Re Liu Sing Lee
Read the full judgment text of HCMP 1099/2003 on BabelCite. This High Court CFI judgment was delivered on 16 April 2003.
1. In these proceedings commenced by originating motion, the applicant applies under sections 35(1) and 40(3) of the Elections (Corrupt and Illegal Conduct) Ordinance, Cap.554 ("the Ordinance") for an order granting relief in respect of failure to comply with sections 34(4) and37(1) of the Ordinance.
Cited by 15 cases
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HCMP001099/2003 HCMP1099/2003 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO.1099 OF 2003 ---------------------------
--------------------------- Coram: Hon Chu J in Court Dates of Hearing: 15 and 16 April 2003 Date of Decision: 16 April 2003 ------------------------ D E C I S I O N ------------------------ 1.In these proceedings commenced by originating motion, the applicant applies under sections 35(1) and 40(3) of the Elections (Corrupt and Illegal Conduct) Ordinance, Cap.554 ("the Ordinance") for an order granting relief in respect of failure to comply with sections 34(4) and37(1) of the Ordinance. Background 2.The applicant was a candidate for the Kowloon City District Council By-Election for the Kai Tai Constituency held on 3 November 2002. On 3 December 2002, he lodged a Return and Declaration of Election Expenses and Donations ("the Return") in connection with the By-Election pursuant to section 37 of the Ordinance. Five items of expenses, payment and donation, particulars of which are contained in the schedule to the Originating Motion have since been discovered to be omitted from the Return. 3.By these proceedings, the applicant apply for an order that :
4.At the first hearing of the Motion on 1 April 2003, the respondents indicated they had no objection to the first four items of omissions. The Commissioner of the Independent Commission Against Corruption ("the Commissioner"), however, had reservation about the value the applicant put to item 5. In the premises, the relief sought in respect of items 1 to 4 were granted. As to item 5, it was adjourned to 15 April 2003, pending further investigations by the Commissioner. At the adjourned hearing, the Commissioner indicates that he objects to relief being granted for item 5. Further affirmations had in the meantime been filed both on behalf of the Commissioner and the applicant. The application on item 5 5.Item 5 relates to a donation of service received by the applicant in respect of the use of a shop front for the display of two banners advertising the applicant's election. By the Originating Motion as amended, the applicant applies to add the following to the Return :
6.The applicant's case is that the advertising space was provided to him free of charge by the proprietor of the business that occupies the shop, Mr Lam. The evidence shows that between October 2000 and August 2001, the space was let at a monthly rental of $3,500. Presently, part of the space is let at $2,000 per month. At the material time, the space had not been let out for more than one year because Mr Lam was unable to find a tenant. Owing to this and because the space was offered free of charge, the applicant proposes to put a nominal value of $500 to the donation of service. 7.Mr Lam, in his statement given to the Commissioner, says that when he was first approached by the applicant for the use of the shop front for the display of election banners, he had asked for a payment of $1,000. He however changed his mind and decided not to ask for any payment, after he had spoken to his wife about the matter. He therefore informed the applicant that the space would be made available to the applicant free of charge. He recalled that the two election banners were put up in mid October and only removed at the end of November 2002. 8.The Commissioner's objection to the application on item 5 is threefold. Firstly, he disagrees with the value of $500 the applicant puts on the donation. The Commissioner had consulted two advertising agencies who indicated that they had no previous experience of dealing with such advertising space. They were unable to express an opinion on the market rental, but commented that such space was of nominal business value. The Commissioner also enquired with the Commissioner of Rating and Valuation. The Commissioner of Rating and Valuation assessed the market rental of the space to be $1,700 per month, based on information of rental in the locality and after making adjustments to reflect differences in size, location and other factors. 9.Secondly, the Commissioner considers that the value of the donation should be assessed not only for the period of mid October to 3 November 2002, but should last until the end of November 2002, when the two election banners were removed. On this basis, the value of the donation should be $2,550 (i.e. $1,700 x 1.5 months). Thirdly, Mr Tavares for the Commissioner points out to the court that the burden is on the applicant to prove that the omission was occasioned by inadvertence and not due to bad faith insofar as the applicant relies on inadvertence as the ground for relief. He reminds the court that if the valuation put by the applicant is not accepted, there is a possibility that the applicant's total election expenses may exceed the statutory limit. Excluding item 5, the applicant's total election expenses come to $43,651.10. The maximum amount prescribed by the Maximum Scale of Election Expenses (District Council) Order 1999, Cap.288J is $45,000. The issues 10.The application therefore raises three issues. The first concerns the value to be put to the donation of service. The second relates to the period of time to be adopted for reckoning the value of the donation, whether the actual duration of the display of the banners would result in an increase in the value to be put on the donation of service. The last issue that the court has to adjudicate is whether the applicant has properly brought himself within the ambit of section 40(4) of the Ordinance to enable relief to be granted. 