Francis Cheung and Another v. Insider Dealing Tribunal

CACV000157B/1999

CACV 157/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 157 OF 1999

(ON APPEAL FROM HCAL 40/1998)

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Coram: Hon Mayo VP, Leong JA and Beeson J in Court

Date of Hearing: 16 May 2000

Date of Judgment: 16 May 2000

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J U D G M E N T

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Hon Leong JA:

1. This is an application for leave to appeal to the Court of Final Appeal. The applicants were found guilty of insider dealing by the Insider Dealing Tribunal. The applicants sought by applying for judicial review in the Court of First Instance to quash the Tribunal's decision. They alleged that one member of the tripartite Tribunal had discussed the Tribunal's deliberations with an outsider and with one of the implicated persons and had sent copies of the note of one member to that implicated person, thereby committed a breach of confidentiality. The applicants also alleged that the member was in dereliction of duty in that he failed to communicate to the other two members his dissenting views, that the member was guilty of misconduct and that the Tribunal was biased. The Court of First Instance dismissed the application. The applicants then appealed to this court but the appeal was dismissed. The applicants now seek leave to appeal to the Court of Final Appeal. Reliance was placed on both s.22(1)(a) and 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance that the appeal lies to the Court of Final Appeal as of right and alternatively, this court should exercise its discretion to grant leave to appeal.

2. Today, Mr Chang, SC for the applicants indicated that the first limb of the application was not pursued and the main application was based on the second limb.

3. Relying on the second limb, the applicants contended that it was great general or public importance that the court should exercise its discretion to grant leave to appeal.

4. The applicants contended firstly that whether a duty existed on the part of a member to communicate his dissenting views to other members was a question of great general or public importance. It was submitted that the ruling of this court that there was no such duty, could be perceived as providing an excuse to any member of such Tribunal not to perform his judicial duty. It was also submitted that the present case was not simply confined to the facts of the case.

5. In our view, the ruling of this court, in the circumstances of the present case, was that the applicants had failed to prove that the member in question held a dissenting view. That being the case, that member had no dissenting view to communicate. That was a question peculiar to the facts of the case and was not of great general or public importance.

6. The conclusion that members of a tripartite Tribunal must act together, be given the opportunity to deliberate together before reaching a conclusion and must act fairly had not established there was a duty for a member to express his dissenting views to the other members of the Tribunal, could not be perceived as a mandate for a member of such Tribunal to act in dereliction of duty. That cannot be a question of great general or public importance which has to be decided by the Court of Final Appeal.

7. The applicant's allegation of misconduct centred on the member disclosing the deliberations of the Tribunal to an outsider. The applicants alleged that the member had thereby committed serious misconduct, possibly a criminal offence. That was a question peculiar to the circumstances of the case. No generalization could be derived from his misconduct, if any, for any general principle to be formed as to what level of misconduct would be sufficient to invalidate a decision of the Tribunal since this depends on a number of elements, such as the nature of the Tribunal and the nature of the misconduct. That could not be a question of great general or public importance.

8. On the question of bias, this court concluded on the facts that there was no real danger of bias. That conclusion was reached by applying the test in Gough. The applicants had not challenged that the wrong test had been applied. Nevertheless, they contended that whether the court had a discretion to uphold a decision notwithstanding evidence of real danger of bias was of fundamental general or public importance. An equally important question was how the court was to exercise such discretion if there was such discretion.

9. In our view, these questions did not fall for consideration in the present case since the court's conclusion was that there was no real danger of bias.

10. The last point of great general or public importance raised by the applicants were that there was a need for guidance from the Court of Final Appeal on the conflict between the fundamental principle that justice must be seen to be done and the modern trend to seek to do justice as economically as possible.

11. In our view, conflicts only arose where bias was found. The proposition in Locabail is that a balance should be struck between setting aside for tenuous bias and waste of resources and delays before setting aside a judgment. It is therefore not in every case of bias that the court should set aside a judgement. As this court had concluded, there was no bias or real danger of bias, there was no conflict to be resolved or balance to be struck between two conflicts. There was no question in this respect for the Court of Final Appeal to consider. On the "or otherwise" point, the case of Cheng Lai-kwan and Nan Fung Textiles Ltd MP No. 13 of 1998 (Civil) was referred to for the proposition that the discretion in s. 22(1)(b) avails the applicants, in that the applicants had the liability to forfeit profits from insider dealing and to pay penalty amounting to three times that amount. There was, it was submitted an utmost probability that the loss suffered by the applicants would be in excess of $1 million and in these circumstances, the Court of Appeal would as a general rule exercise its discretion to grant leave.

12. We do not think that proposition is substantiated. In fact what has been decided is that to grant leave on the "or otherwise" point should only be done in exceptional circumstances and we do not find the present case falls within exceptional circumstances. In our opinion the applicants have not been able to show that their application falls within the second limb of s. 22(1)(b). The application must be dismissed with costs to the respondent.

Representation:

Mr Denis Chang SC and Mr Wong Yan-lung, instructed by Messrs Szeto and Yeung, for the Applicants

Mr Nicholas Cooney, S.G.C., instructed by the Secretary for Justice for Financial Secretary