Dato Tan Leong Min and Another v. The Insider Dealing Tribunal

CACV000162/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1998, Appeal No. 162
(Civil)

(Consolidated)

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Coram: Hon Mortimer V-P, Godfrey and Rogers JJA in Court

Dates of Hearing: 15 and 16 December 1998

Date of handing down Judgment: 27 January 1999

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J U D G M E N T

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Mortimer, V.-P.:

1. The main question in this appeal concerns the role which the Insider Dealing Tribunal can fairly ask its counsel to fulfil. It is an appeal by the Insider Dealing Tribunal (the Tribunal) against the order of Sears J on 1 April 1998 in judicial review proceedings. He quashed the Tribunal's findings against the two respondents in a report sent to the Financial Secretary on 3 June 1997.

2. The insider dealing proceedings began when the Financial Secretary issued a notice under s.16(2) of the Securities (Insider Dealing) Ordinance (Cap. 395) (the Ordinance) to the Tribunal to inquire into dealings in the shares of CNPC (Hong Kong) Limited (formerly Paragon Holdings Limited) between March and May 1993. The Tribunal consisted of a High Court judge (Yam J and two lay members).

3. In January 1996 Senior Crown Counsel, Mr Davies, and two others were appointed counsel for the Tribunal under clause 18 of the Schedule to the Ordinance. "Salmon" letters were sent to the two respondents outlining the allegations against each.

4. As was their right, neither respondent chose to attend any hearing of the Tribunal but each was represented by solicitors in Malaysia throughout the proceedings.

5. The first public sitting of the Tribunal was held on 8 February 1996. Thereafter, it sat on 73 days until 16 August 1996 when it adjourned sine die. There was one final public sitting on 25 November 1996. The Tribunal's report was sent to the Financial Secretary on 3 June 1997. It did not, however, contain a calculation of profits as required by s.16(3)(c) of the Ordinance and the notice of appointment.

6. The report was also sent to the respondents who were asked to submit pleas in mitigation in writing by 18 June 1997. However, on 25 June 1997 the 1st respondent obtained leave to move for judicial review. The 2nd respondent obtained similar leave on 24 July 1997. The report was later said by the Tribunal to be only a draft because of the absence of the calculation of profits. In the event the Tribunal never completed its task.

7. So much for the public sittings of the Tribunal. The judicial review concerned not the public sittings but the Tribunal's activities in private. In particular, the role which the Tribunal required its counsel to play in its closed or private deliberations.

Counsel and the private deliberations of the Tribunal

8. In order to understand the nature of the proceedings, it is necessary to summarise the role which the Tribunal required counsel to undertake in its private deliberations. A full appreciation of the part played by counsel can only be gained by a reading of the minutes and the correspondence.

9. At a preliminary public hearing on 8 February 1996 the chairman referred to the role of counsel:

"They have been nominated by the Attorney General and then appointed by this Tribunal to act as counsel for the Tribunal. Their function is to present objectively to the Tribunal the relevant evidence, regardless of which way that evidence falls ? whether in support of, or against, any allegation of insider dealing. Counsel's function is to assist the Tribunal, to cause to be carried out such investigation or further investigation which the Tribunal requires, to research and present relevant laws and to liaise with witnesses and their legal representatives. For the aforesaid purposes, the Tribunal regularly liaises with counsel."

This gave no hint to the parties or the public of what was to happen. In the public sittings thereafter nothing was disclosed to those present or those implicated or their representatives that frequent meetings between the members of the Tribunal and its counsel were taking place - not only to discuss the administrative matters outlined in the statement.

10. After 8 February 1996 when the substantive public hearings were taking place, there were frequent conferences between the Tribunal and all its counsel. Administrative matters were discussed but by 17 May 1996 the nature of the discussion was enlarged. The chairman announced that "the purpose of this meeting was to have a 'mid-trial' assessment of the evidence against Mr W". Counsel were asked for a summary of the evidence before the next meeting. At the meeting the evidence of other witnesses was reviewed and discussed. On 27 May 1996 counsel were asked "to assist the Tribunal in writing the report" by providing a summary of the witnesses' evidence compared with their statements. On 28 May, 1 July and 3 July 1996 the chairman said he would require counsel's contribution and assistance in writing the report and on 7 August 1996 he said while he was away "counsel could start writing the main parts of the report concerning Mr W" and "he would need counsel's contribution and assistance in writing the report in October".

11. The meetings continued but by 20 August 1996 Mr Peter Davies had become troubled about the role required of counsel to the Tribunal. In consequence he wrote to the chairman and raised the question "Whether counsel to the Tribunal can lawfully become involved in the judicial aspects of the inquiry and, if so, to what extent". He added a telling footnote:

"If it is decided that counsel to the Tribunal becomes fully involved then the delivery of a final submission by counsel to the Tribunal becomes nugatory and I would propose that it be waived so that time can be wholly devoted to putting together aspects of a draft report."

