Competition Commission v. W. Hing Construction Co Ltd and Others

CACV 257/2019

[2020] HKCA 930

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 257 OF 2019

(ON APPEAL FROM CTEA 2/2017)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.This is an application by the Applicant (“the Commission”) to strike out parts of the Notice of Appeal filed by the 4^th Respondent on the ground that they amount to an abuse of process.

2.Having read the submissions lodged by the parties, we consider it appropriate for this application to be determined on paper without an oral hearing.

Background

3.In August 2017, the Commission commenced proceedings before the Competition Tribunal (“the Tribunal”) against a number of contractors appointed to perform decoration work in three buildings of On Tat Estate in Kwun Tong, alleging that they made or gave effect to an agreement or engaged in a concerted practice which contravened the first conduct rule in the Competition Ordinance (Cap 619).

4.The 4^th Respondent, as named in the proceedings (as well as in these appeal proceedings), is “Cheung Yiu Fai Danny and Wong Tung Hoi (in partnership trading as TAI DOU BUILDING CONTRACTOR (大道建築公司))”.

5.On 24 September 2018, less than 2 weeks before the pre-trial review, the 4^th Respondent took out an application to amend its Response and sought leave to file three new witness statements in substitution for a statement already filed (“the Amendment Application”).

6.At the hearing on 2 October 2018 fixed for the pre-trial review, G Lam J, sitting as President of the Tribunal dismissed the Amendment Application (“the Dismissal Decision”) after hearing parties’ submissions.  On 31 October 2018, the Tribunal handed down its reasons for the Dismissal Decision ([2018] HKCT 6, reported in [2018] 5 HKLRD 437) (“the Reasons for the Dismissal Decision”).

7.The trial on liability commenced on 26 November 2018. 

8.On 17 May 2019, the Tribunal handed down its judgment in which the Tribunal found that each of the 10 Respondents, including the 4^th Respondent, had contravened the first conduct rule ([2019] HKCT 3, reported in [2019] 3 HKLRD 46) (“the Judgment on Liability”).

9.On 14 June 2019, the 4^th Respondent filed its Notice of Appeal against the Judgment on Liability.  The Commission filed its Respondent’s Notice on 5 July 2019.

10.Subsequently, dispute arose between solicitors for the Commission and solicitors for the 4^th Respondent as to whether documents in respect of the 4^th Respondent’s Amendment Application (“the Amendment Application Documents”) should be included in the appeal bundles.  Solicitors for the Commission considered it necessary to include the Amendment Application Documents to show the inappropriateness of the 4^th Respondent’s attempt to re-run the case it sought to introduce by way of the Amendment Application.  Solicitors for the 4^th Respondent took the view that the Amendment Application Documents have never been adduced as evidence in the Trial and should therefore be considered as new evidence in these appeal proceedings.  The appeal bundles were eventually lodged without the Amendment Application Documents.

11.On 18 March 2020, the Commission took out a summons (“the New Evidence Summons”) to adduce the Amendment Application Documents into evidence for the purposes of these appeal proceedings. 

12.Meanwhile, on 29 April 2020, the Tribunal handed down its judgment on the amount of pecuniary penalties that should be imposed on each Respondent and issues relating to costs ([2020] HKCT 1, reported in [2020] 2 HKLRD 1229) (“the Judgment on Penalties”).

13.After the Commission and the 4^th Respondent filed and served evidence and written submissions on the New Evidence Summons, on 21 July 2020, Lam VP directed that if the real complaint of the Commission is that it is an abuse of process for the 4^th Respondent to re-run a case based on the Amendment Application which had been rejected by the Tribunal, the proper course is to strike out the relevant part of the 4^th Respondent’s Notice of Appeal and evidence could be adduced to demonstrate such alleged abuse.

14.On 4 August 2020, the Commission made the present application to strike out the alleged offending parts of the 4^th Respondent’s Notice of Appeal.

Legal principles

15.The applicable legal principles are not in dispute.

