Lam Tat Ming v. The Chief Executive of the HKSAR and Another

CACV 259/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 259 OF 2010

(ON APPEAL FROM HCAL NO. 121 OF 2009)

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BETWEEN

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Before: Hon Tang VP, Hartmann JA and Fok JA in Court

Date of Hearing: 1 December 2011

Date of Judgment: 22 December 2011

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JUDGMENT

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Hon Tang VP:

Introduction

1.The Applicant was a police inspector.  He retired on 14 January 2008 when he reached retirement age at 55.  At the time there were pending disciplinary proceedings against him.

2.Section 27(2)(b) of the Pension Benefits Ordinance (Cap. 99) ("PBO") provides that a pension may be cancelled or reduced if it be shown to the designated officer (the Secretary for the Civil Service, ("the Secretary"), that:

"(i)   the officer retired during any disciplinary proceedings brought against him by the Government, or resigned from the service to avoid such disciplinary proceedings; and

(ii)   had such proceedings been completed or taken place they would, in the opinion of the Public Service Commission, have led to the dismissal of the officer from the service or compulsory retirement in the exercise of disciplinary powers of punishment by the Government with a reduction of the pension benefits granted to him."

3.Section 29A(3) provides the procedure for a decision under section 27:

29A. Provisions supplementary to sections 27 and 29

"(3)  (a)   Before a designated officer exercises a power conferred on him by section 27 or 29, he shall by a communication in writing addressed to the officer or other person concerned inform him that exercise of such a power in relation to him is being considered and state why such exercise is being considered.

(b)  The communication referred to in paragraph (a) shall state that, within a period specified in the communication (being a period ending not earlier than 30 days after the date of the communication) or such longer period as the designated officer may allow, the officer or other person to whom it is addressed may make representations to the designated officer as regards the exercise in relation to him of a power conferred on the designated officer by section 27 or 29.

(c)  A person to whom a communication referred to in paragraph (a) is addressed shall notify in writing the designated officer of an intention of his to make representations referred to in paragraph (b).

(d) The officer or other person to whom a communication referred to in paragraph (a) is addressed shall, within the period specified in the communication (or such longer period as the designated officer may allow), be afforded an opportunity of stating in writing, or having so stated on his behalf, why any of the powers conferred by section 27 or 29 on a designated officer should not be exercised in relation to him.

……

(4)   A designated officer shall not exercise a power conferred on him by section 27 or 29 without having had regard to the submission (if any) made to him by or on behalf of the officer or other person concerned pursuant to this section.

(5)   Where a designated officer exercises a power conferred on him by section 27 or 29, he shall forthwith notify in writing the officer or other person concerned."

4.On 2 June 2008, the Secretary refused to grant the Applicant a pension under section 27(2)(a) PBO.  By a letter of the same date, the Secretary informed Lam that:

"… This decision results from the Secretary being satisfied that you retired during disciplinary proceedings which if completed would, in the opinion of the Public Service Commission, have led to your dismissal."

5.The Applicant petitioned to the Chief Executive against the Secretary's decision under section 29A(6).  Pending the determination of the petition or its withdrawal the Secretary's decision would not come into operation.

6.The following provisions in the PBO are relevant to the petition:

29A. Provisions supplementary to sections 27 and 29

"(7)  Where the Chief Executive receives a petition under subsection (6), he may, by a letter addressed to a member of the Panel, require the Panel to consider and report to him on the petition, and where the Chief Executive makes such a requirement-

(a)   the Panel shall comply with the requirement; and

(b)   before he determines the petition, the Chief Executive shall have regard to the report of the Panel."

29B. Panel

"(1)  There shall be an advisory panel (in section 29A and this section referred to as 'the Panel') to perform the functions conferred on it by section 29A and this section.

(2)   The Panel shall consist of 3 members of whom-

(a)     1 shall be appointed by the Chief Executive from amongst-

(i)      the judiciary; or

(ii)     the members of the Bar who are not public officers; or

(iii)    the members of the Solicitors' profession who are not such officers;

(b)     another shall be appointed by the Chief Executive from amongst the justices of the peace who are not public officers; and

(c)     the remaining member shall be a person, other than a person described in paragraph (a) or (b) or a public officer, appointed by the Chief Executive.

