Television Broadcasts Limited v. Communications Authority and Another

HCAL 3/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 3 OF 2013

-----------------------

J U D G M E N T

-----------------------

A. Introduction

1.This is TVB’s application for leave to apply for judicial review. 

2.The primary relief sought in the intended judicial review is to prohibit the Chief Executive in Council (“CEIC”) from making an “apprehended decision” under ss 8(1) and 10(1) of the Broadcasting Ordinance (Cap 562) (“the BO”).  The “apprehended decision” is to decide whether or not to approve three pending applications for domestic free‑to‑air television broadcasting licences.

3.It is an “apprehended decision” because the decision has not yet been made.  In fact, there is no indication at all as to when the CEIC would make the decision and, when he does make that decision, whether or not he would approve those three applications (or any of them).

4.The fact that this intended judicial review seeks to challenge a “future” decision of the CEIC forms, in my view, the core issue as to whether this court should grant leave.  I will explain more below. But first, I would set out the background.

B.  Brief background

5.For the present purposes, the brief background leading to this application can be stated as follows.

6.The power to grant a domestic free TV licence is vested in the CEIC under ss 8(1) and 10(1) of the BO.

7.An application for such a broadcasting licence has to be first made to the Communications Authority (the 1^st proposed respondent herein, which is formally known as the Broadcasting Authority).  For convenience, in this judgment I will refer to both the Broadcasting Authority and the Communications Authority as “the Authority”.

8.The Authority is under a statutory duty to consider the application and make recommendations to the CEIC regarding an application for domestic free TV licence.  See s 9(2) of the BO.

9.In between December 2009 and March 2010, three applications for the grant of a domestic free TV licence were made to the Authority (collectively, “the Applications”). 

10.Thereafter, the Authority carried out consultations with the public, TVB and ATV[1] in relation to the Applications.  Further, for the purposes of the Applications and the recommendation it has to make, it had engaged a consultant (Spectrum) to perform an economic and competition analysis.  Spectrum has produced reports (collectively “the Spectrum Reports”) to the Authority for such purposes.

11.Based on the results of the consultations and the Spectrum Reports, on 13 July 2011, the Authority submitted[2] its recommendation (“the Recommendation”) to the CEIC.  The Recommendation effectively recommends the approval‑in‑principle of the Applications.

12.But since then, TVB has requested repeatedly from the Authority and the Commerce and Economic Development Bureau (“CEDB”) for various information relating to the Recommendation and the disclosure of the Spectrum Reports.

13.Pursuant to these requests, TVB has in fact been provided with the Recommendation together with the details of the Authority’s assessment of the Applications, and redacted copies of the Spectrum Reports.  The CEDB however refuses to provide TVB with non redacted copies of the Spectrum Reports despite TVB’s further demands.

14.TVB thus complains that:

(1) It has only been provided with redacted copies of the Spectrum Reports.

(2) But even looking at the redacted copies only, there are already many fundamental errors and incorrect analyses contained in the Spectrum Reports.  Some of these errors relate in particular to the data and information concerning the size of the market and the revenue generated from TV advertisings.

(3) It, being the major stakeholder in the domestic free TV licence market, has not been fully or properly consulted in the Authority’s consultation process, including the compiling of the Spectrum Reports and the Authority’s assessment of these reports, before the Authority made the Recommendation.

15.TVB has conveyed these complaints to CEDB and demanded (by a letter dated 12 December 2012) the Authority to revise or withdraw the Recommendation.

16.The Authority has not responded to TVB’s said demand.

17.Hence, on 3 January 2013, TVB took out the present leave application for judicial review.

C.  The grounds of the intended judicial review

18.Based on the above background, TVB advances six grounds in support of the intended judicial review in the Form 86, which are as follows[3]:

(1) Ground 1: the Recommendation is unlawful because (a) it contains material errors of fact; (b) it is premised on errors of law; (c) irrelevant considerations have been taken into account; (d) relevant considerations have been ignored; and (e) the Recommendation is irrational[4];

(2) Ground 2: the exercise of the Authority’s powers was tainted by procedural unfairness[5];

(3) Ground 3: the Authority’s consultation policy is itself unlawful[6];

(4) Ground 4: the Authority has failed to apply and follow its own policy on consultations[7];

(5) Ground 5: TVB had a (procedural) legitimate expectation of being meaningfully consulted on any new licence application and this expectation has been breached[8]; and

(6) Ground 6: the Authority and the CEIC have acted unlawfully in refusing to provide the TVB with full (ie unredacted) copies of the Recommendation, the Spectrum Reports and the instructions and/or terms of reference given to Spectrum[9].