This prompted the chairman to deal with the point at the meeting on 21 August 1996 when according to the minutes:

"It was decided (once and for all) that the Tribunal would continue on to discuss this case with counsel but decision on the conclusion on each and every single issue would obviously rest on the Tribunal alone."

12. But the meetings with counsel continued. Evidence was discussed at length. From time to time the fairness of the procedure was discussed. It was decided that counsel should exchange submissions in spite of the footnote to the letter of 20 August 1996. On 24 August 1996 it was decided that Mr Davies should draft a letter to the parties to "remove any possible false impression the parties might have". In paragraph 7 of the draft letter it is written:

"The Tribunal has therefore decided:

(a) that it is right and proper for its counsel to continue to render assistance to it, not only to the stage when the inquiry is declared to be terminated but beyond and that counsel should also sit and deliberate with it when it is writing the Report;

(b) if that is to be the case, that it would be 'artificial' or even perhaps misleading to require its counsel to make a final written submission that closing submissions be required only of counsel to implicated persons who have given evidence;"

For reasons which do not appear, the letter was never sent. Perhaps it was because the role of counsel was still under discussion for in the minutes of 4 November 1996 there is this passage:

"(vi) The Chairman explained that his understanding was these conferences were incidental and conducive to the Tribunal in the writing of its Report after the conclusion of the evidential part of the enquiry by way of hearings. The question there and then raised was in the context of the propriety of Counsel to attend these conferences. In a sense Counsel were already assisting in the drafting of the report in attending the conferences, the purposes of which were to review evidence and to determine whether there were any gaps or areas worth exploring further. Counsel were never expected to set their pen to paper and actually write the report word by word and chapter by chapter. The Chairman reiterated what he said at the meeting on 21st August that the Tribunal sought views from Counsel but final decisions of issues rested with the Chairman and Members alone. Once Counsel had handed in their closing submissions, the Tribunal would deliberate on the findings by itself. Counsel were never expected to take part in the deliberation of the Tribunal in reaching its finding of facts."

13. After November 1996 and the final public sitting of the Tribunal, the involvement of its counsel changed. There were no further meetings. Counsel's contribution continued in correspondence. Memoranda were sent by the Tribunal asking for assistance to which its counsel replied by letter.

14. After the final public sitting of the Tribunal in November 1996, the private meetings between it and its counsel ended. There had been 37 of them. Written closing submissions were exchanged between counsel for the Tribunal and other counsel and were provided to the Tribunal.

15. The private contribution of counsel to the Tribunal continued but in correspondence. Draft chapters of the report were provided by the Tribunal to its counsel for comment and memoranda were sent to which counsel replied by letter. For example, in counsel's letter of 10 April 1997 the following passages appear:

"... obviously it will be easier and more desirable if I can see the further chapters as soon as possible, (even parts of them will be a help), so that I can give an objective view on the overall structure and cross referencing of its various features."

Later,

"The arguments posed have been dealt with by us in our reply but the chairman will have to make a ruling one way or the other with reasons."

To this, there is a footnote:

"On reflection, a further point which occurs to me is that the body of the draft report does not contain text, albeit by way of merely brief references, to the effect that W's counsel's arguments have been considered but rejected and for what reason: an example is the joint enterprise point which has not been raised or dealt with in any detailed way in any prior inquiry ..."

Finally, Mr Davies wrote an eight page letter to the Tribunal on 22 May 1997. This was 11 days before the report was sent to the Financial Secretary. As examples the following passages appear:

(a) "I do not think the criticism against L, X or C is merited for the following reasons: ... The report should therefore be slow to refer to C being a party to anything in the same way as an individual. There was no evidence that something akin to a board meeting was held so that guilty knowledge was in the minds of a majority of persons holding the rank equivalent to a director. Instead, it should refer to the knowledge of its individual officers and employees."

(b) "With regard to L and X

To level criticism at them would seem to be in contradiction of (c) on page 17 where it is stated that the Tribunal accepted the explanation given by X as to the remittance of the deposit. ...

But why does W instead not receive criticism?

...

To conclude: I think criticism of C is deserved but, on the evidence, it should be levelled at W the man in charge with whom F had the relationship and the only man who could authorise what F did. However, because the standard of proof is the criminal one, the report cannot go further than to register the Tribunal's grave concern and doubt that W was entirely free from blame. ... i.e. it must stop short of any positive finding."

(c) "Is the Tribunal justified in making this finding?

