Competition Commission v. W. Hing Construction Co Ltd

CTEA 2/2017

[2020] HKCT 6

IN THE COMPETITION TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COMPETITION TRIBUNAL ENFORCEMENT ACTION NO 2 OF 2017

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Before: Hon G Lam J, President of the Competition Tribunal

Dates of Written Submissions: 4, 16 and 23 June 2020

Date of Decision: 28 July 2020

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D E C I S I O N

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1.By the judgment handed down on 29 April 2020 (“Judgment”),[1] this Tribunal determined the amount of pecuniary penalty imposed on each of the respondents and also made orders for costs of the proceedings in favour of the Commission. Specifically, at paragraph 139, a certificate for two counsel was granted but a certificate for three counsel, sought by the Commission, was refused.

2.On 27 May 2020, the Commission served a notice of appeal that challenges (i) the amount of penalty imposed on the 1^st, 4^th and 9^th respondents as being too low,[2] and (ii) the refusal to grant a certificate for three counsel.  The latter, vis-à-vis all the respondents other than the 1^st, 4^th and 9^th, is an appeal relating only to costs that are left to the discretion of the Tribunal and, as such, may not be brought without the leave of the Tribunal or of the Court of Appeal: section 154(2)(c) of the Competition Ordinance (Cap 619).

3.The time in which leave must be applied for is not set out in the Competition Ordinance or in the Competition Tribunal Rules.[3]  Instead, as the Commission submits, by virtue of Order 59 rules 1(2) and 2B(1) of the Rules of the High Court (Cap 4A) and section 14(3)(e) of the High Court Ordinance (Cap 4), the time limit is 14 days.  The Commission’s summons issued on 27 May 2020 has accordingly sought leave to appeal in relation to costs out of time as against the 2^nd, 3^rd, 5^th, 6^th, 7^th, 8^th and 10^th respondents.

4.The proper approach to an application for leave to appeal a costs decision out of time is illustrated by the recent decision of the Court of Appeal in Lee Carol v Tong Hung Wai Tommy & another [2020] HKCA 325 and is, essentially, the same as the general approach for considering an application for leave to appeal out of time.  In Lee Chick Choi v Best Spirits Co Ltd (HCMP 371 of 2015, 21 May 2015) at §19, Kwan JA stated the following (which was quoted in Tang Chai On v Tang Sing Ki [2016] 5 HKLRD 104 (CA) at §9 and Lee Carol at §5):

“ The legal principles regarding an application to extend time for an appeal are well established. In the exercise of its discretion, the court will take into account the length of the delay, the reasons for the delay, the chances of the appeal succeeding if an extension of time is granted, and the degree of prejudice to the other party if the application is granted. Where the delay is substantial and not wholly excusable, the applicant must show a real prospect of success on the merits, not merely a reasonable prospect of success.”

5.In the present case, there had been a delay of 14 days.  The reason, as explained on affidavit by the responsible legal officer of the Commission, was essentially that the in‑house legal team had focussed on the prospects of any substantive appeal and consequently proceeded on the basis that the applicable time limit was 28 days, without being alert to any shorter time limit for an appeal as to costs only. 

6.The time limit of 14 days for a costs‑only appeal is the same in respect of the Tribunal’s decision as it is for decisions of the Court of First Instance, and is as such not an esoteric provision peculiar to the Tribunal or a novel provision encountered by practitioners for the first time.  Further, while I can understand that the decision‑making process within the Commission for launching an appeal involves an extensive procedure, I do not understand the Commission to be saying that, even if it were aware of the 14‑day time limit, it would still have found it impossible to comply with it because of its internal procedures.  In the circumstances, I am unable to characterise the delay here as being, objectively, either insubstantial or wholly excusable.  It follows that the Commission needs to demonstrate a real prospect of success before it can be granted the requisite extension of time.

7.In paragraph 139 of the Judgment, this Tribunal stated:

“ Finally, the Commission seeks a certificate for three counsel. In my view, awarding costs for three counsel is exceptional: Fu Kor Kuen Patrick v HKSAR (unrep, FACC 4/2011, 27 August 2012), §5; Lin Man Yuan v Kin Ming Holdings International Ltd (HCA 216/2009, 24 December 2015), §28. Recognising that the Commission’s counsel had to deal with multiple respondents, and without underestimating the tasks that they had to undertake, I would still not put this case in that exceptional category. I consider that a certificate for two counsel (one senior counsel and one junior counsel) should be granted instead.”

8.As regards the prospects of success of the proposed appeal, it is well established that costs are very much a matter of discretion for the Tribunal.  It has been said that a decision on costs is a decision “with high discretionary content”: Poon Ching Man v Lam Hoi Pun [2016] 3 HKLRD 815, §34.  The Court of Appeal will only interfere if it is satisfied that this Tribunal’s decision is either wrong in principle or plainly wrong: Poon Ching Man, §34; Lee Carol, §12.

9.In its submissions the Commission has raised four matters which, it is said, are highly relevant to the question of exceptionality and if taken into account should weigh strongly in favour of a certificate for three counsel.  First, the Commission submits that this was one of the pair of first cases brought before the Tribunal under the new competition regime.  This Tribunal was aware of that fact[4] and took it into consideration in the decision but did not regard it as justifying certification for three counsel.

