Wong Sun v. The Insider Dealing Tribunal
Read the full judgment text of CACV 153/2000 on BabelCite. This Court of Appeal judgment was delivered on 3 November 2000.
1. By a notice dated 30 November 1998 and a subsequent amended notice dated 16 December 1998, the Financial Secretary pursuant to s. 16(2) of the Securities (Insider Dealing) Ordinance, Cap. 395 ("the Ordinance") required the Insider Dealing Tribunal ("the Tribunal") to conduct an inquiry to determine whether there has been insider dealing in the securities of a listed company called Hanny Holdings Limited ("the company") by the appellant Wong Sun and the other persons named in the notices, duri
Cited by 3 cases
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CACV000153/2000 CACV 153/2000 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO 153 OF 2000 (ON APPEAL FROM THE FINDINGS OF THE INSIDER DEALING TRIBUNAL) ______________________________________
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________________________________________ Coram: Hon Mayo Ag CJHC, Rogers VP and Leong JA and in Court Date of Hearing: 28 September 2000 Date of Judgment: 3 November 2000 ______________ J U D G M E N T ______________ Hon Leong JA: 1. By a notice dated 30 November 1998 and a subsequent amended notice dated 16 December 1998, the Financial Secretary pursuant to s. 16(2) of the Securities (Insider Dealing) Ordinance, Cap. 395 ("the Ordinance") required the Insider Dealing Tribunal ("the Tribunal") to conduct an inquiry to determine whether there has been insider dealing in the securities of a listed company called Hanny Holdings Limited ("the company") by the appellant Wong Sun and the other persons named in the notices, during the period 11 July 1994 to 2 August 1995 and to identify the insider dealer and the amount of profit gained or loss avoided as a result of such insider dealing. 2. After 74 days of hearing during the period 10 May 1999 to 20 January 2000, the Tribunal on 10 April 2000 found the dealings in the securities of the company between 11 July 1994 and 1 September 1994 and between 20 January 1995 and 6 February 1995 constituted insider dealing. The Tribunal also identified the appellant as one of the insider dealers. 3. On 15 June 2000 the Tribunal made the following orders against the appellant:
4. The appellant appeals against the findings of the Tribunal and seeks to set aside the orders of the Tribunal. 5. The grounds of appeal are:
6. To appreciate how the Tribunal came to refuse both applications, a brief review of the history of the proceedings of the inquiry is necessary. 7. In early 1999, based on the evidential information available to the Tribunal at that time, the Tribunal determined the implicated persons in the inquiry should be the appellant and the other persons named in the Financial Secretary's notices. On 12 February 1999 the Tribunal dispatched "Salmon Letters" to the implicated persons giving them notice of the inquiry. 8. The inquiry hearing was fixed to commence on 3 May 1999. On 5 March 1999, the Tribunal conducted a preliminary hearing. At this hearing, the appellant's counsel sought an adjournment of the commencement of the substantive hearing. Counsel informed the Tribunal that the appellant had been suffering from diabetes and his condition had deteriorated to the extent that it was affecting his kidneys, eyes and nerves. As a result, the appellant required chemo-dialysis treatment three times a week. Counsel sought more time to prepare the case for the appellant. The Tribunal postponed the commencement of the substantive hearing to 10 May 1999. The extension was granted largely to give the appellant extra time to fully instruct his legal advisers. 9. When the proceedings commenced on 10 May 1999, counsel for the appellant informed the Tribunal that the medical condition of the appellant persisted. On 11 May 1999, a report from psychiatrist Dr Chung was placed before the Tribunal. Dr Chung stated in the report that the appellant was mentally fit to attend the inquiry and was able to understand his circumstances and express his ideas and feelings although his memories might be impaired. Dr Chung said that the appellant normally went daily to his office for two hours but on the days he was to receive chemo-dialysis treatment, the appellant only went to his office for one hour. Dr Chung's opinion was if the duration of the inquiry session was short and the appellant was allowed ample rest, the appellant could defend himself in the proceedings. Counsel for the appellant informed the Tribunal that the appellant had no desire to give evidence believing that his poor memory of events would render the exercise futile. No adjournment of the proceedings was sought. 10. The inquiry proceeded from 11 May 1999 without mishap. The appellant was seen attending the hearings on several occasions accompanied by a person who appeared to be his nurse, staying there for an hour or so on each occasion. 11. On 25 August 1999 (46th day of the hearing) the Tribunal considered it could be some time before information about the appellant's latest medical condition could be obtained and postponed the question of whether the appellant would attend to give evidence to the stage when all the other implicated persons had completed their case. Nevertheless, counsel for the appellant informed the Tribunal that the appellant would not give evidence before the Tribunal, unless he was compelled to do so. 12. On 30 August 1999, the Tribunal expressed its concern about the possible prolonged delay to the proceedings if the Tribunal were to wait for the appellant to become medically fit to give evidence, especially when it was not known when the appellant would receive a kidney transplant. 