11.Before dealing with the three issues, I wish to deal briefly with a point that Mr Ng for the applicant has made in his written submissions. Mr Ng had doubted whether this is properly a case of donation of service, but he did not pursue the point in his oral submissions. In my view, that must be the right course because the application, insofar as it relates to item 5, is made on the basis that this is a donation of service of a value of $500. If it were not accepted that there was effectively a donation of service by Mr Lam, then there would be no basis for the application at all. Valuation of the donation of service 12.On the value of the service donated, it has to be noted that the shop front in question has two aspects. The applicant had put up two election banners, one for each aspect. Effectively his banners took up the entire shop front. This is a relevant fact because the current rental of $2,000 is only for one aspect of the shop front, namely, the aspect facing Pak Tai Street. 13.The Ordinance is silent on how the value of an election donation in kind is to be assessed. The Guidelines on Election-related Activities in respect of the 1999 District Councils Election ("the Guidelines") issued by the Electoral Affairs Commission in September 1999, which are applicable to the By-Election, do contain some relevant provisions. In providing that donations in kind include services obtained free of charge, the Guidelines provides that where the services are furnished by a person who deals in similar services with the public, their estimated value would be assessed at the lowest price at which the person offers his services to the public at the time when they are furnished. And where such services are furnished by a person who does not deal in similar services with the public, their estimated value should be assessed at the lowest market retail price at the time when they are furnished : paragraph 13.22. The Guidelines further provides that for premises provided free of charge, a reasonable amount should be assessed as the deemed rental for the premises and be included as an election expense in the return of expenses : paragraphs 13,16, 13.16 and 13.21. 14.On the basis of the Guidelines and given that there is no evidence of what Mr Lam would have charged for the rent at the material time, the Commissioner contends that the value of the advertising space should be assessed by reference to the deemed market rental. The Commissioner takes the view that the assessment of $1,700 by the Commissioner of Rating and Valuation ought to be adopted because that is the only objective evidence before the court as to the value of the advertising space. 15.But in my view, the assessment of the value of item 5 has to be approached by looking at the factual matrix, which is simply this : Mr Lam had agreed to provide the space to the applicant initially at a price of $1,000, but decided to waive the charge of $1,000 after further deliberations. Therefore in truth and in fact, he had made a donation of $1,000 to the applicant. That, in my view, is the proper approach to this case. 16.This is not a case where Mr Lam started off by offering the space free of charge, such that one has to assess the value of the donation on the basis of the deemed rental. That being the case, it is not necessary to decide which of the four figures (i.e. $500, $1,700, $2,000 and $3,500) is to be preferred. If, however, this case has to turn on the assessment of the deemed market rental, then I would agree with Mr Tavares' submissions that the assessment of the Commissioner of Rating and Valuation, being the only objective evidence on the market rent at the material time, is the one to be preferred. The observations of the advertising agents are of no assistance because by describing the rent as low or very low rent, they offer no assistance in coming to a conclusion as to what is the reasonable value to be put to the space. Additionally, it cannot be said that there is an inherent inconsistency between the Commissioner for Rating and Valuation's assessment of $1,700 and the advertising agents' descriptive statements that the rent should be low. The duration of occupation 17.On the next issue of the duration of the display of the two banners, on Mr Lam's evidence, they were displayed for a period of 1.5 months before being removed. The Commissioner therefore takes the view that the value of the donation should be calculated by 1.5 times the deemed monthly rental or such value that the court considers appropriate. Mr Ng, on the other hand, says that the period after the conclusion of the By-Election (i.e. after 3 November) should not be taken into account. 18.In my view, the fact that the election concluded on 3 November 2002, is not conclusive of the point in issue. This is because section 2 of the Ordinance refers to expenses incurred before, during and after the election. The reference in the various sections to expenses for the purpose of promoting election of the candidate or prejudicing the opponent's election also does not necessarily lead to a conclusion that expenses incurred after the election date is not election expenses. 