lot, with the characteristics of the houses in existence at the time the Government Leases were entered into and no other type of building. Therefore the proposed redevelopment by building a 26 storey building is prohibited. |
1. The appellant was charged with murdering his girlfriend (the “Deceased”) by chopping her to death. The evidence was that there were 64 separate wounds to the Deceased’s body. The appellant admitted to killing the Deceased but raised the defence of provocation. He was convicted of murder after a re-trial. 2. Following the grant of leave to appeal, the parties filed a joint written case agreeing that the appeal should be allowed. The only contested part of the appeal was whether, if the appeal were to be allowed, a further re-trial should be ordered. 3. Accepting the parties’ joint submissions, the Court allowed the appeal and quashed the conviction. The Court held that, in the particular circumstances of this case, there was a real risk of the jury adopting an impermissible line of reasoning when considering the objective limb of the provocation defence. It was therefore of such a nature as to require the special direction referred to in HKSAR v Liang Yaoqiang (2017) 20 HKCFAR 1 at paragraph [124] in order to counteract that risk. 4. On the issue of re-trial, the Court was satisfied that it would be in the interests of justice to order a re-trial in the present case. 5. Accordingly, the Court allowed the appeal, quashed the appellant’s conviction and ordered a further re-trial for murder. |
1. This case concerns the sale and purchase of a commercial property which was sub-sold three times. The 3rd sub-sale involved the Appellant (De Monsa) contracting to purchase the property from the 1st Respondent (Richly Bright) for $135,586,400 (paying a 10% deposit), but De Monsa failed to complete the purchase. The sub-purchasers up the chain also failed to complete their transactions. 2. Summary judgment was entered against De Monsa with Richly Bright held entitled to forfeit the deposit and additionally entitled to damages reflecting losses incurred by parties up the chain of contracts for the sale and purchase of the property. This resulted in De Monsa’s liability being assessed in the total sum of HK$40,783,238 plus interest and costs. These orders were upheld by the Court of Appeal in dismissing De Monsa’s appeal. 3. The question before this Court was whether liability in that total amount was correctly imposed. 4. The Court considered the principles governing the amount of damages recoverable for breach of a contract for the sale and purchase of property, especially where there were sub-sales. An award of damages aims to place the innocent party financially in the position he would have occupied if the contract had duly been performed, but within the limits of losses within the parties’ reasonable contemplation and losses for which responsibility has been contractually assumed. 5. The normal rule where the purchaser buying directly from the property owner fails to complete is for the award of damages to equal the difference between the contract price and the market value of the property at the completion date. However, damages payable to a sub-purchasing confirmor whose own sub-purchaser fails to complete are measured by the difference between the price at which the confirmor had contracted to purchase the property and the on-sale price agreed with his sub-purchaser. Where, as is usually the case, the purchaser or sub-purchaser has provided a deposit, the vendor’s remedy is confined to forfeiture of the deposit unless the loss flowing from the breach exceeds the value of the deposit. In the present case, the loss which Richly Bright suffered was less than the deposit. 6. The Court therefore held that the awards made below erroneously exceeded the amounts recoverable on a proper application of the limiting principles mentioned above. De Monsa had assumed responsibility to compensate Richly Bright by agreeing to the forfeiture of the deposit in the sum of HK$13,586,499 and, there being no additional recoverable loss, Richly Bright’s remedy was limited to such forfeiture. Accordingly, the Court allowed the appeal and set aside the Orders of the lower courts. Concurring judgment of Tang PJ: 7. Tang PJ was of the view that the Respondents’ claims, other than for the forfeiture of the deposit must fail because the normal rule for the recovery of damages is the difference between the contract price and the market value at the time of completion, and there was no claim for damages on such basis. The Respondents’ other claims were neither within the reasonable contemplation of the parties at the time of the contract nor were they for losses in respect of which the Appellant could be regarded as having undertaken responsibility. |
The Appellants, from the Democratic Republic of Congo and the Republic of Congo, claimed protection as refugees upon or shortly after their respective arrival in Hong Kong. They made their claims to the United Nations High Commissioner for Refugees (“UNHCR”) which processed them in accordance with the procedural standards for Refugee Status Determination (“RSD”). Although the PRC is a party to The United Nations Convention Relating to the Status of Refugees 1951 and the Protocol Relating to the Status of Refugees 1967, the PRC did not apply them to Hong Kong and it is the Government’s policy not to grant asylum. The critical decision for the Director of Immigration (“Director”) is whether to order the removal of such claimants and if so, to which country they should be removed. The Director’s practice is that pending RSD by UNHCR, a refugee claimant in Hong Kong would be permitted to remain and that if the claim succeeds, the refugee would not be repatriated pending resettlement. In this case, the UNHCR investigated and then denied the claims of the appellants. Their appeals to the UNHCR were also dismissed. The Appellants sought judicial review against the Director’s decision to return them to the countries of putative persecution. Both the Court of First Instance and the Court of Appeal dismissed their claims. The Court of Final Appeal allowed the appeal. The Court accepted the appellants’ argument that the Director’s decision to return a refugee claimant is subject to judicial review and must satisfy the high standards of fairness required. Given it is the practice of the Director to have regard to humanitarian considerations when deciding whether or not to exercise his power to remove a refugee claimant, and that whether such claim is well-founded is a relevant humanitarian consideration, the