13. On 8 September 1999, counsel for the appellant informed the Tribunal that the appellant's express instruction was he would prefer not to give evidence because he did not think he could withstand the pressure and intensity of examination and he had not been able to read the documents and remember them. Counsel also told the Tribunal that the appellant felt that going to the witness box would be an ordeal for him and he did not express a wish to give evidence. Counsel told the Tribunal that he had no instruction to apply for an adjournment to see if the appellant could become better in the meantime. 14. On 9 September 1999, counsel for the appellant informed the Tribunal that he had medical advice from Dr Tam that after a kidney transplant operation, because of the possibility of rejection, the patient was required to remain in hospital for two weeks and kept under constant care for two weeks. Thereafter a full observation period of 6 months was necessary. The Tribunal granted an adjournment until 4 October 1999 pending the prospect or the outcome of the appellant's kidney transplant operation and a full medical report to see if the appellant would be fit to give evidence by then. 15. On 4 October 1999, counsel for the appellant informed the Tribunal that the appellant received a transplant on 22 September 1999 in a Mainland hospital. A medical certificate from the hospital dated 3 October 1999 stated that the appellant's physical condition was still bad and he was still isolated for observation and treatment. Counsel applied for an adjournment to enable the appellant to recover and have an opportunity to give evidence. 16. On 23 October 1999, the Tribunal received oral evidence from Dr Tam who had been treating the appellant since his return to Hong Kong after his operation in the Mainland. Dr Tam told the Tribunal that the appellant had diabetes complications and required anti-rejection therapy; rejection could occur within 6 months after operation but the critical period was first 3 months. Dr Tam was unable to say when the appellant would be fit to testify. However, Dr Tam told the Tribunal that it might be possible for the appellant to give evidence by video link up from his home or a suitable place but Dr Tam said he needed a month to see if the appellant's condition could be controlled for that purpose. Counsel for the appellant informed the Tribunal that the appellant still wished to give evidence. 17. On 26 October 1999, the Tribunal considered that it might be possible for the appellant to give evidence by this route and decided to give the appellant a further opportunity to regain his strength sufficiently to give evidence. The hearing was adjourned to 20 November 1999 for a further report by Dr Tam on whether the applicant would by then be in a sufficiently stable condition to give evidence. The Tribunal also suggested ways in which the appellant could give his evidence without impugning on his medical condition, such as imposing a reasonable time limit for questioning the appellant and to give evidence by video linkage from a center or from his home. 18. On 20 November 1999, Dr Tam informed the Tribunal that the appellant was admitted to hospital on 3 November 1999 for a number of complications arising from his diabetes condition and unhealed abdominal wound but was discharged on 9 November 1999. Dr Tam did not consider the appellant fit for giving evidence. Dr Tam was uncertain if the appellant would be able to give evidence by the end of the year or before the Chinese New Year. Counsel for the appellant informed the Tribunal that despite his condition, the appellant still wished to give evidence. Counsel applied for an adjournment until such time as the appellant was able to give oral evidence. 19. The Tribunal refused the application. In its ruling, the Tribunal considered the question of delay if an adjournment was granted and stated as follows:
20. On the question of whether there would be injustice to the appellant if an adjournment was refused, the Tribunal said this:
21. The Tribunal adjourned the matter to 18 December 1999 for final submissions to be made by the parties and at the same time indicated that the appellant would be given the opportunity of submitting a statement that could be prepared at his leisure with the assistance of his counsel. On the same day when this ruling was delivered, counsel for the appellant indicated that an application would be made to the Tribunal for a stay of the inquiry proceedings. 22. On 18 December 1999, the Tribunal heard the application to stay. The application was principally made on the ground that in view of the appellant's critical health condition that prevented him from being able to give evidence at a most critical stage of the hearing, it would not be fair to the appellant for the inquiry to proceed. 