25. The standard of proof is the criminal one of beyond a reasonable doubt.

26. In the earlier draft report the Tribunal based its finding in this regard on paragraphs ... but in my view, ... are not relevant.

27. In my view the evidence is contained in ... and the report should expand on this.

28. If the agreements were bogus, (and one of them was brought into existence ex post facto), then the Tribunal may properly infer that their purpose was to conceal the real purpose of the payments to ...

29. ...

30. The analysis made by the Tribunal is ingenuous. However, none of all three counsel to the Tribunal ever tried to make anything of the figures on the notepaper. This was because of the evidential peril in doing that: no handwriting expert was called ...

31. ...

32. In my view, the report should emphasise that the Tribunal has advised itself of the dangers of relying upon ... I feel that Chapter 13 should re-state the grounds for its conclusion as follows: ..."

Seven points were then set out, each of which was adopted by the Tribunal. The letter continued in the same vein and in paragraph 46:

"As far as I can see there is still no treatment of S as an implicated person."

This pointed out to the Tribunal that although S was an implicated person there was no reference to him.

The relevant statutory background

16. The Insider Dealing Tribunal is established under Part III of the Ordinance. The main provisions relevant to the issues on appeal are as follows:

(1) The Tribunal is "statutory" and under s.16(1) is required "to inquire into the matter'. Basically therefore the procedure is inquisitorial."

(2) It has specific objectives under s.16(3) which are:

"to determine"

(a) whether insider dealing in relation to a listed corporation has taken place;

(b) the identity of every insider dealer; and

(c) the amount of any profit gained or loss avoided as a result of the insider dealing.

(3) Under s.23, the Tribunal may order payment of any profit made or loss avoided to the Government and impose a penalty not exceeding three times the above profit or loss.

(4) Additionally, there is power to ban a person identified as an insider dealer from taking part in the management of a company for up to five years.

(5) The Tribunal is not bound by the usual rules of admissibility of evidence. It may determine how evidence can be received and may determine its own procedure subject to the Ordinance.

(6) Its orders may be registered in the High Court and once registered take effect as an order of the Court of First Instance. There is a right of appeal to the Court of Appeal on law or, with leave, on fact.

(7) The sittings and representation are provided for in the Schedule as follows:

"Sittings and Representation

11. The chairman shall convene such sittings of the Tribunal as he thinks necessary for the efficient performance of its functions.

12. The chairman shall preside at all sittings of the Tribunal and no sitting shall be held unless the other 2 members are also present.

13. Every question before the Tribunal shall be determined by the opinion of the majority of the members except a question of law which shall be determined by the chairman.

14. Every sitting of the Tribunal shall be held in public unless the Tribunal considers that in the interests of justice a sitting or any part thereof should not be held in public in which case it may hold the sitting or part thereof in private.

15. The hearing of an application to the Tribunal to hold a sitting or part thereof in private shall be held in private.

16. A person whose conduct is the subject of an inquiry or who is implicated, or concerned in the subject matter of an inquiry shall be entitled to be present in person at any sitting of the Tribunal relating to that inquiry and to be represented by a barrister or solicitor.

17. For the purposes of paragraph 16 the Tribunal shall determine whether the conduct of any person is the subject of the inquiry or whether a person is in any way implicated or concerned in the subject matter of the inquiry.

18. The Tribunal may appoint a legal officer nominated by the Attorney General, a barrister or a solicitor to act as counsel for the Tribunal.

19. In paragraph 16 'sitting' does not include any meeting of the Tribunal which is held for the purpose of deliberating on any question before the Tribunal."

The issue

17. The issue for our determination is whether the judge was right to quash the findings in "the report" on the basis of his main conclusions which were as follows:

"2. After the public hearing began, the Chairman adopted a procedure deliberately designed to exclude the public and parties from important decisions and discussions relating to the inquiry.

3. The Chairman used the counsel to the Tribunal to such an extent that they became part of the Tribunal.

4. Up to the time when the public hearing substantially finished in August 1996, he was encouraging counsel to draft the report.

5. From the conclusion of the public hearings in August 1996, the Tribunal received evidence which was never disclosed to the parties and he secretly evaluated the evidence with counsel until the end of the year.

6. When the Tribunal began to write the report, it secretly received comments from counsel and evidence from some parties.

7. The Tribunal in effect conducted an inquiry which breached the basic rules of fairness and openness and although the Chairman was warned about his unusual procedures, he nevertheless continued with them."

The appellant's case

18. Mr Geoffrey Ma SC, for the Tribunal, raises four broad points. He submits that the judge was wrong to quash the findings because:

(1) The participation of counsel in the meetings of the Tribunal did not exceed that which was a permissible role for counsel for the Tribunal. The judge's finding to the contrary that the procedure was unfair and in breach of the rules of natural justice and fairness was wrong in law.