Director must independently determine whether the claim is well-founded. The Court noted that there is a Memorandum of Understanding between the Government and the UNHCR, which provides that the Government would send representatives to the UNHCR to perform RSD duties and the UNHCR shall take full responsibility for the final determination of refugee status of the claimants. The Court held that, while the Director is entitled to give weight to a RSD by the UNHCR, the Director must independently consider the exercise of his power of removal in each case on its own merits. The Court affirmed that the exercise of administrative powers by the Government is necessarily subject to some limits, of which the court has the power to review based on the rule of law. However, the Court acknowledged that judicial review is also subject to a number of limitations, such as those arising from the principles of separation of power and the requirement of justiciability, which may deny jurisdiction to the courts. In this case, the discretion which the Director enjoys in deciding whether to deport refugee claimants is not unfettered, and the rule of law dictates that the decision must be made in accordance with high standards of fairness and subject to judicial review. |
1. The Appeal Committee of the Court of Final Appeal dismissed the application by the Secretary for Justice for leave to appeal from the decision of the Court of Appeal in this matter concerning the admission to the Hong Kong Bar of Mr Timothy Owen KC to represent Mr Lai Chee Ying in his trial on charges of conspiracy in relation to seditious publications and conspiracy to collude with a foreign country or external elements to endanger national security. 2. The Secretary for Justice had, together with the Bar Council, opposed the application for the admission of Mr Owen KC to represent Mr Lai. The Chief Judge of the High Court, sitting as a judge of first instance, had exercised his discretion in favour of Mr Owen KC’s admission, applying long-standing principles based on the public interest. 3. The Secretary for Justice, but not the Bar Council, appealed to the Court of Appeal, essentially challenging the weight attributed to relevant aspects of the public interest involved in the Chief Judge’s exercise of discretion. The Court of Appeal dismissed that appeal, concluding there was no valid basis to interfere with the Chief Judge’s exercise of discretion and confirming the admission of Mr Owen KC. 4. The Secretary for Justice then applied to the Court of Appeal for leave to appeal to the Court of Final Appeal. At that stage, the Secretary for Justice advanced a fundamentally different case seeking to challenge the established principles for admissions of overseas counsel for a specific case and contending instead for a blanket ban on such admissions in cases involving national security, subject only to undefined exceptional circumstances. The Court of Appeal refused to grant leave to appeal on this new argument. 5. The Secretary for Justice renewed his application for leave to appeal to the Appeal Committee of the Court of Final Appeal. 6. In dismissing the application, the Appeal Committee applied the Court’s well-established principle that a new point will not be permitted to be raised on appeal where it bears on fairness to the other party and on the Court’s ability properly to adjudicate on the matter. In the present case, both these considerations weighed against the grant of leave to appeal since the Secretary for Justice was seeking to raise radically new points which, notwithstanding their obvious importance, had not been mentioned or explored either before the Chief Judge or the Court of Appeal. The Appeal Committee held that the Secretary for Justice had not made out a proper case for the grant of leave to appeal and so dismissed the application. 7. Since the application was dismissed on the basis of the principle governing the raising of new points, it was not necessary for the Appeal Committee to enter into any discussion of the Court of Appeal’s views of the merits of the Secretary for Justice’s underlying arguments, which were in any event entirely case-specific and not binding on subsequent cases. 8. The Appeal Committee noted that the courts of the HKSAR were fully committed to safeguarding national security and to acting effectively to prevent, suppress and impose punishment for any act or activity endangering national security as required by Article 3 of the National Security Law. That duty would be carried out whenever national security issues were properly raised and duly explored, enabling the courts to undertake a proper adjudication of those issues. Thus, in relation to admissions of overseas counsel for a specific case, where national security considerations properly arose, such considerations were plainly of the highest importance to be taken into account. In the present case, however, the Secretary for Justice had fundamentally changed his case only at the stage of seeking leave to appeal to the Court of Final Appeal, had raised undefined and unsubstantiated issues said to involve national security which were not mentioned or explored in the courts below, and no appropriate basis had been made out for the grant of leave to appeal. |
1. This inquest is to inquire into the cause of death, the circumstances connected with the death and to facilitate the coroner to make practicable recommendation to prevent future tragedy. It is not concerned with the fault, civil liability or compensation here. The law prohibits any conclusion being framed in such a way as to determine any question of civil liability. 2. All eye witnesses were not available. The two reports issued by the Egyptian aviation and prosecution authorities were received as evidence. The expert evidence of Mr. Chadwick (the General Aviation Flight Standard Officer (Balloon Operations) of UK Civil Aviation Authority was most helpful, impartial and professional. 3. It was the deadliest hot ballooning disaster in history resulted in 19 deaths with 9 Hong Kong citizens. All nine deceased died in the morning of 26 Feb 2013 during a hot-air balloon ride over Luxor City when the balloon caught fire during the flight after the landing procedure has started. The fire was due to hose fuel leak at the upper portion of the forward right hose connected to the burner number 193. Such fire also caused serious and direct injury to the balloon pilot who was unable to do anything to control the fire. The medical causes of death for all of the deceased were multiple injuries and burns. The conclusion as to deaths of all deceased is “deaths by accident”. 