16.The Court of Appeal has inherent jurisdiction to strike out a notice of appeal where an appeal is plainly not competent, or where the appeal is frivolous, vexatious or an abuse of process of the court. In the case of the latter, the inherent jurisdiction would be exercised on precisely the same basis as if Order 18 rule 19 applied to notices of appeal: Leung Chung Lan Lorraine v Hang Seng Bank Ltd [2019] HKCA 1408 at [34].

17.The categories of conduct rendering a claim frivolous, vexatious or an abuse of the process are not closed but depend on all the relevant circumstances and for this purpose considerations of public policy and the interests of justice may be very material.  The court’s jurisdiction to strike out is discretionary and is only to be exercised in plain and obvious cases: Recorder Fok SC (as he then was) in Lam Pak Cheung v Lin Zhen Lue [2009] 1 HKLRD 35 at [27]-[28].

Discussion

18.The crux of the Commission’s complaint in the present application is based on the contention that the 4^th Respondent is seeking to run on appeal the same case it sought to introduce by way of the Amendment Application when there is no appeal against the Dismissal Decision.  It is therefore necessary to discern the content of the proposed amendments. 

19.By the Amendment Application, the 4^th Respondent applied for leave to introduce inter alia the following new pleas contained in the draft Amended Response of the 4^th Respondent to the Originating Notice of Application:

“ 6. In relation to paragraphs 3 and 4, it is further averred that at all material times:

(1) It is noted that, at paragraph 4, the Applicant has alleged that the 4^th Respondent consisted of Danny Cheung Yiu Fai (“Danny Cheung”) and Wong Tung Hoi, individuals in partnership trading as Tai Dou.

(2) However, Tai Dou is in fact a general partnership consisting of the following four general partners (“Partners”): (i) Danny Cheung; (ii) Wong Tung Hoi; (iii) Pacquet Wong Siu Wah (“Pacquet Wong”) and (iv) To Suet Chun.

…

(5) None of the Partners and/or the 4^th Respondents were engaged in and/or had undertaken any decoration works for the Tenants of the Units in the Three Houses of Phase 1 of the Estate (“Relevant Works”) …

7.     It is further averred that:

(1)     The individual who had undertaken the Relevant Works was Mr Ho Kit Chung (“Mr Ho”).  Mr Ho’s father was a long-time personal friend of the founder of Tai Dou, Mr Lau Yuen To and his wife, Ms To Suet Chun, a current partner of Tai Dou. …

(2)     In accordance with a long-standing and informal arrangement between Tai Dou and Mr Ho (as defined below as “the Arrangement”), Mr Ho undertook the Relevant Works as a sub-licensee or assignee of Tai Dou’s License issued by the HKHA.

…

11.     It is further averred that, at the material times:

(1)     The 4^th Respondent and/or the Partners did not undertake or engage in the Relevant Works.  It was Mr Ho who had undertaken the Relevant Works.  Paragraphs 6-7 above are repeated.

(2)     The 4^th Respondent and/or the Partners had sub-licensed or assigned Tai Dou’s rights under the License to Mr Ho.

…     

(4)     By virtue of the aforesaid, Mr Ho operated as a separate and independent undertaking from the 4^th Respondent and/or the Partners in relation to the Relevant Works, within the meaning of an “undertaking” pursuant to s.2 of the Ordinance.

…

C.  4^th Respondent did not participate in the Relevant Works

…

19.     …

(7)     Thereafter, neither the 4^th Respondent, nor any other Partners, had any further participation and/or knowledge in relation to the Relevant Works after the briefing session on 20 August 2015.  Paragraphs 5-6 [sic] above are repeated.”