(3)   Where the Chief Executive makes a requirement under section 29A(7), the member of the Panel to whom the letter containing the requirement is addressed shall, as soon as may be, convene a meeting of all the members of the Panel to consider and report to the Chief Executive on the petition to which the requirement relates."

7.The Chief Executive, without requiring the Panel to consider and report to him on the petition, informed the Applicant's solicitor by letter dated 4 August 2009 that:

"… the Chief Executive does not find any justification to vary the decision of the SCS and has decided to uphold her decision."

These Proceedings

8.The Applicant challenged the aforesaid decisions in these proceedings.  He sought a declaration that section 27(2) of PBO contravenes Article 10 and Article 11 of Hong Kong Bill of Rights ("HKBOR") and is unconstitutional, as well as an order of certiorari to quash the decisions of the Secretary and the Chief Executive.

9.By judgment dated 1 November 2010, Reyes J declared that section 27(2) contravened Article 10 HKBOR and is unconstitutional.  The declaration was confined to section 27(2) (the procedure before the Secretary).[1]

10.As Reyes J has noted,

"… in deciding as she did, the Secretary took particular account of the following:-

(1)     Ngau Wing’s non-prejudicial statement made on 22 October 1994 that Lam had solicited and accepted $450,000 from him.

(2)     Ngau Wing’s non-prejudicial statement made on 9 December 1996 that he was a triad member and had paid substantial amounts to Lam.

(3)     The fact that Lam was an experienced police officer who had served in the District Intelligence Section and Divisional Investigation Team of the district in which Ngau Wing carried out illegal operations.

(4)     Lam’s cautioned statement to the ICAC of 1 May 1997 admitting that Lam had known Ngau Wing since the 1970s and that the two had dined together from time to time despite Lam’s knowledge of Ngau Wing’s undesirable character.

(5)     Oral evidence from an ICAC agent (identified in the evidence before me by the code-name 'Heung Kai') in Ng’s disciplinary proceedings as to meetings between Lam and Ngau Wing in February and April 1997.

(6)     Immigration Department movement records relating to Lam and Ngau Wing corroborating Ngau Wing’s evidence that (for example) Lam and Ngau Wing were in Macau at the same time."

11.Reyes J went on to quash the decision of the Secretary and the Chief Executive on the ground that they were Wednesbury unreasonable. 

The Appeal

12.This is the Chief Executive and the Secretary's appeal.  They are represented by Mr Godfrey Lam, SC (leading Mr Abraham Chan). The Applicant is represented by Mr Gerard McCoy, SC (leading Mr James Collins).

13.The Applicant's case before Reyes J was that section 27(2) infringed both Article 10 and Article 11 of HKBOR.  Reyes J held in his favour on Article 10 but not on Article 11.  Reyes J's decision on Article 11, with which I respectfully agree, is not challenged on appeal.  Thus, we are concerned solely with Article 10. 

14.Article 10 of the HKBOR provides:

"… In the determination of any criminal charge against him, or of his rights and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law. …"

15.The Respondents have rightly accepted before Reyes J that Article 10 applied to both the procedure before the Secretary as well as the procedure before the Chief Executive. 

16.Reyes J said:

"23.   One can therefore immediately move on to consider whether the PBO process complies with Art. 10.  In so doing, the Court looks at the whole of the PBO process, including the possibility of recourse to judicial review.  This is because, as Ribeiro PJ noted in Lam Siu Po v. Commissioner of Police (2009) 12 HKCFAR 237 (at para. 109):-

'Article 10 does not require every element of the protections conferred to be present at every stage of the determination of a person's rights and obligations, but only that such protections should be effective when the determination is viewed as an entire process, including as part of that process such appeals or judicial review as may be available.'"