4. Recommendations to Travel Industry Council (TIC) 1) TIC to conduct a thorough research and collect data from the industry so as to list out popular activities operated in different countries offered by travel companies involving certain degree of risk. TIC to categorize the degree of risk in respect of different activities provided in different countries for the industry as reference. Such list should be updated from time to time; 2) TIC to set out clear guidelines to travel companies as to the necessary information of activities involving certain degree of risk to be provided to customers before taking part in such activities; 3) TIC to set out clear and specific guidelines to travel companies that customers should be reminded that their travel insurance may not cover activities involving certain degree of risk; 4) TIC to look into travel companies’ duty and responsibility in selecting and supervising the local service providers and review the existing guidelines when destination management companies are engaged; 5) TIC to set out new guidelines on travel companies’ duty and responsibility to supervise destination management companies; 6) TIC to set out safety guidance and advertise to customers as to the importance of obtaining details of travel policy insurance and information on activities involving risk before enrolment. 5. Recommendations to Kuoni 1) Kuoni to obtain sufficient information from local service providers and conduct thorough risk assessment on activities involving certain degree of risk provided to customers before offering the same; 2) Kuoni to conduct thorough evaluation after every serious accident taking place during tours provided by them so as to find out the cause of the accident and consider if there is anything that can be done to improve the quality and safety of service provided to customers. 3) Kuoni to provide sufficient information to customers about activities involving certain risk and remind them in more specific and clear terms that activities involving risk may not be covered by their travel insurance; 4) Kuoni to provide more training and information to front desk staff, including receptionists and tour escorts, so that they can be better equipped to explain the risk involved in activities provided by them; 5) Kuoni to set out clear criteria for selecting destination companies and local service providers with first hand information and to closely monitor the service provided by destination management companies and local service providers. 6. Both TIC and Kuoni need to reply the Coroner in writing in three months’ time as to 1) whether the above recommendations are accepted and if yes 2) what steps have been taken to implement the recommendations and 3) reasons if the recommendations are not accepted. |
1. These are two applications for judicial review seeking to impugn the Emergency Regulations Ordinance (Cap 241) (“ERO”) and the Prohibition of Face Covering Regulation (Cap 241K)(“PFCR”) made thereunder as being invalid and unconstitutional. 2. By Ground 1, the applicants contend that the ERO is unconstitutional because it amounts to an impermissible grant or delegation of general legislative power by the legislature to the Chief Executive in Council (“CEIC”) and contravenes the constitutional framework under the Basic Law. The court holds that the ERO, insofar as it empowers the CEIC to make regulations on any occasion of public danger, is incompatible with the Basic Law, having regard in particular to Arts 2, 8, 17(2), 18, 48, 56, 62(5), 66 and 73(1) thereof. The court leaves open the question of the constitutionality of the ERO insofar as it relates to any occasion of emergency. 3. As to Ground 2, the court holds that the ERO was not impliedly repealed by s 5 of the Hong Kong Bill of Rights Ordinance (Cap 383) (“HKBORO”). Insofar as it is invoked in situations not falling within the kind of public emergency referred to in the HKBORO, the Bill of Rights is not suspended and the measures adopted will have to comply with it. 4. On Ground 3, the court holds that the ERO does not in itself fall foul of the “prescribed by law” requirement (ie the principle of legal certainty). Where regulations and measures are adopted under the ERO that curtail fundamental rights, the entire relevant body of law including the regulations and measures have to be taken together to see whether they meet the requirement of sufficient accessibility and certainty. 5. Under Ground 4, the applicants contend that the general words in s 2(1) of the ERO are not to be construed as allowing the Government to adopt measures that infringe fundamental rights of the individual and that the PFCR is therefore beyond the power conferred on the CEIC by the ERO. The court finds that it is not necessary to deal with this Ground and does not express any view on it. 6. Under Ground 5A, the applicants contend that s 3 of the PFCR fails to satisfy the proportionality test (as explained in Hysan Development Co Ltd v Town Planning Board (2016) 19 HKCFAR 372, §§134‑135). The court holds that the provisions in s 3(1)(a), (b), (c) and (d) of the PFCR are rationally connected to legitimate societal aims that the respondents intend by those measures to pursue but the restrictions that sub‑paragraphs (b), (c) and (d) impose on fundamental rights go further than is reasonably necessary for the furtherance of those objects and therefore fail to meet the proportionality test. 7. Under Ground 5B, the applicants contend that s 5 of the PFCR fails to satisfy the proportionality test. The court holds that the measure introduced by s 5 of the PFCR is rationally connected to the legitimate societal aims pursued but the restrictions it imposes on fundamental rights also go further than is reasonably necessary for the furtherance of those objects and therefore fail to meet the proportionality test. 8. In the light of these conclusions, there will be a further hearing for the parties to make submissions on the appropriate relief and costs. |