20.The effect of the new pleas was summarized in the Tribunal’s Reasons for the Dismissal Decision as follows:

“ 5. Proceedings were brought in this Tribunal by the Commission’s Originating Notice of Application on 14 August 2017. A Notice to Act was filed by Messrs Littlewoods as solicitors for the 2^nd, 3^rd, 4^th, 6^th, 7^th, 8^th and 10^th respondents on 27 September 2017 together with a Response on behalf of those respondents filed pursuant to rule 75 of the Competition Tribunal Rules (Cap 619D). The Response denies that there was any market sharing agreement or price-fixing agreement as alleged. It is alleged, inter alia, that it was more economical for the respondents to carry out decoration work for flats located on the same floor and that the respondents were therefore inclined to seek business from tenants of the same floor. It is averred that, if the alleged agreements existed, they did not contravene the first conduct rule since they in fact enhanced overall economic efficiency.

…

7. On 19 April 2018, a witness statement made by Mr Ho Kit Chung (‘KC Ho’) was filed by Littlewoods on behalf of Tai Dou. In that statement KC Ho stated that he was the General Manager of Tai Dou and was authorised to make the statement on behalf of Tai Dou. He said that whenever Tai Dou was invited by the HKHA to be a decoration contractor for public housing units, Tai Dou would contact him. In response to the allegations about On Tat Estate, he said that Tai Dou did not enter into or authorised him or anyone to enter into any market sharing or price‑fixing arrangement. He said, however, that there was a ‘Cleaning Agreement’ among all the respondents whereby each respondent was to clean up four specified floors of each building …

…

12. The proposed Amended Response of Tai Dou was virtually a wholesale substitution of a new document for what had previously been pleaded. It sought to say that neither Tai Dou nor any of its partners undertook any decoration work in relation to the three buildings in On Tat Estate, and that it was KC Ho, with whom Tai Dou had a ‘long-standing informal arrangement since in or around 2006’, who undertook such work using the name of Tai Dou, as a sub-licensee or assignee of Tai Dou’s licence. Once Tai Dou received an invitation from the HKHA to obtain a licence as an approved decoration contractor for public housing units, Madam To, one of the partners of Tai Dou, would inform KC Ho who would then decide whether to undertake the decoration work as invited by the HKHA. Tai Dou ‘would then execute all necessary formalities to obtain a licence for the aforesaid decoration works’. In carrying out such work, KC Ho did not report to Tai Dou. He bore all the costs and retained all the revenues and profits. If it was necessary to enter into any agreement or sign any document which might have legal effect on Tai Dou, KC Ho would have to inform and obtain the agreement of Pacquet Wong, a partner of Tai Dou. It was, however, admitted that, in relation to On Tat Estate, Pacquet Wong replied to the HKHA to confirm Tai Dou’s acceptance of the appointment, executed a surety bond in the amount of HK$500,000, and accompanied KC Ho at the briefing session organised by the HKHA.

13. The proposed Amended Response went on to state that Tai Dou and its partners did not authorise KC Ho in the capacity of an agent or employee to undertake the relevant decoration work on behalf of Tai Dou or its partners, and that KC Ho operated as a separate and independent undertaking from Tai Dou and its partners in relation to such work. It was not admitted that KC Ho had made or given effect to the alleged market sharing agreement or price‑fixing agreement, or that those agreements had an anti‑competitive object or effect. It was said that Tai Dou did not make or give effect to the alleged agreements.

14. The proposed three new witness statements were made by Wong Tung Hoi, Cheung Yiu Fai Danny and Pacquet Wong, in support of the new case in the proposed Amended Response.” (emphasis added)

21.Shortly stated, the new case which the 4^th Respondent sought to introduce by way of the Amendment Application was what the parties and the Tribunal have been calling the “sub-contractor defence”.  In the context of the 4^th Respondent, the sub-contract defence is comprised of the argument that the Commission had mistakenly named as respondent Cheung Yiu Fai Danny (“Mr Cheung”) and Wong Tung Hoi (“Mr TH Wong”) trading in partnership as Tai Dou Building Contractor (“the Partnership”), when it was the Partnership’s sub-contractor Mr Ho Kit Chung (“Mr KC Ho”) who undertook the works in the On Tat Estate (Phase 1) as a separate and independent undertaking.

