Lau Luen Hung Thomas v. Insider Dealing Tribunal and Another

FAMV No. 46 of 2009

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 46 OF 2009 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM HCMP NO. 1017 OF 2008)

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Between:

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D E T E R M I N A T I O N

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Chief Justice Li:

1.On 8 September 2006, the applicant was identified as an insider dealer by the Insider Dealing Tribunal (“the Tribunal”).  He was ordered to pay to the Government the total profit gained as the result of insider dealing amounting to $15,301,676 under s. 23(1)(b) of the now repealed Securities (Insider Dealing) Ordinance, Cap 395 (“the Ordinance”).  Further, he was ordered to pay a penalty of $15 million under s. 23(1)(c) of the Ordinance.  The applicant had paid these sums.

2.The time limit for appealing to the Court of Appeal against the Tribunal’s orders expired on 16 January 2007.  On 30 May 2008, the applicant applied to the Court of Appeal for an extension of time to appeal against the order imposing the penalty.  This application was made over one year and four months out of time.

3.It should be noted that the applicant had made a previous application on 18 June 2007 to extend time for appeal.  On 30 May 2007 in Koon Wing Yee v Insider Dealing Tribunal, the Court of Appeal had quashed all orders made by the Tribunal, on the basis that the proceedings were criminal in nature.  On 28 February 2008, the Court of Appeal (Ma CJHC and Stock JA) had refused to extend time for appeal and set aside the order for extension granted by Cheung JA.  On 26 March 2008, the applicant applied for leave to appeal to the Court of Final Appeal relying on matters arising from the decision of the Court of Final Appeal in Koon Wing Yee which had just been given on 18 March 2008.  On 9 May 2008, the Court of Appeal refused leave, stating that the questions sought to be raised did not arise from the Court of Appeal’s decision and observing that “it was perhaps more appropriate for the point now sought to be run by the Applicant to be canvassed in a new application for an extension of time to appeal, if so advised”.  The applicant then made the present application to the Court of Appeal on 30 May 2008 seeking to extend time.

4.On 9 April 2009, the Court of Appeal (Ma CJHC, Tang VP and Stock JA) refused to extend time for appeal.  On 22 July 2009, that Court refused leave to appeal to the Court of Final Appeal.  The applicant now applies to us seeking leave to appeal against the Court of Appeal’s refusal to extend time for appeal against the Tribunal’s order imposing the penalty.

5.In our view, we have the jurisdiction to entertain this application.  There is a right of appeal from the Tribunal to the Court of Appeal and we are here concerned with a judgment of the Court of Appeal refusing to extend time for such appeal.  That judgment is appealable to this Court.  This is essentially different from the situation where leave to appeal to the Court of Appeal is required and the Court of Appeal refuses leave.  In that situation, the Court of Appeal would have declined to hear the appeal at all and no judgment of the Court of Appeal came into being from which an appeal lies to the Court of Final Appeal.  HLF v MTC & LHN (2004) 7 HKCFAR 167.

6.When the Tribunal imposed the penalty on 8 September 2006 under s. 23(1)(c), it of course did so on the basis that that provision, which empowered it to impose penalties, was valid.  But on 18 March 2008, in Koon Wing Yee v Insider Dealing Tribunal (2008) 11 HKCFAR 170, this Court declared that s. 23(1)(c) was invalid.  The Court held that as s. 23(1)(c) was invalid, the reason for characterizing the proceedings before the Tribunal as criminal was eliminated and it followed that the nature of the proceedings was civil.

7.Whether time should be extended for appeal is of course a matter for the court’s discretion.  In the present case, in refusing to extend time in the exercise of its discretion, the Court of Appeal had applied the principles laid down by the Court of Final Appeal in HKSAR v Hung Chan Wa (2006) 9 HKCFAR 614 at paras 23 to 27.  In that case, it was held that in dealing with applications for extension of time, the principle is that the ground that the previous understanding of the law has subsequently been held to be incorrect would by itself not justify an extension of time.  The Court noted however that there could be exceptional circumstances in a particular case which would justify an extension but observed that the circumstances must be so exceptional that the occasions when they would be held to exist would be very rare.  In the present case, the Court of Appeal held that such exceptional circumstances did not exist.

8.In our view, the Court of Appeal was plainly right to apply the principles in Hung Chan Wa and applying those principles, it was clearly correct in refusing to extend time in the exercise of its discretion.

9.In Hung Chan Wa, this Court stated that it expressed no opinion about the correctness of the decision in R v Kwok Hing Man [1994] 2 HKCLR 160 in relation to the extension of time for an appeal against conviction for a non-existent offence.  The applicant submits that one is concerned with a situation similar to that in Kwok Hing Man.  This submission must be rejected.  We are not here concerned with any criminal offence.  In any event, the applicant is not seeking an extension of time to appeal against the finding of insider dealing but is seeking to appeal out of time against the penalty imposed on the basis of that finding.

10.The applicant has put forward various questions of law which it is submitted ought to be considered by the Court.  Ultimately, one is concerned with the exercise of a judicial discretion.  As has already been stated, the Court of Appeal had plainly exercised its discretion correctly.

11.Accordingly, the application for leave is dismissed with costs.

Mr Gerard McCoy SC and Mr Kevin Patterson (instructed by Messrs Sit, Fung, Kwong & Shum) for the applicant

The 1st respondent did not appear and was not represented.

Mr Ronny Tong SC and Mr Abraham Chan (instructed by the Department of Justice) for the 2nd respondent