BACKGROUND TO THE APPEAL: 1. This appeal concerns Standing Order 41-05 (“SO 41-05”), issued by the Commissioner of Correctional Services (“Commissioner”) to regulate the hair length of prisoners. SO 41-05 requires the hair of male prisoners to be cut “sufficiently close”. As for the hair of female prisoners, it shall not be cut shorter than her style on admission to prison without her consent, unless otherwise recommended by a Medical Officer. Accordingly, female prisoners were given a choice that male prisoners did not have. 2. The appellant was imprisoned for four weeks in June 2014 after being convicted of several charges. Whilst in custody, he was required to have his hair cut pursuant to SO 41-05 (“Decision”). 3. The appellant challenged the lawfulness of both the Decision and SO 41-05 on the grounds that they (a) constituted direct discrimination under s.5 of the Sex Discrimination Ordinance (Cap.480) (“SDO”) and (b) were contrary to art.25 of the Basic Law. Essentially, the issue was whether male prisoners like the appellant were treated less favourably than female prisoners. 4. The Court of First Instance held in favour of the appellant on both grounds (a) and (b) above, allowing his application. On the respondent’s appeal, the Court of Appeal allowed the respondent’s appeal. In essence, it held that the Commissioner applied conventional standards of appearance to both male and female prisoners, hence male prisoners were not treated less favourably. The appellant appealed to the Court of Final Appeal. 5. The issue before the Court is whether SO 41-05 by requiring male but not female prisoners to have their hair cut “sufficiently close”: (a) constitutes direct discrimination under s.5(1)(a) of the SDO, thus unlawful under s.38 SDO; (Question 1) and/or (b)is inconsistent with the right to equality before the law under art.25 of the Basic Law, thus unconstitutional (Question 2)? JUDGMENT: 6. The Court unanimously allowed the appellant’s appeal. REASONS FOR THE JUDGMENT: Question 1 7. The Court held that SO 41-05 constitutes direct discrimination under s.5(1)(a) SDO, and is hence unlawful under s.38 SDO. 8. Establishing direct discrimination under s.5(1)(a) SDO involves four elements: (a) there is a difference in treatment between one person and another (of a different sex); (b) the relevant circumstances between the two persons are not materially different; (c) the complainant is treated less favourably than the compared person; and (d) such difference in treatment is on the basis of sex. 9. It is not disputed that elements (a), (b) and (d) are established under SO 41-05. The central issue is element (c), which is whether there has been “less favourable treatment” of male prisoners on account of the denial of choice to them. On its face, the fact that male prisoners are denied a choice as to their hair length, suggests that they are treated less favourably than female prisoners. The burden shifts to the Commissioner to explain why that is not so. 10. The Commissioner explained that SO 41-05 ensures custodial discipline which requires reasonable uniformity in appearance amongst prisoners. Such uniformity is achieved through applying conventional standards of appearance in Hong Kong society to both genders in prison. 11. The Court rejected the Commissioner’s submission. 12. First, there is no reasonable connection between ensuring custodial discipline and asserting conventional standards of hair length. No proper explanation had been given by the Commissioner. Without such connection shown, the Commissioner cannot proceed to explain why there is such differential treatment and why that is not less favourable treatment. 13. Second, as a matter of evidence, the Commissioner failed to show that SO 41-05 reflects the conventional standards of appearance. The Commissioner failed to provide any bases for suggesting that in Hong Kong society, the conventional hairstyle for men is short, whilst it may be long or short for women. Question 2 14. Given that the Court has allowed the appeal on Question 1, it is unnecessary to deal with Question 2, although on the facts of the present case, the outcome would be the same under art.25 of the Basic Law as under s.5(1) of the SDO. |
1. This was an appeal against the Appellant’s conviction for conspiracy to defraud. It arose as a consequence of the Court’s judgment in HKSAR v Wan Thomas [2018] HKCFA 15, (2018) 21 HKCFAR 214. 2. The Appellant’s conviction arose from the same case as that in HKSAR v Wan Thomas. The Appellant was one of the nine defendants jointly charged with the offence. The prosecution alleged that the defendants had conspired to defraud officers of the Correctional Services Department (“CSD”) by dishonestly and falsely representing to those officers that each of them was a “friend” of an inmate remanded at Lai Chi Kok Reception Centre in order to induce the officers to grant them permission to visit the relevant inmates. 3. The Appellant, together with five other defendants, were convicted after trial by the magistrate. The appeals to the Court of Appeal by four of the defendants, including the Appellant, were dismissed (their original appeal was ordered to be transferred from the Court of First Instance to the Court of Appeal). While the Appellant did not pursue a further appeal to this Court, the 1st defendant (D1) and 2nd defendant (D2) appealed to this Court which led to the judgment of the Court in HKSAR v Wan Thomas. 4. The Court held, in HKSAR v Wan Thomas, that the appeals of D1 and D2 should be allowed and their convictions quashed. The Court reasoned that on a proper construction of the relevant rules of the Prison Rules (Cap. 234A), D1 and D2 were “friends” of the prisoners whom they visited. Hence, they did not make misrepresentations to the CSD officers as to their relationship to those prisoners. Furthermore, the Court held that there was insufficient evidence at trial to prove that the defendants had agreed together to induce the CSD staff to admit them as visitors nor that they had made any misrepresentation dishonestly. 5. In the light of the Court’s judgment in HKSAR v Wan Thomas, the Appellant applied for leave to appeal to the Court of Final Appeal. On the prosecution’s indication that it was prepared to consent to the application, leave was granted and directions were given for the filing by the parties of a Joint Case. 6. The Court accepted the parties’ joint submission that the Appellant’s conviction was unsustainable as a matter of law for the same reasons that led to the appeals of D1 and D2 being allowed in HKSAR v Wan Thomas. Additionally, of the original nine defendants, five had already had their convictions quashed. Substantial and grave injustice would result from the Appellant remaining convicted. DISPOSITION 7. Accordingly, the appeal was unanimously allowed and the Appellant’s conviction quashed. |