23. On 24 December 1999, the Tribunal delivered its ruling refusing the application to stay for these reasons: Firstly, although the appellant had been in ill health, no suggestion had been made that he had been unable to instruct his legal team. Secondly, the appellant had been represented by solicitors and counsel who were able to participate in the proceedings and cross-examine witnesses on the appellant's behalf. Thirdly, the Tribunal had received a substantial amount of evidence from all persons who were at or near the center of the events and this broad spectrum of testimony had been tested by the appellant's legal representatives and the appellant was entitled to call evidence to supplement this broad amount of evidence. Fourthly, the inquiry was substantially based on documents which themselves may be relied on by the appellant's counsel to argue for the appellant's defence. Fifthly, the appellant was given an opportunity in interviews with the SFC to answer a broad range of questions concerning his management and dealings when he was the company chairman. The record of the interviews constituted a large amount of evidence for the Tribunal to consider. Lastly, it had not been demonstrated by counsel for the appellant that there was any area of the inquiry where the absence of the appellant's oral testimony would be so prejudicial to his defence that it will be beyond the power of the Tribunal to preside over and conduct a fair hearing. 24. Final submissions were made in January 2000. On 12 January 2000, Counsel for the appellant raised the issue for the first time that the appellant sold the shares in the company to raise funds to inject into the company because the company needed funds. 25. On 10 April 2000 the Tribunal delivered its report and made the findings which the appellant now seeks to set aside. 26. Miss Lisa Wong for the appellant submits that s. 16(5) of the Ordinance, the relevant part of which reads:
requires the Tribunal to first give the appellant an opportunity to be heard before the Tribunal could find the appellant an insider dealer. She submits that the appellant was not given the opportunity to be heard by reason of the Tribunal's refusal to adjourn on 20 November 1999. 27. Counsel relies on R v Cheshire County Council and another, ex parte Cherrih unreported CO/0188/96 and submits that the Tribunal's discretion regarding adjournment must be subject to the right to be heard. 28. In Cheshire, regulation 30 the Special Educational Needs Tribunal Regulations 1994 gives to the parties in an appeal before the Tribunal the right to be heard subject to a limit on the number of witnesses they may call and regulation 25(5) thereof gives the Tribunal the discretion to adjourn the hearing from time to time. Sedley J held "... that it is only where that limit is reached that the parent's rights end and the Tribunal's discretion begins." 29. As to the meaning of "opportunity to be heard", Miss Wong relies on the following passage taken from the judgment of the Privy Council in Kanda v Government of Malaya [1962] AC 322 at p 337:
30. Miss Wong submits that the appellant was required to go on chemo-dialysis treatment because of his serious kidney problem he had been suffering since 1996. When the substantive hearing commenced, the appellant was only able to go to his office at the most for two hours a day. Because the inquiry involved transactions in 1994 - 95 and large amount of documents were involved and the appellant had difficulty in perusing documents, his legal advisers were unable to obtain any meaningful instructions from him. The appellant did not expect to recover from his illness unless a kidney transplant was viable and he had no desire to give evidence. His transplant in September, 1999 gave him the hope of recovery. He changed his mind and desired to give evidence. But his health condition still made it incapable for him to testify at that time. 31. Counsel submits that the Tribunal has accepted the medical evidence in this respect and on 4 October 1999 adjourned the inquiry for the appellant to regain health. But when application was made on about 23 October 1999 for further adjournment because on the undisputed medical evidence the appellant was still physically incapable to testify, the Tribunal refused the application. The appellant was prevented by his ill health from giving evidence and that was no fault of his own. The Tribunal in refusing the application for adjournment had deprived him of the opportunity to be heard. 32. Miss Wong further submits that the Tribunal's suggestion that the appellant could give his evidence by way of a statement prepared by him with the assistance of his counsel, containing the matters he believed should be made known in his defence, or by a statement in any form, was in substance not an opportunity for the appellant to give evidence. Because, as the Tribunal has accepted, it would not be reasonably possible to expect the appellant in his ill health to prepare and sign a detailed written statement of any complexity if the statement was to be prepared from scratch or to be in a position to submit any written evidence. The deprivation of the opportunity to be heard debarred the Tribunal from making any findings under s. 16(3). 