(2) The Tribunal was entitled to receive the evidence complained of other than in a public sitting. And if this is wrong, the evidence was provided to all other parties apart from the respondents who were not entitled to receive to evidence as they chose not to attend and take part in the hearings.

(3) There is no evidence upon which the judge could find that the Tribunal had prejudged the issues. Insofar as the judge's order was based upon a pre-judgment the order ought not to have been made.

(4) The respondents were not unfairly treated by reason of not being provided with documents, the new evidence and the draft report. They were not entitled to them either generally or because of their non-attendance and non-participation in the inquiry.

In addition, a number of miscellaneous matters were raised during the hearing of the appeal which are not determinative of it. I will make brief reference to them in due course.

The role of counsel for the Tribunal

19. Mr Ma points out that counsel is not independent and is not prosecuting counsel. He is counsel for the Tribunal in inquisitorial proceedings and, therefore, he submits, it is legitimate for the Tribunal to use counsel for whatever purpose it wishes, short of actually taking the decisions or making related findings. Therefore, the requirement that counsel should summarise and evaluate the evidence and make submissions in private and even comment upon the draft report for the assistance of the Tribunal are perfectly legitimate activities.

20. Mr Ma conceded to certain provisos. The first is that if a new point was made in private, the parties must be informed so that they could make their submissions. Second, that counsel should not make any of the decisions which were for the Tribunal alone. Third, that although the Tribunal could lawfully require counsel to do anything consistent with the Ordinance and its objects, it was necessary at all times to comply with the principles of natural justice and fairness.

21. The main question in this appeal is whether the Tribunal complied with this latter proposition and I now turn to consider it.

Fairness and the role of counsel

22. It is trite to say that there can be no universal rule as to what a tribunal or inquiry may require of its counsel. The tasks of inquiries and tribunals vary widely. The basis for the authority of such bodies may be statutory or consensual and the powers exercised differ greatly. It is necessary to take all these circumstances into account in deciding what is or is not fair in a tribunal's use of counsel.

23. After September 1996, the chairman visited London, he was much influenced by the procedures adopted by the Scott Inquiry which had then not reported. This may have misled him. What was a fair procedure in that inquiry can have little bearing upon the Insider Dealing Tribunal with its statutory framework and powers. In passing it is to be noted that in spite of the eminence of its chairman, the Scott Inquiry has not been the subject of independent judicial scrutiny and has not been free of informed criticism.

24. In support of a proposition that the Tribunal could invite counsel to advise upon the effect of evidence, including the credibility of witnesses, Mr Ma relies upon Dale v New South Wales Trotting Club [1978]1 NSWLR 551. In that case a bookmaker had his licence from the trotting club revoked for life. The decision was confirmed by the Club's appellate committee which was entitled under its rules to "conduct the hearing ... in such manner as it (thought) proper" and to retain a barrister "to assist at the hearing". Barristers were present and took part in the deliberation of the committee in making its finding. Hutley JA adverted to this at 558 - Mr Conti was counsel:

"It is for the Committee to decide what is the assistance it needs. That assistance can go much further than even, according to his Honour's judgment, was given by Mr Conti. As a matter of fact, I would conclude not only that Mr Conti did not act improperly, in any technical sense, but he did not go to anything like the lengths which, if the Committee had asked him, he was entitled to go. I can see, for example, not the slightest objection to a committee calling upon its legal assistant to analyse the evidence, and to give advice on questions of credibility. All this can be done by him and the committee in conclave together. His Honour expressly held that Mr Conti was technically at fault in conferring with the Committee in the absence of the plaintiff's representatives. In my opinion, this is to misconceive the role which an assistant in this position performs. If the Committee wants its advisers to confer with it privately on any matter arising in the course of appeal, it is entitled to have that assistance.

As this is a consensual tribunal, and the plaintiff has agreed to submit himself to an appeal conducted in accordance with the rules, he cannot object to the Committee taking any steps which are consistent with the rules and cannot, in objecting, rely upon other methods and other standards required in tribunals which have a statutory or non-consensual basis."

But note the important reservation in the last paragraph.