1. The 1st and 2nd Appellants were executive directors of Upbest Group Limited (“Upbest”), a company listed on the Stock Exchange of Hong Kong (the “Stock Exchange”) involved in the business of money lending. The 3rd Appellant and his wife, the 4th Appellant, were directors and shareholders of Grand Field Group Holdings Limited (“Grand Field”), also a company listed on the Stock Exchange. 2. The 3rd and 4th Appellants, in order to bolster the falling share price of Grand Field, came up with a scheme to give a false impression of profitable activity. A company, Sino Richest Limited (“Sino Richest”), was incorporated to acquire the interest in a gas joint venture in Chongqing. Grand Field purported to acquire 75% of Sino Richest, the consideration being the issuing of 315 million Grand Field shares to the shareholders of Sino Richest, including a company called Logistic China Enterprise Limited (“Logistic China”). 3. In fact the 3rd and 4th Appellants never intended to proceed with the joint venture. In response to the Stock Exchange’s queries, the 3rd and 4th Appellants pretended that Grand Field had sold its interest in the joint venture back to Logistic China. This was the basis of their conviction on the conspiracy to defraud charge. 4. The Appellants put in place a circular fund flow arrangement to create a false picture that there had been a real re-acquisition by Logistic China from Grand Field. HK$32 million originated from Upbest and passed through a number of parties, including Logistic China, Ka Fong Industrial Limited (a subsidiary of Grand Field) and the 3rd Appellant. The money would eventually return to the source, Upbest. In relation to these circular payments, the Appellants were charged with conspiracy to deal with property known or believed to represent proceeds of an indictable offence (the “money laundering charge”), contrary to sections 25(1) and (3) of the Organized and Serious Crimes Ordinance (“OSCO”). The question in the Court of Final Appeal was whether the offence of money laundering could be committed where a person dealt with funds that were known not to derive from any offence but which were used in the furtherance of such an offence. 5. Section 2(6)(a) of OSCO relevantly defines “a person’s proceeds of an offence” as “any payments or other rewards received by him at any time… in connection with the commission of that offence”. The Respondent argued that section 2(6)(a) widens the concept of “proceeds of an indictable offence” in section 25(1) to extend to money or property received in circumstances in which such receipt may be said to be “in connection with” the commission of an indictable offence even if that money or property is known not to be tainted as a benefit received on account of the commission of such offence. 6. The Court of Final Appeal rejected the Respondent’s wide interpretation of OSCO. It held that the ordinary meaning of “proceeds” was money or property derived from the commission of an offence. Section 25A of OSCO imposes a duty to report suspected money laundering offences and makes express provision to cover property which “was used in connection with” or which “is intended to be used in connection with” an indictable offence, suggesting that the Respondent’s wide interpretation was wrong. The Court of Final Appeal also gave due weight to the words “or other rewards” in the phrase “payments or other rewards”. The payment must be in the nature of a reward, linking the payment and the commission of the offence. Further, the Court of Final Appeal accepted that, interpreting sections 2(6)(a) and 25(1) in the light of OSCO’s fundamental purpose, the word “proceeds” had to be understood to refer only to money or property which represented an economic benefit gained by the relevant defendant in connection with the commission of the underlying indictable offence. The HK$32 million from Upbest was not a benefit received in connection with the conspiracy to defraud charge and so did not represent the proceeds of that offence. In addition, adopting the Respondent’s wide interpretation would have detrimental policy consequences. 7. Accordingly, the Court of Final Appeal held that the money laundering charge was not established and unanimously allowed the appeal. |
1. The police seized 2 mobile phones from the plaintiff in a search of his residence in 2020. The plaintiff commenced proceedings to have the seized materials returned to him. One of his claims was that the seized materials contained journalistic material. As a result, the phones were ordered to be sealed by the judge, pending determination of the plaintiff’s claims. 2. In 2022, the police obtained from a designated magistrate a warrant under the Implementation Rules for Article 43 of the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (the Rules). This warrant authorized the searching of the digital contents in the phones seized by the police, including those subject to the claim on journalistic material, but it provided that the phones could only be unsealed by a further order of the judge. 3. To give effect to the warrant, the police applied to the judge by summons for the phones’ contents to be made available. In opposition, the plaintiff applied for leave for judicial review against the validity of the warrant, on the ground that the term “specified evidence” (as defined in section 1 of Schedule 1 of the Rules) does not cover journalistic material. The judge dismissed the plaintiff’s leave application and allowed the summons by the police. The plaintiff appealed both decisions to the Court of Appeal. 4. The Court of Appeal observed that the proper context in which the term “specified evidence” is to be interpreted is as follows:- (1) the Rules authorize a warrant to be issued by a magistrate for a police officer to search “specified evidence”; and “specified evidence” is defined to mean “anything that is or contains, or that is likely to be or contain, evidence of an offence endangering national security” (section 1 of Schedule 1); (2) the Rules are delegated legislation made pursuant to The Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (NSL). One primary objective of the NSL is to effectively suppress, prevent and punish offences and acts endangering national security. The legislative purpose of the Rules must be consistent with the NSL, and a proper interpretation of “specified evidence” must give effect to that purpose; (3) on the other hand, the NSL requires the protection of fundamental rights (NSL Art.4). Journalistic material concerns the freedom of the press, which is a facet of freedom of expression, and is protected as a fundamental right under the Basic Law and the Hong Kong Bill of Rights Ordinance. The immense importance of journalistic material to freedom of the press is central to the construction of “specified evidence”; (4) the NSL also emphasizes adherence to the principle of the rule of law (NSL Art.5). This requires that if a statute does not expressly or by necessary implication override or restrict fundamental rights, it will not be construed as doing so; (5) the NSL is intended to operate in tandem with the laws of the HKSAR, seeking convergence, compatibility and complementarity with local laws (subject to NSL Art.62 which gives priority to NSL in case of inconsistency). This indicates that the Rules and local laws on search are to work as a coherent whole, and consequently local laws powerfully informs the construction of “specified evidence” in the Rules; (6) in exercising the discretion of issuing a warrant under the Rules, a magistrate is to be guided by the primary objective of the NSL, the legislative purpose of the Rules, the requirements for the protection of the freedom of the press, adherence to the principle of the rule of law, and local laws on search, as set out above. 