19.TVB seeks the following principal reliefs in the intended judicial review:

(1) Prohibition to prevent the apprehended decision of the CEIC to be made under ss 8(1) and 10(1) of the BO.

(2) A declaration that the Authority has failed to conduct a lawful consultation process leading to the Recommendation.

(3) Alternatively, certiorari to quash one or more of the following:

(i) The decision of the Authority not to afford any or sufficient consultation with TVB in the performance of its functions under the BO relative to the Applications;

(ii) The policy of the Authority expressed in and evidenced by the document entitled: “A Guide to the Consultation Process of the Communications Authority in Relation to Television Programme Service Licences”, (the Authority’s Consultation Policy) dated February 2010 and amended in April 2012; and/or

(iii) The decision made by the Authority to reject TVB’s request to revise or withdraw the Recommendation;

(iv) In any event, the respective decisions of the Authority and the CEIC in failing to provide TVB with inter alia (1) full, un-redacted copies of the Recommendation, (2) the Spectrum Reports, and (3) the instructions and/or terms of reference given to the consultant.

D.  Should leave be given?

20.As can be immediately seen, all the grounds raised in support of the intended judicial review and the reliefs sought (other than the prohibition) are related to complaints about the interlocutory and preparatory procedures leading to the Recommendation and the Recommendation itself (which, as accepted by Mr McCoy, is also not a decision[10]).  Further, even the prohibition sought is similarly premised on these complaints but not an extant final decision.  For convenience, I would collectively refer to these complaints as the “alleged interlocutory wrongs”.

21.In other words, there are no substantive final decisions which are under challenge in the intended judicial review.  The only relevant substantive decision is the CEIC’s decision, which is yet to be made.

22.However, it is trite that, save in exceptional circumstances, judicial review is focused upon ultimate actions or decisions with substantive legal consequences.  As said by Carnwath LJ in R (Shrewsbury and Atcham Borough Council) v Secretary of State for Communities and Local Government[11]at paragraphs 32 and 33:

“32. Judicial review, generally, is concerned with actions or other events which have, or will have, substantive legal consequences: for example, by conferring new legal rights or powers, or by restricting existing legal rights or interest.  Typically there is a process of initiation, consultation, and review, culminating in the formal action or event (“the substantive event”) which creates the new legal right or restriction. For example, the substantive event may be the grant of a planning permission, following a formal process of application, consultation and resolution by the determining authority.  Although each step in the process may be subject to specific legal requirements, it is only at the stage of the formal grant of planning permission that a new legal right is created. 

33. Judicial review proceedings may come after the substantive event, with a view to having it set aside or ‘quashed’; or in advance, when it is threatened or in preparation, with a view to having it stayed or ‘prohibited’.  In the latter case, the immediate challenge may be directed at decisions or actions which are no more than steps on the way to the substantive event.  In the planning example, judicial review may be directed at a local authority resolution to grant permission while it is still conditional on, say, the completion of a highways agreement, even thought the resolution can have no legal effect until the issue of the formal permission.” (emphasis added)

23.Similarly, in adopting R (Shrewsbury and Atcham Borough Council, Lam J (as he then was) recently in ATV v Chief Executive in Council[12] has also saidthese at paragraphs 19 to 22:

“19. In the present context, the decision that would have substantive legal consequences is the determination of the CE in C, not the recommendation by the Authority. Although there could be cases where challenge may be brought in respect of decisions or actions which are no more than steps on the way to the substantive event (see para 33 of Shrewsbury and Atcham BC v Secretary of State) it is a matter of this court’s discretion with regard to the circumstances of the case before it to decide whether such challenge should be entertained, see張德榮對政制及內地事務局局長 HCAL 45/2011, 11 July 2011.