17.It is accepted that the court is obliged "to adopt a remedial interpretation of a legislative provision to make it Basic Law-consistent."  Koon Wing Yee v Insider Dealing Tribunal (2008) 11 HKCFAR 170 at 208 para. 111 following the Court of Final Appeal's earlier decision in HKSAR v Lam Kwong Wai and Another (2006) 9 HKCFAR 574.  As Sir Anthony Mason NPJ said in Koon Wing Yee:

"111. … The width of s.6(1) (HKBOR) is not in doubt; it authorizes the court to grant such remedy or relief, or make such order, in respect of such breach or violation as it has power to make or grant in the proceedings as it considers appropriate and just.  Section 6(1) is directed not only to the case of reading down a statute in order to avoid a breach or violation of the BOR but also to invalidating a statutory provision when an interpretive remedy is not possible. …"

18.Sir Anthony went on to say:

"113. ... Section 6(1) should be construed, in accordance with its terms, as conferring a power which will enable the courts to resolve the tension which exists between the legislative will and the protection given by the BOR by striking down only that part of the statute that causes the violation or breach, even if it does not itself infringe the BOR, when to do so best gives effect to the legislative intention."

19.As Reyes J explained, the "entirety of the process" comprises the procedure before the Secretary, the petition and the possibility of judicial review.[2]

20.As noted, Article 10 does not require every element of the protections conferred to be present at every stage of the procedure.  In Wong Tak Wai v Commissioner of Correctional Services [2010] 4 HKLRD 409, the Court was concerned with prison disciplinary proceedings under Prison Rules (Cap. 234A) which are subsidiary legislation made pursuant to section 25(1) of the Prison Ordinance (Cap. 234).  One issue was whether determination by the superintendent of a prison that an inmate commits an offence against prison discipline was tainted with apparent bias.  And if so, whether the fact that an inmate may appeal to the Commissioner of Correctional Services who was in a position to conduct a full review on the merits remedies any breach of Article 10 or the lack of independence or impartiality at the first stage of the process before the superintendent. 

21.This Court (Stock VP, Kwan JA and A Cheung J (as he then was)) held by a majority[3] that the initial decision by the superintendent of the inmate's prison did not give rise to any reasonable apprehension of bias.  The Court went on to hold unanimously that the Prison Rules were nevertheless compliant with Article 10 HKBOR because of the availability of an appeal from the superintendent to the commissioner, given the wide power of the commissioner to enquire fully into the merits and to hold a rehearing where the justice of the matter required.

Discussion

22.Mr McCoy made 2 principal submissions on why the PBO process does not comply with Article 10.  First, neither the Secretary nor the Chief Executive is independent of the government.  Secondly, that the procedure before them was unfair because neither held an oral hearing. Moreover, even if they had held an oral hearing, it would have been unfair because neither had power to compel the attendance of witnesses.

Lack of Independence

23.Mr McCoy submitted that as representatives of the Government, both the Secretary and the Chief Executive would have had an interest in seeing that Government was liable to pay out as little pension as possible.  With respect, I do not agree.  Government money belongs to the community.  Theoretically, every member of the community might wish the Government to pay out as little as possible.  I do not believe a fair-minded observer would think that the Secretary or the Chief Executive might not be independent for this reason.

24.Mr McCoy further submitted that that this is specially so because the Applicant had been accused of accepting bribes from a triad member and betraying the trust imposed upon him as a police inspector by the Government and the public.  I do not agree.  Of course, if the accusations are proved, the Applicant may properly be deprived of his pension.  I do not accept a fair-minded observer would think that the Secretary or the Chief Executive could not distinguish between accusation and proof.

25.Mr McCoy then submitted that since both the Secretary and the Chief Executive are servants of, or part of the Government, therefore they would be perceived to be not independent.  It is said that having regard to their connection to the Government, a fair-minded observer would reasonably perceive a real danger of their respective decisions being biased, so that there would be apparent bias.  