22.As recorded in the Reasons for the Dismissal Decision, the 4^th Respondent had submitted before the Tribunal that the Commission would not require significant time to respond to the new case because the 1^st and 9^th Respondents had already raised the same sub-contractor argument (see [24]).  Such submission was rejected by the Tribunal on the ground that the scope of an undertaking and whose acts may be attributed to it are fact-sensitive questions and there was no justification to force the Commission to squeeze its investigation, preparation and decision-making processes into the few weeks before the Trial (see [25]).

23.Notwithstanding the Dismissal Decision and the absence of appeal against the same, the 4^th Respondent made an attempt to run the sub-contractor defence in its closing submissions for the trial.  The said attempt was addressed in the Judgment on Liability at [324]-[328]: 

“ 324. Tai Dou (R4) is a partnership consisting of 4 partners, being the two persons named in the Originating Notice of Application (namely, Cheung Yiu Fai Danny and Wong Tung Hoi) as well as Mr Pacquet Wong and Madam To Suet Chun. It attempted at a very late stage to raise a similar argument [that the work on the Estate was carried out by a separate undertaking] but, for the reasons set out in this Tribunal’s Reasons for Decision dated 31 October 2018, was not allowed to do so. In so far as counsel sought in closing submissions to run the sub-contractor defence on behalf of Tai Dou (R4), I consider that the argument is inadmissible.

325. On the basis of its existing Response (filed jointly with the 2^nd, 3^rd, 6^th, 7^th, 8^th and 10^th respondents), Tai Dou (R4) admits that it attended the worship ceremony at the Site Office on 16 June 2016 and that lots were drawn there (though it is averred it was for the purpose of allocating desks in the Site Office). From the evidence, it can be seen that Pacquet Wong, an undisputed partner of Tai Dou (R4), signed the reply accepting the appointment as an Appointed DC, signed the surety bond, signed the Licence, signed and submitted to HKHA a list of staff and workers, attended the briefing session on 20 August 215 and named KC Ho as the contact person. The evidence shows that those working in On Tat Estate (Phase 1) in the name of Tai Dou (R4) included KC Ho and Ma Yick Yin.

326. A witness statement of KC Ho was originally filed on behalf of Tai Dou (R4), in which he described himself as the General Manager of Tai Dou (R4). … Ma Yick Yin was called, and said that he considered KC Ho the general manager of Tai Dou (R4), that he worked in On Tat Estate (Phase 1) in accordance with KC Ho’s instructions, and that he and the workers used business cards with Tai Dou (R4)’s name. There are also receipts issued to tenants bearing an oval chop stating “Tai Dou Building Co” in both Chinese and English.

327. Despite KC Ho’s absence, based on all the other evidence there is no doubt that KC Ho and the team working there in the name of Tai Dou (R4) had engaged in the Floor Allocation Arrangement and the Package Price Arrangement. Counsel’s argument that there is a possibility that Tai Dou (R4) did not enter into any arrangement with others but simply obtained decoration work from the remaining floors because they were not allocated to any of the other respondents, seems to me, with respect, to be wholly unrealistic.

328. It is clear that the undertaking operating in On Tat Estate (Phase 1) was the partnership Tai Dou. The two named persons each being a partner must be held responsible as persons comprised in the undertaking. Counsel’s argument that there is nothing to show that they personally took part in or were aware of the conduct impugned is beside the point.” (emphasis added)

24.Notably, after explaining that the 4^th Respondent’s argument based on the sub-contractor defence is inadmissible, the Tribunal went on to make a finding on the basis of the existing pleadings and evidence that the undertaking operating in the On Tat Estate (Phase 1) was the Partnership and that the two persons named as the 4^th Respondent (i.e. Mr Cheung and Mr TH Wong) must be held responsible as persons comprised in the same undertaking (i.e. the Partnership): see [328] quoted above. 