20. In Financial Secretary v Wong (2003) 6 HKCFAR 476, Litton NPJ said at para 93,

‘It is not every decision by a decision maker which is susceptible to review: were it otherwise the functioning of the executive arm of government and of statutory bodies and tribunals would be ensnared in multiple applications in the courts.’

21. After referring the passage from Wade and Forsyth, His Lordship continued at para 94,

‘The emphasis here is on the decisive nature of the exercise of power.’

22. In the same case, Bokhary PJ said at para 14,

‘The courts’ judicial review jurisdiction is of a supervisory nature.  This extremely important jurisdiction is not meant for the purpose of micro-managing the activities of subordinate tribunals or administrative decision-makers.  It should hardly ever be exercised to review decisions that go only to procedure rather than to the end result.’ ”

24.This strict approach of the court in not to entertain challenges of intermediary or preparatory steps in the decision making process has been repeatedly approved and followed in Hong Kong in judicial review cases[13].

25.These relevant principles governing when the court may entertain challenges of intermediary or preparatory steps by way of judicial review have been helpfully summarised by Ms Teresa Cheng SC (together with Mr Abraham Chan) in their skeleton for the Authority as follows:

(1) Judicial review focuses on ultimate actions with substantive legal consequences and a decisive or determinative effect[14].

(2) The supervisory jurisdiction of the court is not to micro‑manage the administrative actions of public bodies and the court must be vigilant against doing so[15].

(3) Intermediate steps should normally only be reviewed as part of the entire process after the determinative and ultimate action or decision is taken[16]. For example, where a challenge is based on an allegation of an unfair consultation process, it has been said that, unless the preliminary “decision” has a permanent judicial effect on the person affected, the court should not entertain such a challenge, in particular, as it is usually difficult to judge whether the process is so materially unfair before the process has ended[17].

(4) Courts will not review procedural “decisions” or intermediate steps save in exceptional circumstances, such as where the decision has substantial legal consequences and will cause clear and otherwise irretrievable prejudice to the applicant[18].

(5) Errors of fact in the procedural “decision” do not of themselves generally amount to exceptional circumstances[19].

(6) Any alleged unfairness must be clearly shown.

26.These principles are not disputed.

27.In light of the above principles, even if (but without deciding) the grounds in support of the interlocutory wrongs are reasonably arguable[20], the pertinent question that needs to be asked at this leave stage is whether it is reasonably arguable that there are exceptional circumstances to justify the court’s intervention by way of judicial review.

28.For this question, I am of the clear view that this is not such a case in light of the following:

(1) The CEIC has yet to make a decision whether to approve the Applications or not. The Recommendation is only advisory in nature, and the CEIC is not bound to follow it. He has an unfettered discretion under s. 10 of the BO to make whatever decision he thinks appropriate[21]. In the premises, TVB simply cannot show that at this stage, its interest has already been seriously affected or prejudiced because of the alleged interlocutory wrongs.

(2) TVB’s interest is not clearly or irretrievably affected by these interlocutory wrongs is further underlined by the following. As fairly accepted by Mr McCoy: (a) before the CEIC makes his final decision, TVB is entitled and free to represent to the CEIC all the complaints it has now raised in the intended judicial review regarding the faultiness of the Recommendation and its consultation process; and (b) after hearing these submissions, the CEIC may approve or disapprove the Applications, or (if he thinks appropriate) remit the Recommendation back to the Authority for reconsideration in light of those complaints.  As such, I cannot see how it could reasonably be contended that the interlocutory wrongs would or have caused substantive legal consequences or clear and irretrievable prejudice to TVB.

29.However, Mr McCoy seeks to argue that there are the following exceptional circumstances in the present case which justify the court to intervene at this stage.

30.First, he says the legislature must have intended the CEIC to make a decision based on a lawful Recommendation.  If the court is to allow the CEIC to proceed to make the final decision notwithstanding the unlawful Recommendation (given those alleged interlocutory wrongs), it would have the consequence of effectively endorsing the CEIC to make an unlawful decision.

31.I am not convinced by this argument. 