26.In Wong Tak Wai, Andrew Cheung J (as he then was), with the concurrence of Stock VP, said:

"138.    In my view, a fair-minded and informed observer would also be a realistic and pragmatic person.  He would not be idealistic or rigid in his approach.  He would accept that we live in an imperfect world, and, as has been observed by Baroness Hale[4], it is inherent in the system of prison discipline that it is administered by those with responsibility for managing the prison.  It is particularly noteworthy that in Al-Hasan, the House of Lords plainly did not regard the mere fact that it was the Deputy Governor of the prison concerned who heard the disciplinary charges as being sufficient in itself to found a case of apparent bias. 

139.     A fair-minded and informed observer would also recall that analogous situations exist in real life in many other organisations, such as schools and businesses.  All this would help shape his perception of what would constitute a reasonable apprehension of bias."

27.Indeed, the Applicant's disciplinary proceedings (had they not been aborted) would have been adjudicated by an appropriate tribunal made up of police officers or public servants (Regulation 16, Police (Discipline) Regulations (Cap. 232A)) under the Police (Discipline) Regulations.  Just as those proceedings could not be regarded as lacking in independence, I reject the suggestion that the Secretary or the Chief Executive would be perceived as apparently biased; even though, with respect, that appeared to have been Reyes J's view, since he, in the course of commenting on the lack of any power by the Secretary or the Chief Executive to summon witnesses, said:

"59.   … One is left with an apparently biased tribunal evaluating evidence which it is unable to have tested through cross-examination of key witnesses."

Fair Hearing

28.Mr McCoy submitted before Reyes J that there could be no oral hearing before the Secretary or the Chief Executive, both of whom would deal with the matter on documents alone without examination and cross-examination of relevant witnesses in an oral hearing.  That was how the Secretary and the Chief Executive dealt with the Applicant.  The significance of this will be further considered when I come to their decisions.  For the time being, I am concerned with whether an oral hearing was possible, and if so, whether the procedure was nevertheless unfair because there was no power to compel the attendance of witnesses.

29.The learned judge appeared to have thought that a limited oral hearing was possible, he said:

"57.   But by the expression 'oral hearing', Mr. Godfrey Lam means no more than that Lam could have asked the Secretary and the Chief Executive for a hearing at which witnesses could give evidence on Lam’s behalf and Lam or his counsel could make oral submissions. Such a limited 'oral hearing' would not cure the defect highlighted by Mr. McCoy."

30.However, he did not consider a limited hearing sufficient, he said:

"58.   The crucial point is that, if testimony of Ngau Wing and Heung Kai was to be used against Lam, Lam ought to have had an opportunity to confront and cross-examine them.  Lam would never be able to do so in the limited 'oral hearing' envisaged by Mr. Godfrey Lam. Obviously, neither Ngau Wing nor Heung Kai would have voluntarily given evidence in Lam’s favour.  It would thus be fanciful to expect Lam to have himself adduced evidence from Ngau Wing or Heung Kai.  Consequently, a request by Lam for the 'oral hearing' posited by Mr. Godfrey Lam would have been of little use.  

59.    More pertinently, Mr. Godfrey Lam accepts that, under the PBO process, neither the Secretary nor the Chief Executive has the power to summon Ngau Wing and Heung Kai to give live evidence and be cross-examined by Lam or his counsel on the same.  The dangers identified by Moses J in Bewry (especially in para. 67 of the passage cited above) would equally be present here. One is left with an apparently biased tribunal evaluating evidence which it is unable to have tested through cross-examination of key witnesses.

60.    That deficiency within the fact-finding mechanisms of the PBO process is something which the Court cannot cure through judicial review.  In Bewry, Moses J could remit the matter for re-consideration.  But here, on the assumption that I quash the decision, remittance back to the decision-makers would be to no avail.  The same officers would be constrained to consider the documents before them and assess primary facts without the ability to summon Ngau Wing or Heung Kai and see and hear their evidence being tested in cross-examination.

……

62.    Here the powers of the Secretary and Chief Executive are seriously circumscribed.  They could not consider summoning witnesses (such as Ngau Wing and Heung Kai) to have their evidence tested in cross-examination.  If they wished to call witnesses to test the credibility of adverse statements, they simply have no power to do so.  In my judgment, therefore, the fact-finding procedure under PBO process does not comply with the requirements of Art. 10.  It does not comply because it does not give relevant decision- makers, where (as is often likely to be the case) there are hotly disputed allegations of primary fact, the option of summoning witnesses for the purposes of live cross-examination."