33. On the Tribunal's exercise of discretion to refuse the application for adjournment, Miss Wong submits that although the Tribunal believed that considerable time had been allowed for the appellant to regain his health, the Tribunal failed to consider the fact that the appellant needed 6 months observation after his kidney transplant operation and complications might arise during that period. Secondly, the appellant's case was that some of the securities transactions under inquiry were his friends' transactions and without the appellant's oral testimony he would be prejudiced in his defence. The defence under s. 10(3) of the Ordinance was available to the appellant and this was also prejudiced by the lack of his oral evidence. Thirdly, further adjournment of the inquiry would have little impact in terms of delay since the transactions under inquiry took place in 1994 - 95 and the inquiry did not start until 1998. The inquiry had proceeded without interruptions except a break in September/October 1999 not necessitated by the appellant. The only adjournment appellant asked for was on 4 October 1999. Fourthly, the Tribunal had failed to have regard to the wish of implicated person Sanrita Wong to question the appellant for the purpose of her defence. 34. Miss Wong relying on R v Howson (1981) 74 Cr. App. Rep. 172 and R v Holgate (No. 1) (1996) 3 HKC 315 submits that the proceedings should be stayed because appellant was prevented from having a fair inquiry as a result of his inability to give oral evidence that some of the transactions were in fact his friends' and he had injected $17 million into the company in September 1994 and therefore had a defence under s. 10(3) of the Ordinance. Miss Wong submits that the Tribunal recognised that the appellant was incapable of working for more than a short time a day and even when he was fit it would have taken him weeks to prepare his evidence. The SFC interview records, representation by counsel at the inquiry, opportunity to call witnesses and to adduce documentary evidence would not be sufficient to mitigate the loss of the appellant's oral testimony. The Tribunal should not have found that the appellant had no defence under s.10(3) because there was no evidence from the appellant who was prevented by his illness to give evidence. The appellant suffered prejudice in not being able to give oral evidence. 35. Mr Lunn SC for the respondent submits that the opportunity to be heard is not limited to the opportunity to give evidence. The appellant was served with the "Salmon Letter" and a summary of evidence to be adduced in the inquiry. He was aware of the case against him. He was allowed to have legal representatives at the inquiry and he was so represented. Counsel acting for him cross-examined witnesses at the inquiry and made final submissions on his behalf. At the early stage of the inquiry, when the appellant's condition was relatively better, he could have come to give evidence or asked the Tribunal to allow his evidence to be taken first. But the appellant did not avail himself of this opportunity. It was the appellant's express instructions to his legal representatives right up to and including 8 September 1999 that he would prefer not to give evidence. The Tribunal had offered opportunities to the appellant in various ways which would enable him to state his case to the Tribunal in a viable form, such as giving evidence by video linkage or making a statement without cross-examination, or producing a statement drafted by counsel on his behalf and even just to give instructions to his counsel as to what the case was. But the appellant did not take up these opportunities. 36. On the question of stay, Mr Lunn referred to a number of cases: Tan v Cameron 1992 2 AC 205, R v Takeshi Machiya 1990 1 HKC 73 and R v Holgate (No. 1) 1996 3 HKC 315 where the principles on stay of proceedings were considered. These are criminal cases but Mr Lunn submits the same principles apply in the present case. Applying them to the present case, Mr Lunn submits that the burden is on the appellant to show that he suffered prejudice in that he did not have a fair trial. The Tribunal may however, proceed with the inquiry if there is no injustice to the appellant and for that purpose the Tribunal should consider what the appellant would have said if he had lived up to proof and take into account the extent to which the appellant's defence might have been handicapped by the absence of his evidence. 37. Mr Lunn submits the Tribunal had correctly applied these principles when it reached their conclusion to refuse the application. 38. As may be seen from the history of the inquiry proceedings, the appellant was given considerable time by the Tribunal since the commencement of the inquiry to regain his health. There was no suggestion at any time that the applicant was incapable of giving instructions to his legal representatives. No application had been made for adjournment on the ground that counsel was unable to obtain instructions from the appellant. It is obvious from Dr Chung's report which was put before the Tribunal on the 2nd day of the substantive hearing, that at that time, the appellant was not only capable of giving instructions but also participating in the proceedings by personal attendance. Indeed, the appellant was seen attending the hearings in the company of a person who could be his nurse, on a number of occasions. Counsel was able to cross-examine witnesses in the inquiry on his behalf. Such cross-examination would not normally have been possible without some instructions from the appellant. From the beginning of the inquiry, the appellant had