32.Even if (also without deciding it now) Mr McCoy is correct to say that the CEIC can only make a decision based on a recommendation that has been lawfully made, TVB is entitled to seek to quash the CEIC’s decision on this very basis later by way of judicial review.  Therefore, there is no question that there is endorsement of CEIC’s decision even if it is unlawfully (as contended) made.  Further, TVB’s right to challenge the CEIC’s decision would not in any way be affected or diminished by the court not granting leave to judicial review these interlocutory actions now.  In other words, no substantive legal consequences and irretrievable prejudice would be resulted from these interlocutory wrongs.

33.Second, Mr McCoy says, given the procedural wrongs as indentified in this application, TVB has lost a fair and full opportunity to properly persuade the Authority to make a recommendation in the way TVB has wished.  Therefore, even if it could submit all its arguments and complaints to the CEIC before a decision is made, TVB has lost the said first and prior opportunity to persuade the Authority, which it is entitled to have under the BO.  Looked at it in another way, the TVB should have two opportunities to make representations on such an important matter (one in the Authority’s proper consultation process for making a recommendation, and the second to the CEIC before the decision is made). But now, given the alleged interlocutory wrongs, it effectively only has one.  This, Mr McCoy further submits, is a serious prejudice suffered by the TVB.

34.I am equally not persuaded.

35.It has not been shown or submitted to me what material submissions or representations TVB would have been able to make to the Authority in the consultation process, but which it would not now be able to do so before the CEIC.  In other words, as mentioned above, whatever TVB can represent to the Authority, it could also submit to the CEIC.  In the premises, the suggestion of prejudice is more apparent than real, and without substance.

36.In any event, assuming TVB can show some forms of prejudice that have been caused to it by the interlocutory wrongs, such prejudice is not irretrievable.  As I have repeatedly emphasised, TVB is entitled to apply for judicial review seeking to quash the CEIC’s decision after it has been made on the same basis.  No irretrievable prejudice is thus suffered by TVB by reason of the alleged interlocutory wrongs[22].

37.Third, Mr McCoy says TVB has committed to invest some $6b in its television business as a result of the earlier interim review conducted by the Authority.  At that time, the Authority did not indicate that it would consider (as it did now) opening up the domestic free TV market for additional licensees.  As a result, TVB has a legitimate expectation (given its very significant financial commitment) that it should be properly, fairly and comprehensively consulted on this very important question as to whether, and if so, how many new licensees should be approved to enter the market.  The alleged interlocutory wrongs therefore have a significant impact on TVB’s said financial interest, and have infringed on its legitimate expectation.

38.There is also nothing in this contention.

39.As far as I can see, the said financial commitment and allegation of legitimate expectation add nothing further to TVB’s earlier arguments.  In substance, all TVB is saying under this contention is still that it should be entitled to a fair consultation, and because of the alleged interlocutory wrongs, no such fair consultation has been conducted by the Authority.  As such, it has suffered prejudice.  However, for the same reasons I have explained above, I do not accept that TVB has suffered any substantive adverse legal consequences or clear or irretrievable prejudice at this stage by reason of the alleged interlocutory wrongs.

40.In the premises, none of the matters advanced by Mr McCoy affect my views set out in paragraph 28 above. 

41.I have therefore come to the clear view that the court should not entertain the intended judicial review before the CEIC has made the decision.

42.In light of this conclusion, it is unnecessary for me to consider the questions (which have also been raised in this leave application) as to (a) whether TVB is out of time in making the present application, and (b) if so, whether extension of time should be granted by the court.

E.  Conclusion

43.For the above reasons, I refuse this leave application.

44.I would like to further stress one point. Although I have come to this conclusion on the basis of assuming (but without deciding) that the grounds raised about the alleged interlocutory wrongs are reasonably arguable, this judgment should not be read as if I have decided that those grounds are reasonably arguable.

45.I would also make an order nisi that there be no order as to costs in this application.  Unless any of the parties applies to vary it, the order nisi shall become absolute 14 days from today.

46.It remains for me to thank counsel for their helpful assistance in this matter.

Mr Gerard McCoy SC leading Mr Timothy Parker, instructed by Norton Rose Hong Kong, for the applicant

Ms Teresa Cheng SC leading Mr Abraham Chan, instructed by Eversheds, for the 1^st proposed respondent

Ms Eva Sit, instructed by the Department of Justice, for the 2^nd proposed respondent