19.Obviously, incidental expenses, though incurred after the election date, would form part of election expenses. This explains why, for instance, expenses for removal of election banners, which are invariable incurred after the election date, would be regarded as election expenses. Similarly, where premises are rented for display of election materials and there is delay in removing the materials beyond the election date, resulting in additional rental or charges being levied for the use of the premises, then the additional rental or charges is an item of election expense and has to be accounted for. 20.In the present case, what is of importance is that there is in truth, no letting at a fee of the shop front advertising space. As my earlier analysis shows, this is, in truth and in substance, a donation of service in the sense of the proprietor waiving the fee for using the space. Hence when the court comes to assess the value of the donation, the court cannot assume that the delay in removing the banners would, without further evidence, necessarily enlarge the value of the donation. 21.Even if it were a case of letting at a fee, it is probable that Mr Lam would have allowed the banners to remain on the shop front at sufferance, in which case it would not attract additional payment. It is also to be noted that when Mr Lam initially asked for $1,000 as the charge, he had not indicated how this was made out. Neither had he elaborated on this when he gave his statement to the Commissioner. 22.The court cannot therefore assume that had Mr Lam asked for a fee, he would have demanded payment for more if there was delay in removing the banners. In these circumstances, the court is not in a position to conclude that the donation is more than $1,000 in value by virtue of the banners being taken down only towards the end of November, and not promptly at the conclusion of the By-Election. Section 40(4) of the Ordinance 23.I now come to the last issue, which is an interesting point of law on the proper application of section 40(4). Sections 40(3) and (4) of the Ordinance provide :
24.The application was originally made on the basis of section 40(4)(b), namely, the failure to include item 5 was due to the inadvertence of the applicant. But as I have pointed out to Mr Ng in the course of submissions, in the light of the latest round of evidence filed on behalf of the applicant, it is not open to the applicant to base his case on section 40(4)(b). 25.The effect of the affidavit of Miss Mok, the applicant's election agent, and the 2nd affirmation of the applicant is that both the election agent and the applicant, when they came to prepare and sign the Return, did not forget about the use of Mr Lam's shop front. Quite the contrary, they had considered the matter and eventually took the view that because the use was free of charge, this was a donation of no value. They therefore concluded that it was not necessary to include this item in the Return. In short, it was no omission, but a conscious decision to leave out the item. 26.In Ex parte Lenanton ex parte Pierce (1889) 53 J.P.265, cited in Re Brook Bernacchi & Others [1957] HKLR 185 at 186, it is stated :
On this definition, it is not open to the applicant to say that the failure to include item 5 in the Return was an act of negligence or carelessness, given that he and his election agent had deliberated over the matter and decided that it was not necessary to include the item in the Return. It was a conscious decision, albeit erroneous. 27.Mr Ng did not insist on relying upon section 40(4)(b). He agreed that the application might have to proceed under subsection (c), namely, "the error was due to any reasonable cause". In my view, the circumstances in which the error with regard to item 5 came about can amount to a reasonable cause under subsection (c), subject to the matter discussed below. 28.Irrespective of which of the subsections under section 40(4) that the application for relief was made, the applicant has to show that the error was not due to his bad faith. In this context, a number of matters have been canvassed in submissions of both counsel. It is not necessary for me to repeat them. It will be sufficient for me to set out my views on this point. 29.Firstly, as a matter of general principle, it must be clear from the wording of section 40(4) that the burden is on an applicant to satisfy the court that there is no bad faith on his part. A respondent has no duty to prove bad faith, though in appropriate cases, he may adduce evidence to show bad faith or to cast doubt on an applicant's assertion of absence of bad faith. I do not consider the Commissioner has acted inappropriately in drawing the Court's attention to the fact that, with the inclusion of item 5, there is a possibility of the applicant's total election expenses exceeding the permitted maximum, depending on how item 5 is to be valued. 