through his counsel informed the Tribunal that because of his state of health, he had no desire to give evidence. He made his stance clear to the Tribunal on 25 August 1999 when counsel on his behalf informed the Tribunal that unless compelled, he would not give evidence. The appellant's determination not to give evidence was put beyond doubt on 8 September 1999 when his counsel informed the Tribunal that the appellant believed he could not withstand the pressure and intensity of cross-examination. He expressed no wish to give evidence. He had of his own free will chosen to abandon his right and the opportunity to give oral testimony, notwithstanding his knowledge that in the inquiry, he could be found an insider dealer by the Tribunal. That may well explain why on that occasion his counsel had no instruction to ask for an adjournment to see if he could become better in the near future. Nevertheless, the Tribunal recognised that the appellant could still change his mind as to testifying before the Tribunal and postponed the question of the appellant's attendance to give evidence until other implicated persons had completed their case. 39. Indeed, the appellant had a change of heart on the 58th day of the inquiry on 4 October 1999 and indicated to the Tribunal he wished to give evidence. The Tribunal was mindful of the requirement to give the appellant the opportunity to be heard on the one hand and the need in the public interest for finality in proceedings, in particular when there were other implicated persons involved in the inquiry and the proceedings should not be protracted. The Tribunal appreciated the physical condition of the applicant and indicated that if the appellant gave evidence, he would be allowed regular breaks, to take medicine and be examined in a manner befitting his medical condition and only to give evidence while he remained strong physically and mentally. The hearing was adjourned to see if the appellant's condition could improve in the meantime. 40. The appellant's condition remained the same on 20 November 1999 despite the kidney transplant. The Tribunal accepted Dr Tam's evidence that he was uncertain if the appellant would be well enough to give evidence after the 6 months post-kidney operation observation period. It was only in these circumstances, the Tribunal refused further adjournment. But that did not mean that the appellant had been shut off from any opportunity to put his case, to call evidence and to contest what other witnesses had said. The special procedure in an inquiry of this nature permits the Tribunal not to follow strictly the rules of evidence and the appellant was still able to put his case in a manner acceptable to the Tribunal without him giving oral evidence. The various ways of putting his case the Tribunal had suggested as being acceptable were all rejected by the appellant. I fail to see any justification for the appellant now saying that in these circumstances he had not been given full opportunity to be heard. 41. Counsel for the appellant relies on two tax cases, Rose v Humble [1970] 1 WLR 1061 and R v Sevenoaks General Commissioners and Inland Revenue Commissioner, ex parte Throne [1989] STC 560, to support her contention that the Tribunal's refusal to adjourn the hearing until the appellant was well enough to give oral evidence had caused injustice to the appellant who was entitled to be heard. 42. In Rose v Humble the taxpayer was absent at his tax appeal because of ill health. His solicitor informed the commissioner that he was suffering from coronary thrombosis and was recovering from a recent operation and would be able to give evidence in two to three months. The commissioner refused to adjourn the hearing and proceeded to deal with the matter. 43. Buckley J held that the refusal resulted in substantial injustice to the taxpayer who was entitled to have his evidence heard and considered by the tribunal. He said at p. 1071:
44. In Sevenoaks, the taxpayer was not fit to attend the hearing of his tax penalty summons. A medical certificate certified that the taxpayer was "almost incapable of speech and was not fit to answer questions." The taxpayer's evidence was considered crucial to his appeal. An adjournment for two months was granted. On the adjourned hearing date, the taxpayer's condition had not improved and he sought further adjournment. The tax inspector refused to adjourn on the ground that it was not known when the taxpayer would be well enough to attend the hearing. The hearing proceed in his absence. Morritt J held that the medical evidence which did not indicate a reasonable prospect that the taxpayer will be able to attend at a particular future time, was one of the factors to be considered in deciding whether to grant an adjournment or not. But what had to be considered was whether in all the circumstances, including the size of the claims against the taxpayer, to refuse an adjournment would give rise to an injustice to the taxpayer. His Lordship accepted if the following conditions are fulfiled, an adjournment ought to be granted to the taxpayer: (1) his inability to attend is because of ill health; (2) his evidence is reasonably necessary if his case is to be properly presented; (3) there is a reasonable prospect that the taxpayer will be able to attend an adjourned hearing at a specific reasonable future date; and (4) the other party suffered no injustice. 