31.Reyes J then concluded that that was a systemic problem and not just a difficulty with the way in which decision-makers have dealt with a particular case.  He rejected the suggestion that quashing the relevant decisions as having unreasonably attached significant weight to hearsay evidence from Ngau Wing and Heung Kai would solve the systemic problem because,

"65.   … Given the seriousness of their consequences, the PBO process is, in reality, only likely to be invoked when grave allegations have been made against a public servant in aborted disciplinary proceedings.

66.    In the majority of such cases, there are unlikely to be admissions of key allegations.  There are instead likely to be serious disputes of primary fact.  The resolution of those disputes would then be essential pre-requisites to any decision to deny a pension.  The lack of an option to have evidence relating to those disputes tested by cross-examination would mean, if Argument X is right, that in many cases decision-makers will just have to reject disputed evidence as to a public servant’s engagement in improper activities and reluctantly conclude that a pension must nevertheless be paid. 

67.    Such outcome is unlikely to have been that contemplated by the Legislature.  More likely, the Legislature intended that where grave allegations have been made against a retiring public servant, the latter person should be held accountable by the deprivation of all or part of a pension.  In other words, the PBO envisages that decision-makers grapple with the evidence.  They must assess the evidence critically, rather than repeatedly dismiss the same in a majority of cases (on purely technical grounds) as hearsay of little weight. If right, Argument X would have the consequence of emasculating the deterrent effect of the PBO process in most situations."

32.Mr Godfrey Lam applied to us for leave to adduce the 2^nd affirmation of Ma Siu Hung, who is the Chief Executive Officer of the Conduct and Discipline Division of the Civil Service Bureau, who said that:

"… for the period from 1997 to November 2010 when section 27(2) of the PBO was declared unconstitutional, designated officers had so far refused to grant pension under s.27(2) of the PBO in 11 cases.  Of these 11 cases,

(a)     seven were based on criminal conviction, the guilty verdict of which was returned by a criminal court;

(b)     there was one case in which the officer concerned had already gone through the full disciplinary hearing and was found guilty.  He resigned to avoid the award of punishment; and

(c)     of the remaining three cases in which the officers resigned or retired from the civil service before completion of disciplinary proceedings, one had not made any representations during the PBO process while one did not dispute the disciplinary charges laid against him in his representations to the designated officer.  The remaining case was the Respondent's case."

33.Mr McCoy offered only perfunctory (his word) objection to the production of such evidence.  We have admitted such evidence.[5]

34.Mr Ma's evidence show that out of 11 cases the question of oral hearing or evidence only arose in the Applicant's case.

35.Before us, Mr McCoy did not seriously dispute that an oral hearing before both the Secretary and the Chief Executive was possible.  He accepted that the court must "adopt a remedial interpretation of a legislative provision to make it Basic Law-consistent" and that in doing so the court may expunge inconsistent provisions, such that even if (which is not the case) section 27 and/or section 29A had expressly prohibited oral hearings, such provisions may be expunged, and an oral hearing could take place.

36.Essentially, the learned judge took the view that because witnesses could not be compelled to testify before either the Secretary or the Chief Executive, the proceedings before them were Article 10 non-compliant.  Even so, with respect, it does not follow that all proceedings before the Secretary[6] would be Article 10 non compliant.  First, witnesses might agree to testify voluntarily.  Secondly, consistently with Koon Wing Yee, the court should do no more than is necessarily to address the breach or violation, and it would suffice for the court to quash an offending decision.  It would not be necessary to go further and condemn the procedure even in respect of cases where no oral hearing would be required.

Witnesses

37.I believe Mr Godfrey Lam is right that in police disciplinary proceedings, police officers could be required to give evidence by reason of their position (see e.g. section 30 Police Force Ordinance).  Other witnesses may give evidence voluntarily. 

