Koon Wing Yee v. Insider Dealing Tribunal and Another

CACV 358 & 360/2005

CACV 358/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 358 OF 2005

(ON APPEAL PURSUANT TO SECTION 31 OF THE
SECURITIES (INSIDER DEALING) ORDINANCE
(“THE ORDINANCE”), CAP. 395
FROM DETERMINATIONS OF AN INSIDER DEALING TRIBUNAL
IN RELATION TO
EASY CONCEPTS INTERNATIONAL HOLDINGS LTD. AND
EASYKNIT INTERNATIONAL HOLDINGS LTD.)

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BETWEEN

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CACV 360/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 360 OF 2005

(ON APPEAL PURSUANT TO SECTION 31 OF THE
SECURITIES (INSIDER DEALING) ORDINANCE (“SIDO”), cap. 395
FROM DETERMINATIONS OF AN INSIDER DEALING TRIBUNAL
IN RELATION TO
EASY CONCEPTS INTERNATIONAL HOLDINGS LTD. AND
EASYKNIT INTERNATIONAL HOLDINGS LTD.)

______________________

BETWEEN

______________________

Before : Hon Ma CJHC, Tang VP & Stock JA in Court

Date of Hearing: 28 November 2006

Date of Decision: 28 November 2006

Date of Handing Down Reasons for Decision: 7 December 2006

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REASONS FOR DECISION

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Hon Ma CJHC :

1.By a Report dated 7 October 2005, the Insider Dealing Tribunal made adverse findings of insider dealing against Mr Koon Wing Yee (the Appellant in CACV 358/2005) and Mr Sonny Chan (the Appellant in CACV 360/2005) in relation to Easy Concepts International Holdings Ltd and Easyknit International Holdings Ltd.  Later, the Tribunal made various orders and imposed fines on these two persons under sections 23 and 27 of the Securities (Insider Dealing) Ordinance, Cap.395 (“SIDO”).  Notices of appeal in the two appeals were filed on 3 November 2005 (CACV 358/2005) and 4 November 2005 (CACV 360/2005).

2.By ex parte notices of application, the Appellants sought leave to appeal from a single judge of the Court of Appeal pursuant to section 31(1)(b) of SIDO (under that provision leave to appeal against questions of fact are required but no leave is required on questions of law).  After a hearing in open court on 6 January 2006, in a judgment handed down on 19 January 2006, Rogers VP : -

(1) Granted leave to appeal in respect of some of the grounds raised in the Notice of Appeal in CACV 358/2005 but refused leave on others;

(2) Refused leave to appeal on those grounds of appeal in CACV 360/2005 for which leave was sought and after further determining that the other grounds of appeal contained in the notice of appeal were not points of law at all and were unmeritorious, then struck out the whole appeal.

3.By Notices of Motion both dated 27 January 2006, the Appellants sought the reversal of the orders made by Rogers VP in relation to the refusal of leave in both appeals and in relation to the order striking out the appeal in CACV 360/2005.  These were effectively renewal applications for leave to this court.

4.The matter was originally fixed for hearing on 7 June 2005.  Prior to that hearing (which was also to be ex parte), the court raised with the Appellants the question whether the renewal applications for leave were competent in the light of the decision of the Appeal Committee of the Court of Final Appeal in HLF v MTC & LHN (Intervener) (2004) 7 HKCFAR 167.

5.In response to this point, the Appellants contended as follows : -

(1) Notwithstanding the decision in HLF,the court ought nevertheless entertain the renewal applications for leave on the basis that the requirement for leave in section 31(1)(b) of SIDO (on questions of fact) was unconstitutional.  Reliance was placed on the decision of the Court of Final Appeal in Solicitor v Law Society of Hong Kong & Secretary for Justice (Intervener) (2003) 6 HKCFAR 570.

(2) It was also argued that by the very reasoning of the Appeal Committee in HLF, this had the effect that a single judge of the Court of Appeal would not have the jurisdiction to deal with applications for leave at all.

(3) In any event, as far as the Appellant in CACV 360/2005 was concerned, the Vice President was wrong to strike out the Notice of Appeal when this was not a matter that was before him.