25.It is also worth mentioning that in respect of the sub-contractor defence raised by the 1^st and 9^th Respondents, the Tribunal held that while the relevant sub-contractors may well be liable for the infringing conduct as another person comprised in the same undertaking, this does not preclude the Commission proceeding against the respondent contractor who retained a wide range of legal and economic obligations in relation to the works undertaken by their “sub-contractors” and must be regarded as a person comprised in the undertaking in question and therefore liable for the contraventions of the first conduct rule: see [301]-[323] of the Judgment on Liability.

26.The 4^th Respondent apparently made another attempt to run the sub-contractor defence at the hearing on penalties. Such attempt was again rebuked by the Tribunal.  As held in the Judgment on Penalties at [79]-[81], [87]: 

“ 79. There is no dispute that the value of the work orders done at On Tat Estate (Phase 1) in the name of Tai Dou Building Contractor is $2,943,630. The 4^th respondent submits, however, that the person who carried on renovation business there was KC Ho, not the partnership Tai Dou or the two individuals named in the Originating Notice of Application, namely, Mr Cheung Yiu Fai Danny (‘Mr Cheung’) and Mr Wong Tung Hoi (‘Mr TH Wong’). The Value of Sales of the 4^th respondent is therefore nil.

80. This submission is also to be rejected. The undertaking that is alleged by the Commission and found by this Tribunal to have operated in On Tat Estate (Phase 1) and, in the course of such operations, contravened the first conduct rule is Tai Dou, the partnership, as an undertaking. The ‘sub-contractor defence’ was held not open to the 4^th respondent. In any event, having regard to the Tribunal’s conclusions with respect to the defence raised by the 1^st and 9^th respondents, it would not have absolved the 4^th respondent altogether.

81. As is clear from the Originating Notice of Application, Mr Cheung and Mr TH Wong are proceeded against herein as persons ‘in partnership trading as TAI DOU BUILDING CONTRACTOR (大道建築公司)’ although, as a partnership, Tai Dou was registered as having four partners including, in addition, Madam To Suet Chun and Mr Pacquet Wong (the brother of Mr TH Wong). The Response that the 4^th respondent filed jointly with some other respondents did not in any way contend that the Commission has proceeded against the wrong person, and indeed contained a statement of truth signed by KC Ho as the ‘general manager of Tai Dou’ on behalf of the 4^th respondent.

…

87. … As explained in the Judgment, while the competition rules apply to undertakings, ss 92-94 of the Ordinance allow the Commission to apply for, and the Tribunal to make orders against persons who have contravened or been involved in a contravention of a competition rule. ‘Person’ as defined in s 2 of the Ordinance, in addition to the meaning given by s 3 of the Interpretation and General Clauses Ordinance (Cap 1), includes an undertaking. Where a partnership, as an undertaking, has contravened the first conduct rule, it seems to me generally that its partners as such are persons who have contravened the rule. An agreement entered into by a partnership is an agreement to which the partners are jointly party. Here, the persons specifically named in the Notice of Application are Mr Cheung and Mr TH Wong in partnership trading as Tai Dou. They were undoubtedly partners of Tai Dou and were proceeded against as such. As partners of Tai Dou, they joined in making and giving effect to the agreements in question which contravened the rule and therefore likewise contravened the rule: cf Clode v Barnes [1974] 1 WLR 544. Whether the application could have been brought against the partnership as a ‘person’ without naming any individuals does not strictly arise.” (emphasis in bold added)

27.It is against the above procedural history that the Commission now seeks to strike out paragraphs 1, 8(b), (c), (i), (j), (l), (m) and 9 of the 4^th Respondent’s Notice of Appeal on the ground that the 4^th Respondent is making yet another attempt to run the sub-contractor defence on appeal.  Those paragraphs read as follow:

“ 1. Contrary to the Commission’s pleaded case and without an explanation of his reasoning for so doing, the Learned President equated the 4^th Respondent with Tai Dou Building Contractor (‘the Partnership’) and made findings against the 4^th Respondent based on the acts and/or omissions of other members of the Partnership and/or their agents. (Footnote 39 of the Judgment and §§324-328 of the Judgment);

…

8. The Learned President analysis of the evidence was flawed in that:

...

b. he failed acknowledge as significant the 4^th Respondent’s ignorance of and lack of participation in, the alleged contravening acts (either personally or through any employee(s)/contractor(s)/agent(s) of theirs);

c. he wrongly assumed the Pacquet Wong acted on behalf of the Partnership and/or the other partners when there was no evidence to that effect;

…

i. he was wrong to draw the inference that the 4^th Respondent attended the worship ceremony at the Site Office on 16 June 2016 by reason of the admission that KC Ho was there on behalf of the Partnership (§325 of the Judgment);

j. he was wrong to infer from the presence of KC Ho as a representative of the Partnership at the Worship Ceremony that he was authorised by the 4^th Respondent to participate in any drawing of lots in respect of any price fixing or market sharing agreement which took place on that or any other day, which drawing of lots is in any event denied;

…

l. he was thus wrong to infer that the 4^th Respondent or their employee(s)/contractor(s)/agent(s) had attended the alleged price fixing meeting and/or had participated in any price fixing or market sharing agreement which in any event occurred at a later date if at all;

m. he was wrong to infer the 4^th Respondent’s participation in or knowledge of price fixing or market sharing agreements from evidence that KC Ho had entered such agreements with the other Respondents;

…

9.     Had the Learned President applied the correct approach in his analysis, he would have found that even if Pacquet Wong was guilty of the contravening acts through any of the workmen at the site, the Commission had failed to prove beyond reasonable doubt that those acts were done within the consent or connivance of the 4^th Respondent, and/or due to their neglect or omission; …”

28.Counsel for the 4^th Respondent, Mr Solomon Lam (with Mr Joshua S Kanjanapas Wong), submitted that although the 4^th Respondent is not allowed to run a positive case based on the sub-contractor argument by virtue of the Dismissal Decision, it is nevertheless entitled to require the Commission to prove its case and to appeal against the Judgment on Liability for any error. 

29.To the extent that Mr Lam is pointing out that the Commission bears the burden to prove its case against the 4^th Respondent, that must be correct.  On the other hand, we agree with counsel for the Commission, Mr Byron Chiu, that requiring the Commission to prove its case does not entitle the 4^th Respondent to raise arguments which are effectively running the sub-contractor defence by the back door. 

30.As the Tribunal had observed in its Reasons for the Dismissal Decision, the focus of the Response filed on behalf of the 4^th Respondent (and other Respondents) plainly lies in the denial of any market sharing or price-fixing agreement and the positive averment that it was more economical to carry out decoration work for flats located on the same floor.  As the pleadings stood at the time of the Amendment Application, the 4^th Respondent had not pleaded the sub-contractor defence but had instead admitted to attending the worship ceremony where lots were drawn.  By virtue of the Dismissal Decision, this remained the case at trial.  This set the limit to which the 4^th Respondent can manoeuvre in the conduct of this appeal.

31.Mr Lam was at pains to stress that the 4^th Respondent is not appealing against the Dismissal Decision.  He however submitted that the 4^th Respondent is only precluded from running the sub-contractor defence but not adopting the stance set out in the grounds of appeal now under challenge. 

32.Mr Lam suggested that the Commission had misread the 4^th Respondent’s Notice of Appeal. According to Mr Lam, the 4^th Respondent’s grounds of appeal are that the Tribunal had erred in equating Mr Cheung and Mr TH Wong with the Partnership and in finding Mr Cheung and Mr TH Wong liable for contravening competition rules without any evidential basis or finding that they personally had the requisite mens rea or mental state. 