38.Before us, Mr McCoy concentrated his effort on the lack of a power to compel attendance of witnesses.  He submitted:

"The High Court has no jurisdiction to issue a subpoena to any person to attend before a tribunal and to give evidence before it; unless that tribunal

a)      is independent (functionally, hierarchically, practically and also tested as a matter of appearance) and

b)      is created by statute[7]; and

c)      enjoys a statutory power to receive evidence before it on oath; and

d)     has provision for witnesses before it having absolute immunity; and

e)      where the tribunal is empowered to make a binding determination or adjudication (i.e. this excludes advisory roles or recommendations)"

39.Mr Godfrey Lam relied on Order 38, rule 19 of The Rules of High Court (Cap. 4A) where the court may issue a subpoena in aid of "an inferior court or tribunal". 

40.The leading case in Hong Kong is Chu Piu-wing v Attorney General [1984] HKLR 411, which was concerned with a subpoena issued by the court requiring a police informer to attend a police disciplinary tribunal to give evidence.  In the judgment of the court given by McMullin VP, he said at page 418:

"A final twist of ingenuity in this argument proposed the idea that a subpoena issued out of the High Court was of its nature an instrument designed to assist inferior Tribunals only in cases when such Tribunals had power to take evidence on oath.  It is true that under other Ordinances different bodies are empowered to compel the attendance of witnesses and, in some instances, specifically to oblige witnesses to testify.  But we do not find the argument from silence impressive in the present case.  We do not think that the absence of any power in the Police Force legislation to compel the attendance of civilian witnesses should be interpreted as an indication that the Legislature intended to inhibit the power of the High Court to give assistance by way of subpoena.  In this matter we think we should follow the lead of McNeill, J. in Currie and others v. Chief Constable of Surrey [1982] 1 WLR. 215, an authority which while not binding is directly in point.  The case concerned disciplinary proceedings taken under precisely similar police regulations and the Tribunal in question had no power to take evidence upon oath.  In a reserved and very fully considered opinion McNeill, J. found that the subpoena was effective.  It is, with respect, a decision which accords with common sense and we think we ought to follow it."

41.Mr McCoy relied on Mahon and Another v Rahn and others (No.2)  [2000] 1 WLR 2150, a decision of the English Court of Appeal.  With respect, Mahon does not help Mr McCoy.  There, Brooke LJ (with concurrence of the other members of the court) said:

"166.    In Lincoln v. Daniels [1962] 1 Q.B. 237 the central issue related to the question whether disciplinary proceedings against barristers, which were at that time conducted by Benchers of their Inn, attracted absolute privilege.  Devlin L.J. said, at pp. 255-256:

'I appreciate that the Bench of the Inner Temple (and I dare say those of the other Inns) conducts its proceedings with less formality than in a court of law.  There are no pleadings or discovery; witnesses cannot be subpoenaed and do not give evidence on oath.  These are factors to be taken into account, but I think that in any case of doubt the overriding factor is whether there will emerge from the proceedings a determination the truth and justice of which is a matter of public concern, for it is public policy that justifies absolute privilege.'

167.     Sellers L.J., at p. 250, did not regard matters of the type mentioned by Devlin L.J. as 'vital to the present issue.'  Danckwerts L.J., for his part, said, at p. 269:

'I do not think that the absence of a statutory foundation or of some of these features such as the taking of evidence on oath need be fatal to the recognition of a tribunal as a judicial body to which it is necessary in the interests of a proper and complete hearing to attach the protection of absolute privilege.  It seems to me that in the case of proceedings which may result in the deprivation of a barrister of the right to practise his profession, it is desirable that a judicial determination of the matters by the Benchers of his Inn should be as free from harassing consequences as that of a military court of inquiry or the proceedings before the Disciplinary Committee of the Law Society.'