5. As for local laws, the Court observed that:- (1) under the common law, in dealing with a search warrant for journalistic material, the court performs the judicial gatekeeping role of guarding against unlawful and arbitrary interference with fundamental rights that a search warrant might entail, balancing the competing public interests in protecting such material on the one hand, and crime prevention and law enforcement objectives on the other hand; (2) in addition, search and seizure of journalistic material under statutory provisions is generally subjected to the regime in Part XII of the Interpretation and General Clauses Ordinance (Cap 1). Under this regime, the court is required to look at all the circumstances of the case, and to consider whether it would be in the public interest that the seized material should be made use of for the purpose of the relevant investigation. Public interest is relevant at both the issue and execution stages of the warrant. This regime does not have the effect of abrogating the common law, and therefore it is not the only lawful regime to address claims based on journalistic material; (3) in performing its judicial gatekeeping role, the court has to balance the public interest in deciding whether to issue the warrant with or without conditions, and may set aside or vary the warrant based on public interest upon the application by the person affected by it. 6. Based on these observations, and referring to well established local and overseas case law, the Court reiterated that journalistic material is not immune from search and seizure for the purpose of criminal investigation. The Court further held that:- (1) despite its importance to the freedom of the press, the protection afforded to journalistic material is not absolute. Although always subject to the protection and procedural safeguards based on public interest and vigilant judicial scrutiny, it is not immune from search and seizure in investigation of any criminal offence, and the same must be true for offences endangering national security as a matter of principle; (2) to serve the legislative purpose of furthering the primary objective of the NSL to effectively suppress, prevent and punish offences endangering national security, the police must be able to carry out effective search on anything, including journalistic material, that contains or is likely to contain evidence of an offence endangering national security. Were such material excluded from the definition of “specified evidence”, it would unduly limit the scope and hence reduce the effectiveness of police investigation. That would not be conducive to the said legislative purpose; (3) such an interpretation does not diminish the protection afforded to the freedom of the press by local laws or violate the principle of legality. For the Rules operate in tandem with local laws on search as a coherent whole. The same protection and safeguards based on public interest for journalistic material under local laws equally apply to a warrant under the Rules. The magistrate will perform the same judicial gatekeeping role in exercising his discretion under the Rules as he would under local laws, to ensure that the search and seizure of journalistic material is justified in the public interest. 7. The Court of Appeal therefore dismissed the plaintiff’s appeals, holding that “specified evidence” as defined in the Rules, in its proper context and as borne out by its natural and ordinary language, covers journalistic material. |
1. The Respondent was charged with the offence of unlawful assembly upon trailing closely behind a plainclothes police officer (“PW1”) with three other persons and using a video camera continuously to make a recording. 2. After trial, Principal Magistrate Don So (“the magistrate”) found the Respondent guilty and imposed a sentence of 3 months’ imprisonment. The magistrate found, amongst other things, that (1) the Respondent consciously assembled with the other three defendants; (2) their acts insulted and provoked PW1, in particular, the Respondent’s conduct of filming PW1 was provocative; (3) such acts were likely to cause other persons reasonably to fear that those assembled would commit a breach of the peace or provoke other persons to commit a breach of the peace; (4) these acts cumulatively had a greater intimidating effect; and (5) the Respondent was aware of the harassment, threat and provocation directed towards PW1 at the scene and he deliberately participated in the assembly. 3. On appeal to the Court of First Instance, A Wong J (“the Judge”) allowed the Respondent’s appeal against conviction because he could not draw the irresistible inference that the Respondent had the participatory intent. 4. The Court reiterated the law on unlawful assembly previously discussed in HKSAR v Lo Kin Man. With respect to the participatory intent for the offence, it was held that two ingredients are needed to satisfy the requirement: (a) the defendant intended to become part of the assembly; and (b) while he or she assembled together with these other participants and was aware of the related conduct of other participants, he or she intended to engage in or act in furtherance of the prohibited conduct under Section 18(1) of the Public Order Ordinance (Cap 245). 5. This Court held that in the present case the unlawful assembly came into being as the Respondent joined the other defendants in the group trailing closely behind PW1. He had committed a prohibited act under Section 18(1) by the way and the circumstances in which he filmed PW1 in the unlawful assembly. 