45. In my opinion, Humble does not apply because the recovery date of the appellant in the present case was uncertain. Equally, Sevenoaks is not applicable because on the medical evidence, there was no reasonable prospect that the appellant would be able to attend the hearing at a specific reasonable future date and the other implicated parties who had completed their case, would be anxious to have the proceedings finalized and would be prejudiced if the inquiry was prolonged indefinitely. 46. The question now seems to me, is how important is the appellant's oral evidence to his case. What then is the case of the appellant? His case was that his dealings in company shares during the first period 11 July 1995 to 2 August 1995 were to raise money to inject into the company because the company needed funds. Out of the proceeds of sale of the shares, he had put $17 million into the company. Some of the transactions in the periods under investigation were in fact the transactions of his friends Lam Ming, Ronald Lye and WS Pak and his secretary Connie Li would be able to say that that was the case. He therefore had a defence under s. 10(3) of the Ordinance because he had entered into these transactions not to make a profit or to avoid loss. It should be observed that it was at the final submission stage of the proceedings that the appellant raised these issues and put the letters of Lam Ming, Ronald Lye and WS Pak before the Tribunal. Although in his SFC interviews, the appellant did name these persons as friends for whom he transacted the shares, he did not explain how the proceeds were returned to them. There was no evidence that the appellant took steps to contact these persons to assist him in his defence. Prior to the final submission stage, the appellant never mentioned he injected $17 million into the company. My view is if he had such a defence, one would expect him to raise that at the first opportunity, if not in his SFC interview, at least earlier in the inquiry. There was abundant documentary evidence before the Tribunal and there were records of these transactions. The appellant was represented by counsel at the inquiry. An examination of the documents and a cash flow analysis of the proceeds of the transactions and cross-examination of the witnesses would have enabled him to establish his defence, if indeed he had one. The appellant's oral evidence could not be crucial. In fact, Connie Li's evidence was of no assistance to the appellant since she agreed to put her name in a number of trading accounts which in fact were the appellant's accounts. In any case, the Tribunal found overwhelming evidence that appellant used nominee accounts to deal in the shares of the company for his own benefit. 47. One of the considerations for the Tribunal in deciding to continue the proceedings without the oral evidence of the appellant is the extent to which the defence of the appellant might have been handicapped by the absence of the oral evidence of the appellant (R v Holgate). In my opinion, there was little to support the defence which the appellant said he could raise and the appellant's oral evidence would unlikely have taken it further. Although the Tribunal accepted that the appellant suffered a material handicap as a result of not being examined by his own counsel and stating his case in public, the absence of the appellant's oral evidence would not have handicapped a defence which in any case is unlikely to come up to proof. 48. The Tribunal had applied the law correctly and had considered all the relevant circumstances. Its conclusion that the proceedings should continue despite the appellant's inability to give oral evidence at the inquiry cannot be faulted. 49. I would dismiss the appeal. Hon Rogers VP: 50. I agree that this appeal should be dismissed. I only wish to add to what has already been said because of the importance of the issue raised by the appellant. 51. The kernel of the appellant's case is that he has not been given a chance to present his case. Even without regard to Section 16(5) of the Securities (Insider Dealing) Ordinance Cap. 395 which has already been set out in Leong J.A.'s judgment, the importance of a fair procedure must be paramount. A person identified as an insider dealer is liable to penalties of the most severe financial kind. He is also liable to be deprived of the opportunity of being able to be a company director for a substantial period. Whereas effort is made to try and avoid reference to the proceedings being criminal proceedings, there can be no doubt that the penalties that can be visited on an insider dealer are severe and serve as a punishment. In those circumstances I have no doubt that the standards of fairness to the accused which are applicable in criminal proceedings should be applied to proceedings in the insider tribunal in respect of persons liable to be found to be insider dealers. 52. In this case I have been troubled by the notion that there can be a balancing exercise between the interests of a person liable to be found to be an insider dealer being able to be heard and the process of the Tribunal being concluded. If there was a real danger of unfairness or of such a person not being given an opportunity of being heard, I do not accept that any such balancing exercise becomes relevant. 