168.     I can see nothing in the speeches of Lord Diplock and Lord Fraser of Tullybelton in Trapp v. Mackie [1979] 1 W.L.R. 377 which casts any doubt on the correctness of the decisions in Addis v. Crocker [1961] 1 Q.B. 11 or Lincoln v. Daniels [1962] 1 Q.B. 237.  Indeed, as Lord Fraser [1979] 1 W.L.R. 377, 386 reminded us, in Dawkins v. Lord Rokeby (1873) L.R. 8 Q.B. 255 (affirmed by the House of Lords (1875) L.R. 7 H.L. 744) the military court of inquiry had no power to administer an oath and sat in private (and almost certainly had no procedure equivalent to discovery in a civil action), and its proceedings were nevertheless held to attract absolute privilege.

169.  … If we considered that the proceedings … were so properly comparable with those of a court of justice as to attract absolute privilege, then the High Court would have power to compel witnesses to attend; if not, not."

42.The authorities[8] cited in Mahon show quite clearly that a subpoena may be issued in aid of a tribunal although it has no power to administer an oath and its decision is not binding in law.  And that absolute privilege may attach to evidence given in such a tribunal.

43.Trapp v Mackie was concerned with a suit in defamation brought by Trapp against Mackie in respect of his evidence at an inquiry, which was held following the dismissal of Trapp, a headmaster of a Scottish School.  He had been dismissed by resolution of an education authority, and the Secretary of State ordered an inquiry into the reasons for the decision under the Education (Scotland) Act 1946.  Under 81(3) the Secretary "shall make such inquiry as he sees fit".  The Secretary exercised his discretion to cause a local inquiry to be made and appointed a senior member of the Scots bar to act as commissioner.  The commissioner's function was to report to the Secretary on the question whether Trapp's dismissal was reasonably justifiable which is not binding in law on the Secretary of State.  Lord Diplock, in his judgment[9], said at page 382:

"My Lords, these consequences of the conclusion reached by the commissioner at the close of the inquiry differ from the consequences of decisions of a court of justice in that the latter are binding and authoritative in their own right (whether subject to appeal or not), whereas the conclusion reached by the commissioner as to whether or not the dismissal was reasonably justifiable has in strict law no binding effect unless and until it is adopted by the Secretary of State.  It is not authoritative in its own right however improbable it may be in practice that the Secretary of State will not adopt it.  But this distinction between the report of the commissioner and decisions of courts of justice, while it may be relevant in constitutional questions as to what constitutes an exercise of judicial power, has never been regarded as sufficient to exclude tribunals which report to a higher authority, with whom the ultimate decision rests, their opinion upon some question into which they are authorised by law to inquire, for the assistance of that higher authority in reaching its decision.

……

In deciding whether a particular tribunal is of such a kind as to attract absolute privilege for witnesses when they give testimony before it, your Lordships are engaged in the task of balancing against one another public interests which conflict.  In such a task legal technicalities have at most a minor part to play.  Where the report of a tribunal though not necessarily decisive as a matter of legal theory nevertheless in practice has a major influence upon the final decision that in law is binding and authoritative, the same considerations apply to such a tribunal as those that weigh the balance down in favour of absolute privilege for evidence given before a tribunal whose decisions are in strict law binding and authoritative in their own right."

44.Mr McCoy also made the point that the role of the Panel is purely advisory, and the Chief Executive may not accept the advice of the Panel.  That is so, however improbable it may be in practice that he will not accept it.  But that does not mean that the advice of the Panel has no effect.  It is difficult to envisage a case where the Chief Executive may properly refuse to accept an advice favourable to the civil servant.  Any such decision would be subject to heightened scrutiny by the court[10], and if seen to be unreasonable, quashed.

45.Mr McCoy also submitted that a petition to the Chief Executive is not an appeal.  But, in substance, it is an appeal.  The expression maybe a relic from the time when government servants served at the pleasure of the Crown and pension was not as of right.  See e.g. section 5 Pensions Ordinance (Cap. 89) as enacted on 9 December 1949. 

46.It may be of interest to note that when the PBO was first enacted on 1 July 1987 the provisions dealing with the cancellation or reduction of pensions were quite different.  At that time, section 27 provided that:

"(2)   Subject to the advice of the Public Service Commission, the Governor may –

(a)      refuse to grant a pension; or

(b)     cancel or reduce a pension granted,

… if it be shown to the Governor that –

(i)  the officer retired during any disciplinary proceedings …

(ii) had such disciplinary proceedings been completed …

(5)     Any person … aggrieved by any decision … may, … petition the Governor against the decision and determination and the Governor may confirm, vary or reverse the decision and determination as he thinks fit".