30.Secondly, turning to the facts of this case, it seems to me the inescapable conclusion to be drawn from the evidence is that the applicant and/or his election agent had not paid sufficiently proper regard to the Ordinance and the Guidelines. The failure to include item 5 in the Return is a matter that cannot be free from criticism, especially when one considers that the applicant has a legal background, that he has experience in election matters and also that his election agent is obviously also experienced in election matters. The applicant should be in a position, better than the other lay candidates, to appreciate the requirements of the law and the provisions in the Guidelines. Had the applicant given the matter a more mature deliberation, it would have, and it should have, occurred to him that the waiver of payment by Mr Lam is a donation in kind and that a value can and should be ascribed to it. More importantly, he should have appreciated that the donation should be declared. 31.That said, however, in the absence of other evidence, I am not prepared to draw an adverse inference of bad faith. The evidence before the court does not to my mind demonstrate a wilful disregard of the law or a case of shutting one's eye to the obvious. The circumstances in this case is different from that in Re Leung Kam-ho, Gilbert [1995] 1 HKCLR 164, where the election agent admittedly was ignorant of the election rules and regulations, yet did not bother to make himself acquainted with them. The present case, in my view, involves an error of judgment with regard to the applicant's duties under the Ordinance in the making out of the Return. The error is no doubt an unfortunate and regrettable one, but it is not of a kind that should per se give rise to an adverse inference of bad faith. Nor is it of a kind that would render it unjust for the relief to be granted. 32.Mr Tavares has made some submissions on whether the applicant's election agent ought to familiarise herself with the requirements of the law. I do not think I need to express my view on this because the applicant does not put his application on the basis that he had delegated the preparation of the Return to his election agent. Independent of the election agent's view on the matter, the applicant himself had taken a view on the point and decided that item 5 needs not be included in the Return. The knowledge, attitude or the responsibilities of the election agent is therefore immaterial in determining whether a case under section 40(4) has been made out. 33.For the reasons that I have indicated, I am prepared to grant the relief sought in relation to item 5 on the basis that the value to be put to this donation is $1,000. Costs 34.As to the costs of the application insofar as it relates to item 5, Mr Ng asks that there be no order as to costs. He submits that in the normal course, costs should follow event so that with his success with the application, the applicant could have asked for costs. But having regard to the circumstances of this case, the more appropriate order would be for no order as to costs. Mr Ng further says that it will not be right to penalize the applicant for the mistake with a costs order against him. 35.In my judgment, the starting point is to recognize that, generally speaking, a costs order should not be viewed as a matter of punishment and, in this particular case, as a penalty imposed on the applicant for having to make the application, although a purist would say that but for the omissions and failure, the application would not have been necessary. 36.The present case however has some special features that are relevant to the consideration on costs. Firstly, the Commissioner was put to the burden of having to file an affirmation of Mr Simon Ho in which very relevant and important materials are set out. It contains information such as the background leading to the application, Mr Lam's account of the arrangement for the use of the shop front and also the value of the shop front. Such information ought to have been introduced by the applicant in making the application in order to discharge his burden, firstly, under the Ordinance and, secondly, of putting before the court all relevant and material evidence. The relevance and importance of Mr Ho's affirmation is best demonstrated by the fact that it has led to the applicant's second affirmation and the affidavit of Miss Mok. 37.Secondly, it is only with the latest evidence from the applicant and Miss Mok that the application on item 5 is put in the proper perspective. Thirdly, there is no objective basis for the applicant to base his application of item 5 on an ascribed value of $500, which has led to the arguments on valuation, hence today's hearing. The costs of the Commissioner would not have to be incurred had the application been put on the right basis and being led by proper evidence in the first instance. This hearing would not have been necessary had the requisite information been properly put before the court and the issues properly identified yesterday. It is only fair that the Commissioner should be paid his costs of today's hearing. Conclusion 38.There will be an order granting to the applicant the relief sought in the Amended Originating Motion in relation to item 5, on the basis that the value of the donation of service is $1,000. There will also be an order that the applicant pays the Commissioner his costs of today to be taxed, if not agreed. Otherwise, there is no order as to costs of the application on item 5.
Representation: Mr Lawrence Ng, instructed by Messrs Yip, Tse & Tang, for the Applicant Mr Clifford Tavares, G.C. of Department of Justice, for the Returning Officer for Kowloon City By-Election (Kai Tai Constituency), Chief Electoral Officer of Regional and Electoral Office, Commissioner of Independent Commissioner Against Corruption and Director of Public Prosecution |
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