53. In this case, it appears that the greatest cause for concern was that by the 9th September the appellant's physical condition had deteriorated to the extent that he could not attend a hearing. Less than 2 weeks later he had a kidney transplant. After that his condition was not stable. He suffered from rejection problems. Even on the 22nd December, the doctor gave written evidence that his diabetes was such that the appellant had been noted to be confused and sometimes incoherent. Because the blood sugar levels were erratic with consequent disorder to the appellant's mental capacity, the doctor concluded that the appellant would "be unable to sustain any lengthy conversation or answer any questions of a detailed content regarding his business for the present." 54. It is not sufficient to say that the appellant had an opportunity to be heard, but that he could not avail himself of it. That, as a statement on its own, seems to me to strain both the meaning of the Section as well as fairness and justice to an extent that I would not consider right. 55. As has been pointed out in Leong JA's judgment, the appellant's instructions to his counsel changed on the 9th September. Up until that day the appellant had indicated through his counsel that he would not give evidence, unless compelled to do so. However, on the 9th September, at the close of all the other evidence, the appellant's counsel announced that his client wished to give evidence. Thereafter the appellant had never been in a fit state to be able to attend the hearings. 56. Since, on one footing, at any rate, it might be said that the 9th September was the natural time for the appellant to give evidence, the question at once arises as to whether the requirements of fairness, not to mention Section 16(5) have been met. 57. There are a number of points that arise. The first is whether the appellant had already had an opportunity to be heard prior to the 9th September. Another is as to whether the opportunities that were afforded to the appellant after the 9th September were sufficient to satisfy the requirements. The Tribunal had offered to accept evidence from the appellant in statement form and to have evidence from accountants and others. 58. In my view the period from the commencement of the hearings in May until the 9th September are relevant to this extent. As has already been said, in the early part the appellant was at least cognisant of the proceedings and the nature thereof. It is true that one of the persons who had received Salmon letters had given their evidence out of order. However, I do not place very much reliance on that because a man who stands in the position of an accused is entitled to see how the case against him is made out and how it develops before answering the allegations made against him. Neither do I place much reliance on the ability of the appellant to put his case when interviewed by the SFC. Anybody being interviewed in those circumstances can be expected to be cautious. 59. It is the nature of the defence that it is said could be raised coupled with the offer on the part of the Tribunal to receive evidence in statement form that in my view is crucial to this case. 60. The argument put forward on behalf of the appellant is that he could have a defence under section 10(3) of the Ordinance. That defence in summary that he entered into the transaction otherwise than with a view to the making of a profit or the avoiding of a loss was based on the premise that the appellant used the proceeds or part thereof to inject desperately needed capital into the company. The surrounding circumstances relating to the names in which the shares were held are irrelevant for the present consideration. They might go to show that the defence might, ultimately, not be believed, but the question here is whether the appellant has had an opportunity of being heard in particular in respect of this defence. 61. In my view he had. If the appellant had a defence under Section 10(3), from the time when he was first made aware of the nature of the allegations against him, the appellant must have at least informed his legal advisers of its nature. During the major part of the hearings of the Tribunal the appellant was, at the least, able to give instructions to his lawyers. It may be that much of the cross-examination of witnesses was done without reference to what the appellant might or might not say. Given the nature of that defence, the lawyers and accountants armed with the basics were or should have been in a position to prepare the basis of a statement which the appellant could have made in written form. Of course, that statement would have had to be supported by documentation, but that again should have been available to his advisers. 62. In those circumstances, it seems to me, that the requirements both of fairness and of Section 16(5) would have been satisfied. I, too therefore, would dismiss this appeal. Hon Mayo Ag CJHC: 63. I have had the advantage of reading in draft the judgments of Rogers VP and Leong JA. I agree with what they say and do not wish to add anything further. 64. As the appeal has been dismissed we make an order nisi that the respondent should have its costs.
Representation: Miss Lisa K Y Wong, instructed by Messrs Chan, Wong & Lam for the appellant Mr Michael Lunn, SC & Miss Cynthia Tang, SGC for Secretary for Justice for the respondent |