6. According to the findings of the courts below, the Respondent had the intent to become part of the group of people who pestered PW1 at close distance. This finding was supported by the video recordings which showed that the Respondent rushed towards PW1 together with others in the group. Further, as found by the magistrate and affirmed by the Judge, the Respondent was able to film without objection or fear of reprisal by the others in the group. Thus, ingredient (a) was established. 7. As the Respondent was aware of the related conduct of the other participants and intended to engage in his own prohibited act of filming PW1 while assembled with the other defendants. Thus, ingredient (b) was also established. 8. This is clearly not a case of mere presence or spontaneous filming by an innocent bystander. Had the Judge properly directed himself on requirement of participatory intent, there is nothing to preclude him from drawing the irresistible inference that the Respondent had the requisite intent. 9. Accordingly, this Court unanimously allowed the appeal and restored the conviction and sentence against the Respondent. |
1. Poon Lok To Otto (the “Husband”) and Kan Lai Kwan (the “Wife”) were married in 1968. The Husband became very successful with his business from the mid-1990s. Analogue Holdings Ltd (“Analogue”) was incorporated to be the holding company of his business. In July 1995, a discretionary trust based in Jersey was set up (the “Trust”). The Husband was the Settlor, Protector and a potential beneficiary. HSBC International Trustee Limited was the Trustee. The Husband settled 84.63% of the shares of Analogue in the Trust. 2. In February 2009, the Husband petitioned for divorce on the basis of two years’ separation. The Wife did not defend the proceedings. The decree nisi was pronounced in May 2009 and made absolute in September 2010. The Wife applied for ancillary relief. She argued that the equal sharing principle should be applied to the entire value of the Trust, not only to two-thirds of that amount (which the Husband contended for). She also claimed that they had been separated only since 2008. The Husband, on the other hand, claimed that they had been separated since 2001. This was relevant due to the substantial profits generated by Analogue after 2001. 3. To decide whether the Trust was a financial resource of the Husband, the Court of Final Appeal adopted the test of asking whether, if the Husband were to request the Trustee to advance the whole or part of the capital or income of the Trust to him, the Trustee would, on the balance of probabilities, be likely to do so. Considering the creation and terms of the Trust, the Husband’s letters of wishes, the nature of the Trust assets and previous distributions made by the Trustee, the Court held that there was clear evidence of the overwhelming likelihood that the Trustee would, if requested by the Husband, advance the whole or part of the capital or income of the Trust to him. Accordingly, the Court of First Instance and the Court of Appeal were wrong to hold that the matrimonial assets included only a two-thirds interest in the value of the Trust. The entire Trust fund should be regarded as a financial resource available to the Husband. 4. Disagreeing with the finding of the Court of First Instance that the Husband and the Wife separated in 2001, the Court of Final Appeal held that as a matter of fact their marriage continued until they finally separated in 2008. The Court of Final Appeal also disagreed with the finding of the Court of Appeal, based on the doctrine of estoppel, that they separated in 2007. Whether the Husband and the Wife had separated was a question of fact. The Court was subject to a statutory duty to have regard to all the circumstances of the case. It was not estopped from finding that the Husband and the Wife in fact separated in 2008. 5. On the question of whether there should be a departure from the equality principle, the Court of Final Appeal held that the increased profits of Analogue did not provide a ground for such a departure. Those profits arose out of the business which had been built up during the Husband’s and the Wife’s marriage, in respect of which the Wife could legitimately assert an unascertained share. 6. Accordingly, the Court of Final Appeal unanimously allowed the Wife’s appeal and dismissed the Husband’s appeal. |
1. On 3 November 2016, the Appellant was driving a private car when his offside front wheel pressed against the left foot of a pedestrian who was crossing the road from a safety island. 2. On 1 June 2018, the Appellant, acting in person, pleaded guilty to a charge of careless driving contrary to section 38(1) of the Road Traffic Ordinance (Cap. 374). After the summary of facts was read and agreed, the Appellant was convicted by the Magistrate. The Appellant then contended during mitigation that although he was careless, (1) the pedestrian unexpectedly extended her foot onto the road and he was unable to stop his car; (2) he did not know how the incident could have been avoided; (3) he could not avoid the pedestrian despite already stopping his car immediately, and (4) he had already stopped the car immediately. 3. The court adjourned the case to obtain a community service report before sentencing. It was stated in the report that the Appellant maintained his story of how the accident happened, and insisted he was innocent, and that he had only pleaded guilty in order to save time. 4. In the meantime, the Appellant engaged counsel and made an application to the court to reverse his guilty plea on the ground that his plea was equivocal and the conviction could not stand. 5. On 6 July 2017, the Magistrate dismissed the Appellant’s application and held that because the Appellant understood the charge, admitted the facts and upon the court’s enquiry also made an admission to the elements to the charge, there was thus no inconsistency with his guilty plea, which was an unequivocal one. 6. On appeal, the Court of First Instance upheld the Appellant’s conviction. The Judge observed that the only issue was whether the Appellant’s plea was equivocal. As the Magistrate had clarified with the Appellant during his mitigation submission and confirmed his admission of driving carelessly, there was nothing improper with the way the Magistrate dealt with the matter. The statements the Appellant made to the probation officer, as stated in the community service report, were irrelevant. 7. The Appellant brought a further appeal to this Court against the decision of the Court of First Instance. ISSUES 8. The Court clarified the legal principles on the reversal of guilty pleas. 