33.On behalf of the Commission, Mr Chiu contended that paragraphs 8(b), (c) and 9 of the 4^th Respondent’s Notice of Appeal are also liable to be struck out because they concern the argument that the 4^th Respondent should not be held responsible for the acts and/or omissions of other members of the Partnership.  He submitted that such an argument is “strongly reminiscent” of the sub-contractor defence.

34.In our judgment, any attempt by the 4^th Respondent to rely upon the sub-contractor defence without appealing the Dismissal Decision constitutes an abuse of process and should be struck out.  Without the sub-contractor defence, and in light of the pleaded case of the 4^th Respondent as outlined above, we agree with Mr Chiu that the 4^th Respondent should not be permitted to rely on any arguments in the appeal challenging the attribution of the acts of Mr K C Ho to the Partnership by the Tribunal.

35.On a careful and reasonable reading of the document, the 4^th Respondent’s Notice of Appeal includes grounds which make the impermissible challenge to such attribution:

(a)     Paragraphs 8(i) (j), and (m) contain references to the works in the On Tat Estate (Phase 1) having been carried out by Mr KC Ho as distinct from the Partnership;

(b)     Paragraph 8(l) contended that the Tribunal erred in concluding that the 4^th Respondent or their employee(s) /contractor(s) /agent(s) had attended the alleged price fixing meeting and/or had participated in any price fixing or market sharing agreement (by reference to Mr KC Ho’s participation in the same);

(c)     Though on its face Paragraph 1 is not specifically directed against the attribution of the acts of Mr KC Ho to the Partnership, it was specifically directed against footnote 39 of the Judgment and §§324-328 of the Judgment.  These parts of the Judgment explained the attribution of the acts of Mr KC Ho to the Partnership.

(d)     If the sole purpose of paragraph 1 is to set out the argument now put before us by Mr Lam as summarized at [32] above, we cannot see any need to make reference to §§324-328 of the Judgment.

(e)     Actually the argument summarized at [32] has also been set out in the other paragraphs in the Notice of Appeal and repetitions at different paragraphs in the same Notice of Appeal is unnecessary and unhelpful. 

(f)     To avoid any misunderstanding, we would strike out the references to §§324-328 of the Judgment in paragraph 1 of the Notice of Appeal.

36.The position regarding the other parts of the Notice of Appeal is different.  To some extent, the position on the face of the Notice of Appeal was not very clear because of the inherent ambiguity in the reference to “the 4^th Respondent”: it can either be taken as a reference to the Partnership (viz the firm) or a reference to Mr Danny Cheung and Mr Wong Tung Hoi personally.

37.Based on Mr Lam’s submissions, we understand that the arguments raised in paragraphs 8(b), (c) and 9 are directed not at the finding against the Partnership (the firm), but rather at the finding that the 4^th Respondent (i.e. Mr Cheung and Mr TH Wong) should be held liable because of the finding against the Partnership.  In that sense, paragraphs 8(b), (c) and 9 do not engage the impermissible challenge of attribution which Mr Cheung and Mr TH Wong are precluded by the Dismissal Decision from advancing in this appeal.

38.With this judgment, the permissible perimeters of the arguments to be entertained in this appeal should be clear to all parties. 

Disposition

39.For the reasons stated above, the following parts of the Notice of Appeal filed by the 4^th Respondent are struck out as an abuse of the Court’s process:

(a)     The reference to §§324-328 of the Judgment in Paragraph 1;

(b)     Paragraph 8(i), (j), (l) and (m).

40.We regard the Commission has largely been successful in the application for striking-out.  We make an order nisi that the 4^th Respondent do pay the Commission 80% of the costs of the application.  Having regard to the statement of costs of the Commission, we fix such costs at $80,000. We shall make no order as to costs in respect of the New Evidence Summons.

Mr Byron Chiu, instructed by King & Wood Mallesons, for the applicant

Mr Solomon Lam and Mr Joshua S Kanjanapas Wong, instructed by Bryan Chan & Co, for the 4th respondent