25. Mr Ma also relies upon a passage in Canada (Attorney General) v Royal Commission of Inquiry of Blood System (Can.) (1997) 207 NR 1 FED see A at 52:

"[102] We must be careful not to impose too strict standards on a commissioner who is conducting a public inquiry of the nature and scope of this inquiry, in terms of the role he may assign to his counsel once the actual hearings have concluded. A final report is not a decision and the case law that may have developed in relation to decisions made by administrative Tribunals, particularly in disciplinary matters, does not apply [see footnote 14]. We must be realistic and pragmatic [see footnote 15]. The Commissioner will not likely be able to write all of his report himself, or verify the accuracy of the facts set out in it on his own, any more than he could reasonably have asked all the questions during the examination of witnesses or sift through the hundreds of documents that were introduced. What is important is that the findings he makes in his report be his own. If, in order to make those findings, he considers it advisable to seek the assistance of one of more of his counsel, including those who conducted the examination of witnesses, in relation to questions of fact, evidence and law, he must have broad latitude to do so."

Note again, however, the second sentence of this passage. This and the cases cited under footnote 14 demonstrate that this authority is of little assistance to this Tribunal with its different composition, statutory background, function and powers. The distinctions are important and obvious. Sears J had them much in mind when he referred to the relevant passage in Professor Wade's Administrative Law 7th Edition at p.910.

The Insider Dealing Tribunal

26. This Tribunal was fulfilling a quasi criminal function. Its task was not only to inquire into, but also to determine, wrongdoing. Having done so, it had to impose penalties. In this case, Mr Gerard McCoy SC, for the 1st respondent, informs the Court that the financial orders could have amounted to as much as $510m.

27. Although the Tribunal is inquisitorial, the statutory framework requires its procedure to be near that of a conventional adversarial hearing. The real difference is the occasional need for the Tribunal to pursue lines of inquiry which may arise in the course of the hearing or become apparent from the statements taken earlier in SFC inquiries.

28. Save in exceptional circumstances the hearings must be public. Counsel for the Tribunal opens the case and examines the witnesses, who are then cross-examined by counsel for the other parties before being re-examined by him. Those potentially implicated who receive "salmon" letters may give evidence in their own defence and will be cross-examined by counsel for the Tribunal. At the conclusion of the evidence counsel for the Tribunal and those implicated may make submissions after which the Tribunal makes its determination and findings under s.16 of the Ordinance. Thereafter it will hear pleas in mitigation before ordering repayment, penalties or disqualification.

Conclusion on the Tribunal's first point

29. The true role of counsel for the Tribunal was never disclosed to the parties or the public. The consequence was that apart from the public hearings, the Tribunal was receiving submissions summarising and evaluating the evidence from counsel in parallel private proceedings. Counsel for the Tribunal were making the submissions before the evidence had been concluded and thereafter the submissions were made in writing, forcefully and in detail until a few days before the report was sent to the Financial Secretary. Additionally, counsel for the Tribunal made detailed submissions upon the draft report. Counsel for the other parties and the parties themselves had no opportunity to answer or be heard upon these submissions which almost certainly influenced the Tribunal's decisions.

30. In these circumstances the absurdity of asking counsel for the Tribunal to provide written submissions to the Tribunal with copies to the other parties at the end of the evidence was recognised by Mr Davies. Nevertheless final submissions by counsel were ordered in writing. The submissions were exchanged with a right of reply. But this was a charade as counsel for the Tribunal continued to make submissions thereafter in writing unknown to the other counsel and parties.

31. Mr McCoy SC, for the 1st respondent, had little difficulty in demonstrating that the judge was right and the procedure adopted was unfair. Private submissions to the decision-makers by counsel - who have the role of presenting evidence of wrongdoing - during the hearing and after the hearing on the draft report, were unfair and in breach of the rules of natural justice. On this point alone the judge's conclusion was justified as was his order to quash the Tribunal's findings.

The reception of evidence in private meetings

32. Undoubtedly the Tribunal received some evidence after the public sittings had finished. There were nine instances asserted and some are conceded. Mr Ma contends, however, that the procedure adopted was not unfair as the evidence was supplied to the parties other than the respondents. He submits that it was not necessary for the Tribunal to refer this evidence to the respondents as they had not attended the hearings and in correspondence, the 2nd respondent had said through solicitors that he preferred to be "left alone".

33. As I see it, the difficulty faced by the Tribunal is that the Ordinance requires it to sit in public unless for specific reasons it orders otherwise. The reception of evidence other than at a public sitting is not, therefore, permissible. If it is done, difficulties arise in seeking to be fair by providing the evidence to those involved for their comment or other action.