10.The Commission further submits that overseas leading counsel was admitted by the High Court without opposition from the Bar Association or the Secretary for Justice.  I had in coming to the Judgment taken into account the fact that Queen’s Counsel from England had been instructed to appear in the case.  The Commission correctly understands the references in the Judgment (§§139 & 146(4)) to “one senior counsel” as meaning either Mr Daniel Beard QC or Mr Abraham Chan SC.  As the Court of Final Appeal pointed out in HKSAR v Pang Hung Fai (No 2) (2015) 18 HKCFAR 1 at §14, however, where overseas counsel is admitted on an ad hoc basis on the footing that local counsel is engaged, this does not require the engagement overall of more than two counsel. 

11.Thirdly, the Commission prays an aid the fact that Mr Beard QC was admitted to appear in this case on the express condition that three counsel be engaged.  However, the admission of Mr Beard was sought on the basis that he would be leading both local senior counsel and local junior counsel.  There is nothing to indicate that the Chief Judge of the High Court himself took the view that admission should be denied unless local senior and junior counsel were instructed to appear together.  Any condition accepted by the Commission in that regard should in my view be treated as self‑imposed and not a sufficient ground for seeking a certificate for three counsel as against the respondents.

12.Fourthly, the Commission submits that it was important that local senior counsel was engaged to provide support in relation to particular Hong Kong law and procedure related matters, and to further the long‑term objective of developing local capacity to handle matters under the competition regime.  The first part of the submission is a general point that may be said of many cases and not necessarily a justification for a certificate for three counsel.  The second part of the submission may be a laudable objective but not a reason why the respondents in the present case should be made to pay for it.

13.It seems to me, in these circumstances, that even without considering any prejudice to the relevant respondents, there is no sufficient justification for extending time for applying for leave to appeal.

14.The 3^rd, 5^th, 6^th, 7^th and 8^th respondents, now acting in person, have lodged written submissions in opposition to the application,[5] whereas the 2^nd and 10^th respondents have not made any response. 

15.The 6^th respondent submits that the Commission’s legal team should have been familiar with the procedural rules on time limit; that it does not follow from the admission of London counsel that there should be a certificate for three counsel; and that the judge presiding over the trial was in the best position to make a discretionary order as to costs.

16.In the 3^rd, 5^th, 7^th and 8^th respondents’ submissions, which are made in materially identical terms, it is stated that they had adopted a considered strategy after taking legal advice, namely, that: (1) those respondents would not appeal against the Judgment unless the Commission appealed against them in relation to costs; (2) if the Commission applied within 14 days for leave to appeal in relation to costs, then those respondents would appeal against the Judgment in relation to both penalties and costs; but (3) if the Commission was not granted leave to appeal, then those respondents would immediately withdraw their appeal; or (4) alternatively, if the Commission obtained leave to appeal, then those respondents would continue to proceed with their appeal. 

17.The 3^rd, 5^th, 7^th and 8^th respondents say that, by around 19 May 2020, they genuinely believed that the Commission would not be appealing on costs, and therefore they did not themselves bring any appeal and instead began taking steps to ask for payment of the penalties by instalments.  Their former solicitors only received the Commission’s summons herein at 5:16pm on 27 May 2020, the last day on which they could lodge an appeal against the Judgment.  These respondents therefore submit that they were prejudiced by the 14‑day delay on the part of the Commission, as a result of which they had lost their right to appeal against the Judgment.

18.The Commission accepts, however, that by Order 59 rule 6 the respondents can lodge a cross‑appeal by way of respondents’ notice if the Commission obtains leave to appeal against them. They could therefore still follow their strategy if they wish.  I am therefore not satisfied that the 3^rd, 5^th, 7^th and 8^th respondents have made out the alleged prejudice.

19.For the foregoing reasons, the Commission’s application is dismissed, with an order nisi of costs in favour of the 3^rd, 5^th, 6^th, 7^th and 8^th respondents, to be taxed if not agreed.

Written Submissions by Mr Abraham Chan SC and Mr Byron Chiu, instructed by King & Wood Mallesons, for the Applicant

Written Submissions by the 3^rd, 5^th, 6^th, 7^th and 8^th Respondents, unrepresented

No written submissions by the 2^nd and 10^th Respondents, unrepresented

[1] [2020] HKCT 1.

[2] The challenge is essentially directed against the one‑third reduction of the Base Amount mentioned in paragraphs 103 to 105 of the Judgment.  That reduction was also made in favour of the 3^rd respondent but since, because of the statutory cap, the amount of penalty for the 3^rd respondent would have been the same with or without that reduction, the appeal is only brought in relation to the 1^st, 4^th and 9^th respondents.

[3] Though rule 45(1) provides that an application for leave to appeal against an interlocutory decision, the termination or order of the Tribunal must be made within 14 days.

[4] See eg paras 107, 108 and 138 of the Judgment.

[5] It is unclear whether the 5^th respondent — a limited liability company — has obtained the Registrar’s permission for it to be represented by one of its directors: see rule 30(2)(b) of the Competition Tribunal Rules (Cap 619D).