47.The present two tier procedure before the Secretary followed by a petition and the establishment of the Panel to advise the Chief Executive were introduced by Ordinance 86 of 1988 to address the concern expressed during the Second Reading of the Pension Benefits Bill 1987.[11]

48.I have already dealt with the question of independence.  Mr McCoy accepted that the Secretary and the Chief Executive are tribunals for the purpose of Article 10.  They were also constituted by PBO.

49.I agree with Mr Godfrey Lam that Order 38, rule 19 applies to the procedure before the Secretary, and the Chief Executive, including the Panel.

Certiorari

The Secretary's Decision

50.I believe under section 27(2), the Secretary may in a suitable case conduct an oral hearing.  However, if as a matter of practice the Secretary would not hold an oral hearing that would not render the entire PBO process Article 10-non-compliant.  PBO provides for a petition to the Chief Executive, where the Panel may be required to advise the Chief Executive on the matter.  The constitution of the Panel is such that it is well suited for the hearing of oral evidence and the resolution of factual disputes. 

51.I do not believe Article 10 requires two oral hearings with witnesses.  The process before the Secretary might be compared with the process before the Securities and Futures Commission which is followed by a review by a Market Misconduct Tribunal.  See e.g. Tsien Pak Cheong David v Securities and Futures Commission [2011] 3 HKLRD 533.  I would not quash the Secretary's decision.

The Chief Executive's Decision

52.In the present case, where there is serious conflict over allegations of criminal conduct, I believe the Chief Executive, who cannot be expected to hold an oral hearing with witnesses, should have referred the petition to the Panel.

53.On the facts of this case, I respectfully agree with the learned judge that an oral hearing with examination and cross-examination of witnesses is required to resolve the serious factual disputes. 

54.As Reyes J pointed out:

"34.  … Lam had no opportunity to challenge and test Ngau Wing’s evidence through cross-examination.  A corollary to this is that the decision-makers in the present case did not have the opportunity to hear and see how Ngau Wing might have reacted to cross-examination by Lam’s counsel.  The result was that, despite the gravity of the charges in the Lam’s disciplinary proceedings (including association with a triad member and acceptance of unauthorised financial advantages) and despite the severity of the penalty at stake in the PBO process (the deprivation of Lam’s pension), the decision-makers … determine issues of hotly disputed fact solely on the basis of documents. 

35.  This (Mr. McCoy says) was unfair.  Mr. McCoy submits that there was no way on the documents before it that the PBO process could fairly have led to any decision to deprive Lam of his pension. It would not have been possible to assess the truth or falsity of Ngau Wing’s or Lam’s version of events on documents alone without confrontation and cross-examination of relevant witnesses (such as Ngau Wing) in an oral hearing. …"

55.That being the case, I believe the Chief Executive ought to have referred the matter to a Panel, who should (as one would expect) conduct such an oral hearing.  I respectfully agree with Reyes J that a resolution of the matter without a proper hearing to be Wednesbury unreasonable.  I would therefore quash the decision of the Chief Executive, and remit the petition to him for further consideration.  I believe the Chief Executive should consider requiring the Panel to advise him on the petition.  In which event, the Panel should hold an oral hearing where oral evidence with cross-examination could take place.

Disposition

56.For the above reasons, I would set aside the declaration granted by the learned Judge, as well as the order quashing the decision of the Secretary.  The parties are requested to make written submissions on costs within 10 days of this judgment.

Hon Hartmann JA:

57.I agree.

Hon Fok JA:

58.I agree with the judgment of Tang VP.

Mr. Godfrey Lam, SC & Mr. Abraham Chan, instructed by the Department of Justice for the Respondents

Mr. Gerard McCoy, SC & Mr. James Collins, instructed by Messrs Henry Wan & Yeung for the Applicant