34. Even in the Pensions Appeal Tribunal, where the medical member could be expected to advise the others upon the effect of medical evidence, the basic rule was explained. See Moxon v Minister of Pensions [1945] 1 KB 490 at 501 per Tucker J (as he then was):

"It remains to consider whether, apart from the Minister's decision, the tribunal could have come to the same conclusion on the advice of its medical member given on the undisputed facts, such advice relating to a matter of medical science, namely, the characteristics of a particular disease. It is no doubt true that the medical member is appointed for the express purpose of advising the other members of the tribunal on technical matters arising out of the evidence as to the proper medical inferences to be drawn from the facts established, but it is, I think, of the essence of 'evidence,' according to English ideas, when used with reference to judicial or quasi-judicial matters, that it should consist of oral statements or documents in writing which are made in the presence of or communicated to both parties before the tribunal reaches its decision. This is not my view confined to judicial tribunals bound by legal rules of evidence, but is equally applicable to a quasijudicial tribunal such as a pensions appeal tribunal, which is expressly required to have regard to the onus of proof in its adjudications."

We have not investigated on appeal whether the evidence received in private was determinative and as such would have led to a quashing of the Tribunal's findings had the point stood alone. It is simply another example of a difficulty into which the Tribunal led itself.

35. I would also hold - in accordance with the judge's finding - that it was not permissible under the Ordinance for the Tribunal to receive written submissions from counsel and parties other than at a public sitting. The Ordinance requires that the hearing is public and therefore that the public as well as all implicated and interested parties have the right to know the nature of the cases being advanced. I am not suggesting that it is necessary for the written submissions to be read out to the court in full. The practice of referring to and summarising the skeleton arguments as adopted in proceedings in court is sufficient.

Pre-judgment of issues

36. The judge concluded that during some of the meetings with counsel before the evidence was complete, the Tribunal had decided some issues contrary to the respondents. Certainly some of the minutes cited by the judge appear to express a concluded view. See for example those of the meeting of 22 October 1996. However, I do not think the evidence is sufficient to support this finding. The Tribunal was at pains to point out from time to time in the minutes that the decisions on the evidence were solely for the Tribunal. Any fact finding tribunal is entitled to form opinions, even strong ones, in the course of the evidence. This only becomes unfair if it determines to close its mind to any evidence thereafter. The evidence here does not go so far.

Counsel's submissions and the report

37. Associated with this last point is the anxiety of the respondents that counsel for the Tribunal wrote some of the report. This arises from the earlier minutes in which the chairman suggested that counsel should assist in writing the report and his request for the provision of the disk containing counsel's submissions, some of which were incorporated into the report, including typing errors. Although it is better that such errors be corrected, there is no reason why the Tribunal should not incorporate counsel's submissions into its report verbatim if it independently concludes them to be correct and wishes to express its findings in the same terms.

Unfairness to the respondents

38. Additionally, the judge found that the respondents had not received fair treatment because they were not sent the new evidence and were not provided with the passages in the draft report in which they were criticised. I have already touched upon the evidence received in private. As to the provision of the draft report, the Tribunal initially determined to send this to the respondents for their comments but later decided not to do so, on the basis that they had not appeared or taken part in the proceedings. The respondents were represented by solicitors throughout and I have no doubt that if the draft report was sent to some for comment, it ought to have been sent to all those implicated. It was unfair to leave them out. On this, the judge was right.

39. However, I must note in passing that if conventional procedure had been adopted by the Tribunal no problem about the provision of evidence or the provision of parts of the draft report would have arisen. By this I mean that if all the evidence had been received in public, if the submissions of counsel for the Tribunal had been heard in public and the meetings of counsel with the Tribunal had been limited to administrative matters, the procedure would have been fair and beyond challenge. In these circumstances, it would have been quite unnecessary to provide either evidence or passages of the report to anyone for further comment.

Conclusions on the appeal

40. For these reasons I am quite satisfied that the judge's conclusions (with the one exception I have mentioned) were justified. I agree with them and I would dismiss this appeal. Mr Ma SC has presented the appeal on behalf of the Tribunal with considerable restraint but on the substance of the judge's finding, the appeal is without merit.

41. Before leaving the appeal, there are several matters to which counsel adverted and to which I now turn.

The role of counsel for the Tribunal

42. In his judgment Sears J considered the historical background of the provision and use of counsel at inquiries and cited relevant passages from the Royal Commission on Tribunals of Inquiry established in 1966 under the chairmanship of Salmon LJ. He summarised the role of counsel to this Tribunal as follows:

"It is obviously desirable and indeed necessary for the Tribunal and counsel to meet before the inquiry opens and to discuss the procedure, relevant lines of inquiry and potential problems and for the counsel to interview witnesses or investigate various avenues of importance. Once the inquiry starts, the position changes. Although they are counsel to the inquiry, they are in a special position. They must not abuse this special role and become part of the Tribunal. Although therefore matters of investigative nature and procedural matters may be the subject of discussion with the Tribunal, they should be rare. Further, they must not frustrate the public nature of the inquiry and have discussions behind closed doors unless it is essential. Put simply, counsel are under a duty not to get involved in the judicial function of the Tribunal, or the decision-making process and to ensure that all things are done openly, publicly and fairly, unless, as I said, it is essential to have a meeting in the absence of the parties and the public."