6.Other questions arose in the renewal applications that merited some consideration.  First, a query arose whether HLF had any application in the first place given that appeals were already in existence at the time Rogers VP dealt with the applications for leave.  Accordingly, section 35(3) of the High Court Ordinance, Cap.4 allowed a full Court of Appeal to review his decision.  Secondly, as far as the order striking out the appeal was concerned, another jurisdiction issue emerged : did section 35(1) of the High Court Ordinance permit this since a single judge could only make orders or determinations that did not involve “the determination of the appeal”?

7.The June hearing was adjourned to enable more time to be allocated to the renewal applications and it was also ordered that the 2nd Respondent be permitted to appear at the hearing.

8.The hearing took place on 28 November 2006.  The Appellant in CACV 358/2005 was represented by Sir John Swaine SC and Mr Bernard Mak, the Appellant in CACV 360/2005 was represented by Mr John J E Swaine.  Mr Peter Duncan SC appeared for the 2nd Respondent.

9.After hearing argument from counsel, this court ordered that the order of the Vice President in CACV 360/2005 striking out the Notice of Appeal be set aside and that all other matters in the renewal applications be adjourned to the substantive hearing of the appeals which are fixed to be heard on 7 May 2007 (this date had already been fixed in relation to CACV 358/2005 in which the Vice President had given leave to appeal on some issues).

10.As regards the order striking out the appeal, I am of the view that the Vice President did not have the necessary jurisdiction to make this order as a single judge of this court.  Section 35 of the High Court Ordinance states as follows : -

“35. Powers of single judge in Court of Appeal

(1)   Subject to subsection (3), in pursuance of the civil jurisdiction of the Court of Appeal, any order or direction not involving the determination of the appeal may be made or given by a single judge sitting in court or in chambers, and a single judge may likewise make any interim order which he may think fit to prevent prejudice to the claims of any party pending an appeal.” (emphasis added)

11.In striking out the Notice of Appeal, the court made an order that determined the appeal.  After it was made, the appeal no longer existed.  In Shiu Wing Steel Ltd v Director of Environmental Protection & Airport Authority (Interested Party) [2006] 3 HKLRD 33, Ribeiro PJ had to consider the meaning of section 46(2) of the Hong Kong Court of Final Appeal Ordinance, Cap.484 which was in similar terms to section 35(1) of the High Court Ordinance.  Section 46(2) reads : -

“In an … appeal, any incidental order or direction, not involving the decision of the … appeal, … may be made or given at any time by a single permanent judge.”

12.In construing that provision, Ribeiro PJ said this at 35I-J (paragraph 10) : -

“In my view, in empowering the single permanent judge to make ‘any incidental order or direction, not involving the decision of the … appeal’, the subsection confers a broad power to make necessary or desirable incidental orders or directions (not confined to orders concerning further evidence) which do not have the effect of deciding the appeal – that function obviously being reserved to the Court itself.  I take the words ‘not involving the decision of the … appeal’ to mean ‘not having the effect of deciding the appeal’.”

The Vice President’s order effectively decided the appeal.

13.As for adjourning the other matters to the substantive hearing in May 2007, I consider that in view of the arguments that have been advanced, it would be far more convenient and efficient for all matters to be determined together than to have a piecemeal consideration of overlapping issues.  For example, section 31 of SIDO allows appeals on law to be as of right whereas leave is required on questions of fact.  In the present case, it may not altogether be an easy exercise to separate the two : some issues can be said to involve mixed questions of law and fact.  Further, in relation to the constitutional issue raised by the Appellants, this is an issue that ought to be dealt with at the appeal proper and not in a renewal application.

Hon Tang VP :

14.I agree.

Hon Stock JA :

15.I agree.

Sir John Swaine SC & Mr Bernard Mak, instructed by Messrs Anthony Siu & Co for the Appellant in CACV 358/2005

Mr John J E Swaine, instructed by Messrs Angela Wang & Co for the Appellant in CACV 360/2005

Mr Peter Duncan SC, instructed by the Department of Justice for the 2nd Respondent (the Financial Secretary)