9. Firstly, a plea is equivocal if a defendant adds to his plea of guilty a qualification which, if true, may show that he is not guilty of the offence charged. An equivocal plea cannot be accepted and cannot form the basis of a conviction. A conviction resulting from the erroneous acceptance of an equivocal plea is a nullity and must be set aside; no discretion is involved. 10. Secondly, whether a plea is equivocal is to be determined at the time it is made. The terminology employed in some previous case law was wrong and must be clarified: anything that is said or comes to light after conviction cannot and does not retrospectively turn an unequivocal plea into an equivocal one; it instead may form the basis of an application to invoke the court’s discretion to allow a reversal of plea. In the current appeal, the Appellant’s plea was an unequivocal one. His allegations during mitigation and to the probation officer did not turn his unequivocal plea into an equivocal one. 11. Thirdly, a conviction is not complete and the court’s jurisdiction over the matter does not lapse until sentence is passed. Where, as in the current appeal, material emerges after conviction but before sentence which, if true, may show that the defendant is not guilty of the offence charged, the court has a discretion to allow a change of plea. 12. Fourthly, such discretion is an unfettered one. The way the court exercises it must turn on the facts, and the overriding consideration must be the interests of justice. In the current appeal, where material emerged in mitigation and reports suggesting that the Appellant might not be guilty of the offence charged, the interests of justice would weigh heavily in favour of allowing a reversal of plea. Further, while an equivocal plea is defined by the threshold of a qualification that, if true, may show that the defendant is not guilty of the offence charged, for the purposes of invoking the court’s discretion on allowing a reversal of plea, the threshold need not be so and could be lower. DISPOSITION 13. Accordingly, the appeal was unanimously allowed and the Appellant’s conviction was quashed. As the Appellant has already served his sentence of 150 hours of community service, retrial was exceptionally not ordered. |
1. The Appellant was directed to go through a customs inspection when she arrived at Hong Kong International Airport from Kuala Lumpur. During the inspection carried out in her presence, white powder was discovered in the lining of her suitcase. Tests conducted on the spot revealed that the white powder was heroin and the Appellant was arrested and cautioned. Upon being asked what the white powder was, the Appellant responded orally in Cantonese, “我諗呢一啲係毒品啩”, translated in English as “I suppose this is dangerous drug”. Before the Court of First Instance, whether the Appellant’s response was capable of an admission as to knowledge was left to the jury. The jury convicted the Appellant of trafficking in a dangerous drug. 2. The Court of Final Appeal observed that the Appellant gave her response after her suitcase had been searched in her presence and had heard the drug results of the white powder testing positive. Furthermore, the addition of the “啩” final particle was a non-committal response by the Appellant and was not intended to be an admission of knowledge. 3. The Court concluded that the Appellant’s response was incapable of being an admission. Even if the statement was treated as possibly being an admission, it was so ambiguous that the probative value would be extremely limited and outweighed by risk of unfair prejudice from leaving it to the jury. Thus, the trial judge should have considered exercising his residual discretion to exclude the ambiguous statement as a possible admission. 4. Accordingly, the appeal was allowed and a re-trial ordered. |
1. The Appellant offered money to persons associated with localist political organizations as an inducement for them either to stand themselves, or to get others to stand, as a candidate in the 2015 Hong Kong District Council Election. 2. The Appellant was convicted before the District Court of offences relating to corrupt conduct at an election, contrary to sections 6 and 7(1) of the Elections (Corrupt and Illegal Conduct) Ordinance, Cap 554 (“ECICO”). 3. Section 7(1) of the ECICO (“s7(1)”) states that a person engages in corrupt conduct at an election if he/she “corruptly” does specified acts. Such specified acts include the offer, solicitation or acceptance of an advantage as an inducement for a person to, or to get a third person to, stand or not stand as a candidate at an election. 4. The sole issue on appeal before the Court of Final Appeal was the meaning of the word “corruptly” in s7(1), on which the Trial Judge and the Court of Appeal (“CA”) differed in their interpretations. The Trial Judge held that “corruptly” meant that a defendant must intend not only to do a specified act under s7(1), but also to prevent a fair, open and honest election. The CA held that it required only that a defendant intentionally does a specified act which results in personal gain. 5. The Court held that neither interpretation was correct. 6. The Court first observed that section 3 of the ECICO lays down the legislative objectives of promoting fair, open and honest elections, and prohibiting corrupt and illegal conduct in relation to elections. Therefore, conduct that is “corrupt” is intended to mean conduct which is inconsistent with the attainment of fair, open and honest elections. 7. In light of this legislative purpose, the Court held that the word “corruptly” in s7(1) is not a mental element. It does not require proof of specific intent on the part of a defendant to prevent a fair, open and honest election. Instead, it functions to define what amounts to “corrupt conduct at an election” by confining the specified acts in s7(1), which involve the offer, solicitation or receipt of “an advantage”, only to those acts which carry an objective tendency to undermine a fair, open and honest election. A defendant is not necessarily guilty under s7(1) by engaging in any of the specified acts if the act does not have the requisite tendency. 8. The Court concluded that the Appellant was guilty as charged because he intentionally engaged in specified acts under s7(1) “corruptly” in that his conduct involved inducing his co-defendants to stand for election for personal gain in order to divert votes away from targeted candidates with a view to manipulating the election results against them in a way which tended to undermine a fair, open and honest election. DISPOSITION: 9. The Court unanimously dismissed the appeal. |
Subsets and Splits