I entirely agree with this summary. Mr McCoy agreed that it was permissible for counsel and the Tribunal to meet in private as often as necessary for the purposes outlined by the judge until the start of the inquiry. Thereafter, he submitted that there must be no private contact or meetings. For my part, I do not think that there can be an absolute rule of this nature. Obviously, the Tribunal should never meet with counsel privately and involve them in the judicial function or the decision-making process. But there may be exceptional circumstances in which it is convenient for the Tribunal to meet counsel to discuss administrative matters or even a new line of inquiry after the hearings have begun. Such meetings should be kept to a minimum and the other parties should be told when the meetings are taking place and the nature of the discussion.

43. Further, the statutory obligation to hold the hearings in public must be maintained. It follows that the evidence must be received and submissions on law and evidence by counsel for the Tribunal or for the parties must be made at public hearings. Counsel for the Tribunal should never be invited to assist in the writing of the report or to make submissions upon the draft report.

The participation of the Tribunal as a party in these proceedings

44. Undoubtedly, it is unusual for a Tribunal to appear as a party to defend itself when its decision-making process is challenged in judicial review proceedings. Where misconduct is being inquired into, it is usual to allow the person making the allegation to present the case against the applicants. The judge summarised his views upon the participation of the Tribunal briefly as follows:

"The more modern practice when various tribunals are subject to judicial review is for them to take a neutral role, and to provide the court with as much information as possible, so that a just result follows. Here the Tribunal has taken an aggressive attitude to justify the strange procedure it adopted. It might have been better had the Financial Secretary conducted the opposition to this challenge rather than the Tribunal itself. However, counsel for the Tribunal, Mr Geoffrey Ma, is a well respected Senior Counsel and he has presented his submissions with moderation. Also, I have had the benefit of Mr Peter Graham. Most of his conclusions coincide with mine. The only criticism I make is that the Tribunal fought long and hard to prevent these minutes being disclosed. This was wrong. They are under a duty to assist the court and as has been said, should put all their cards on the table. See for example, R. v Lancashire County Council Ex-p. Huddlestone [1986] 2 AER 941. It may be that someone recognized the serious impact these minutes would have once they were disclosed."

On this, Mr Ma submits that it is not wrong for the Tribunal to appear and put its side of the story, to explain what happened and to assist with legal submissions. He asks the Court to note comments by Cooke P in Goodman Fielder Ltd v Commerce Commission [1987]2 NZLR 10 at 20 cited in Re Sutherland (Deceased) [1994]2 NZLR 242 at 246:

"Those observations do not apply in their terms or spirit to a case where considerations of public interest and the effective administration of an Act arise, especially if there is no other party to put those considerations adequately before the appellate Court. In such a case it is right that the Commission should help the appellate Court to whatever extent the Commission and that court find consistent with the Commission's public responsibility. An affidavit on behalf of the Commission may be found appropriate as well as argument; it was appropriate in this case. We think, though, that the Commission's position is a special one to which the ordinary practice and rules about cross-examination on affidavits do not apply."

These observations of Cooke P hardly apply to the circumstances of this case but for my part, I accept Mr Ma's submission that it is not wrong for the Tribunal to appear. It remains unusual. Sears J correctly described the normal practice. It can be said in favour of the Tribunal that Mr Ma's submissions on appeal have been moderate and restrained as they were below. However, having brought this appeal its members put themselves personally at risk in costs. This is undesirable even if they are indemnified.

45. Mr Ma's second submission is to challenge the judge's view that the Tribunal took an aggressive attitude to justify the procedure it adopted in its determination to avoid disclosure of the minutes of its meetings with counsel.

46. Mr Ma rightly points out that the well-known passages in R v Lancashire County Council, ex parte Huddleston [1986]2 All ER 943 at 945 where Sir John Donaldson MR says that judicial review in these circumstances:

"... is a process which falls to be conducted with all the cards face upwards on the table and the vast majority of the cards will start in the authority's hands"

must be balanced by Parker LJ's observations at 947 that:

"In the vast majority of cases authorities whose decisions are challenged will no doubt put before the court all that is necessary to enable justice to be done, for I agree that they have, or should have, a common interest with the courts in ensuring that the highest standards of administration are maintained and that, if error has occurred, it should be corrected. I agree, therefore, that when challenged they should set out fully what they did and why, so far as is necessary fully and fairly to meet the challenge.

In so doing they will, in my view, be making full and fair disclosure and putting the cards face upwards on the table as referred to by Sir John Donaldson MR. I express my views in a rather more restricted way, for I would not wish it to be thought that once an applicant has obtained leave he is entitled to demand from the authority a detailed account of every step in the process of reaching the challenged decision in the hope that something will be revealed which will enable him to advance some argument which has not previously occurred to him."

In spite of these passages, however, I find it difficult to accept that in the unusual circumstances of this case once a challenge had been made, the minutes of the meetings and the correspondence should not have been disclosed. This falls into the category of disclosing all that is necessary to enable justice to be done. The manner in which the minutes came to light partially and grudgingly during cross-examination of counsel for the Tribunal in the Magistrates Court was unfortunate. An account of this appears in Sears J's judgment. His strictures are in point.

Finally

47. Finally, it must be said that the minutes demonstrate no intention on the part of the Tribunal to be unfair. Rather the reverse. But the Tribunal misled itself upon the true nature of these proceedings. Once made that mistake was almost impossible to rectify. It led to an unanswerable challenge. The challenge having succeeded below, it would have been well for the Tribunal to have accepted its error and to have allowed matters to rest.

Godfrey JA:

48. The Securities (Insider Dealing) Ordinance, Cap. 395, enables a Tribunal constituted thereunder to "appoint a legal officer nominated by the Attorney General, a barrister or a solicitor to act as counsel for the Tribunal" (see para. 18 of the Schedule to that Ordinance). This language is the same as that used in relation to a Commission of Inquiry constituted under the Commission of Inquiry Ordinance, Cap. 86, section 6(4) of which enables the Commission to "appoint a legal officer nominated by the Attorney General, a barrister or a solicitor to act as counsel for the Commission." No distinction need be drawn between a Commission appointed under Cap. 86 and a Tribunal appointed under Cap. 395 in this respect; that each is obliged, as a matter of general law, to act fairly. Each is entitled to make such use of counsel appointed to act for it as it chooses, provided that it does not breach this obligation. But there the resemblance, I think, ends.

49. The legislature, in Hong Kong, has not made insider dealing a criminal offence. But it requires a Tribunal constituted under Cap. 395 to sit in public (see para. 14 of the Schedule) and empowers it to make penal orders against those found guilty of insider dealing (see section 23(1)).

50. The respondents here are entitled to say that the use which a Tribunal constituted under Cap. 395 makes of its counsel should properly reflect these two considerations.

51. I waste no tears on the respondents, who refused to co-operate with the Tribunal and, in the case of one of them, went to so far as to ask to be left alone. Nevertheless, if, in the end, they have not been treated fairly, they are entitled to complain.

52. And they do complain. They complain that the use the Tribunal made of its counsel here, having regard to the nature of its task, went beyond what was fair. With considerable reluctance, I find myself compelled to agree.

53. The reason why, as it seems to me, both in the case of a Commission constituted under Cap. 86 and a Tribunal constituted under Cap. 395, the Commission or the Tribunal is empowered to appoint counsel to act for it, is to remove the impression of hostility and unfairness which would be created if the Commission or Tribunal itself conducted the process of eliciting the facts on which it has to base its conclusions. The appointment of counsel for the Commission or the Tribunal removes this impression; if any such impression remains, it shifts to the shoulders of counsel for the Commission or the Tribunal.

54. It is particularly important that in the case of a Tribunal constituted under Cap. 395, those in the position of the respondents, and indeed the public at large, should feel able to trust to the impartiality of the Tribunal. This is not, as it seems to me, compromised in any way by meetings between the Tribunal and its counsel to discuss administrative arrangements (though I think a transcript of the proceedings at such meetings should be made and any interested party should be told of the meetings and what transpired at them). But the reception of evidence in private, through the instrumentality of counsel for the Tribunal, the evaluation of evidence by the Tribunal in consultation with counsel, and the involvement of counsel in the drafting of the Tribunal's conclusions, all go well beyond what the interests of fairness permit, at any rate in the proceedings of a Tribunal constituted under Cap. 395, even if they would, or may, be permissible in the case of a Commission constituted under Cap. 86.

55. Unfortunately, the Tribunal here saw the matter differently and in doing so, I agree that it fell into error.

56. For these reasons, I too would dismiss this appeal.

Rogers JA:

57. I have had the advantage of reading the judgment of Mortimer V-P in draft and I agree with it. In the circumstances I do not wish to add anything further.

Mortimer V-P:

58. The appeal is dismissed with an order nisi for costs against the appellant.

Representation:

Mr Geoffrey Ma, SC and Mr Daniel Wan (M/s Stephenson Harwood & Lo) for Appellant

Mr Gerard McCoy, SC and Miss Lindy Course (M/s Richards Butler) for 1st Respondent